body minded paying the deficit, but through local red tape this seeming trifle sometimes caused two or even three weeks' delay in the delivery of important letters.

Certain of our strongest firms have been calmly ignoring shipping directions. What did they care if the packages had to cross the Andes on mule back, and if mules could only carry packages of a certain size and weight? What did they care if the duty remission for naterials on some Government contract, or the customs classification of a shipment, depended on adherence to specific directions? I could multiply examples of the most amazing casualness and careless disregard, of bad packing, of ungenerous credit, which have enraged the importer.

The

A European merchant, many years established in a South American city, and knowing the community, has been selling pianos in this way: The manufacturer would quote him a price and deliver the piano, giving him long credit at an ordinary rate of interest. merchant would finally sell the piano on the installment plan, receiving interest at a higher rate on the deferred payments, the merchant trusting the buyer, the manufacturer trusting the merchant, both thus making good profits, and the purchaser being accommodated. This man found the American manufacturer entirely unwilling to deal in this way.

European houses on the spot, whether independent or financed by large home houses, give credits for as long, sometimes, as a year. They would not continue to do so if they lost by doing it. Often this fits the customs of the local domestic trade. In one country the local retailer is expected to be paid within eighteen months. Naturally, our exporters' demand for "cash down on receipt of documents," even when the customer is well vouched for, does not appeal to him.

He prefers to get long credit from a European house, and pay interest for it, rather than to borrow from his bank at high interest or sink his own capital to

pay for American goods, long before he gets them, their price plus the profit of a commission house. Indeed, he is generally dissatisfied with the methods of American export trade as now conducted, which is almost exclusively through commission houses. These, it seems, might become more efficient through organization and more aggressive and scientific methods.

On the other hand, the export trade of certain of the big combinations is beginning to be pushed with commendable zeal and efficiency. Trade at large, to reach its greatest volume, must include the pushing of smaller lines of goods. These smaller lines, in the aggregate, would reach considerable sums, and it does not appear that there have hitherto existed efficient agencies for their marketing. To hold Latin-American trade erality of credits, in representation on we must equal our competitors in libthe spot, and in other facilities.

There is no doubt that more American merchants resident in the trade centres would give valuable impetus to our commerce. Even our commission houses operating on the spot are so few that in handling many lines there is the greatest danger of their sacrificing the building up of a steady trade to the opportunities of unduly heavy profits now and then, and so damaging our general commercial interests. Then we must send many commercial travelers.

Just here, however, it cannot be too strongly emphasized that Americans sent to these countries to do business must above all be men of agreeable manners. In these countries many quite unworthy people have these: so a good man who lacks them is likely to be badly misjudged. They should have sympathetic personality and sufficient education, besides being men of sobriety and good character, and should be able to speak the language of the country.

All this will be expensive, but noncompeting firms might join in sending men, or competing firms might, it is hoped, be guaranteed against the terrors of the Sherman law in order to join in sending a corps of representatives upon some basis of division of the

field or the profits. Combination is even more necessary abroad to put forth the nation's strength in world competition than it is for efficiency at home. These men would be students and salesmen, and perhaps future merchants who would settle in these countries and emulate the patriotic groups of resident foreigners who in so many places help to form an atmosphere favorable to their countries' interests.

They would work to replace with our goods those now shut off by the war, but also to introduce dozens of lines of American products which are now comparatively hard to find in these markets. A number of strong firms might join to establish commercial houses or selling agencies in trade centres of certain groups of countries. Commission houses might do the same if they carried samples and instructed their clients in packing, credits, &c., but in each case there should be American houses on the spot which would carry general lines and supply to the eye that visible evidence of the goods themselves which is such a valuable form of advertisement.

In the establishment of American houses in these countries, as in many other respects, much may be learned from the Germans. They bring out carefully selected young men. These, if efficient, have sure promotion. The partners retire before old age to make room for those who work up. The inefficient are dropped. It is a little like the principle of a good foreign service.

