May 23. 1919 



HARDWOOD RECORD 



19 



Mexico's Commercial Resources 



Editor's Note 



The letter which follows was written for Hardwood Record by Lazaro Basch, commercial agent of the Secretary 

 of Industry, Commerce, and Labor of Mexico. He is now in charge of the Mexican exposition at San Francisco, Cal. 

 Mr. Basch is a native of Alsace, France, but has lived fifteen years in Mexico. 



In the great period of reconstruction that must necessarily take 

 place in all the countries of Europe, now that they may turn their 

 attention and activities away from the exigencies of war to the 

 building up of their commerce, it will be imperative to seek new 

 fields from which they may replenish the national larders. Impor- 

 tant among the countries that will come in for a large part of this 

 trade will be Mexico, with her limitless natural resources, her 

 wealth of mineral deposits, virgin forests of fine construction woods 

 in vast quantities, and agricultural products ranging from the trop- 

 ical to the temperate. 



Will the United States sit calmly back and allow foreign nations 

 to get control of the bulk of Mexico's exports, or will they demand 

 the share that is due them if sufficient effort and interest in acquir- 

 ing the same be shown? 



Naturally, your progressive country will want to engage in active 

 commercial relations with the southern republic as your proximity 

 and friendship warrant, but how may this be accomplished, since 

 past activities in this direction have been so half-hearted and luke- 

 warm? Unless new methods are adopted, you cannot hope to accom- 

 plish much more in the future than you have done in the past. 



Learn Spanish 



If a careful study of commercial possibilities of both countries, 

 added to fifteen years' actual residence in Mexico and active asso- 

 ciation with her business and commercial interests justify the state- 

 ment, I may venture to say that three principles govern the acquisi- 

 tion of Mexico's future commerce, or a large part thereof. These 

 may be termed the A B C of trade relations with the sister republic, 

 and they are, in brief: 



Learn Spanish; give the people what they want; in effecting pay- 

 ment, extend credit where justified. 



Because of your excellent schools, colleges, and other institutions 

 of-learning and the general prosperity of your country, you have 

 far greater facilities for learning Spanish than has the Mexican 

 for learning English. Moreover, you want the business, and should 

 therefore be willing to put forth the extra effort to learn the 

 language of your prospective customers. Having acquired the 

 language, the representative should be chosen quite as much for his 

 honesty and diplomacy as for his ability to get business. 



He should live among the people, adopt their modes of life 

 wherever possible, respect their opinions and eccentricities and 

 strictly observe the "live and let live" edict. Thus by giving the 

 people a fair deal and decrying the "gold brick" schemes of past 

 malefactors, the agent will gain the confidence of the people, and 

 once that is accomplished the rest is comparatively simple. 



Your representative should now be in a fair position to get the 

 business desired. Having gained the good will of the people, let 

 him be tactful and diplomatic in order to retain it. The Mexican 

 uses the metric systems of weights and measures. Therefore, let 

 the agent sell goods by the meter instead of the yard, and measure 

 produce by the liter and kilo instead of the gallon and ton. Also, 

 he should use only the Mexican money in making his sales, which 

 is a simple matter, as the Mexican peso is equivalent to your half 

 dollar. Moreover, this latter concession will be to the agent's 

 advantage, as the Mexican exchange is on a strictly gold and silver 

 basis. Hence there is no reduction on currency that may represent 

 a doubtful redeemable value in the national treasury. Moreover, 

 in buying drafts on the United States in -Mexico, there is always a 

 small percentage of advantage on the American side. 



Give Buyer What He Wants 



The agent must give his customer what he wants. Frequently he 

 will try to substitute some article of which he has an over-supply 



in place of the article selected by the customer. This is a serious 

 mistake, for the Mexican is very positive in his selections and he 

 is not easily influenced in accepting a substitute. If the agent will 

 humor his customer in these small matters, he will be amply repaid 

 by greater patronage, personal advertisement by the satisfied cus- 

 tomer, and a general reputation for honesty, amiability, and relia- 

 bility of goods. 



Another important detail under the Mexican commerce is the 

 packing of the goods. As the railways are not direct and there 

 are many changes, with consequent long holding of goods at sta- 

 tions, the shipments should be well packed to prevent damage by 

 frequent handling Nor should the freight or cost of packing be 

 charged to the customer. It is far better that the agent charge a 

 higher price for the goods to cover incidental costs of transporta- 

 tion and packing than to worry his customer with the wearisome 

 details of separate charges for cost of goods, packing, shipping and 

 delivery. 



Manner of Payment 



Assuming that the goods are now satisfactorily delivered and 

 that they correspond with the samples from which they were 

 selected, we are ready to discuss the last and most important of the 

 three principles governing the acquisition of Mexican commerce, 

 namely, the manner of payment. This is necessarily a vital issue 

 and should be handled with extreme delicacy to assure a continua- 

 tion and extension of business. Let the agent accept payment 

 partly in the gold and silver legal tender, and the balance in raw 

 materials, such as sisal hemp, mineral products, castor beans, etc., 

 for which there is a great demand in the United States. The pro- 

 portionate amounts of cash and raw materials may be arranged 

 according to mutual agreement. If a large percentage of this pay- 

 ment is to be made in cash the agent should be willing to extend 

 his client's credit for thirty, sixty or even ninety days, if he is 

 convinced of the honesty of his customer. 



In order to facilitate this there should be established in the 

 capital of each state of Mexico a complete system of banks, which 

 would have facilities for handling all the shipping documents, 

 receiving same and delivering them to the customers, only upon 

 the acceptance of the well known "letra de cambio" (note of 

 exchange), in which is stipulated the terms of payment. These 

 "letras de cambio," according to Mexican laws, are the easiest 

 and quickest way to enforce payment. The banks, once well estab- 

 lished, should thoroughly study the extension of credit to reliable 

 parties as has been done hitherto in Argentina, Brazil, Chile and 

 all other Latin-American countries by European banking houses. 

 It was always a lamentable fact to me that during all my travels 

 in South America I had not heard of one American bank that would 

 follow the system adopted by the originally European banks. 



If the agent uses fair dealing in all respects with his customer, 

 observes the laws of the country, and does not antagonize in the 

 matter of payment for goods, there is no reason why commerce 

 with Mexico should not flourish and far exceed that secured by 

 other nations. Mexico has been so exploited in former times that 

 it is not surprising she should be on the qui vive to avoid future 

 repetition of this deplorable practice. 



Commercial Exhibitions 

 To the end that our foreign commerce may be developed upon a 

 firm and practical basis which shall contribute to the prosperity of 

 both the producer and the country in general, the Secretary of the 

 Industry, Commerce; and Labor of Mexico plans to establish a series 

 of commercial exhibitions throughout the United States. These will 

 be an adjunct to the consulate in each locality, and will exhibit, 



