REPORT OF THE SECRETARY OF THE TREASURY TO THE PRESIDENT ON THE SECOND PAN AMERICAN FINANCIAL CONFERENCE AT WASHINGTON, JANU- ARY 19-24, 1920. CONVENED UNDER AUTHORITY OF PUBLIC ACT 379 OF THE SIXTY-FOURTH CONGRESS. WASHINGTON GOVERNMENT PRINTING OFFICE 1921 REPORT OF THE SECRETARY OF THE TREASURY TO THE PRESIDENT ON THE SECOND PAN AMERICAN FINANCIAL CONFERENCE AT WASHINGTON, JANU- ARY 19-24, 1920. CONVENED UNDER AUTHORITY OF PUBLIC ACT 379 OF THE SIXTY-FOURTH CONGRESS. WASHINGTON GOVERNMENT PRINTING OFFICE 1921 THE SECOND PAN AMERICAN FINANCIAL CONFERENCE. REPORT OF THE SECRETARY OF THE TREASURY TO THE PRESIDENT. SIR : Under authority of Public Act 379 of the Sixty-fourth Con- gress, 1 and by your direction, the Department of State invited the Governments of Mexico, Central and South America, and the Repub- lics of the West Indies to be represented at a Second Pan American Financial Congress to be held at Washington from the 12th to the 17th of January, 1920. All the Governments to which the invitation was sent accepted, and most of them, with a view to contribute to the fullest extent to the success of the conference, indicated their willingness to send as chairmen of their delegations their ministers of finance. Whether or not circumstances permitted the ministers of finance to absent themselves from home for the duration of the conference and the voyage to and from the United States, these eminent financial officers of government were uniformly and sin- cerely interested in the purposes of the conference, as shown by their success in setting on foot preliminary examinations of its program by representative financiers and jurists. This program, in tentative form, had been distributed among the ministers of finance in June, 1919. In the course of the next few months various suggestions were received, some from the ministers of finance and some from persons in the United States who had been consulted. These suggestions were found acceptable and incorporated in the final program, which was circulated in the late fall of 1919. The delegates named by the Governments were in nearly all cases furnished with the revised edition before their departure from their several capitals. 1 The President is authorized to extend to the Governments of Central and South America an invitation to be represented by their ministers of finance and leading bankers, not exceeding three in number in each case, to attend the Second Pan American Finan- cial Conference in the city of Washington, at. such date as shall be determined by the President, with a view to carrying on the work initiated at the First Pan American Financial Conference and establishing closer and more satisfactory financial relations between their countries and the United States of America, and authority is given to the Secretary of the Treasury to invite, in his discretion, representative citizens* of the United States to participate in the said conference, and for the purpose of meeting such actual and necessary expenses as may be incidental to the meeting of said con- ference and for the entertainment of the foreign delegates during the conference, to be expended under the direction of the Secretary of the Treasury, to be immediately avail- able and to remain available until expended, $50,000. 5 6 SECOND PAN AMERICAN FINANCIAL CONFERENCE. Owing to the irregular and altogether inadequate transportation facilities between a number of the American Republics and the United States, several delegations found it impossible to reach Wash- ington in time for the opening of the conference, and it became necessary to postpone the date of its opening one week. The pre- liminary session of the foreign delegates with the Secretary of the Treasury took place on Saturday afternoon, January 17, 1920, in the Hall of the Americas in the Pan American Union Building, and the formal inaugural session occurred in the same place on Monday, January 19. The conference closed its plenary sessions on Friday, January 23, and the official part of its program concluded with a banquet tendered to the delegations by the Secretary of the Treasury on Saturday, January 24, and with another banquet tendered to them at New York by the Pan American Society of the United States on Tuesday, January 27. The work of the conference was done, generally speaking, in much the same way as the work of the First Pan American Financial Con- ference, which took place in Washington in May, 1915. There were two general committees composed of the presiding officers of the official delegations and an appropriate number of citizens of the United States. The first of these general committees was that desig- nated to collect and examine all resolutions offered by other com- mittees of the conference directly, or by delegates to the conference in its general sessions. This committee submitted a report embody- ing 18 resolutions, which now constitute the formal and collective recommendations of the official delegations to the conference, made with the approval of the 296 United States citizens who served as committeemen and to whose help in great measure must be attributed the success of the conference. Although the time of year was hardly propitious for such a gathering, either because of the inclemency of weather or because of the pressure of business in the month of Janu- ary, these gentlemen put aside other considerations and accepted the invitation to serve in this advisory capacity. The second general committee was designated to consider all the problems of communication between the American Republics, in- cluding those relating to maritime transportation facilities, postal communications, and cable and wireless facilities. The Hon. Joshua W. Alexander, Secretary of Commerce, acted as general chairman of this committee and took a personal and constructive part in its work. A report embodying the conclusions of several subcommittees desig- nated to examine the main headings enumerated above was submitted to the conference by this committee and given its formal approval. In addition to the two general committees, there were 19 national or " group conference " committees, comprising, in each case, the re- spective official delegation and about 15 financiers, economists, engi- LETTER OF THE SECRETARY OF THE TREASURY. 7 neers, and industrial leaders of the United States who had been selected with an eye to the particular problems before the respective committees, so far as these problems were known to the Treasury Department. The presiding officers of the official delegations be- came automatically chairmen of the group conference committees; they had associated with them, as vice chairmen in some cases, the gentlemen designated by the Treasury as interim chairmen of those representing the United States upon the several commit- tees. They likewise enjoyed the enthusiastic and sustained coopera- tion of a number of the high officials of the Government, mostly within the field of public finance, but, in several notable instances, in other executive departments. It will be seen from the program of meetings of the conference that its great accomplishment was due to the conference commit- tees, which met almost continuously during the first three days of the conference. The Secretary of the Navy had been good enough to place at the disposal of the conference a number of convenient rooms suited for the accommodation of such committees in the new Navy Building. Here, in intimate association and in an atmosphere conducive to the utmost degree of frankness, the program of the conference was discussed systematically, with special reference to the financial problems of the respective countries. The general sessions of the conference were held at night, for the most part, with a view to leave the day as free as possible for the meetings of the committees. There were delivered at the general ses- sions a number of able addresses by distinguished delegates and citi- zens of the United States. To these general sessions were invited persons interested in Latin America, or in a general way in the prob- lems confronting the conference. The conference was a gathering primarily for intensive labor with less time or taste for formality on the one hand, or diversion on the other, than is sometimes the case in international gatherings. Never- theless, private hospitality found numerous opportunities for ex- pression during the week of the conference, while the deference of the Government to its guests was significantly demonstrated in the recep- tion tendered by the Secretary of State and Mrs. Lansing on Wednes- day, January 21 ; by the luncheon to the delegates on Saturday, Janu- ary 17 ; and to the delegations and conference committeemen on Mon- day, January 19, by the Secretary of the Treasury in the first in- stance and by the Federal Reserve Board and United States section of the International High Commission in the second instance; and finally, by the banquet with which the conference closed its meetings in Washington. The Secretary of the Navy again added greatly to the enjoyment by the official delegations of their sojourn in this country by his generous invitation to them to be the guests of the 8 SECOND PAN AMERICAN FINANCIAL CONFERENCE. Navy at Annapolis on Saturday, January 24. A number of the dele- gates and members of their families took occasion of early arrival in Washington to avail themselves of an invitation to visit Mount Vernon and seek inspiration at the tomb of the foremost figure of our War for Independence, whose name acquires an ever greater influence throughout the nations of this hemisphere. The secretary-general of the conference, in accordance with the plan approved by my predecessor, Mr. Secretary Glass, has gathered in convenient form its records, including the proceedings of the sessions, the addresses, the reports of committees, and the lists of persons in attendance. I wish, in submitting for your examination a summary of this material, to call attention to three considerations which I regard of paramount importance. The purpose of this conference was, in substance, the same as the purpose of the First Financial Conference in 1915. The Government of the United States felt that the responsible financial officers of the several American Republics had much in common in facing the serious problems arising from the adjustment of war conditions, that they would best serve the interests of all the Governments by entering into a full and free discussion of methods of solving these problems. The first conference was called amid the impressions, still vivid and even painful, of the initial paralysis of international communications, commerce, and finance in the winter of 1914-15. It was necessary to take stock of the resources of the American hemisphere and of the equipment for their development and enjoyment. Four years of war passed. A number of the American Republics were drawn into the struggle, and, stopping at no sacrifice, brought it to a decisive end. The American Republics felt its effect with varying degrees of directness and distress, but no one of them escaped a serious measure of economic loss. They had naturally relied upon the financial assistance of the Old World in the development of their natural resources, while they had welcomed the immigrant who chose to leave the Old World and seek his fortune in the New. The war put an end nearly everywhere to the flow of capital and labor required not merely to promote the development, but often to assure the sound- ness of Latin- American commerce and industry. The effect of four years of abnormal economic life, of industrial undernourishment, of apprehension, of insecurity made the situation confronting the peoples of Central and South America at the close of the conflict even more grave than it had been in 1915. The development of sufficient resources in Europe to renew the arrested development in South and Central America could not safely be counted upon for the present. It was, therefore, not merely expedient, but urgent, that the effort be made by the American Governments to survey the situation and to LETTER OF THE SECRETARY OF THE TREASURY. 9 take such joint or several measures as would best promote their indi- vidual and common interests. The conference of 1915 came when it did because of the war ; but there is good reason to believe that abundant cause for holding such a meeting would have been apparent before long, even if the great conflict had been happily averted. The developments between 1915 and 1920 strengthened the conviction that these conferences have ful- filled a natural and quite definite purpose. It is, of course, to be clearly understood that in inviting eminent business men of the United States to join the Secretary of the Treasury in conferring with the ministers of finance and other official delegates from Mex- ico, Central and South America and the West Indies, our Govern- ment had no intention of taking^ a formal and responsible part in any program of investment and financial development of the other countries. The purpose was to reinforce the conclusions of the personal con- ferences between the official representatives of the American Repub- lics with the mature opinions of citizens of this country whose tech- nical knowledge, training in public finance, or experience, warranted close attention to their views. Out of such first-hand examination of the financial problems of the several countries, it was not unreasonably expected that there would develop among the members of the group committees an abiding and constructive interest in the respective countries with which they were concerned. From the foregoing statement the fundamental reasons for calling the First and then the Second Pan American Financial Conference should be clear. The stimulus of good relations which such gather- ings can not but afford would alone have justified their convocation, were it for nothing more than the economic advantages in due course flowing from them. But something larger and more significant was involved, and will be involved in other conferences, if the Congress shall from time to time authorize their taking place. Our bankers and those seeking to build markets for export trade are certain to join more and more actively in defining and supporting this policy; and as a consequence, the collection and diffusion of accurate in- formation among our people will be taken up with redoubled energy by the various agencies devoted to the development of closer rela- tions cultural, economic, or official between the free nations of this hemisphere. The outlay on the part of the Government of energy, time, and funds, would be trifling, regardless of the number of conferences which might be held, if the fact became clearly recog- nized by the people of the United States, (1) that the other Ameri- can Republics are likely to become more and more important markets in which to sell the things we produce and to buy the things we 10 SECOND PAN AMERICAN FINANCIAL CONFERENCE. need, and (2) that in order that we may be certain to enjoy our opportunities as buyers or sellers in those countries, we shall have to encourage their financial and industrial expansion as best we may by investment and other appropriate means. The paramount consideration of the importance of Latin Amer- ica as an investment field and as a commercial market for the United States has two corollary aspects to which, in closing, I wish briefly to advert. The transportation facilities between the other coun- tries and the United States have never been what they should have been, largely because the economic demand for them was never pressing. Europe enjoyed, and even yet enjoys, better facilities than the United States in all branches of communication with the greater part of Latin America. Whether as to postal facilities or those of telegraph and radio communication, it is imperative that, for commercial reasons if for no other, measures be taken to provide for the independence of our facilities of all other interests. As to the lack of maritime transportation facilities, so much evi- dence some of it of a costly character has been accumulated dur- ing the last few years that it is only necessary here to call atten- tion to the repeated emphasis laid by the conference upon an im- provement in this regard as the first essential in promoting our re- lations with Central and South America throughout the entire con- ference. Hardly a committee report fails to urge that steps be taken with the least possible delay to correct the uncertainties and insufficiencies of the present service. The rehabilitation and ex- tension of land transportation facilities, whether by rail or other- wise, is hardly less strongly stressed as a prerequisite of the open- ing up of new resources and a better development of those to which access is already possible. The second corollary to the importance of closer financial rela- tions between the Republics is to be found in the approval with which the conference regarded the work of the Inter- American High Com- mission. The first conference saw the need of a continuing body of persons eminent in their respective callings and acquainted with the national problems of the various Republics, which would undertake seriously to carry out its own recommendations. Hitherto no special agency had been set up to give effect in a practical way to the recom- mendations of intermittent international conferences. It was thought that a group of financiers and jurists in each country, closely in contact with the minister of finance and engaged in con- stant correspondence with the other sections and with some central directive body, could gradually bring to an advanced stage and, in due course, to realization the chief points enumerated by that first conference as demanding international cooperation. The organiza- LETTEE OF THE SECRETARY OF THE TREASURY. 