I think the most minute study should be given, first, to the nearer countries, say those north of the Equator, including the republics of the Caribbean. Each country must be separately studied. Primarily, there will be found a cry, sometimes desperate, for capital. Public works, concessionary and otherwise, have stopped for lack of funds from Europe. New developments in railroad building, mining, harbor works, plantations, are arrested. Where European credits have been customarily used to handle crops, there is distress, and no less so in cases in which such credit has previously been given by ostensibly

American houses operating really with European capital.

American capital may come to the rescue by advances upon good security through local banks. It can establish banks or buy controlling interests in existing banks, many of which pay their stockholders 15 per cent. or more. It can relieve the stagnation and make profitable investment by an active campaign for public and private contracts and for sound and fair concessions, not visionary or get-rich-too-quick schemes.

Supposably, the repairing of the destruction brought by the war will make European capital scarce for some years, but an effort will doubtless be made to retain for it its former preponderance in these countries; and so it is important that, whatever the war's effects upon our own money markets, use should be made of such an opportunity as does not come more than once.

To be sure, the scarcity of money in the United States makes this difficult, but the same worldwide money scarcity will secure an especially high rate of interest in Latin America, where even in normal times money can often be placed on excellent security in some of the countries, and at a rate very high indeed compared to that prevailing now in the United States. For safe investments with such a margin of profit, it is to be hoped that money, even if dear at home, will be forthcoming.

Undoubtedly the purchasing power of these republics has been hard hit by the cutting off of credits and markets by the war, as their Governments have been hard hit through the falling off of revenues from import duties. Some of the Governments will require foreign loans. Capital, I repeat-and I mean really American capital-is the urgent need. We are not asked to make them a present of capital to buy our goods with, but if we do not help finance them and buy their products they will have nothing with which to buy our goods.

The situation invites us to give capital and credit to take the place of the European supply which has failed. One need not fear that the returns will be uninvit

ing, for Europe would hardly have been supplying credit and capital to Latin America as a mere matter of amiability. Thus our capital must regenerate LatinAmerican prosperity, while our bankers, merchants, and manufacturers are engaged in making solid, permanent arrangements, not opportunistic ones, to take possession of a great share in the present and still more in the growing future development and commerce of these countries. Capital, then, and credit are the first requisites.

The war has had the effect of making the Latin-American countries realize for once the economic importance to them of the United States. The products of some, like the tin of Bolivia and the nitrates of Chile, have been going almost entirely to Europe. Several republics suffer the more acutely in proportion to their previous failure to cultivate financial and commercial relations with the United States.

They now feel this and are compelled to a mood receptive to our advances. More, they are forced to seek new markets for their goods just as they are forced to buy some of ours. In this way there should come about new exports to the United States, and there should spring up there the corresponding new industries and habits of consumption, to the ultimate benefit of all the countries concerned.

Meanwhile, the United States is the only present economic hope of a number of the republics. It is to be hoped that our capitalists and business men will realize the responsibilities as well as the opportunities of profit in the rôle they are asked to play, and that their response to their new opportunities will be one of courage, thoroughness and intelligence, and one also of quiet patriotism.

II.

POLITICAL POTENTIALITIES. Turning from the opportunity to the lesson, from the commercial and economic aspects of this question to those that are political in the large sense, one's imagination is appalled at the potentialities of

the yet unknown results of so vast an upheaval. Yet we must envisage some of these if we are to be prepared for their effect upon us. We must be ready for the impact of the resultant forces of these great dynamics. We must be ready everywhere, but nowhere more than in our relations with Latin America, in the zone of the Caribbean, and wherever the Monroe Doctrine as still interpreted gives us a varying degree of responsibility.

The war's first effect upon our LatinAmerican relations is to compel through commercial and financial rapprochement a larger measure of material interdependence, more contact, and, we may hope, a substitution of knowledge for the former reciprocity of ignorance. All this makes for better social and intellectual relations, good understanding and friendship, and so for political relations much more substantial in the case of many of the republics than the rather flimsy Pan-Americanism celebrated in eloquent speeches and futile international conferences.

