The sun., 1919-10-13
MUST GIVE CREDIT
TO HOLD BUSINESS
American Concerns Lose Trade
in Latin America by Policy
of Suspicion.
EUROPE HAS ADVANTAGE
Pre-War Competitors Coming
Back and Getting Their Old
Customers.
by A. II. BALDWIN.

Assistant Manager Of the Foreign Trade
BureuD Of the Guaranty Trust
Company Of Ne,o York.
However business may have been
done during the war period and that
which Immediately followed, the time
has definitely passed when American
exporters can afford to ignore or be-
little the credit relation in their deal
ings with Latin-American buyers. Yes
terday the trade was on our own terms
Tomorrow we shall meet sharp COM
petition from those who controlled the
market few years back.
In spite, however, OF the food of ad-
| monition and warning. pro and con.
| as to giving credit accommodation, there
are still many American Arms that de-
cline to give any credits abroad. They
| refuse to take the same attitude to-
wards credit accommodations to foreign
| buyers that they adopt readily enough
| with domestic accounts, and II is some
what difficult to see how such discrim-
| nation against export accounts can be
Justified.
The principles as to credit that apply
are Identical In respect to both markets,
| domestic and foreign. In both there
are firms to which no reasonable seller
should deny customary accommodation,
as there are others which deserve to De
denied any credit favors whatever. In
both cases, no firm acts blindly or with
| out careful investigation. The informa-
| ton necessary upon which a credit man
may base his decision as to approving
or denying credit to foreign firms is
| daily becoming more complete and more
| readily accessible from many sources.
| including the banks, credit agencies,
trade organizations. and often other
| traders.
Big Losses Through Provincialism
1t should not be difficult to-day to
| obtain a satisfactory line on the credit
standing of any firm in Latin America
| worthy of such favor, and 1t Is simply
| a sort OF stubborn provincialism towards
| foreign trade that characterizes those
| who will not give consideration to any
kind of business abroad. except through
the cash against documents method.
No doubt that method Of export trad
ing excludes the chance of loss. but II
also excludes large volume of very
satisfactory and profitable business,
which goes TO other firms. or other
countries. willing to regard requests for
credit with open minds. and ready to
realize that a ;ich Portuguese firm in
Brazil, or Spanish or Italian firm in the
Argentine. is just as likely to meet Its
similar rating in Kansas City or New
Orleans
1t is true that American exporte. S
have sometimes had unfortunate and
costly experiences with bad foreign ac-
}counts, bat so have they had with do
mestic firms, II proper care has not
been exercised by the credit man. II
is not because a firm is foreign that 1t
constitutes a poor risk. AS a matter Of
aNt Ann rir n
! as high pride in their position and in
their long record OF honorable dealing
and are as scrupulous in meeting thor
, accounts fully and promptly as any
, American firm could possibly be.
! Bank Facilities Better.
Our trade relations with Latin Amer
lea are daily becoming closer. Amerl-
can banks are extending their connec-
tons more and more in that continen:
American branch houses increase in
) number. and so do the statesmen 81
American firms, and there is really little
excuse for the claim that the credit
conditions there are difficult to est
mate satisfactorily.
| IT Is well known, or should be wei
known. by exporters that the commerc'
there is affected by the seasonal move
ments of export products. such as wheat
| faXseed, rubber, coffee and other com
modities. and that the slowness of com
, munication with interior points and loni
, stablished customs, make 1t most nat
ural that traders should need or fine
: convenient a considerable margin of tim
: in which to dispose of goods and maxi
= collections before settlement for imports
II is suggested that there Is not nee'
: of careful scrutiny OF all factors involved
: and opportunity for the exercise o
: highly trained judgment when consider
3 ing requests for credit from Latin Amer
! lean firms, but II Is urged that our ex
3 port trade will inevitably suffer unles
Q we meet the terms OF our foreign com
petitors as far as credits are concerned
when good accounts are in question.
e All our talk of the southern continen
= las a natural" market for our good
, will not avail much If we treat 1t cava
! lierly and with suspicion.
! A policy of meeting the credit require
: ments with knowledge and intelligen
- liberality is surely indicated as the on
e for our traders to adopt, especially /
: view of the superior strength of on
i financial position at this time. Gu
Il future position in the markets in ques
Il ton will depend upon the way we hRndl
e business with them just at this perio
when we may thus be able 10 check tn
return OF a great deal of trade to pre-
| war channels