11 tion was set up, and at an important meeting in Buenos Aires, it worked out a procedure by which it proposed to accomplish the things for which it was established. The vice chairman of the com- mission laid before the conference on January 20 a record of its achievement since the meeting at Buenos Aires, and, in accordance with his recommendation, in order better to indicate the constituency and significance of the commission, its name was changed from " International High Commission " to " Inter-American High Com- mission." New matters were intrusted to its study and it was given encouragement to pursue its activity with reference to those things it had taken up under the instruction of the first conference. It was unmistakably apparent that at least one successful method had been found for international cooperation in an effective way in technical matters within the province of fiscal administration, commercial law, and public finance. The setting upon a new and broader basis of this agency in all the Republics seems sure and can not but serve to remove obstacles in the way of ever closer and stronger financial and commercial relations. Respectfully, D. F. HOUSTON, Secretary. THE PRESIDENT, The White House. REPORT OF THE SECRETARY-GENERAL. JANUARY 23, 1920. The honorable the SECRETARY OF THE TREASURY. SIR : I have the honor to report to you that the Second Pan Amer- ican Financial Conference has this day completed its survey of the topics submitted for its consideration. There have been in attend- ance 53 delegates from 19 of the American Republics, whose diplo- matic representatives at Washington have likewise been the guests of the Secretary of the Treasury, together with 283 gentlemen repre- sentative of the financial and industrial communities of the United States whom the Secretary of the Treasury invited to join him in conferring with the official delegates. The deliberations of the con- ference have been carried out in five general sessions, in each of which formal papers were submitted, followed by informal discus- sion. Twenty-one committees have reviewed the agenda of the conference over a period of three days. Of these, nineteen were conference committees, each taking up the topics agreed upon with particular reference to one of the republics represented in the con- ference. Two of these committees were general in character. One dealt with problems of communication, including ocean and land transportation, and postal, cable, and radio telegraphic communica- tions. This was necessarily the case in view of the international character of these topics. Finally, the committee on resolutions has brought together all the conclusions of a concrete character submitted to the conference and formulated those upon which it has seemed appropriate that the conference should consider a formal expression of opinion. The conclusions of the conference will be communicated to the several participating governments, to the sections of the Inter- American High Commission, arid to others directly or indirectly interested therein. I have the honor to state that no further business requires the attention of the conference. Respectfully^ L. S. ROWE, Secretary -General. 12 RESOLUTIONS ADOPTED BY THE CONFERENCE, JANU- ARY 23, 1920. I. Resolved, That, with a view more definitely to indicate the con- stituency and sphere of work of the International High Commission, the title of that body shall hereafter be " the Inter- American High Commission." II. Resolved, That the conference adopts that part of the report of the Committee on Transportation and Communication relating to maritime transportation and directs its transmission to the United States Shipping Board for consideration and action, and that, so far as concerns the subjects of railroad transportation, postal facili- ties, uniformity of bills of lading, and wireless, cable, and telegraph communication the report be transmitted to the Inter- American High Commission for suitable action. III. Whereas banks, both National and State, in the United States have established branches in various Latin American countries; and Whereas restrictions exist under the laws of various States of the United States which in effect prevent the operation of branches of foreign banks within their jurisdiction : Therefore we recommend that the legislation in such States be so modified as to permit the establishment of branches of banks of Latin American countries, under proper regulations, so as to secure equality of treatment. IV. Resolved, That the Inter- American High Commission be re- quested to study the question of the possibility of achieving uni- formity and relative equality in the laws and regulations governing the organization of corporations and the treatment of foreign cor- porations in the various American Republics. V. Resolved, That the conference recommends the increased use of acceptances for the purpose of financial transactions involving the importation and exportation of goods and hopes that, with the passing of the period of readjustment in which nations are now en- gaged, the United States will offer a constantly widening market for the long-term securities of American countries. VI. Resolved, That the Inter- American High Commission be re- quested to continue its efforts to bring about the adoption of the plan recommended at Buenos Aires in 1916 for the establishment of an International Gold Fund, such plan having already been em- bodied in a convention which has been adopted by several of the American Republics. 13 14 SECOND PAN AMERICAN FINANCIAL CONFERENCE. VII. Resolved, That steps having heretofore been taken to bring about the adoption by the American countries of a uniform law in regard to bills of exchange, the conference requests the Inter- Amer- ican High Commission to bring to the notice of the American Gov- ernments the desirability of adopting a uniform law on the subject of checks. VIII. Resolved, That, in view of the increase and diversification of taxes in the various American countries, the Inter- American High Commission be asked to study the question of the best method of avoiding the simultaneous double taxation of individuals and cor- porations as between such countries. IX. Whereas the International Bureau, at Habana, for the regis- tration of trade-marks, as provided in the convention adopted by the Fourth International American Conference at Buenos Aires in 1910, has been opened and is in successful operation ; Resolved, That the conference recommends the early ratification of that convention by all the American countries that have not so far ratified it, to the end that its provisions may be effective throughout the Americas. Meanwhile, it is suggested that, pending the establishment of the International Bureau at Rio de Janeiro, consideration be given to the use of the Habana bureau by countries of the south- ern group that have ratified the convention. X. Resolved, That the conference recommends the early ratifica- tion by the American Republics, so far as they have not already rati- fied it, of the convention adopted by the International American Conference at Buenos Aires, in 1910, concerning patents and copy- rights. XI. Resolved, That the conference recommends that the Webb Law be so amended as to permit American companies importing or dealing in raw materials produced abroad to form, under proper govern- mental regulations, organizations to enable such companies to com- pete on terms of equality with companies of other countries associated for the conduct of such business. XII. Resolved, That the conference recognizes the value of the services of commercial attaches and strongly urges a substantial extension of the system. In making this recommendation, the conference intends to ex- press its sense of the importance of appropriate training, lin- guistic and otherwise, for all branches of the foreign service, as a means of developing and facilitating commercial and financial relations. XIII. Resolved, That a simultaneous census should be taken in all the American countries at regular intervals not exceeding 10 years, RESOLUTIONS OF THE CONFERENCE. 15 in harmony with the system prevailing in the United States, and that uniformity should be observed in the preparation of statistical works. XIV. Resolved, That the conference recommends that the metric system of weights and measures be universally employed, and that pending the attainment of that end articles weighed and marked, and shipping documents prepared, according to the system of weights and measures now prevailing in the United States, should be accompanied with statements giving the equivalents under the metric system. XV. Resolved. That the plan of arbitration of commercial disputes put into effect between the Bolsa de Gomercio of Buenos Aires and the United States Chamber of Commerce, and since adopted by the chambers of commerce of several other American countries, should be extended to all the American countries, and that legislation should be adopted wherever it is now lacking for the purpose of incorporat- ing the arbitral settlement of commercial disputes into the judicial system, to be carried out under the supervision of the courts. XVI. Resolved, That the Inter- American High Commission be re- quested to study the question of the creation of an inter- American tribunal for the adjustment of questions of a commercial or financial nature involving two or more American countries, and the deter- mination of such questions on principles of law and equity. XVII. Resolved, That, it being in the interest of all nations that there should be the widest possible distribution of raw materials, the importation of such materials into any country should not be pre- vented by prohibitive duties. XVIII. Resolved, That it is recommended that the banking inter- ests of the United States study the possibility of financial relief to Europe by repaying Latin- American obligations held in Europe by means of new loans granted in the United States to the respective Latin- American countries. RESERVATIONS TO RESOLUTIONS. II. TRANSPORTATION. The Bolivian delegation in approving the second resolution of the Conference, makes the reservation that the Inter-American High Commission, when studying the subject of land transportation, shall take into consideration the Bolivian propositon, which reads as follows : In order that the Pan-American Railroad may be enabled to fulfill the high ideals which inspired its execution, and furnish overland connection between all the countries of the Americas, we propose that a transverse line, crossing South America from 16 SECOND PAN AMERICAN FINANCIAL CONFERENCE. east to west, shall be considered as an integral part of that same railroad, and that for this purpose the lines already constructed may be utilized so far as possible. J. L. TEJADA. The Brazilian delegation desires to make a reservation in similar terms. SAMPAIO. VI. INTERNATIONAL GOLD CLEARANCE FUND. The Venezuelan delegation fails to approve the recommendation for an international gold clearance fund, because Venezuela needs more specie than she now possesses for her increased business activi- ties, which should be stimulated for the public good, and also because it is desirable to maintain a financial balance. Venezuela can not accept the draft or resolution for the present. V. LECUNA. VIII. DOUBLE TAXATION. Venezuela agrees to a single system of taxation of individuals and corporations, provided the country wherein the taxable properties are located determines the kind and fixes the rate of taxation. V. LECUNA. XI. THE WEBB LAW. The Venezuelan delegation fails to approve the recommendation relative to the Webb law, because it considers that the United States is the country to pass on that subject. V. LECUNA. XVII. RAW MATERIALS. Venezuela considers that each country should retain its liberty to protect its national production, where it is desirable so to do. V. LECUNA. The words "Minerals and foodstuffs" ought to be incorporated, making the resolution cover "raw materials, minerals, and food- stuffs." SAMPAIO. LIST OF OFFICERS OF THE CONFERENCE. PRESIDING OFFICER. THE SECRETARY or THE TREASURY OF THE UNITED STATES. HONORARY PRESIDENTS. MINISTER OF FINANCE OF ARGENTINA. MINISTER OF FINANCE OF BOLIVIA. MINISTER OF FINANCE OF BRAZIL. MINISTER OF FINANCE OF CHILE. MINISTER OF FINANCE OF COLOMBIA. MINISTER OF FINANCE OF CUBA. MINISTER OF FINANCE OF DOMINICAN REPUBLIC. MINISTER OF FINANCE OF ECUADOR. MINISTER OF FINANCE OF GUATEMALA. MINISTER OF FINANCE OF HAITI. MINISTER OF FINANCE OF HONDURAS. MINISTER OF FINANCE OF MEXICO. MINISTER OF FINANCE OF NICARAGUA. MINISTER OF FINANCE OF PANAMA. MINISTER OF FINANCE OF PARAGUAY. MINISTER OF FINANCE OF PERU. MINISTER OF FINANCE OF EL SALVADOR. MINISTER OF FINANCE OF URUGUAY. MINISTER OF FINANCE OF VENEZUELA . 