COMPETITIVE CONDITIONS IN SOUTH AMERICAN TRADE. 175
to place his orders with those firms unless an important price differance
 was shown.
The extensive use of British equipment and supplies on the railroads
owned by British capital has given the firms supplying it an advantage
over their competitors when it comes to bidding on contracts for the
supply of State-owned roads in various South American countries.
In many cases, although the contracts are nominally let under competitive
 conditions open to all bidders, the specifications placed in
such contracts are so framed as to favor certain foreign bidders and
exclude others. Often the contracts follow closely those of the
British-owned roads. For example, in various contracts for equipment
 on the Chilean national roads the specifications require that only
Yorkshire iron be used for certain parts, although any other iron of
equal grade would equally serve the purpose. Sometimes the contracts
 provide that the equipment must conform to certain British
standards—which in turn specify definitely that certain material of
British origin must be used.
Possibly the inclusion of some such specifications may be due to
sollusion between the writers of the specifications and the supplying
companies. The fact, however, that a large part of the operating
force on the State roads have gained their railroading experience on
the British-owned roads and are thoroughly familiar with the British
equipment and supplies has great influence on the character of the
specifications. This influence has been shown repeatedly in the
demand for American equipment in the case of various Americanbuilt
 roads on the west coast, particularly where many of the operating
 force are Americans. The investment of British capital in railroads
 has, therefore, not only the direet result of securing to the
foreign supply companies a large noncompetitive market for their
goods, but also it has given them an advantage in competing for the
business of the State-owned roads.
A German locomotive-manufacturing company known as the Borsig
 Co., has often been successful in securing contracts for equipment
 from State-owned roads in various Soutk American countries.
Various explanations were offered to account for this, inasmuch .as
the investment of German capital in railways is relatively small.
Among the reasons generally given were the aid of the German
diplomatic staff in making arrangements whereby the contract would
be awarded in return for assistance in placing State loans abroad; or
the subvention of the Borsig Co. through the Deutsche Bank, by
helping to finance the transactions and by giving an export bounty
of £400 to the Borsig Co. on every one of its locomotives that it
was able to place abroad.
Of the imports of railroad material into Argentina in 1913—including
 rolling stock and material for construction—over 80 per cent