COMPETITIVE CONDITIONS IN SOUTH AMERICAN TRADE. 171

ferred by the preferential duty. This action benefited the European
trade in those articles, particularly the British trade, which then had
and still retains an advantage over American competitors by reason
of much cheaper freight rates.
The greatest obstacle at the present time to the maintenance of
trade in American goods in South America is the lack of ships to
carry the goods already sold to South American purchasers. With
the German merchant fleet inactive, and a large portion of the
British merchant fleet withdrawn from the carrying trade between
neutral nations, the situation is acute and becoming worse. Most
stocks of imported merchandise accumulated in South American
countries before the war have been already consumed. Supplies
for current needs have to be bought in the United States, often
at prices made excessive because of the war. There is not enough
shipping available to carry the necessary current supplies to the South
American countries, even though the demand for them, curtailed by
the high prices and the exorbitant shipping rates, is much below
normal. Only a fraction of the American goods already sold can be
transported at the present time. In all classes of goods the exportation
 of which is permitted from the various European countries the
American trade is placed at a disadvantage because of its lack of carriers.
 This applies not only to goods of British origin but also to
those of all the other European countries, including some originating
in Germany which are exported through neutral countries.
Many informants, in discussing the situation, made the charge that
the interests controlling the British shipping were, under the pretext
 of military necessity, deliberately endeavoring to hamper American
 trade in South America; that they were doing this in the interest
of the future British trade, to offset, as far as possible, the present
 American advantages in being able to supply the goods. It
was charged that they were using two methods—giving much
lower rates on merchandise shipped from Great Britain than on
similar merchandise from the United States, and not allowing
enough British vessels to engage in the carrying trade between the
United States and South America. It was pointed out that on classes
of goods which it is still possible to export from Great Britain, the
American exporter has to pay freight rates from 30 to 40 per cent
higher than the British exporter pays. It was also pointed out that
British merchants can take orders and make prompt deliveries, while
it is practically impossible to secure early deliveries, or even safely
to set a date for delivery, on goods from the United States. Most
of the ships from England to the River Plate region, it was said, are
coming out partly loaded, or even in ballast, while if they were allowed
to cross to the United States and take a cargo on their trip down they
could come with full cargoes at the present abnormally high freight