1497021 2 17 VICE PRESIDENTS. SENOR DR. DOMINGO E. SALABERRY, Chairman, Delegation of Ar- gentina. SENOR DR. JOSE Luis TEJADA, Chairman, Delegation of Bolivia. SENHOR DR. CARLOS CESAR DE OLIVEIRA SAMPAIO, Chairman, Delega- tion of Brazil. SENOR DR. Luis IZQUIERDO, Chairman, Delegation of Chile. SENOR DR. POMPONIO GUZMAN, Chairman, Delegation of Colombia. SENOR DR. CARLOS MANUEL DE CESPEDES, Chairman, Delegation of Cuba. SENOR DR. Luis GALVAN, Chairman, Delegation of the Dominican Re- public. SENOR DR. EAFAEL H. ELIZALDE, Chairman, Delegation of Ecuador. SENOR DR. Luis TOLEDO HERRARTE, Chairman, Delegation of Guate- mala. M. FLEURY FEQUIERE, Chairman, Delegation of Haiti. GEN. JUAN E. PAREDES, Chairman, Delegation of Honduras. SENOR ING. YGNACIO BONILLAS, Chairman, Delegation of Mexico. SENOR DR. OCTAVIANO CESAR, Chairman, Delegation of Nicaragua. SENOR DR. JOSE AUGUSTIN ARANGO, Chairman, Delegation of Panama. SENOR DR. EUSEBIO AYALA, Chairman, Delegation of Paraguay. SENOR DR. FERNANDO C. FUCHS, Chairman, Delegation of Peru. SENOR DR. JOSE ESPERANZA SUAY, Chairman, Delegation of El Sal- vador. SENOR DR. RICARDO VECINO, Chairman, Delegation of Uruguay. SENOR DR. VICENTE LECUNA, Chairman, Delegation of Venezuela. SECRETARY GENERAL. L. S. ROWE. ASSISTANT SECRETARIES GENERAL. C. E. McGuiRE. G. A. SHERWELL. SPECIAL ASSISTANTS. BRANCH, H. N. MURRAY, J. H. CORLISS, J. C. OVALLE, J. Q. ENGLE, M. L. PARKER, J. BROOKS B. KIZER, E. D. RICKARD, J. D. LuiTWEILER, J. C. RlNGE, H. R. MCPHERSON, C. R. THIESING, T. H. 18 LIST OF OFFICIAL DELEGATIONS, SPECIAL GUESTS OF THE SECRETARY OF THE TREASURY, SPECIAL REP- RESENTATIVES OF THE SECRETARY OF THE TREAS- URY, AND MEMBERS OF THE COMMITTEES. 1 SPECIAL GUESTS OF THE SECRETARY OF THE TREASURY. His Excellency the AMBASSADOR OF ARGENTINA. His Excellency the AMBASSADOR OF BRAZIL. His Excellency the AMBASSADOR OF CHILE. His Excellency the AMBASSADOR OF MEXICO. His Excellency the AMBASSADOR OF PERU. The MINISTER OF BOLIVIA. The MINISTER OF COLOMBIA. The MINISTER OF CUBA. The MINISTER OF THE DOMINICAN REPUBLIC. The MINISTER OF ECUADOR. The MINISTER OF GUATEMALA. The MINISTER OF HAITI. The MINISTER OF HONDURAS. The MINISTER OF NICARAGUA. The MINISTER OF PANAMA. The MINISTER OF PARAGUAY. The MINISTER OF EL SALVADOR. The MINISTER OF URUGUAY. The MINISTER OF VENEZUELA. 1 The Hon. John Barrett, Director General of the Pan American Union, was invited by the Secretary of the Treasury to serve as a member of all the group committees, 19 COMMITTEE ON RESOLUTIONS. JOHN BASSETT MOORE, of New York, Chairman. Domingo E. Salaberry, Argentina. Jose" Luis Tejada, Bolivia. Carlos C6sar de Oliveira Sampaio, Brazil. Luis Izquierdo, Chile. Pomponio Guzman, Colombia. Carlos Manuel de Ce*spedes, Cuba. Luis Galvan, Dominican Republic. Rafael H. Elizalde, Ecuador. Luis Toledo Herrarte, Guatemala. Fleury Fequiere, Haiti. Juan E. Paredes, Honduras. Ygnacio Bonillas, Mexico. Octaviano C6sar, Nicaragua. Jose" Agustfn Arango, Panama. Eusebio Ayala, Paraguay. Fernando C. Fuchs, Peru. Jose 1 Esperanza Suay, Salvador. Ricardo Vecino, Uruguay. Vicente Lecuna, Venezuela. John Barrett, of the District of Colum- bia. Franklin Q. Brown, of New York. Frederick A. Delano, of the District of Columbia. John H. Fahey, of Massachusetts. Charles S. Hamlin, of the District of Columbia. Archibald Kains, of New York. Eugene Meyer, Jr., of New York. Andrew J. Peters, of Massachusetts. W. S. Rowe, of Ohio. Frank A. Vanderlip, of New York. Paul M. Warburg, of New York. THEODORE H. THIESING, of New York, Secretary. COMMITTEE ON TRANSPORTATION AND COMMUNICATIONS. JOSHUA W. ALEXANDER, of Missouri, Chairman. Ricardo C. Aldao, Argentina. Ricardo Martinez Vargas, Bolivia. Carlos Csar de Oliveira Sampaio, Brazil. Alberto Edwards, Chile. Tomas Surf Salcedo, Colombia. Luis Gonzalez de Mendoza y Freyre de Andrade, Cuba. Arthur B. Mayo, Dominican Republic. Luis Felipe Borja, Ecuador. Manual Echeverrfa y Vidaurre, Guate- mala. Horace Etheart, Haiti. Ignacio Agurcia, Honduras. Bartolome 1 Carbajal y Rosas. Mexico. Adolfo Cardenas, Nicaragua. Luis E. Alfaro, Panama. Rodney Croskey, Paraguay. Pedro DAvalos y Lisson, Peru. Reyes Arrieta Rossi, Salvador. Florencio AragOn y Etchart, Uruguay. Enrique Perez Dupuy, Venezuela. Admiral W. H. G. Bullard, U. S. N. Ira A. Campbell, of New York. E. T. Chamberlain, of the District of Columbia. Hendon Chubb, of New York. A. H. Dick, of New York. James A. Farrell, of New York. Herbert Fleishhacker, of California. J. P. Grace, of New York. Walker D. Hines, of New York. E. N. Hurley, of Illinois. Julius G. Lay, of the District of Co- lumbia. W. G. McAdoo, of New York. Alfred E. Marling, of New York. Frank C. Munson, of New York. Walter Parker, of Louisiana. C. M. Pepper, of New York. T. C. Powell, of the District of Colum- bia. Admiral H. H. Rousseau, U. S. N. J. J. Shirley, of New York. Raymond B. Stevens, of New Hamp- shire. Edwin F. Sweet, of Michigan. 20 JAMES C. CORLISS, of Massachusetts, Secretary. ARGENTINA. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY, DR. DOMINGO E. SALABERRY, MINISTER or FINANCE or THE ARGENTINE REPUBLIC. DR. RICARDO C. ALDAO. MR. LUIS E. ZUBERBUHLER. Secretariat. MR. ALEJANDRO E. BTJNGE, Technical Adviser. DR. PEDRO PALACIOS, Secretary. MR. EDUARDO OCANTOS, MR. JACOBO WAISHMAN, MR. FERNANDO SAGTUIER, JR., LIEUT. A. PARKER. Special Guest of the Secretary of the Treasury. His EXCELLENCY THE AMBASSADOR or THE ARGENTINE REPUBLIC AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. W. P. G. HARDING, GOVERNOR OF THE FEDERAL RESERVE BOARD. % United States Members of the Group Committee. Frank A. Vanderlip, of New York, Chairman. Charles H. Bentley, of California. H. E. Byram, of Illinois. Hendon Chubb, of New York. F. Abbott Goodhue, of Massachusetts. E. N. Hurley, of Illinois. Ira N. Hollis, of Massachusetts. Archibald Kains, of New York. Edward Dudley Kenna, of New York. Marc M. Michael, of New York. Frank C. Munson, of New York. Walter Parker, of Louisiana. Andrew J. Peters, of Massachusetts. E. R. A. Seligman, of New York. Henry L. Janes, of New York, Secretary. BOLIVIA. CONFERENCE COMMITTEE. Official Delegation. DR. JOSE Luis TEJADA S. DR. HERIBERTO GUTIERREZ. DR. RICARDO MARTINEZ VARGAS. Secretariat. MB. ALBEBTO CORTADELLAS, First Secretary. MB. JOBGE GUTIERREZ, Secretary. MB. EDUABDO RIVAS, Secretary. MR. JORGE DELGADO, Commercial Attached Special Guest of the Secretary of the Treasury. THE .MINISTER OF BOLIVIA AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. WALTER W. WARWICK, COMPTROLLER or THE TREASURY. United States Members of the Group Committee.. Joseph P. Grace, of New York, Chairman. Arthur L. Church, of Pennsylvania. J. Rogers Flannery, of Pennsylvania. Harry F. Guggenheim, of New York. Arthur M. Harris, of New York. John Hughes, of New York. Harrison C. Lewis, of New York. Charles M. Pepper, of New York. G. C. Poole, of New York. Calvin W. Rice, of New York. George H. Richards, of New York. Henry C. Ulen, of New York. Charles Lyon Chandler, of Pennsylvania, Secretary. BRAZIL. CONFERENCE COMMITTEE. Official Delegation. DR. CARLOS CESAR DE OLIVEIRA SAMPAIO. DB. MANGEL COELHO RODBIGUES, Legal Adviser and Secretary. Special Guest of the Secretary of the Treasury. His EXCELLENCY THE AMBASSADOR OF BRAZIL AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. ALBERT STRAUSS, VICE GOVERNOR OF THE FEDERAL RESERVE BOARD. United States Members of the Group Committee. Oscar T. Crosby, of Virginia, Chairman. Chandler P. Anderson, of the District of Columbia. Joseph H. Bagley, of New York. William S. Culbertson, of Kansas. Henry S. Dennison, of Massachusetts. A. H. Dick, of New York. W. Cameron Forbes, of Massachusetts. Edward S. Huxley, of New York. W. S. Kies, of New York. Frederico Lage, of New York. F. A. Molitor, of New York. A. S. Peabody, of Illinois. William E. Peck, of New York. V. H. Pinckney, of California. Gerard Swope, of New York. Theodore F. Whitmarsh, of New York. Percy A. Martin, of California, Secretary. 23 CHIL*. CONFERENCE COMMITTEE. Official Delegation. DR. LUIS IzQUIERDO. DR. SAMUEL CLARO. DR. ALBERTO EDWARDS. DR. VICTOR V. EOBLES. DE. AETUBO LAMAECA BELLO, Secretary. Special Guest of the Secretary of the Treasury. His EXCELLENCY THE AMBASSADOR or CHILE AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. EDWIN F. SWEET, ASSISTANT SECRETARY or COMMERCE. United States Members of the Group Committee. Paul M. Warburg, of New York, Chairman. Spruille Braden, of New York. Laurie R. Cofer, of California. Edward P. Costigan, of Colorado. Daniel A. de Menocal, of Massachusetts. C. H. Ewing, of Pennsylvania. Andrew Fletcher, of New York. John Hays Hammond, of the District of Columbia. N. B. Kelly, of Pennsylvania. F. I. Kent, of New York. J. C. McKinley, of West Virginia. M. A. Oudin of New York. J. Luis Schaefer, of New York. A. H. Titus, of New York. Pope Yeatman, of New York. Verne Leroy Havens, of New York, Secretary. 24 COLOMBIA. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY, DK. POMPONIO GUZMAN, MINISTER OF FINANCE or COLOMBIA. DR. TOMAS SURI SALCEDO. MR. EBNESTO CoRTfssoz, Attach^. Special Guest of the Secretary of the Treasury. THE MINISTER OF COLOMBIA AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. CHARLES S. HAMLIN, OF THE FEDERAL RESERVE BOARD. United States Members of the Group Committee. Wallace D. Simmons, of Missouri, Chairman. Joseph G. Brown, of North Carolina. Maurice Coster, of New York. E. A. deLima, of New York. F. C. Dillard, of Texas. John Henry Hammond, of New York. George H. Kretz, of New York. F. Lavis, of New York. J. Ruperti, of New York. L. K. Salsbury, of Tennessee. James Brown Scott, of Maryland. W. R. Shepherd, of New York. George M. Shriver, of Maryland. R. Lancaster Williams, of Maryland. William E. Dunn, of New York, Secretary. 26 CUBA. CONFERENCE COMMITTEE. Official delegation. DR. CARLOS MANUEL DE CESPEDES, MINISTER or CUBA AT WASHINGTON. MR. Luis GONZALEZ DE MENDOZA Y FREYRE DE ANDRADE. CORONEL MANUEL DESPAIGNE. MB. POBFOBIO BONET, Secretary. Special representative of the Secretary of the Treasury. HON. ANGUS MOL/EAN, DIRECTOR or THE WAR FINANCE CORPORATION. United States members of the Group Committee. Milton C. Elliott, of the District of Columbia. Acting Chairman. Phanor J. Eder, of New York. Philip W. Henry, of New York. Charles D. Makepeace, of New York. E. M. Patterson, of Pennsylvania. C. A. Phillips, of New Hampshire. Levi L. Rue, of Pennsylvania. Frederick Strauss, of New York. Albert E. Tate, of North Carolina. G. C. Taylor, of New York. Henry B. Wilcox, of Maryland. William H. Woodin, of New York. Robert E. Griffith, of the District of Columbia, Secretary. 26 DOMINICAN REPUBLIC. CONFERENCE COMMITTEE. Official delegation. DR. Luis GALVAN, MINISTER OF THE DOMINICAN REPUBLIC AT WASHINGTON. Lieut. Commander Arthur B. Mayo, United States Navy, technical delegate. Special representative of the Secretary of the Treasury. HON. NORMAN H. DAVIS, ASSISTANT SECRETARY OF THE TREASURY. United States members of the Group Committee. Charles J. Rhoads, of Pennsylvania. Chairman. W. D. Anderson, of Pennsylvania. A. F. Dawson, of Iowa. F. R. Fairchild, of Connecticut. Paul Fuller, Jr., of New York. George D. Graves, of New York. Chauncey H. Hand, Jr., of New York. J. T. Holdsworth, of Pennsylvania. Frank J. R, Mitchell, of New York. Joseph H. O'Neil, of Massachusetts. Morris K. Parker, of New York. Charles T. Plunkett, of Massachusetts. A. Gonzalez Lamas, of New York, Secretary. 27 ECUADOR. CONFERENCE COMMITTEE. Official Delegation. DR. RAFAEL H. ELJZALDE, MINISTER OF ECUADOR AT WASHINGTON. DR. Luis FELIPE BORJA. MR. GUSTAVO R. DE YCAZA. /Special Representative of the Secretary of the Treasury. HON. HENRY A. MOEHLENPAH, MEMBER OF THE FEDERAL RESERVE BOARD. United States Members of the Group Committee. E. M. Herr, of Pennsylvania, Chairman. E. M. Borchard, of Connecticut. Harry L. Brown, of Massachusetts. O. K. Davis, of New York. Fred W. Ellsworth, of Louisiana. Herbert Fleishhacker, of California. Clifford D. Ham, of New York. Robert O. Hayward, of New York. George de B. Keim, of Pennsylvania. Walter H. Lipe, of New York. Benoni Lockwood, of New York. Howard A. Loeb, of Pennsylvania. John McHugh, of New York. George H. Prince, of Minnesota. J. W. Stoll, of Kentucky. Walter M. Van Deusen, of New York. Thomas F. Woodlock, of New York. George T. Weitzel, of the District of Columbia, Secretary. 28 GUATEMALA. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY, DR. Luis TOLEDO HERRARTE, MINISTER or FOREIGN AFFAIRS OF GUATEMALA. DR. MANUEL ECHEVERRIA Y VIDAURRE. DR. VIRGILIO RODRIGUEZ BETETA. Special Guest of the Secretary of the Treasury. THE MINISTER OF GUATEMALA AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. THOMAS WALKER PAGE, VICE CHAIRMAN OF THE UNITED STATES TARIFF COMMISSION. United States Members of the Group Committee. John Clausen, of Washington, Chairman. A. G. Bates, of New York. A. C. Burrage, of Massachusetts. L. A. Coolidge, of Massachusetts. F. A. Delano, of Illinois. John L. Dickey, of West Virginia. A. B. Farquhar, of Pennsylvania. William Fisher, of California. Samuel Gompers, of the District of Columbia. Roy H. Griffin, of New York. Frank K. Houston, of Missouri. E. W. Kemmerer, of New Jersey. A. C. Robinson, of Pennsylvania. George S. Wright, of Massachusetts. D. G. Munro, of New Jersey, Secretary. 29 HAITI. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY, M. FLEURY FEQTJIERE, MINISTER OF FINANCE OF HAITI. M. HORACE ETHEART. M. FERNAND DENNIS. Special Guest of the Secretary of the Treasury. THE MINISTER OF HAITI AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. D. C. BIGGS, GOVERNOR OF THE FEDERAL RESERVE BANK or ST. Louis. United States Members of the Group Committee. Edward Hidden, of Missouri, Chairman. Charles J. Andre, of Minnesota. L. R. Browne, of New York. Paul W. Chapman, of New York. J. W. Esmond, of Illinois. M. B. Lane, of Georgia. E. S. Lee, of Kentucky. Will E. Morris, of California. G. A. O'Reilly, of New York. Joseph E. Otis, of Illinois. Gustave Scholle, of the District of Columbia. T. Stebbins, of New York. Arthur H. Wood, of New Jersey. Julius Goebel, Jr., of Illinois, Secretary. 30 HONDURAS. CONFERENCE COMMITTEE. Official Delegation. GENERAL JUAN E. PAREDES. DR. ANTONIO LOPEZ VILLA. DR. IGNACIO AGURCIA! Special Guest of the Secretary of the Treasury. THE MINISTER OF HONDURAS AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. J. U. CALKINS, GOVERNOR OF THE FEDERAL RESERVE BANK OF SAN FRANCISCO. United States Members of the Group Committee. John W. Thomas, of Illinois, Chairman. M. F. Backus, of Washington. James M. Barker, of Massachusetts. Charles J. Brand, of Pennsylvania. H. K. Brooks, of New York. Victor M. Cutter, of Massachusetts. E. H. Darville, of New York. Charles de la Vasselais, of Louisiana. C. T. Owens, of Alabama. John S. Rossell, of Delaware. Samuel Sachs, of New York. C. E. W. Smith, of New York. Thomas D. Mott, of Indiana, Secretary. 31 MEXICO. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY, YGNACIO BONILLAS, AMBASSADOR OF MEXICO AI WASHINGTON. DR. ENRIQUE MARTINEZ SOBRAL. DR. BARTOLOME CARBAJAL y ROSAS. Secretariat. DR. SALVADOR URBINA. MB. ALBERTO CENTENO. MR. JULIO POULAT. MR. FRANCISCO VALDES. /Special Representative of the /Secretary of the Treasury. HON JOHN SKELTON WILLIAMS, COMPTROLLER OF THE CURRENCY. United States Members of the Group Committee. Robert S. Brookings, of Missouri, Chairman. E. N. Brown, of New York. Henry Bruere, of New York. Edward W. Decker, of Minnesota. John S. Drum, of California. S. T. Henry, of New York. Alba B. Johnson, of Pennsylvania. William H. Knox, of New York. George L. LeBlanc, of New York. Theodore C. Lyster, of Mew York. Robert F. Maddox, of Georgia. William M. Ritter, of Ohio. W. L. Sibert, of the District of Columbia. G. R. Tuska, of New York. Charles H. Cunningham, of Texas, Secretary 32 NICARAGUA. