Morning journal and courier., 1884-11-11
MEXICO GOING AHEAD.
The Long Credit System Forced or the Country by European COmmer cfal Houses,

The Long Credit System Forced on the Country by European COmmer- ciaI Houses.
 The following interesting communication is made to us by gentleman formerly con- nected with the Mercantile agency of R. G. Dun & Co.,, and who is perfectly familiar with the subject. It attributes a predomi- nant influence to European commercial houses in Mexico in forcing the long credit system on that country, and explains what the agencies are that are now rapidly work ing out great commercial change for the benefit of this country. There seem to be strong reasons to believe these views to be correct, and if so, the complete control of the Mexican market by our manufacturers will be sooner or later assured.
 To the Editor of the JOURNAL and COURIER:
 wish to say one thing in the COURIER in regard to the export trade to Mexico, which is coming to have increased importance to our manufactures. It concerns @ matter of which there seems to be much general igno- rance, but at the same time good deal of misrepresentation not based on ignorance of the export trade, but growing out of the in terest of portion of the merehantile conc- nlunity to keep the actual facts in the dark. I refer to the matter of long credits as an in evitable obstacle in our seaport trade, more especially with Mexico, to which country only the following facts apply so far as know Having investigated this matter thoroughly and with unusually good faclll- ties so far as Mexico is concerned, l am pre- pared to show unquestionab1y that the exis- tence of a long credit system in Mexico is not voluntary on the part of Mexican merchants who purchase of the importing houses.
 The habits of inquiring into this subject have rather tended toward looking upon the long credit business something traditional and deep rooted, and therefore unavoidable
 And this is the mistake under which this unmitigated evil has often been regarded from business point of view. The fact is, that this long credit business has heretofore been forced by foreign importing houses upon the Mexican trade. These concerns are branch establishments of parent houses in the mother country. They are nearly all Germans, having large capital at home and in country where interest is very low, and having the advantage also of a subsidized ocean service between Europe and Mexico, and consequently very cheap freight. These German importers in Mexico much prefer to sell their goods to Mexican dealers on a twelve months credit at enormous profits to cover this credit, there to sell on short tune and less profit. They do not want the money to use. they only care to know that it is safe and that they are getting 30, 40, or 50 per cent for it. The importer IS established in the country has made himself acquainted with the means and business of every GUS toner he sells and by keeping the customer in his debt to to some extent he has hereto fore managed to hold strong contract over his trade Bankruptcy is not 8 common af- fair in Spanish countries, and in Mexico with all it's official robbery there exists great deal of the punctilio and a genuine sense of personal honor in business dealings. The dealers of the country are largely Mexicans
 IL. hoan hald in the grip of this strong combination of the German importing houses, until the recent building of American railroads opened new channels of trade and transportation The railroads, in fact dealt terrible blow to the power of this commercial ring. It is by no means crushed, but the prestige of com mercial power in the hands of Europeans 1n Mexico is utterly destroyed
 Less than a year ago, the Mexican dealers at some interior points began to make pur- chases in metal goods, machinery, blows, etc. of our western houses, and they soon realized how they had for years been re morsely swindled in charges, commissions, and profits by the German importers in the city of Mexico They tu1ned this custom in some lines as I have said, into the new channels of American trade and cut off deal ings with these importing and commission concerns. Tho result is significant enengh, and it is now teaching more simple lessons of business truth to these Mexicans. They got their goods cheaper, but whether the con su1ner got them cheaper don't know. There is not the least doubt of the ability to pay cash of larger part of the Mexican trade.
 The fact is also true in Mexico that the petty trade has no need to extend long cred its to the population. In the mines the laborers are paid every Saturday In the agricultural sections, where almost every great hacienda has attached to 1t 8 country store where double profits are made out of the laborers' wages, the wealthy farmer baron with two crops year IS not in sit uation to need much credit except 1t be ill an uncommonly bad season.
 Another reason that enables Mexican mer- chants to go long way in repudlatlng long credit dealings is, that since the railroads have connected the interior cities and large towns funds transported as easily, safely and rapidly between points in the United States west of the Mississippi river. The armed conveys that used to ac- company the Especial mule trains, :" on which the trade of the country two years ago de pended for transportation of moEey two or three times year, are now a thing Of the past. and consequently domestic exchange is much less and the rate consequently growing less.
 It is not for the interest of system of business done through commission houses in New York, New Orleans, and the City of Mexico, to explain these facts publicly or al low them privately; neyeftheless they are Ile facts Our export trade heretofore has almost entirely depended on the system of ordering goods through commission houses The building of the American railroads in Mexico and their connection with the great south western system of the United States is not merely direct blow to European importa- tion in Mexico, but the effect upon the mercantile methods in this country which have so largely profted by exorbitant charges at the expense of the Mexican dealers is to cause gradual but certain abandonment of system that has been viciously abused and is fast coming to be antiquated in use. Mexico is making rapid progress. I doubt if there be any people on the face of the globe who are so fast emerging out of the hard ruts of superstitious policies in govern ment, religion or trade.