TRADING with NATIONAL BAN K. U-B -A TRADE MAP OF AS I A AND THE EAST INDIES Copyright 1919 by. Irving National Bank East from no Greenwich. VvV * TRADING WITH THE FAR EAST ' "... TRADING WITH THE FAR EAST ; HOW TO SELL IN THE ORIENT : POLICIES : METHODS ADVERTISING : CREDITS : FINANCING DOCUMENTS : DELIVERIES SECOND EDITION REVISED AND ENLARGED Is II 2 3 IRVING NATIONAL BANK WOOLWORTH BUILDING NEW YORK COPYRIGHT 1919, I92O IRVING NATIONAL BANK NEW YORK. INTRODUCTORY WORD THE FIRST edition of "Trading with the Far East" appeared a little more than a year ago, the United WHENStates had reached a critical in its stage history. The war had wrought great changes in our life. From a nation that had prided itself upon its independence, and, in a sense, even upon its isolation, we had emerged from the conflict bound by new ties of great economic and commercial importance. We had become world merchants. As our commerce had ex- panded, our perspective had broadened. Commercial relations had been established with markets which formerly were closed to us. American ships were familiar sights in ports where the Stars and Stripes had not been seen in half a century. The pendulum of American trade had swung to a high point. Would some supporting force, some expression of national resourcefulness, energy, enterprise, keep it there? Or, with the return of Europe to something resembling normal activity, would we fall back to our pre-war contentment in our economic self-sufficiency? In part, this question has been answered. Peace has been attained. Most of the nations have made at least a beginning in O *-3 rehabilitation. Yet, our sales to other nations in 1919 amounted to $7,922,150,600, exceeding in value those of any previous year, while our purchases from abroad totalled $3,904,406,300, also a record for all time. Our international trade is now above $110 for every man, woman and child in the United States. It is not necessary in pursuing commercial success that we follow a course of relentless, bitter trade aggression: were this the case, one great lesson of the war would go for naught. As a large creditor nation, we can afford to temper just demands with a spirit of generosity consistent with the finest ideals of our business life. Co-operation rather than competition will be our sure guide. It is our legitimate function to supply American goods wherever there is a demand for them, and to buy freely in return. In seeking fields for our trade expansion, no part of the world offers greater promise of return than the Far East. Already we have discovered that the requirements of European markets are now less in quantity than in other years and that Europe's buying power is likely to be limited for some time to come. The countries of Latin-America have proved fruitful in the past, with the pros- INTRODUCTORY WORD pect of greater rewards in store. But the Orient still is undeveloped ground, vast in natural resources, with half the population of the globe and with untold possibilities of wealth in the years to come. Trade with the Far East involves problems of magnitude. Dis- tance, strange customs, different characteristics, unfamiliar points of view, new languages and dialects these are among the features creating the background against which all commercial activity must be carried on. The machinery of business and commerce is unusual, often complicated, and the conditions and factors in market-making are constantly changing. It was to acquaint the busy manufacturer and merchant with the more outstanding among these conditions that "Trading with the Far East" was published. Now it comes forth, revised, with more recent infor- mation and a larger store of facts. In preparing the material standard sources have been drawn upon. In addition practical suggestions from prominent exporters have been incorporated, analyzing situations and outlining effective solutions. The countries and islands included are: Japan, Chosen, Formosa; the Philippine Islands; Siberia; China, Manchuria, Mongolia, Tibet, Hong Kong; French Indo-China; India, Burma, Ceylon, Afghanistan, Baluchistan; Siam; the Malay Peninsula, and the Dutch East Indies, including Java and Sumatra. The book undertakes to provide an interpretation for commercial purposes, of conditions in these countries, with a general analysis of trade opportunities and possibilities for development of the Orient's resources. In short, it endeavors to do for the Far East what has been accomplished for our neighbors to the south in "Trading with Latin-America," also published by the Irving. Together the books cover fields which offer exceptional markets, perhaps the best for American trade for years to come. One unifying idea runs through the diversified material of both volumes the idea that our foreign trade activity, now accepted as a national undertaking, must serve properly the international interests upon which so much of the happiness of nations depends. With this as a foundation, and with an opportunity to exercise in peace the national power of accomplishment so well illustrated in war, success in international commerce should be assured. IRVING NATIONAL BANK. vi CONTENTS PAGE AMERICA'S TRANS-PACIFIC MARKET . .."'