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY DR. OCTAVIANO CESAR, MINISTER OF FINANCE or NICARAGUA. DR. ADOLFO CARDENAS. MR. A. F. LINDBERG. Special Guest of the Secretary of the Treasury. THE MINISTER OF NICARAGUA AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. A. C. MILLER, OF THE FEDERAL RESERVE BOARD. United States Members of the Group Committee. W. L. Saunders, of New York, Chairman. J. Gilmore Fletcher, of New York. Leslie E. Freeman, of New York. Charles J. Gerstenberg, of New York. Robert N. Harper, of the District of Columbia. Walter W. Head, of Nebraska. Jeremiah W. Jenks, of New York. S. C. Mead, of New York. William P. Philips, of New York. William A. Prendergrast, of New York. Paul S. Reinsch, of Wisconsin. Charles P. Vaughan, of Pennsylvania. Sol Wexler, of New York. Elmer H. Youngman, of New York. E. D. Kizer, of New York, Secretary. 1497021 3 PANAMA. CONFERENCE COMMITTEE. Official Delegation. MR. JOSE AGUSTIN ARANGO. DR. Luis E. ALFARO. DR. JUAN NAVARRO DAZ. Special Guest of the Secretary of the Treasury. THE MINISTER OF PANAMA AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. M. B. WELLBORN, GOVERNOR OF THE FEDERAL RESERVE BANK OF ATLANTA. United States Members of the Group Committee. James Brown, of New York, Chairman. Lindell T. Bates, of New York. Henry G. Brengle, of Pennsylvania. Charles Henry Butler, of the District of Columbia. Thomas F. Crean, of New York. B. S. Cutler, of New York. Nelson A. Gladding, of Indiana. J. A. House, of Ohio. George L. Hoxie, of New Jersey. George F. Kunz, of New York. George Mixter, of New York. Eugene W. Ong, of Massachusetts. Clarence J. Owens, of the District of Columbia. Walter S. Penfield, of the District of Columbia. . G. F. Swain, of Massachusetts. A. W. Tedcastle, of Massachusetts. J. G. Eppinger, of Illinois, Secretary. A. I. Hasskarl, of Nebraska, Acting Secretary. 34 PARAGUAY. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY DR. EUSEBIO AYALA, MINISTER OF FINANCE OF PARAGUAY. MR. RODNEY CROSKEY. MR. PEDRO JORBA, Jr. DR. ENRIQUE BORDENAVE, Secretary. Special Guest of the Secretary of the Treasury. THE MINISTER OF PARAGUAY AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. JULIUS G. LAY, FOREIGN TRADE ADVISER, THE DEPARTMENT OF STATE. United States Members of Group Committee. Lewis E. Pierson, of New York, Chairman. C. K. Anderson, of Illinois. W. E. Aughinbaugh, of New York. William M. Baldwin, of New York. Dudley Bartlett, of Pennsylvania. Constant Cordier, of New York. E. M. Haig, of New York. Herbert H. Houston, of New York. Nicholas P. Lloyd, of Pennsylvania. Richard I. Manning, of South Carolina. J. N. G. Nesbit, of New York. John S. Pendleton, of New York. Thomas W. Streeter, of New York. Otto Wilson, of the District of Columbia, Secretary. 3* PERU. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY, DR. FERNANDO C. FUCHS, MINISTER OF FINANCE or PERU. DR. PEDRO DAVALOS Y LISSON. DR. RlCARDO BuLLEN. Special Guest of the Secretary of the Treasury. His EXCELLENCY THE AMBASSADOR OF PERU AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. GEORGE W. NORRIS, FARM LOAN COMMISSIONER. United States Members of the Group Committee. John H. Fahey, of Massachusetts, Chairman. Fred Cardway, of New York. John Joy Edson, of the District of Columbia. Hollis Godfrey, of Pennsylvania. William C. Gorgas, of New York. Richard S. Hawes, of Missouri. Emory R. Johnson, of Pennsylvania. Alfred Meyer, of New York. C. D. Mitchell, of Tennessee. James M. Motley, of New York. T. C. Powell, of the District of Columbia. H. Parker Willis, of New York. C. M. Woolley, of New York. Harry Erwin Bard, of New York, Secretary. 86 SALVADOR. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY, DR. JOSE ESPERANZA SUAY, MINISTER OF FINANCE OF SALVADOR. DR. REYES ARRIETA Rossi. Special Guest of the Secretary of the Treasury. THE MINISTER OF SALVADOR AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. JAMES H. MOYLE, ASSISTANT SECRETARY OF THE TREASURY. United States Members of the Group Committee. W. S. Rowe, of Ohio, Chairman. J. Howard Ardrey, of New York. John P. Frenzel, Jr., of Indiana. O. C. Fuller, of Wisconsin. George H. Harries, of New York. J. B. Havre, of California. James T. Keena, of Michigan. George C. Luebbers, of New York. George E. Macomber, of Maine. G. A. Northcott, of West Virginia. Harry Harwood Rousseau, of the District of Columbia. Dayton Shelly, of Pennsylvania. Sidney Story, of Michigan. Jerome Thralls, of New York. Charles W. Warden, of the District of Columbia. Oscar Wells, of Alabama. Walter F. McCaleb, of New York, Secretary. 37 URUGUAY. CONFERENCE COMMITTEE. Official Delegation. His EXCELLENCY, DR. RICARDO VECINO, MINISTER or FINANCE OF URUGUAY. DR. JACOBO VARELA ACEVEDO, MINISTER OF URUGUAY AT WASHINGTON. DR. FLORENCIO ARAGON Y ETCHART, CHAIRMAN OF THE FINANCE COM- MITTEE OF THE URUGUAYAN SENATE. Special Representative of the Secretary of the Treasury. HON. EUGENE MEYER, MANAGING DIRECTOR OF THE WAR FINANCE CORPORATION. United /States Members of the Group Committee. Harry A. Wheeler, of Illinois, Chairman. Edward Winslow Ames, of New York. William C. Buethe, of Illinois. Ira A. Campbell, of New York. Paul A. Draper, of Massachusetts. Albert W. Harris, of Illinois. Samuel M. Lindsay, of New York. R.JL. McKellar, of Kentucky. Clarence D. Randall, of New York. Welding Ring, of New York. James J. Shirley, of New York. Glen L. Swiggett. of Tennessee. F. H. Taylor, of New York. Eugene P. Thomas, of New York. R. E. Tomlinson, of New York. Alfredo L. Demorest, of the District of Columbia, Secretary. 38 VENEZUELA. CONFERENCE COMMITTEE. Official Delegation. DR. VICENTE LECUNA, PRESIDENT OF THE INTERNATIONAL HIGH COM- MISSION, NATIONAL SECTION OF VENEZUELA. MR. ENRIQUE PEREZ DUPUY. DR. NICOLAS VELOZ GOITICOA. Special Guest of the Secretary of the Treasury. THE MINISTER OF VENEZUELA AT WASHINGTON. Special Representative of the Secretary of the Treasury. HON. J. B. McDouGAL, GOVERNOR OF THE FEDERAL RESERVE BANK OF CHICAGO. United States Members of the Group Committee. Robert H. Patchin, of New York, Chairman. A. C. Bedford, of New York. James B. Bonner, of the District of Columbia. E. G. Buckland, of Connecticut. M. J. Caples, of Maryland. John T. Dismukes, of Florida. Charles E. Falconer, of Maryland. George W. Hyde, of Massachusetts. John H. Latane, of Maryland. Severo Mallet-Prevost, of New York. John V. Noel, of New York. Robert A. Shaw, of New York. S. Davies Warfield, of Maryland. William P. Wilson, of Pennsylvania. Clarence H. Haring, of Connecticut, Secretary. PROGRAM AND SUMMARY OF THE GENERAL SESSIONS OF THE CONFERENCE. TOPICS AGREED UPON BY THE GOVERNMENTS OF THE AMERICAN REPUBLICS FOR SUBMISSION TO THE SECOND PAN AMERICAN FINANCIAL CONFER- ENCE. /. The effect of the war on the commerce and industry, manufactur- ing and mining, agriculture and public utilities of the Republics of the American Continent. 1. To what extent has the war stimulated the development of domestic resources, so as to create greater economic independence? To what extent has it delayed this development ? 2. Urgent present public financial needs (a) For the liquidation or funding of existing financial obli- gations. (b) For the further development of public enterprises. 3. Urgent present financial needs in commerce and industry. //. How can required capital and credit facilities best be provided f 1. To what extent can these requirements be met by domestic capital? 2. To what extent is foreign capital required ? (a) The extension of improved banking facilities, through the establishment of branches and by other means. (>) The wider use of acceptances and other means of extend- ing credit. (c) The creation of a market for the distribution of foreign government and corporate securities. The establish- ment of investment companies. (d) The direct investment of capital in foreign enterprises y industrial and commercial, and in the construction of public works. ///. National credit and the factors affecting it. 1. Extent and nature of the public debt. 2. The national fiscal system, with special reference to sources and adequacy of revenues. 40 GENERAL SESSIONS. 41 3. The relation of the fiscal system to currency reform. 4. What guaranties and remedies are provided by law in the case of provincial and municipal loans? IV. The effect of the war on transportation facilities Requirements of the present and immediate future. 1. To what extent has the war affected transportation facilities on land and sea ? 2. Laws and regulations to provide for the encouragement of ship- ping facilities between the American Republics. 3. The removal of obstacles in the way of transportation facilities, through adequate provision for lighthouses and other aids to naviga- tion and through agreements as to harbor and quarantine regulations, entrance and clearance, docking, lading, and unlading facilities. 4. Freight rates. 5. Maritime insurance facilities. V. Measures to facilitate commercial intercourse among the American Republics. 1. The convention concerning commercial travelers. 2. The convention to establish an international gold clearance fund. 3. Parcel-post facilities and lower postal rates. 4. Cable facilities ; wireless telegraphy. 5. The establishment of free ports. 6. Improved warehouse facilities. VI. The development of uniformity of legislation in relation to 1. Uniform customs regulations ; the prevention of the undervalua- tion of merchandise in export and import declarations. 2. Bills of exchange and checks; bills of lading and warehouse receipts. 3. Contracts regarding the consignment of merchandise in foreign trade and the conditions of acceptance or rejection of merchandise. 4. Commercial arbitration; agreements between the chambers of commerce of the American Republics, with special reference to the agreements between the chambers of commerce of Buenos Aires, Montevideo, and Guayaquil and the Chamber of Commerce of the United States. 5. Patent and copyright law ; the protection of trade-marks, espe- cially through the establishment of the International Trade-Mark Bureaus at Habana and Rio de Janeiro. 6. Uniform admiralty law. JOURNAL OF THE SESSIONS. PRELIMINARY MEETING OF THE OFFICIAL DELEGATES. An informal meeting of the official delegates was called to order at 3 p. m. Saturday, January 17, by the Secretary of the Treasury of the United States in the Hall of the Americas of the Pan American Building. On motion of Dr. Japobo Yarela Acevedo (Uruguay), the Secretary of the Treasury of the United States, L. S. Howe, C. E. McGuire, and G. A. Sherwell were elected presiding officer, secre- tary general and assistant secretaries general, respectively, of the conference. The presiding officer announced the appointment of the Hon. W. G. McAdoo to preside at the second general session, to take place on January 20, 1920, at 8.30 p. m. Dr. L. Toledo Herrarte (Guatemala) moved that, for the selection of vice chairmen to preside at the first, third, fourth, and fifth general sessions of the conference, the American countries be divided into four groups, the first to include the Caribbean Republics; the second, the South American countries of the east coast, and Colombia, Venezuela, and Paraguaj 7 ; the third, the South American countries of the Pacific coast, including Bolivia ; and the fourth, Mexico and the Central American countries. The vice presidents were chosen by ballot as follows: For the Caribbean countries, Cuba; for the South American countries of the Atlantic coast, Uruguay; for the South American countries of the Pacific coast, Ecuador ; and for Mexico and the Central American countries, Honduras. A further ballot determined the order in which the chairmen of these four delegations were to preside at the general sessions: Cuba, first; Uruguay, third ; Ecuador, fourth ; and Honduras, fifth. It was unanimously agreed that at the opening session the chairmen of all delegations would briefly reply to the address of welcome. In the general sessions papers were to be read and free discussion there- after invited, previous notice of an intention to discuss a paper being required and a time limit of 10 minutes imposed. Those taking the floor without previous notice were to be limited to 5 minutes. The secretary general announced that the Federal Reserve Bank of New York had extended an invitation to the official delegates to visit the bank on the morning of January 27. The meeting was adjourned at 4.30 p. m. 42 GENERAL SESSIONS. 43 OPENING SESSION, MONDAY, JANUARY 19, 1920. The conference was called to order at 10.30 a. m. by the Hon. Carter Glass, Secretary of the Treasury of the United States and president of the conference. He delivered a message of welcome from the President of the United States, in which it was declared that the Republics of the American Continent should, in the troubled times of world reconstruction, seek no selfish purpose, but continue to be guided by the desire to serve one another and the world. To this message he added his personal greetings, and stated briefly the purpose of the conference, asserting that the great cause of conti- nental cooperation made necessary the personal meeting of those high in the financial and economic affairs of their country so as to know r each others' views. The Hon. Robert Lansing, Secretary of State of the United States, expressed his personal gratification and the satisfaction of the De- partment of State because of the meeting, and, said that as free peoples, jealous of their rights as nations and individuals, the American Republics could render humanity no greater service than to preserve their lofty ideals untouched by selfish motives. The Hon. John Barrett, Director of the Pan American Union, welcomed the delegates on behalf of the Union. Responses to the addresses of welcome were then made by each of the foreign delegates in alphapetical order, as follows : Argentina Dr. Domingo E. Salaberry. Bolivia Dr. Jose Luis Tejada. Brazil Dr. Carlos Cesar cle Oliveira Sampaio. Chile Dr. Luis Izquierdo. Colombia Dr. Tomas Suri Salcedo. Cuba Dr. Carlos Manuel de Cespedes. Dominican Republic Dr. Luis Galvan. " Ecuador Dr. Rafael H. Elizalde. Guatemala Dr. Luis Toledo Herrarte.. Haiti M. Fleury Fequiere. Honduras Gen. Juan E. Paredes. Mexico Dr. Enrique Martinez Sobral. Nicaragua Dr. Octaviano Cesar. Panama Mr. Jose Agustin Arango. Paraguay Dr. Eusebio Ayala. Peru Dr. Fernando C. Fuchs. El Salvador Dr. Jose Esperanza Suay. Uruguay Dr. Ricardo Vecino. Venezuela Dr. Vicente Lecuna. All the responses expressed hope for the speedy recovery of the President of the United States, and many delegates in their speeches 44 SECOND PAN AMERICAN FINANCIAL CONFERENCE. placed stress on the results of the work of the First Pan American Financial Conference. The chairman then announced the membership of the committee on resolutions and the committee on transportation, whereupon, at 1.30 p. m. the conference took a recess. FIRST GENERAL SESSION, MONDAY, JANUARY 19, 1920. The conference was; called to order at 9 o'clock p. m. by the lion. Carter Glass, who turned the gavel over to Dr. Carlos Manuel de Cespedes, minister of Cuba at Washington and chairman of the Cuban delegation. The speeches of this session were devoted to the discussion of "The improvement of ocean and land transportation facilities." The Hon. John Barton Payne, chairman of the United States Shipping Board, outlined the activities of the Shipping Board and its shipping program and promised adequate passenger and freight service between the United States and the Latin-American Republics. This formal address was followed by brief discussions of the transportation problem by Dr. Ricardo C. Aldao, Argentina ; Dr. Ricardo Martinez Vargas, Bolivia ; Dr. Pomponio Guzman, Co- lombia; Dr. Alberto Edwards, Chile; Dr. Luis Felipe Borja, Ecua- dor; and Mr. Enrique Perez Dupuy, Venezuela. The conference recessed at 10.50 p. m. SECOND GENERAL SESSION, TUESDAY, JANUARY 20, 1920. The session was called to order at 9.10 p. m. by the Hon. William G. McAdoo, former Secretary of the Treasury of the United States, who, after extending his greetings to the assembly, dwelt upon the great duties and responsibilities now imposed on the countries of this hemisphere as a result of the war, which had more closely united them. He pointed out that this closer union, political as well as economic, was in some measure due to the practical results of the First Pan American Financial Conference, effected through the sym- pathetic and energetic work of the International High Commission, which was created by that conference. After referring to the strides which had been made by the several American Republics in the ex- pansion of their foreign commerce and shipping, he introduced the Hon. John Bassett Moore, the vice president of the central executive council of the International High Commission, who outlined the work accomplished by the commission since its creation in 1915. Briefly referring to the organization and constituency of the com- mission, Mr. Moore enumerated the subjects taken up and the results accomplished by the commission. He regarded its establishment as a matter of great practical significance. It had supplied the need felt by numerous scientific, educational, and economic Pan American conferences of a permanent body to carry out their resolutions. GENERAL SESSIONS. 