THE CUBA REVIEW 



19 



Santa Clara, and the rapidly developing wealth of Oriente, at the far eastern end of the 

 island, there comes to Havana a flood of business which is handled by these wealthy 

 old established merchants who, curiously enough, seem little known to American manu- 

 facturers, or at least comparatively neglected by them. American drummers who visit 

 Havana apparently give scant attention to these humdrum establishments in old din^y 

 seemmgly lifeless streets, while the smaller if smarter establishments are given undue 

 attention. 



The impression has become general among manufacturers in the United States that 

 Cuban buyers invariably demand open credits, will tolerate no drafts and demand from 

 three to six months' time. This is true to a limited extent onlv. Some Havana buyers 

 still handle their American business through Xew York exporters, some have their own 

 New York offices; some want open accounts, remitting immediatelv on receipt of goods 

 or taking time, as may have been agreed upon ; some will accept anv sort of terms' that 

 may be suggested — if they can get an extra 2 per cent. In other words, the Cuban 

 market is not so very different from any other. — Mr. Hough in the American Exporter. 



The United States government has made a special study of foreign credits. The 

 matter has been compiled by Archibald J. Wolfe, Commercial Agent of the Department 

 of Commerce and Labor, and published a few months ago as Special Agents' Series 

 No. 62. From this work the following consular reports on credits in Havana and Cien- 

 fuegos are taken. 



The usual terms of credit offered in Havana by American manufacturers are 30 to 90 

 days without interest, but in some cases draft with bill of lading attached is sent, the 

 bill of lading being surrendered on acceptance of draft by the importer. There are a 

 few concerns who require cash in New York before shipment is made. 



American exporters consider credit in Cuba much more of a risk than do the European 

 exporters, and this is due in part to the difficulty of American houses in having their 

 banks finance the transactions, while on the other hand the large majority of European 

 shippers finance their own shipments, and the further fact that the European houses are 

 willing to meet what might be termed the prejudices of the Latin-American trade, which 

 the American houses are not always willing to do. 



The manufacturers of foreign nations other than American sell their goods prin- 

 cipally on consignment and against open credit. The acceptance of a time draft is 

 usually recorded before surrendering the bill of lading. As a rule, no guaranty of any 

 kind is given. 



Usually no interest is charged by the foreign manufacturer, other than American, for 

 the time over which credit extends. The rate of interest charged by local banks on loans 

 to be used by importers for payment on goods in cases where credit is not extended 

 runs from 8 to 10 per cent. 



As will be noted, there is considerable variation between the terms offered by European 

 houses and those offered by American houses, although there is very little variation in 

 this matter Ijctween European nations themselves, and practically no variation in terms 

 among firms of the .same nation in similar lines of business. 



The larger and more responsible importers of Cuba demand and usually receive longer 

 terms of credit from the foreign exporter, this being in some cases as long as 12 and 

 18 months, and it is probably a fact that consideration of longer terms of credit over- 

 balances considerations of price and quality in the mind of the importer. 



Almost invariably the Cuban merchant insists that at least credit be extended to him 

 long enough to enable him to receive the goods in his warehouse and to pass them 

 through the customs. 



In conclusion it may be stated that in order for the American exporter to get his full 

 share of this trade he should closely meet European competition in the matter of credits. 

 — United States Consul-General James L. Rodgcrs. 



The general terms of credit offered by representatives of American manufacturers in 

 Cienfuegos are 90 days net; cash, 2 per cent. 



When credit is refused it is generally because of fear of the importer's responsibility. 

 Confidential reports are generally obtained through private information by responsible 

 local merchants. 



European manufacturers generally grant 5 and 6 per cent cash discount on current 

 accounts. Whether or not the acceptance of a time draft is recorded before the surrender 

 of the bill of lading corresponding to the shipment depends on the importer's standing 

 with the shipper. No guaranty is required after credit has been granted. 



No interest is charged for the period over which credit extends: on the contrary, 

 European houses offer a discount for cash before maturity. Local banks charge from 

 8 to 10 per cent per annum, according to the standing of the mercliants, for money 

 advanced. There is no variation in terms of credit granted by exporters of various 

 nations or by houses of the same country. 



