Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-08-26
AMERICANS GREAT
HANDICAP IN THE
FAR EAST TRADE

| American firms dealing in the far
East must acquaint themselves with !
number Of unusual business methods.
among them the comprador system.
which has it's highest development in
China. Business houses deal with the
Chinese through a Chinese agent
known as the "comprador.' Originally
this agent was simply a man who en-
gagged servants and bought supplies in
the native markets.
For years the system has developed.
however, until now practically all the
business of foreigners with Chinese is
done through agents of this sort.
whether it be in buying or selling, in
loaning or in borrowing money. In
| many firms the comprador Is a part
ner; in many instances he Is in reality
| the owner Of the business, furnishes
the capital, manages 1t. and uses the
| name of foreigner to secure foreign
protection from the many abuses which
obtain in commercial circles. .
The real comprador is a cashier,
handles all money received by firm
and makes all payments. In many
foreign business houses bills are paid
by the representative Of the business
Office in an order on the comprador OF
the firm, and this order is banked as a
| bank check or draft. All servants are
engaged by the comprador Of the firm
and he is responsible for them. In
| short. there is no limit to what a COM
prador does not do under the present
way of doing things In China.
Writing of this system Consul An
derson of Annoy says:
The system has a good many points
which commend 1t and some which do
not. Under the Chinese method COM
prador who brought a dealer patron
age would receive a percentage of the
profits of all sales made to the COM
prador's firm. Following out the same
principle the comprador receives a
percentage of the wages paid all Chin
csc employees. Formerly this system Of
commission was carried on without the
knowledge, or, at least, without the
connivance Of the business firm, and in
many cases it is in vogue at present.
Gradually, however, things have so de-
Veioped that this percentage system is
recognized as means Of paying the
comprador portion of his salary. and
with most business houses in China the
! only arrangement made is to see te II
mat the commission taken is reasona
BILE in amount,
Compradors nowadays are engaged only
upon contracts. generally in writing in
which certain commissions are fixed. and
| for the faithful performance Of all en-
gagements made the comprador gives
bond The comprador Of a tea firm. for
| instance, will receive a certain commits
sion as wages on each box of tea the firm
| buys. j know of one firm which paws 30
cents Mexican (about % cents gold to its
| comprador for every chest of tea he buys
for the firm in the tea season. Silk firms
pay on the basis of certain sum for each
unit of silk bought
The particular evil of this phase Of the
system is not so much in this seeming tax
upon all articles thus purchased in China.
LOT the commission is in reality payment
Tor services which would be a part of the
cost OF the article If they were paid for
~ some other manner but in the fact
comrradors not only take a commission
from the firm for which they buy, but al
SO take commission from the man from
whom they buy. A higher price is there
fore Paid for the goods bought than the
situation warrants, and all the subse-
qucnt transactions in that commodity are
based upon fictitious value for which
the consumer in due time must pay.
Legitimate banking Is injured, legiti-
mate borrowing is made onerous and
there is no doubt that many commenda-
BILE enterprises in China are held back by
Just such methods on the part of Chinese
who are in position to benefit them
selves at the expense of their fellows.
IN all the business circles of the East
there Is constant danger Of fraud on the
public or upon the business houses con
cerned. arising from the acts of compra-
dors which are unauthorized so far as the
nrTns are concerned. but which seem to
come within the coulprador's authority SO
far as the public is concerned: While the
insisting upon knowing the exact limit of
the comprador's authority 1t is evident
that such course would be a continual
break upon the smooth course of bust
ness.
American firms dealing with the Far
East need to cultivate the compradors.
The system Is development. and 1t prob
ably has come to stay. 1t will be modified
as business methods in the East are mod
ifed and the more the Chinese become
acquainted with foreign ways and with
the English language the less force will
this system have in Asiatic business. But
for some time to come the compradorS
will be the arbiters between foreign goods
and Chinese consumers, between Chinese
buyers and foreign Sellers between
Chinese debtors and foreign creditors. If
comprador of firm in China repre-
Senting Amer lear interests says that GER
tain goods will not do the goods might as
well he changed at once and without ar
average first-class house in the Far East
is business man of more than ordinary
ability, with acumen, experience and
good judgment Where making money
for his firm is making money for himself.
as is generally the case, he is reasonably
not be done.