4$ THIRD GENERAL SESSION, THURSDAY, JANUARY 22, 1920. The conference was called to order at 10 a. m. by the presiding officer, Dr. Kaf ael H. Elizalde, chairman of the delegation of Ecuador and minister of Ecuador at Washington. The secretary general an- nounced the dispatch by the President of the United States of mes- sages to the Presidents of the other American Republics felicitating them upon the inauguration" of the conference. The secretary general then announced that most of the group committee reports had been received by him. These reports had been drafted after having been given serious attention for sev- eral days on the part of the members of the official delegations and the groups representing the United States, and were respectively signed by the chairmen and vice chairmen of the conference com- mittees, the chairmen being the heads of delegations and the vice chairmen being the persons selected by the Secretary of the Treasury to act as chairmen of the group committees. The secretary general also recorded the fact that the report of the committee on communications had been signed by the Hon. J. W. Alexander, Secretary of Commerce and chairman of the committee, and submitted to the chair. All the reports of the group committees and committee on com- munications were, by direction of the chair, referred to the committee on resolutions for the preparation of the general recommendations of the conference. The Hon. Huston Thompson, a member of the Federal Trade Com- mission of the United States, then delivered an address on the means of preventing unfair competition in foreign 'trade. Commissioner Thompson, taking as his text the provisions in Public Act 126 of the Sixty-fifth Congress (the " Webb-Pomerene " Act) , conferring juris- diction on the Federal Trade Commission in cases of unfair com- petition outside the jurisdiction of the United States, devoted his attention to the more important types of unfair competition and sug- gested an international commission to deal with this matter. Mr. Thompson was followed by Mr. Luis Zuberbuhler. Mr. Zuber- buhler declared that the expansion of foreign trade should be on a permanent and stable basis, inasmuch as sound and enduring com- mercial ties can exist only when the buyer and the seller fully under- stand the needs of each other. The grasp of conditions in other coun- tries can come only through long-continued commercial intercourse. He pointed out that there is no greater stimulus to foreign trade than the constant reinforcement of capital from the country which de- sires that trade, and he showed how the investments of Great Britain had proved a bulwark to her trade in Latin America. "The only kind of trade that is capable of effective and sufficient 46 SECOND PAX AMKRK'AX FiXAXVIAL CON FKRKXCE. development," he said, " is that which rests on the investment of capital in the enterprises which are fundamental to the progress of the Nation. It is necessary, in consequence, to banish any attitude of mind which looks upon the consuming market as something merely incidental and occasional in character and suitable for the inexpensive disposition of any surplus produced originally to meet the require- ments and tastes of the domestic market." Dr. Zuberbuhler con- tinued with reference to the Webb law, to the fundamental theory of which he took exception, in that it favored combinations of capital for foreign trade in a guise regarded as illegal in domestic trade. An address was next delivered by Dr. Victor Eobles, a member of the delegation of Chile, a member of the House of Deputies of that Republic, and a former member of its cabinet. Dr. Eobles outlined the situation in his country in respect of nitrate, coal, and agricul- tural production, indicating in a convincing manner how safe a field for investment was presented in Chile, a country with a public debt of but 32,000,000 sterling. He pointed out how rapidly the prices of the products of Chile had increased from 1914 to 1919, and the multiform effects produced in the economic life of his country. He concluded his detailed survey of the Chilean economic situation with the expression, however, that the American Republics should strive to make concessions mutually advantageous for the strengthening of the friendship and the more prosperous development of the commer- cial relations between the several countries. " Thus, happily joining reciprocal guarantees and concessions, interests, and even affections, the spirit of Pan Americanism will become a lasting and attractive reality." The session adjourned at 12.25 p. m. FOURTH GENERAL SESSION, THURSDAY, JANUARY 22, 1920. The conference convened at 3.35 p. m., Secretary Glass in the chair. In accordance with the arrangement reached in the prelimi- nary meeting held on January 17, the presidency of the conference for this session devolved upon His Excellency the Minister of Fi- nance of Uruguay, Dr. Ricardo Vecino, who, at the invitation of the Secretary of the Treasury, took the chair. Upon the conclusion of routine business submitted by the secre- tary general, the Hon. Andrew J. Peters, a member of the United States section of the commission, and mayor of Boston, addressed the conference briefly, extending the welcome of that city to such delegates of the conference as might find it possible to visit it. The Hon. Paul M. Warburg, former vice governor of the Federal Reserve Board, a member of the United States section of the Inter- national High Commission, and vice chairman of the conference com- GENERAL SESSIONS. 47 mittee for Chile, then delivered an address on " Fiscal and Currency Standards as the Future Measure of the Credit of Nations." Particular emphasis was laid by Mr. Warburg in this important address on several topics of interest to the conference. While the theory of banking is the same to-day as it was in the past, in practice its most fundamental feature has been almost universally aban- doned at this time. The essential characteristic of ante-bellum banking in leading countries- was that their paper circulation and their deposit liabilities were protected by, and therefore kept in a certain relation to, large gold reserves assembled in their central banks. These central institutions, in turn, could strengthen themselves by drawing on the floating gold supply carried in the pockets of the people and in the vaults of the banks, or by collecting their holdings of other nations' gold obligations. A gold country repudiating its obligation to pay in gold would have been deemed a bankrupt, and a country permitting the existence of a substantial gold premium, be it domestic or in the form of an excessive discount on its foreign exchanges, would have been considered as being headed for insolv- ency, a condition which would have caused widespread alarm. The fear not to be able to fulfill their gold obligations, the wish and will, at all hazards, to ward off any such catastrophe, was the strongest direct- ing force arid regulator, not only of the financial, but even of the economic policies of such countries. Rather than to expose themselves to the danger of a suspension of gold payments, they would resort to such weapons as high discount rates, high import duties or taxes, the export premium, bor- rowing in foreign markets on even onerous terms, or to any other means of counteracting demands caused by an overwhelmingly adverse trade balance. The war brought about a complete reversal of these doctrines and tra- ditions. The danger of internal and external gold demands thus eliminated, the protection of high interest rates became unnecessary and almost all belliger- ent countries embarked upon an era of Government finance based upon low interest rates born of inflation. This enabled the countries to procure the domestic goods and services needed at a cheap price for money, but at high prices for the things re- quired people imagining that they were escaping taxation when they were paying it in its most drastic and most inexorable forYn, by the depreciation of money. The belief is entertained by some that as a solution of our difficulties we are likely to abandon gold as the future means of ultimate settlement of international balances. I do not believe that the world will enjoy fairly stable standards of currency and credit until it returns to the observance of approximately the same principles of banking and finance as prevailed before the war. That does not mean that I foresee that antebellum exchange parities will generally be reestablished. Indeed, I hold the view that quite a number of countries will never regain their previous exchange levels. Their power to reclaim all or in part the shrinkage of their standards will depend upon their ability to produce and to save, and upon the measure of permanent depreciation sustained during the war, not only through a decrease of the value of their property, but also through the increase of their national indebtedness. But whatever the level they may be able to recover, ulti- 48 SECOND PAN AMERICAN FINANCIAL CONFERENCE. mutely it will be to their vital interest once more to fasten it to a definite gold relation and to reestablish a stable exchange, fluctuating between the maxima and minima of gold parities, without which a country's trade and growth will remain subjected to a fatal handicap. (We may expect some countries to aim for a direct return to a free gold standard, while others may have to choose the indirect route of a gold exchange standard.) Let us bear in mind, however, that the more perfect the machinery of credit, the more insignificant becomes the necessity of settling in actual gold. If Governments adopt a rigid policy of preventing the further issue of Government securities and money for the purpose of covering current defi- ciencies, they will take the first and most effective step in combating the decrease of production, the rise of prices, and the fall of exchanges. If they will not or can not adopt such a course, they are headed for insolvency and social and economic disruption. When central bank rates are thus once more effective and the foreign credit of a country has been restored, the moment will be at hand when the resumption of gold payments may be considered, and with that the stabili- zation of foreign exchanges. Whenever that point is reached, a country may be deemed to have completed its economic convalescence. The first step in this direction must be the establishment of honestly balanced budgets. Side by side, however, with the determination of the Government to stop the further increase of Government debt must go an equally firm policy on the part of the note-issuing banks to arrest a further expansion of cir- culation. Through the depreciation of the purchasing power of money the value of the return from investments (that is, from savings of the past) has been cut in two in countries with the soundest economic conditions, and in those most adversely affected it has been decimated, if not practically wiped out. The distribution of income in all countries has therefore been drastically modified. In the aggregate, the share of the farmer and the wage-earner has , been phenomenally increased at the expense of those who lived on fixed income from savings of the past. Extravagance must not only be curbed on top. but just as much on the part of the masses receiving the bulk of the national income, and, in the aggregate, doing the largest share of the country's spending. For the vast number of American consumers, a recession of prices is of infinitely greater importance than boosted exports sold at high prices to purchasers whose natural limit of credit has been fairly exhausted. For foreign countries buying our goods, a decline in our prices would mean either a corresponding drop in their own prices or a recovery in their exchanges, or a combination of both. In any case, we would serve them better if we sold them at a lower price the minimum that they must have than if we furnished tlieiu on credit, and at high prices, the maximum they might take. After five years of suffering and sacrifices, the masses at present are unruly, self-willed, and unreasonable. They are unwilling to submit to irksome Government interference or drastic burdens of taxation. The lending countries, by insisting on the adoption of a balanced budget policy on the pan of borrowing countries asking for new loans., and by reducing such credits to ilie very minimum necessary, would a<^ist their debtors to choose a safe course, v/hich. without such outside iutluence. their Govern- ments miirlit not ahvays be able to follow. GENERAL SESSIONS. 