Mr. Peirce to Mr. Hay.
St. Petersburg, October 11, 1899.
Sir: I have the honor to again call your attention to the proposition of an exposition of American industries to be held in Russia, which was referred to in Mr. Hitchcock’s dispatch No. 238, of January 21, 1899.
It is hardly possible to touch upon an article of American industrial progress which would not find a market in Russia if properly placed before this community. A few such are already meeting with considerable success as American typewriters, sewing machines, bicycles, tools, hardware, and a number of smaller articles. In the line of machinery the Worthington pump has had a most gratifying success; the Baldwin Locomotive Works have established a regular market in Russia for their engines, of which they have sold up to the present time some 400 engines to the Russian Government, and recently, after an exhaustive test, the Westinghouse air brake has received a very large contract from the Government for the equipment of trains upon the Government lines of railway. American agricultural machinery is also largely used throughout Russia, but its use could be extended by proper exhibition and representation.
These are articles which it has been possible to exhibit to the consumers in the regular way, and they illustrate the fact that a profitable market exists in Russia for American specialties, if only the manufacturer is prepared to display here his wares.
There are, however, almost innumerable lines in which the Russian public is wholly ignorant of what progress we in America have made, and in which there can be little doubt that we have only to make known what we have to offer in order to find an abundant consumption of our goods.
Without at the present time attempting to specify with any sort of fullness what articles of American manufacture would be likely to find a sale in Russia, I will venture to give a few illustrations which may perhaps serve in a general way to indicate Russia’s industrial condition in regard to those things which it lacks and which in America have become matters of course.
[Page 598]Taking, for instance, conveniences of the household, although the majority of people in this community, including even the very rich, live in apartments or flats, the use of elevators is extremely limited. I do not know myself of more than twenty in all St. Petersburg, and these are of the most primitive and inconvenient character. I know of but two American pianos in St. Petersburg, one of which is my own. American stoves of any sort are unknown, heating and cooking being almost exclusively done by means of earthenware stoves, which, however satisfactory in certain respects, are costly in the beginning as well as in consumption of fuel. I may here remark that the fuel in common use is wood, which, however, has advanced within two years 50 per cent in price, and in consequence English, or rather Welsh, coal is beginning to take its place. * * * I am confident that American furniture, if it were known here, would sell readily. * * * There are many other minor articles of the household which could well be introduced from America, but the above are the most striking needs.
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None of the large cities are provided with any system of street railways better than the old-fashion horse cars.
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“Automobiles,” so called, are coming into somewhat extensive use in St. Petersburg; but I have not heard of any attempt to introduce those of American manufacture, nor are American carriages known to any extent in Russia.
On the other hand, the Bell telephone is in general use in all the large cities, and, I believe, with satisfactory results to the stockholders of the company.
St. Petersburg is almost wholly built of brick covered with stucco. These bricks are hand made, there being no machine brick-making industry in Russia. Bricks are quoted, delivered in St. Petersburg, at 27 rubles—about $13.50 a thousand—and this with extremely low-priced labor.
Perhaps one of the greatest opportunities for American machinery is in the line of lumber manufacturing, in which Russian methods are primitive in the extreme. It is probable that, should an American company be formed to come to Russia to erect mills for the manufacture of lumber with improved machinery, the Government would extend to it very valuable concessions. I may here remark that I have received the best assurances that Americans coming to Russia to erect factories, or to engage with capital and improved appliances in industrial enterprises, will receive the fullest governmental support. This may be taken to include protection in the way of tariff.
Russian capital, both alone and in conjunction with capital from abroad, is investing largely in industrial enterprises, and this tendency is steadily increasing. In these undertakings American machinery ought to play a far larger part than it does at the present time, but it can only hope to do so by becoming known in Russia.
I have not touched upon the subject of mining machinery, in which direction there is a very wide field for our countrymen in Russia. Gold, silver, platinum, copper, iron manganese, quicksilver, coal, salt, and the precious stones are already mined in large quantities, and increased activity in exploration is constantly developing new deposits. There is an active and a growing demand for all sorts [Page 599] of mining and metal-working machinery, and in the development of mining and metallurgical industries, as well as in other industrial enterprises, the Imperial Government is extending to capital special encouragement and support in which foreigners participate.
The enormously productive oil lands of the district lying between the Black and Caspian seas are being rapidly and profitably exploited, largely by foreign and especially English capitalists, and here again crude methods, both in the production of the raw article and in its refinement, offer opportunities for the profitable introduction of American processes and apparatus. None of the products of petroleum produced in Russia are comparable to the American articles, American illuminating oil, for instance, finding some sale in St. Petersburg at double the price of the Russian oil.
The manufacture of textile fabrics is probably more highly developed in Russia than most industries, but even in this direction it is worthy of note that such articles as crash, formerly one of the leading products of Russian commerce, is still made only by hand in the peasant villages, and, in consequence, its exportation is rapidly decreasing.
That our commerce with Russia is growing is shown by the large sales which have been made of steel rails, bridges, locomotives, tools, ships, dredges, and other articles of development of public works within the last few years, not to mention articles of regular trade.
Our published statistics regarding our commerce with Russia are misleading, the volume of our trade being much larger than it appears therefrom.
Take, for instance, the item of cotton. Russia consumes of American raw cotton $40,000,000 annually, while the published statistics place it far less than this; I believe less than one-half. The reason of this disparity is that the greater part of American cotton consumed in Russia comes here by way of England and is accredited to English consumption. In the same way a great quantity of American agricultural machinery comes into Russia via Hamburg and other German ports and is not included in the statistics of our Russian trade.
A line of Danish steamers is now plying directly between New York and St. Petersburg, as you have already been informed, and I am told that the results of this year’s traffic have been satisfactory to the owners, although, in the absence of return freight from Russia to the United States, the return cargoes have been made up in Swedish and Danish ports. In this connection I would say that, believing that reciprocal trade is of very great importance in building up our commerce with Russia, I am now engaged in endeavoring to secure an exhibit of specimens of such Russian special products as seem likely to find a market in the United States to be sent to the Philadelphia Commercial Museum, which has at present an extremely meager Russian exhibit.
Submitting the above for your consideration, I have, etc.,
Chargé d’Affaires ad interim.