There is little in Pan-Americanism of that kind. The "raza Latina" of eloquence is not itself homogeneous; still less so is the population of the whole hemisphere. And with Rio de Janeiro, Buenos Aires, and Santiago we have, of course, far less propinquity than we have with the capitals of Europe. But what we really can do is to build up, especially with the nearer republics, real ties of common interest and good neighborhood, and with the distant ones ties of commerce and esteem.

The war may tend to cure certain rather self-centred countries of affecting the morbid view that the people of the United States are lying awake nights contriving to devour them, when, in fact, it would be hard to find in a crowded street in the United States one in a thousand of the passersby who knew more than the name, at most, of one of those very few countries referred to.

Europe's preoccupation with the war temporarily deprives such a country and its few misguided prophets whose monomania is dread of that chimera, the

"Colossus of the North," of the pastime of nestling up to Europe in the hope of annoying us. It postpones, too, the hope of the morbid ones that we shall come to war with a powerful enemy. Now, perhaps, even these will appreciate the remark of a diplomatist of a certain weak country in contact with European powers, who once said: "If we only had the United States for a neighbor! What I can't understand is that your neighbors do not realize their good luck." Turning from these exceptional phenomena, the very fact of the war leaves the United States in a general position of greater political prestige.

Whatever the upshot of the European tragedy, its political and psychological consequences are likely to be great. If it result in new national divisions upon racial lines of more reality, who knows but that the awakened spirits of nationality will germinate fresh military ambitions? Or will the horrors of the war force political reforms and the search for assurance in more democratic institutions against any repetition of those horrors? And is popular government an assurance against useless war while men remain warlike even when not military?

Except from the successful countries or from those where disaster has brought such sobering change that men can return to work heartened with new hope, when the war is over there is likely to be a heavy emigration of disgusted peorle. Possibly even victory will be so dear that men will emigrate from a country half prostrate in its triumph. Many will come as the Puritans came, and as the bulk of our own excellent Germanic element came, and will cast in their lot with a new nation. We shall get a good share, but doubtless some will go to the republics of the far South, and some to the highlands of the tropics and through the canal to the West Coast. If so, this will tend gradually toward increased production and purchasing power, as well as toward a leavening of social, political, and economic conditions of life.

If the war were indecisive or left all the combatants more or less prostrated, peaceful immigration might give a big

impulse to the gradual growing up of powerful States in the temperate zone of the extreme South. The situation there, and the evolution of our own power, make it perhaps even now fair to consider the question of regarding as optional in any given case the assertion by us of the Monroe Doctrine much below the equator, let us say, beyond which it may possibly be doubtful whether we have nowadays much reason for special interest.

But, even so, our relations to South America and our obligations under the Monroe Doctrine, in spite of the blessed fortifications of the Atlantic and Pacific Oceans, leave us where it is tempting fate to be without a navy of the first magnitude, and a big merchant marine. We have seen what happened to Belgium and Luxemburg. We have seen how even some of the most enlightened nations can still make force their god. Nations learn slowly, and there are perhaps some new big ones coming on, like China.

If the war is a fight to a finish, and the Allies triumph, we can imagine Russia, with its teeming millions of people, occupied for a while in the Near East; Japan consolidating her position in the Far East, an increasingly powerful neighbor to us in the Philippines, the Hawaiian Islands, and the Pacific Ocean; France still a great power; and England as a world power of uncomfortably ubiquitous strength, able to challenge the Monroe Doctrine at will.

Or, let us suppose that Germany should triumph and that German emigration should swarm into the Caribbean countries, or into Brazil or some other country where there is already a large German colony-elated, triumphant Germans, not Germans disgusted by a disastrous war. Would Germany be likely to heed the Monroe Doctrine, or would it be only another scrap of paper "?

66

In the present stage of civilization the safety of America should not be left dependent upon the forbearance of any power that may emerge dangerously strong from the war or that may other