49 Except where plainly altruistic motives must thus exercise a determining influence, I believe that the time is near at hand when international bank- ers, considering new loans, will apply the strictest principles not only with respect to budgeting, but also with regard to the urgency of applications and the purposes involved. As it will be every citizen's patriotic duty to accumulate savings, so the aggregate gathered for investment will have to be looked upon as a sacred fund belonging to the Nation, to be employed only where it will do the greatest possible good. World demands, in the near future, will far out-distance world savings and if it were possibl& nothing would be more timely than a " world priority list," regulating the use of new capital. These views, I fear, do not sound very encouraging to countries of our hemisphere whose future largely depends upon new development. Happily, however, several of them are in the class of lend- ing rather than borrowing countries, and quite a number, through the emergencies of the war, have been taught to develop their resources and new industries and have made admirable progress in the direction of greater economic and financial independence. My own belief is that capital in the old world will find so vast a field in work of reconstruction and colonization in " darkest Europe " that it will not be able to devote itself as liberally to the development of the countries of tlrs hemisphere as it did in the past. The three Americas will, therefore, be drawn together in a commercial and financial union of grow- ing strength and intimacy. The next formal address was delivered by the Hon. Medill Mc- Cormick, a Member of the United States Senate, who prefaced his address, as Mr. Warburg had concluded his, with words of welcome in Spanish to the delegates from the other countries. Senator Mc- Cormick was concerned primarily with the budget system, into the need of which he went in great detail. He traced the system of the movement for budgetary legislation in the United States down to the time when it has assumed national proportions, transcending partisan lines. He outlined briefly the plans for budgetary reform in tlie United States, then under consid- eration in Congress, indicating in an illuminating manner the grave defects from which the fiscal system of the United States suffers be- cause of its failure to devise a budgetary procedure. He discussed as well the subject of audit control and cited the practice in some of the other American countries. Senator McCormick was followed by Dr. Virgilio Rodriguez Beteta, of the delegation of Guatemala, who eloquently set forth how profound was the feeling of friendship on the part of the other countries toward the United States because of the sympathy of the people and Government of the latter country toward the other na- tions in their struggle for independence and national development. Dr. Rodriguez Beteta indicated that Guatemala was planning the establishment of a bank of issue upon a sound basis, such as might be calculated to stabilize conditions of exchange and to pave the way for the foundation of a national agricultural mortgage bank. Thus 1497021 4 50 SECOND PAN AMERICAN FINANCIAL CONFERENCE. Guatemala would be in a position to take care of her indebtedness, to establish her currency on a sound basis, and to promote vigorously the development of her natural resources. . A detailed survey of the problem of national credit was made by Dr. Florencio Aragon y Etchart, a senator of Uruguay. Dr. Arjigon y Etchart took as his text a statement of Mr. Warburg's, to the effect that the budgetary law of a country is one of the most pre- cise indications of the financial policy which it follows. He quoted the eminent Argentine economist, Terry, to the effect that in ord4r to know well the financial life of a nation, one has only to study the pages of its budget. " The taxation system existing in some of the countries of South America is certainly not one based on scientific principles of economics, nor one justly conceived with respect to its incidence on the taxpayer. It is a procedure formed in the inade- quate mold of the old-time systems of taxation, resting chiefly upon customs duties and analogous taxation, constituting the principal part of the national revenue. This type of taxation offers no resist- ance to the slightest domestic commotion or to the effects of an inter- national crisis or conflicts of other countries. When such an event occurs the nations of South America which enjoy the best of credit find it difficult to resist this convulsion and settle the difficulties ensuing upon financial disturbance in the world. Customs revenues shrink the moment difficulties arise in any part of the world, con- sumption is reduced, and a period of retrenchment in expenditures sets in." Senator Aragon then entered upon a careful analysis of the means of reforming the taxation systems of the Republics of America. In speaking of the difficulties of securing funds to meet the frequently recurring deficits, he pointed out that customs duties had already reached a maximum in most of the American Republics, while re- course to money lenders, whether domestic or foreign, was bound to lead to a discouraging situation. " The pessimism with which the bankers examine the resources of the country usually leads them to be more exacting in their condi- tions. If they grant loans it is upon conditions almost usurious in character and incompatible with the given credit of the country often an interest of 8 or 9 per cent on securities sold to syndicates at 79 or 80. The reform of the system of taxation on a more equitable basis is precisely the end toward which the countries of America should strive, if they wish, and, of course, there is no possibility of doubting that they wish, to reinforce their economic capactiy and strengthen their financial activity." To the income tax, Senator Aragon devoted much attention, stating that it is an equitable means of relieving those of modest resources from the burden of many onerous indirect taxes, while it furnishes the Government with a ready measure of the economic progress of the country. He showed GENERAL SESSIONS. 51 his intimate acquaintance with the history of taxation in the United States, and, in closing, dwelt briefly upon the importance of mone- tary reform as an element in strengthening national credit. The ideal to be maintained at all costs for the strengthening of public credit is the establishment of the gold standard, not merely in name but in fact, having by its side the bank note, convertible on demand, and resting squarely on public confidence. The bank of the Republic of Uruguay has a circulation of 55,000,000 pesos, resting on a gold reserve of 75 per cent, which has at times even approximated 83 per cent. The notes of this bank circulate in Uruguay like gold itself. The session adjourned at 5.30 p. m. FIFTH GENERAL SESSION, FRIDAY, JANUARY 23, 1920. The conference assembled at 11 o'clock, with Gen. Juan E. Paredes, chairman of the delegation of Honduras, in the chair. Upon the conclusion of the routine business of the morning session, necessarily extensive because of the fact that this was the last session of the conference, the formal address on the " Problems of the UnitedStates as a Creditor Nation," was delivered by the Hon. W. G. P. Harding, governor of the Federal Reserve Board. We in the United States, while accustomed to maintain a favorable trade balance through a moderate excess of exports over imports, had come to look upon European capital as a natural and necessary factor in our de- velopment and to accept with complacency the fact that we \vere a debtor and not a creditor nation. Being absorbed primarily in our own affairs, we were satisfied with a minor position in financing the commerce of the world. While we had, of course, extensive trade relations with all civil- ized countries, we undertook to finance only a comparatively small part of our exporting and importing transactions, leaving the greater part of it to European bankers and acceptance houses. Consequently, most of our trade with our sister republics to the south was financed by means of credits opened in London and other Old World centers. Our participa- tion in foreign financing was confined principally to dealings in short bills, and our fixed investments, represented by holdings in securities of foreign Governments and municipalities and by stocks and bonds of for- eign industries, were comparatively small ; in fact, we had become so de- pendent upon foreign capital that up to a few years ago it was the cus- tom to finance our growing crops by means of finance bills drawn in antici- pation of seasonal exports of agricultural stapled in the fall of the year. The financial dependence upon Europe which existed in the United States obtained, perhaps, in a greater proportionate degree in South American countries, and for this reason the outbreak of the World War in August, 1914, caused a jar which shook the American Continents from Alaska to Tierra del Fuego. Five years ago the United States stood as a debtor on the world's balance sheet to the extent of, perhaps, five billions of dollars, part of which was represented by loans of short maturities and the greater part by American securities held abroad. * * * 52 SECOND PAX AMERICAN FINANCIAL, CONFERENCE. Early in the year 1917 it became evident that the United States was no longer a debtor nation but was a creditor nation to the extent of, perhaps, two billions of dollars. * * * Because of the great demand upon capital in this country, we must not lose sight of the necessity for restricting our foreign credits to essential purposes. It is not to be expected, for the present at least that loans and investments abroad will be made because of attractive rates of in- terest or favorable prospects for profit; they will be made, primarily, in the hope of restoring more normal conditions in the war-stricken coun- tries by enabling their populations to get back to productive work, and with the incentive also of opening foreign markets for those commodities of which we produce an exportable surplus. It is expected that corporations organized under the Edge Act will make loans to business men in Europe, and take their obligations in the usual form. It may be that they will require the guarantee of European Govern- ments and of municipalities and that the beneficiaries on the other side will be required to provide a fair cash margin. The loans abroad should be made on terms sufficiently long as to enable repayment to be made out of credits growing out of European exports. Because of adverse exchange rates finance bills maturing before the pro- ductive capacity of European countries has been restored can not be effec- tive. A 12 months' credit to a French merchant calling for repayment at maturity in dollars would involve heavy loss to the borrower unless he were able to provide himself with funds in this country by means of the export to America or elsewhere of some commodity produced in France. It is evident, therefore, that credits must be sufficiently long to enable bor- rowers to repay them out of the proceeds of goods produced in and exported from the borrowing country. * * * European nationals can produce many things which we either do not produce at all or can not produce as cheaply as they can, or it may be that they can produce things needed in South American countries or in the Far East, and as American importers have constant dealings with South American and oriental countries it follows that European credits available in China and Japan, Argentina, Chile, Brazil, and other Latin American nations will be just as effective in liquidating European obligations in the United States as direct European credits in New York would be. Governor Harding was followed by a member of the delegation of Mexico, Dr. Enrique Martinez Sobral, who briefly reviewed the rapidity with which his. country was recovering from the unfortu- nate consequences of civil war, and demonstrating its ability to avail itself successfully of its very great natural resources and prosperity. Dr. Luis Tejada, head of the delegation of Bolivia, member of the congress and former minister of finance, of that country, next ad- dressed the conference, speaking in English as had Dr. Martinez Sobral. He outlined to the congress a plan for the extension of financial aid to Europe by the United States through the purchase by the latter country of Government securities of the Republics of Central and South America now held in Europe. Both halves of the hemisphere were in accord as to the need of aiding Europe, in- asmuch as the problems of the world called for the reconstruction of GENERAL SESSIONS. 53 Europe as a prerequisite to their own solution. Direct loans from the countries of this hemisphere to the countries of the older world w T ere difficult, and the problem was constantly becoming more com- plicated by the decline in exchange. "If the United States decides to grant assistance to Europe, let it do so by allowing Latin America to pay its obligations to the countries of Europe. This would allow Latin America to take advantage of exchange conditions, while it would do no harm to Europe, inasmuch as the exchange situation must be adjusted before her reconstruction can begin. No advantage would accrue to Europe from her retention of Latin American obli- gations, * * * while on the other hand a market would be created for European securities, inasmuch as the countries of Central and South America when discharging their own obligations would pur- chase those of Europe." The fourth address of the morning was delivered by Dr. Carlos Cesar de Oliveira Sampaio, chairman of the Brazilian delegation. Dr. Sampaio discussed the problems of Brazil as a debtor nation. After outlining the effect of the war on Brazil, he emphasized his belief that the other portions of this hemisphere must necessarily remain the chief field for the display of enterprise from the United States. " The program of the Brazilian Government is to reduce public expense, improve the fiscal system, bring about a balance of its budget, contract loans only for productive purposes, reorganize the banking system of the country* so as to make its currency more elastic, and abandon forever the process of issuing inconvertible cur- rency. We expect gradually to establish a safe basis for our mone- tary system and for the improvement of our national finances. We hope to increase production and reduce imports, to stabilize exchange, to pay the interest on our loans, and to fill the gaps left by recurring deficits. The prosperity of a nation is related to its capacity for production, which depends upon land, labor, and capital. Land we have in abundance. Two-thirds of our territory we have not yet explored, having yet to follow the example of the great American who discovered the Roosevelt River in northern Brazil. Of capital we have not enough and we are obliged to look to other countries. We have not sufficient man power, but men will come to us, if for no other purpose than to escape from the troubled situation in Europe. What we wish to see now is a greater number of citizens of the United States at work in Brazil with their own money, just as the Chicago packers are developing our meat industries and the smelting interests are trying to bring about the same result with iron ore and manganese." Dr. Sampaio referred to the blow to the rubber industry of Brazil through the creation of new sources of that commodity in other parts of the world, and expressed the hope that the rubber industry would again be prosperous in his country. 54 SECOND PAN AMERICAN FINANCIAL CONFERENCE. At the conclusion of the remarks of Dr. Sampaio, the Hon. John Bassett Moore, chairman of the committee on resolutions, submitted the report of his committee. 1 The chairman of the committee read the report in full, briefly commenting on those of the resolutions which called for any explanation. The voting on the resolutions of the conference then took place, there being unanimous approval of the resolutions as submitted by the committee, but three countries making reservation to certain resolutions. 2 The secretary general then submitted his own formal report. 3 His Excellency, the minister of finance of Argentina, Dr. Domingo E. Salaberry, on behalf of the official delegations and venturing to interpret their feeling, expressed the deep gratitude for the hospi- tality and consideration shown to them, and called upon the assembly to rise as an expression of its consideration for the President of the United States, for whose speedy restoration to good health, he stated, he was confident all the delegates sincerely hoped. Unanimous votes of thanks to the Secretary of the Treasury and to the secretary of the conference were adopted. The Secretary of the Treasury then took the chair, and, expressing his deep regret that because of illness and the pressure of official duties, he had been deprived of the pleasure of constant contact with the delegates and members of the committees, he stated that he felt entire confidence that the conference could not but cement the bonds of cooperation between the American Republics, and stimulate the desire of all their citizens to unite in the great purpose of being of service to each other, to humanity, and to the world. He then de- clared the sessions of the conference adjourned sine die at 1 p. m. On the evening of Saturday, January 24, a banquet was tendered by the Secretary of the Treasury to the delegates in the Hall of the Americas of the Pan American Building, and was attended by the official delegates and the members of the committees. In the course of this banquet, the replies of the Presidents of the American Republics to the telegram of the President of the United States were read by the secretary general. A rising vote of thanks was extended to the governing board of the Pan American Union for its courtesy and kindness in putting at the disposal of the conference the halls of the building. Toasts were proposed and drunk to the Presidents of the American Republics, and felicitous remarks were made on behalf of the official delegations by His Excellency, the minister of finance of Argentina, and His Excellency, the Mexican ambassador, and on behalf of the United 1 This will be found in. full on p. 56. 