No. 199.
Mr. Raphael M. Columbus to Mr. Fish.
Sir: In answer to a circular I received from the Department of State, dated 19th August last, requesting me to communicate any information and to make any suggestions that may tend to increase the commerce between the United States and the Spanish-American countries, I beg to submit the following remarks: The exports of Peru are cotton, wool, bark, orchilla, hides, goat-skins, sugar, silver, and guano. The most important, and by far the most wealth producing of these articles is guano, yielding an enormous revenue to the government, with very little expense. This is shipped chiefly to Europe for manuring the worn-out and exhausted lands of the old countries, while the new lands of the United States do not require that stimulant. Hides and goat-skins are nearly all sent to New York, where they are skillfully and rapidly converted into manufactured articles. Sugar is shipped to San Francisco, the vessels bringing back a return freight of lumber and flour. Cotton and wool are sent principally to England and France. The reason is very obvious; the United States produce more cotton than is required for their own manufactures, and they consequently export the balance to Europe, while England produces no cotton, but she imports and manufactures large quantities of it. Orchilla is also shipped to England, where it is in great demand on account of her cotton manufactories. Bark is sent exclusively to England, there being no demand for it in the United States. The cargo traffic from here to England, via the Isthmus, consists mainly of cotton, orchilla, and bark; and the reasons I have already adduced above may partly explain why it should seek Liverpool and London rather than New York.
England produces very little raw material, but she imports it in great quantities to be sent abroad again in manufactured goods. The United States is not only a manufacturing country, but also produces raw material in great abundance, so much so that she has a surplus to export to Europe.
The reasons why a greater quantity of European than American goods is imported into this country are various. First, an English line of steamers was early established on the coast, which had the effect of drawing to these countries numbers of English, French, and German [Page 264] merchants who directed the commerce to Europe, rather than to the United States, and who imported into these countries European wares to supply the wants of the inhabitants, thus cultivating by degrees a taste and a necessity for European manufactures. Second, the low prices of European goods, as compared with American, is another recommendation in their favor. The perfection of machinery and cheapness of labor enable European manufacturers to successfully compete with the United States, where labor is so much higher than in Europe. Third, European merchants are more thrifty, and are content with smaller profits than American merchants, which also enables them to sell their goods at lower rates. If the Isthmus Canal be constructed, the great influx of Americans in this country will tend to alter this state of things. The establishment of American commercial houses would naturally open up and widen the commercial relations between these countries and the United States.
In defect of the ship-canal I would suggest that an American line of steamers be established from San Francisco to Valparaiso, which would increase the investment of American capital on this coast, and in proportion as American firms would augment in number, and the resources of the country be developed, so would the commerce of the United States begin to preponderate, and at last to supersede that of Europe.