New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-21
Latin Americans
Cancel Orders;
Seek Lower I rices
Foreign Buyers Refuse 10
Honor Drafts Covering
PaymeniforCoodsB Bought
Here Before Armisiice

Business with South America,
principally with Argentina and Brazil,
has been impcdcd through the refusal
OF business men in those Latin-Ameri-
can countries to honor drafts drawn
on them covering the payment OF
where in the United States. Letters
of credit arranged through New York
banks have also been cancelled 1t
was estimated yesterday that several
million dollars worth of business
has been lost as 4 result,
The principal reason which has been
given by the South American business
men for this action is that they want
lower prices than the ones agreed on,
and on which the goods were sent
forward to them. Many instances
are reported where the goods have
arrived in Iatin-American ports and
the consignee has refused TO accept
them at the prices named when the
order was placed
The line of business which has been
particularly affected by this action is
the cotton goods trade banker who
is conversant with the situation said
yesterday that he knew of one bust
ness man engaged IN the cotton goods
trade who had sent forward goods
valued as $4,000, only to receive
word when the material arrived that
the consignee would not accept it at
the price agreed on, and that the i'm
porter wanted q reduction in quota
tons,
20 Per Cent PTice-Cut Asked
Another instance was cited where
another cotton goods man has about
sixty-fiye per cent Of his Latin-Ameri-
can business outstanding because he
would not turn his goods over to the
consignee at lower figure than
named in the draft which was at
tached 20 the bill Of lading
Bankers say that cables have been
received by American business men
asking for reductions OF as much as
20 per cent. These reductions have
not been given. In the meantime,
the goods are lying on the piers and
IN the warehouses there awaiting
some disposition. in some cases
cables have been received here before
the material has been sent, and the
orders arc being held.
With regard to the situation in Ar
gentina and Brazil, it was explained
that while the war was on business
men In those countries stocked up, not
knowing how long the war would con
tinue, and they wanted to make sure
that their stocks were large enough
10 carry them over for some time.
This placed the importers in an over
bought condition, and as soon as the
armistice was signed they began to
look for lower prices.
Many Agreements Broken
Every advantage Is being taken to
cancel the contracts; even technicali-
ties are resorted to to break the agree
ments, with the object in view Of fore
ing the seller to lower his price. AS
the major portion of the business is
done through drafts, the South Ameri-
cans find that it is easy to refuse
payment and not accept the goods.
AS one foreign credit banker OK
planned It, the business houses with
an established reputation are not re-
fuslng to make payment on their
tracts and accept the goods. Rather.
1t Is the smaller firms who have
grown up during the war which are
trying to force the prices lower
through this action.
If the business was done through
the letter Of credit method, where
the instrument was irrevocable, there
would not be such situation" said
one banker
The branch American banks which
have been established in. South Amer
lea are doing much to have business
done IN this manner instead Of draw
ing. draft and sending it forward
with the goods. The Latin American
has been accustomed to buying his
goods by means of Il draft, and he
does not take IS kindly to d letter of
credit as he might
Disposing of the Stocks
The argument which is being ad
vanced by the consignees Isl that dur
ing the war they were compelled to
wait for their orders to be filed be-
cause the manufacturers were busy on
war orders, and they could not get
goods as easily from any other coun-
Try as from the United States. Now
they figure that other countries will
be in the market shortly and they are
not compelled to rely on the United
States"
Representatives. Of American bust
ness houses nave gone to South
America to make some disposition OF
the stocks OF materials