2 These reservations will be found following the resolutions on p. 15. 3 This report will be found on p. 12. GENERAL SESSIONS. 55 -States by the Hon. Thomas R. Marshall, Vice President of the United States. TRIP TO PHILADELPHIA AND NEW YORK OF THE OFFICIAL DELEGATES TO THE SECOND PAN AMERICAN FINANCIAL CONFERENCE. On Sunday, January 25, 1920, a number of the offcial delegates to the conference, accompanied by their families and attended by some members of the staff of the conference, proceeded to Philadelphia, where they were received at the station by a committee representing the mayor of the city and the chamber of commerce. A dinner was tendered to them by the Baldwin Locomotive Co. at the hotel in which they were lodged as guests of the Treasury Department, and the following day a portion of the party went to inspect the Baldwin Locomotive Works, while another group visited the New York Ship Building Corporation's plant, where a ship was launched during the visit. Luncheons were tendered at both establishments, and in the evening the parties returned to Philadelphia and preceded to New York. On Tuesday, January 27, the delegates visited the Federal Reserve Bank of New York and were shown in detail the system employed in its operation. At the termination of the visit thfe delegates were the guests at luncheon of the directors and officers of the bank at the Bankers Club. Addresses were delivered by Acting Governor Case, Dr. Tejada, Messrs. W. L. Saunders, and A. B. Hepburn. On the same evening a banquet wa's given in honor of the delegates by the Pan American Society of the United States at the Waldorf Astoria Hotel. Addresses were delivered by the Hon. John Bassett Moore, president of the society; the former Secretary of the Treas- ury, W. G. McAdoo ; Dr. Ricardo Aldao, Dr. J. G. Schurman, and Dr. L. S. Rowe. REPORT OF THE COMMITTEE ON RESOLUTIONS. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR : The committee on resolutions designated a special subcommit- tee, composed of John Bassett Moore, Eusebio Ayala, Luis Izquierdo, Luis Toledo Herrarte, John H. Fahey, Frank A. Vanderlip, and Paul M. Warburg, to confer and consider every proposal laid before the committee, either formally or informally, and to draft resolutions and report them to the committee. This subcommittee examined carefully all the conference reports, including the report of the com- mittee on transportation, and also various proposals directly laid be- fore it, and then formulated resolutions which were duly laid before the committee. The latter acted upon the recommendations of the subcommittee and submitted to the conference for adoption the fol- lowing resolutions, in which the members of the committee unani- mously concurred : I. Resolved, That, with a view more definitely to indicate the constituency and sphere of work of the International High Commission, the title of that body shall hereafter be "The Inter- American High Commission." II. Resolved, That the conference adopts that part of the report of the committee on transportation and communication relating to maritime transportation, and directs its transmis- sion to the United States Shipping Board for consideration and action; and that so far as concerns the subjects of railroad transportation, postal facilities, uniformity of bills of lading,, and wireless, cable, and telegraph communication the report be transmitted to the Inter- American High Commission for suitable action. III. Whereas banks, both National and State, in the United States have established branches in various Latin-American countries; and Whereas restrictions exist under the laws of various States of the United States which, in effect, prevent the operation of branches of foreign banks within their jurisdiction : Therefore we recommend that the legislation in such States be so modified as to permit the establishment of branches of banks of Latin- American countries, under proper regulations,, so as to secure equality of treatment. 56 REPORT OF COMMITTEE ON RESOLUTIONS. 57 IV. Resolved, That the Inter-American High Commission be requested to study the question of the possibility of achieving uniformity and relative equality in the laws and regulations governing the organization of corporations and the treatment of foreign corporations in the various American Republics. V. Resolved, That the conference recommends the increased use of acceptances for the purpose of financial transactions in- volving the importation and exportation of goods, and hopes that, with the passing of the period of readjustment in which nations are now engaged, the United States will offer con- stantly widening market for the long-term securities of Amer- ican countries. VI. Resolved, That the Inter- American High Commission be requested to continue its efforts to bring about the adoption of the plan, recommended at Buenos Aires in 1916, for the estab- lishment of an international gold fund, such plan having already been embodied in a convention which has been adopted by several of the American Republics. VII. Resolved, That, steps having heretofore been taken to bring about the adoption by the American countries of a uni- form law in regard to bills of exchange, the conference requests the Inter- American High Commission to bring to the notice of the American Governments the desirability of adopting a uniform law on the subject of checks. VIII. Resolved, That, in view of the increase and diversifica- tion of taxes in the various American countries, the Inter- American High Commission be asked to study the question of the best method of avoiding the simultaneous double taxation of individuals and corporations as between such countries. IX. Whereas the international bureau, at Habana, for the registration of trade-marks, as provided in the convention adopted by the Fourth International American Conference at Buenos Aires in 1910, has been opened and is in successful oper- ation : Resolved, That the conference recommends the early ratifica- tion of that convention by all the American countries that have not so far ratified it, to the end that its provisions may be effec- tive throughout the Americas. Meanwhile, it is suggested that, pending the establishment of the international bureau at Rio de Janeiro, consideration be given to the use of the Habana bureau by countries of the south- ern group that have ratified the convention. X. Resolved, That the conference recommends the early rati- fication by the American Republics, so far as they have not already ratified it, of the convention adopted by the Interna- 58 SECOND PAX AMERICAN FINANCIAL CONFERENCE. tional American Conference, at Buenos Aires, in 1910, concerning patents and copyrights. XI. Resolved, That the conference recommends that the Webb law be so amended as to permit American companies, importing or dealing in raw materials produced abroad, to form, under proper governmental regulations, organizations to enable such companies to compete on terms of equality with companies of other countries associated for the conduct of such business. XII. Resolved, That the conference recognizes the value of the services of commercial attaches, and strongly urges a substantial extension of the system. In making this recommendation the conference intends to ex- press its sense of the importance of appropriate training, lin- guistic and otherwise, for all branches of the foreign service, as a means of developing and facilitating commercial and financial relations. XIII. Resolved, That a simultaneous census should be taken in all the American countries at regular intervals, not exceeding 10 years, in harmony with the system prevailing in the United States, and that uniformity should be observed in the prepara- tion of statistical works. XIV. Resolved, That the conference recommends that the metric system of weights and measures be universally employed, and that, pending the attainment of that end, articles weighed and marked, and shipping documents, prepared according to the system of weights and measures now prevailing in the United States, should be accompanied with statements giving the equiva- lents under the metric system. XV. Resolved, That the plan of arbitration of commercial disputes put into effect between the Bolsa de Comercio of Buenos Aires and the United States Chamber of Commerce, and since adopted by the chambers of commerce of several other American countries, should be extended to all the American countries, and that legislation should be adopted wherever it is now lacking for the purpose of incorporating the arbitral settlement of commer- cial disputes into the judicial system, to be carried out under the supervision of the courts. XVI. Resolved, That the Inter- American High Commission be requested to study the question of the creation of an inter- American tribunal for the adjustment of questions of a com- mercial or financial nature involving two or more American countries and the determination of such questions on principles of law and equity. XVII. Resolved, That it being in the interest of all nations that there should be the widest possible distribution of raw REPORT OF COMMITTEE ON RESOLUTIONS. 59 materials, the importation of such materials into any country should not be prevented by prohibitive duties. XVIII. Resolved, That it is recommended that the banking interests of the United States study the possibility of financial relief to Europe by repaying Latin- American obligations held in Europe by means of new loans granted in the United States to the respective Latin- American countries. With respect to some of the foregoing 18 resolutions a few explana- tory remarks may be made. Resolution No. I is intended to change the title of " The Interna- tional High Commission " to " The Inter- American High Commis- sion." Your committee found that in the work of the International High Commission much difficulty and confusion had at times arisen from the fact that the title "International High Commission" did not convey a definite indication either of the constituency of the com- mission or of the sphere within which it carried on its activities. There are so many international high commissions, chiefly with European countries, that a clarification seemed to be desirable. This resolution, it is hoped, will accomplish that end. ' Resolution No. II relates to the report of the committee on trans- portation. The only part of that report which the resolution for- mally adopts is that relating to maritime transportation. The other subjects were so varied and involved so much detail that it was thought better to refer them to the Inter- American High Commission for consideration than to ask the conference, within the time at its disposal, to undertake to follow them through all their ramifications so as to formulate and express definite conclusions. Resolution No. IV relates mainly to the treatment of foreign cor- porations and their branches. This is obviously a question of prac- tical concern to all the American countries. Resolution No. IX relates to the trade-mark convention adopted at Buenos Aires in 1910. That convention provided for the division of the American countries into two groups a northern and a south- ern with an international bureau of registration for each group, the northern bureau to be at Habana and the southern at Rio de Janeiro ; and in order that each or either of these bureaus should be established it was necessary that two-thirds of the group which it was to serve should ratify the convention. More than two-thirds of the northern group have ratified the convention, and in August, 1919, the international bureau at Habana was opened and is now in successful operation. The resolution, adverting to this fact, pur- poses that the conference recommend the early ratification of the convention by all the American Republics that have not as yet rati- fied it, so that its provisions may be effective throughout the Amer- icas. Meanwhile, the resolution suggests that the countries of the 60 SECOND PAX AMERICAN FINANCIAL CONFERENCE. southern group that have ratified the convention may, if they so desire, gain the benefits of the convention by using the Habana bureau, to which it is understood that there is no legal or other obstacle. Indeed, the able and efficient director of the Habana bureau, Dr. Mario Diaz Irizar, as appears by his report of December 31, 1919, now in the hands of the conference, has from the first been sending notifications of registration to countries in the southern group that have ratified the convention, as well as to countries in the northern group, and has held himself ready to accept any appli- cations for registration that might be sent to him from ratifying countries of the southern group. Washington, D. C., January 23, 1920. COMMITTEE ON RESOLUTIONS. JOHN BASSETT MOORE, Chairman, THEODORE H. THIESING, Secretary. REPORT OF THE COMMITTEE ON TRANSPORTATION AND COMMUNICATIONS. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR: Your committee on transportation and communications has judged it wise, for the fuller investigation of the subject, to treat the matter of transportation and communications under four heads : Maritime transportation; railroad transportation; wireless, cable, and telegraph communication; postal facilities, documentation, and maritime insurance. .Recommendations of subcommittees which had studied these four aspects of the problem were adopted unanimously by the committee on transportation and communications, and are herewith presented as the final recommendations of your committee. MARITIME TRANSPORTATION. 1. A substantial reduction of freight rates: these have so increased since the outbreak of the war that they are hampering commercial intercourse between the United States and the Latin American Republics. 2. The establishment of regular freight lines, the vessels of such lines to be as large as is economically practicable, considering the port depths, the loading and unloading facilities, and the kind of prod- ucts generally shipped. 3. The use of cargo boats designed for special trades, particularly for the movement of coal and bulk cargoes. 4. The conclusion of arrangements between the oceanic and coast- wise shipping interests of various countries, whereby through rates, including transfer service, may be secured, and through shipments may be made from the larger ports to smaller ones at which oceanic steamers do not touch. 5. The establishment of more frequent sailings and the use of faster boats in the passenger service between the JJnited States and Latin American countries. It is desirable that this type of service should be at least equal in speed and accomodations to that existing between the countries of Latin America and any other countries of the world. 