.. .3 Future in the Pacific Trade seekers busy Conditions favor us Credit and financing Ship problem solved Getting market data Laws aid exporters On equal footing Value of Edge law Import trade vital Gift of war-time Trade routes changed Seek primary market Canal boon to trade In Dutch East Indies Reciprocity rules How it worked out Still room to expand Buy more: sell more In China and Japan How to create buyers Wealth is growing Co-operation the key New li -ing standards Half the world here Organization needed Price vs. sentiment Must pool resources Must work together Outlook reassuring Government support Resident Americans America in new light National background Looks beyond order American prestige. As THE ORIENTAL SEES THINGS 15 An invisible barrier The unchanging East Richest of markets An American fault Must win good will Building confidence Points of view vary One important rule No disputing tastes Analyze the market Knows what he wants Price first Eastern psychology. ORGANIZING FOR EXPORT TRADE 21 Decide export policy Two courses open Selling and credits Pricp must be right Selecting a market Two ways of selling Selling goods direct Agencies employed An export department Operate separately Good way to start The export manager Experience an asset Why vision counts Of wide information Foreign policy. SELLING GOODS IN THE FAR EAST 27 Some methods costly Many selling agencies Export combinations Time tried methods The branch house Pays in big trade A separate concern One big advantage Exclusive salesmen Balanced sales plan Need flexible policy Combination salesmen No waste of Snergy Some real advantages Makes trade possible Expense pro- rated Make trips yearly Partner vs. salesman Appointing agencies Adjusting policies Bases for dealing Protect the agent Using export houses Buy and sell abroad Aggressive merchants Com- mission houses Foreign export firms Co-ordinate agencies. CONTENTS ADVERTISING A NEW FORCE IN THE ORIENT .... 37 Blazing sales trails How Americans excel The native viewpoint Must keep at it Promotion campaigns Street show methods Careful in spending Reserve giving way Aims of advertising "Chop" is invaluable Care in selection Must plan in advance Three buying groups Class lines merge The export journal Over-seas newspapers Direct advertising Vernacular press Hard to reach people Appeal in pictures Circulars with goods Stick to the truth Care in translation. / OF IN . VALUE CATALOGUES FAR EASTERN TRADE . 44 Long range salesman Pains well repaid Care in translation Illustrations help Want exact facts How to quote prices Use metric system Must stand wear Send letter with it Mark date of issue Care in distribution. PROMOTING SALES BY CORRESPONDENCE 47 Tact an essential When to use English Give details in full Sign all letters Send a duplicate. AMERICAN SALESMEN FOR THE FAR EAST .... 49 Essential qualities The pioneer spirit Americanism an asset Heavy responsibility The German methodWhere to find him Build for permanence Needs of salesmen Travel costs vary- Latitude in routing Social obligations Trade that will last. Two HIGHWAYS TO THE ORIENT 53 Routes and seasons How to cover Japan Chosen and Siberia All roads to Shanghai Hub of Chinese trade Up Yangtze River Hong Kong is next French Indo-China Singapore and Siam Covering East Indies How to reach Manila Two visits advised Journey takes time A shorter circuit The route via Suez Covering South Asia Hotels and expenses. BANKING SERVICE IN FAR EASTERN TRADE .... 59 In touch with markets Beware of pitfalls Obtain credit data Help one another Specialized service Aiding the exporter Getting the money Negotiating drafts Obstacles to trade Commercial credits Added sales burden Confirmed credits Power to negotiate Export acceptances Emergency services Share knowledge Routine easily fixed Aid in organization Help in forwarding Simplify problems Financing imports When trade thrives Letters of credit Protect the shipper Foreign securities See business chances. CONTENTS TARIFF PROBLEMS IN THE ORIENT 68 Seek lowest rates Standards changing Rates in Orient low Pref- erential rates Protection in Japan Americans favored Chosen's new tariff China needs revenue New deal next year Many kinds of duties India's tariff raised British preference Changes frequent Information sources Rates may differ Careful descriptions. VALUE OF EXPORT COMMISSION