CHAPTER IV.

COMPETITIVE CONDITIONS IN SOUTH AMERICAN TRADE.
SECTION 1. INTRODUCTION.

Owing to the importance which South America now has as a
market for American goods, the Commission has devoted particular
attention to the competitive conditions in the trade with these
countries. The following discussion of conditions is based both on
published data and on special investigations made by representatives
of the Commission in South America in the early part of 1916.
The salient facts regarding the conditions of trade between the
United States and the principal South American countries may be
summarized as follows:
1. The growth of American trade with South America has been and
still is greatly hampered by the lack of American shipping. By discriminating
 against American trade, both in the matter of service and
freight rates, owners of foreign vessels carrying goods between the
United States and South America have given and still give the
European shippers a marked advantage in the South American markets
 over their American competitors.
2. In certain industries the system of combinations, trade agreements,
 and export rebates enjoyed by European manufacturers is the
principal reason for their ability to sell such goods in South America
at lower prices than the American manufacturers.
3. One of the greatest obstacles to the growth of a permanent demand
 for American goods is the heavy investment of foreign capital
in the economic development of the South American countries and
the scarcity of similar American investments there. The demand for
many articles in South America is much more influenced by the
ngtionality of the capital invested there than by the prices or character
of the goods.
4. Whenever practicable the American manufacturer should establish
 a competent personal representative in each foreign market where
his own present trade or the future prospects of the market will warrant
 such a step. This is advisable to insure the proper pushing of
the sales of his goods, independent of whether he desires the distri-165