61 62 SECOND PAN AMERICAN FINANCIAL CONFERENCE. 6. The establishment of a fast weekly passenger service between New York and Buenos Aires by way of Rio cle Janeiro and Monte- video. If vessels having the necessary draft, speed, and other requi- sites for operation in such a service are not now available, their con- struction should be started as soon as possible. 7. The establishment and operation of a provisional fortnightly passenger service between New York and Buenos Aires by way of Rio de Janeiro and Montevideo. In this service there should be used steamers now available which are capable of maintaining an average- of not less than 18 knots per hour. 8. The establishment of a line connecting the west and east coasts of South America. If private enterprise is not able to take care of this project properly, the amount of aid which could be given ix> such a line by the various American Governments should be ascer- tained in the manner suggested by the Chilean delegation. 9. The adoption of a policy whereby mail contracts should con- cede more suitable remuneration for fast service, thereby aiding in the improvement of passenger service to the various countries con- cerned. 10. The reduction of port dues and handling charges in Latin American countries, and the simplification and standardization of port regulations. 11. In view of the importance of improving transportation facili- ties and of securing continuous and concerted action in that direc- tion, the International High Commission should appoint a perma- nent committee to aid in the execution of the recommendations herein made, and in general to investigate and study the problem of ocean transportation for the purpose of making recommendations to the various Governments for improvement of the service and for the better development of commercial relations. RAILROAD TRANSPORTATION. 1. That a conference be called of the Government officials heads of companies operating in the Latin American Republics in the near future for the purposes of preparing (a) A comprehensive plan for the linking of small lines into through trunk systems, whereby duplication of service may be avoided. (b) Plans for the operation, financing, and general stand- ardization of rates, equipment, and practices of trunk-line railways. 2. That consideration be given to the establishment of branch roads for the development of the territory served by the trunk lines. BEPOET COMMITTEE ON TRANSPORTATION AND COMMUNICATIONS. Q& 3. That the nations of the South and Central American Republics do their utmost to develop and utilize their resources, such as water and petroleum, in order to have power to move their trains ; and that new transcontinental lines be established traversing the continent from east to west. 4. That as part of the internal transportation facilities of each of the countries there be developed a system of highways suitable for motor truck use and other vehicular traffic, giving access to the terri- tory that can not be economically reached by steam railroads. Such roads and highways will enable the railroads to obtain the products of the interior and to distribute articles of commerce. POSTAL FACILITIES. 1. That the delegates from all Latin- American Republics, not now parties to postal conventions whereby mail is exchanged between those countries and the United States under the rates, conditions, and classifications applicable to the domestic service of each country, urge upon their respective Governments the importance of entering into such conventions ; and 2. That the delegates to the Second Pan American Financial Con- ference be requested to urge upon their respective Governments the importance of parcel post conventions providing and limiting in- demnity for nondelivery of parcel post shipments, and the use of the utmost diligence in reducing thefts of such shipments. UNIFORMITY OF BILLS OF LADING. 1. That the Second Pan American Financial Conference request the International High Commission to draft or to cause to be draf ted r with due regard to the rights and liabilities of those interested in the shipment and transportation of merchandise in the overseas trade be- tween the countries represented in the conference, a uniform bill of lading, with weight units expressed in both the avoirdupois and metric systems, as simple in form and as limited in stipulations and condi- tions as the practical necessities of the overseas service will admit; and 2. That the International High Commission be further requested to submit the draft of such bill of lading to the ministers of finance of the countries represented in the conference, and to the United States Shipping Board, the principal ocean carriers, and the leading commercial organizations and foreign trade bankers of the United States interested in overseas trade, with a request for their consid- eration of, and conclusions with respect to, the proposed form ; and 3. That the International High Commission be further requested to prepare or to cause to be prepared a final draft of such bill of lad- ing with due regard to the criticisms and suggestions which shall have 64 SECOND PAX AMERICAN FINANCIAL CONFERENCE. been made by those to whom the first draft shall have been sub- mitted, and to furnish copies of such final draft to the ministers of finance of the countries represented in the conference, and to the United States Shipping Board, the principal ocean carriers, and the leading commercial organizations and foreign trade bankers of the United States, with the request that all reasonable efforts be exerted to have such proposed form of bill of lading adopted into common use in the overseas trade between the respective countries ; and 4. That such form of bill of lading be known as the " Pan Amer- ican Conference bill of lading." WIRELESS, CABLE, AND TELEGRAPHIC COMMUNICATION. 1. That copies of the statement entitled "Postal, cable, and tele- graph communication with Latin America " be furnished to the dele- gates of the several nations represented at the conference ; and 2. That a permanent subcommittee on cables, wireless, and tele- graphs be appointed by the conference, in view of the importance of the subject and the inadequacy of existing facilities, with a view to cooperation of such permanent subcommittee with such officials of the Latin- American countries as may be designated by their re- spective Governments, this subcommittee to function under the gen- eral guidance of the International High Commission. For the committee on transportation and communications, J. W. ALEXANDER, Chairman. J. C. CORLISS, Secretary. ARGENTINA. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR : Your committee has the honor to render the following report : I. TRANSPORTATION. It was reported that five steamers have been selected to run be- tween New York, Brazil, Uruguay, and Argentina, having a speed of about 15 knots and a displacement of from 14,000 to 18,000 tons. These steamers will make the trip to Buenos Aires via Rio de Janeiro and Montevideo in about 18 days. The representatives of Argentina pointed out that during the past 30 years, except for the period of the war, faster service was in effect from their country to Italy, France, Germany, and Spain, steamers making the trip in 15 days. They desired, in order properly to develop trade between the United States and Argentina, that a similar service from this country be established, requesting that steamers of about 18 knots be used. The representatives of Argen- tina also pointed out the need of increased passenger and mail serv- ice, their greatest difficulty being at present the inadequate number of sailings to take care of the commercial mails, parcel post, and business passengers between the two countries. It was the consensus of opinion that a recommendation should be made to the Shipping Board to have placed in this service as soon as possible two or more steamers of greater speed, with a request at the same time that payment be made for the carriage of mail and parcel post by Argentina, Uruguay, Brazil, and the United States, this pay- ment not to be considered in any way in the form of subsidy, but simply a fair compensation for service rendered. Need for improved docking and terminal facilities was pointed out by the American group, and the Argentine delegation gave assurance that improvements were now already under way and would be pushed forward as rapidly as possible so as practically to double the present facilities in the very near future. 1497021 5 65 66 SECOND PAN AMERICAN FINANCIAL CONFERENCE. The following resolution was adopted : Whereas the Americas alone are at once capable of rapidly increasing surplus yields of those products of mine, forest, and field Avhich the world must have in" order to insure safety to civilization ; and Whereas only through the perfection of a transportation sys- tem that will link the Americas each to the other and all w r ith the markets of Europe, Asia, and Africa will rapid development be promoted : Therefore be it Resolved, That we suggest to the Transportation Committee that it recommend that the Governments of the several American Republics consider the advisability of entering into a joint agree- ment looking to the fostering and developing of a perfected sys- tem of passenger and freight steamship transportation which will link the several countries of the Americas for purposes of interchange, and the Americas as a whole with the markets of the world. II. BANKING. The Argentine delegates drew attention to the existing laws in the United States which prohibit the establishment of branches of for- eign banks. They urged the committee to use its influence in order that the States should pass legislation which would enable branches of foreign State banks to do a general banking business in this coun- try. A resolution was passed that the advisability and fairness of such legislation be 'brought at once to the attention of the proper authorities in each of the various States, this legislation to be applied only to such countries as grant like privileges to branches of Ameri- can institutions. Argentina expressed the belief that such legislation would lead to the establishment in the United States of branches of the Banco de la Nacion Argentina, which will lead to the further development of commerce between the two countries. III. NAME OF MONETARY UNIT. The committee adopted the resolution that the proposed Pan American monetary unit should be called " Colon." This coin, as agreed upon at an earlier Pan American conference, was to have the weight of 0.33437 grams of gold 0.900 fine, and to be subdivided according to the decimal system. It is recommended that this name and unit be adopted as the money for the payment of all accounts in international commerce of the countries of the hemisphere. It is fur- ther recommended that it be adopted in each of the various Republics as opportunity may offer, whenever the laws governing their mone- tary systems are discussed or reconsidered. REPORT OF THE CONFERENCE COMMITTEE ARGENTINA. 67 IV. CENSUS. The Argentine delegates brought to the attention of the other members of the group committee the fact that several of the South American Republics have never taken a census, and that in many other of the Republics only very incomplete and meager statistical information had ever been compiled. They suggested that every effort be made to influence all South American Republics to pursue a definite plan in the collection of statistical information and that, so far as possible, the same information be collected in all of the Re- publics. The Argentine delegation felt that the system at present in vogue in the United States was the most satisfactory and complete, and they strongly recommended that this system be used as a basis throughout Latin America, and that this uniformity should apply to the systematized statistical works as well as to the census and also to the definition of basic subjects and the adoption of classification and methods. The Argentine delegation also pointed out that these periods should be agreed upon by all of the Latin- American Republics so that they should coincide with those of the United States; that is, at ten-year intervals, beginning 1920. This suggestion met with the unanimous approval of all of the members of this group. V. COMMERCIAL ARBITRATION. The following resolution was adopted : Resolved, That the Second Pan-American Financial Conference recommend to the Secretary of Commerce of the United States that his department cooperate with business in the United States and Argentina in developing closer relations, by instructing the consular and trade agents to call attention to the existence of arbitration boards maintained by chambers of commerce in the United States and Argentina for the prompt adjustment of business disputes. It is also recommended that all the Re- publics of America, which have not already done so, adopt by appropriate laws and regulations the contract of arbitration originally celebrated between the Bolsa de Comercio de Buenos Aires and the Chamber of Commerce of the United States, sub- ject to such changes as may from time to time be agreed upon. VI. TAXATION. Resolved, That in view of the extension of income and inherit- ance taxes in the various American States, the International High Commission be asked to study the question of the best method of avoiding the simultaneous double taxation of indi- viduals and corporations. 68 SECOND PAN AMERICAN FINANCIAL CONFERENCE. VII. UNIFORM LEGISLATION FOR CORPORATIONS. Resolved, That the International High Commission be asked to study the possibility of achieving uniformity and relative equality in the provisions governing the organization and fiscal treatment of foreign corporations by the various American Republics. VIII. COMMERCIAL ATTACHES. Resolved, That the conference recognizes the value of the sys- tem of commercial attaches and urges upon Congress a substan- tial extension of the system. IX. TRADE-MARKS. Resolved, To recommend an early approval by the Congresses of the Republics of America of the convention concerning copyrights and trade-marks which was approved in the Pan American Conference held at Buenos Aires in May, 1910. X. ARGENTINE-AMERICAN CHAMBER OF COMMERCE. Resolved, That it should be recommended by the Second Pan American Financial Conference that business men having con- nections with Argentina should lend their moral and personal support to the newly established organization of the Argentine- American Chamber of Commerce in New York, which has been created to promote commercial relations between the two coun- tries. Respectfully submitted. The CONFERENCE COMMITTEE FOR ARGENTINA, D. E. SALABERRY, Chairman. F. A. VANDERLIP, Vice Chairman. BOLIVIA. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR: This report follows as closely as possible the program of topics agreed upon by the Governments of the American Republics for submission to the Second Pan American Financial Conference. This report does not aim to include any matter which has been al- ready covered either by the International High Commission or by any o-f the official publications of the Bolivian Government. It is felt that statistical data regarding Bolivia and its relations with other countries have been so fully covered in the publications of the International High Commission and of the Bolivian Government that it will be superfluous to restate them. The war of 19141918 stimulated the development of the domestic resources of Bolivia in two distinct ways: First, by increasing the prices obtained abroad for staple mineral products, such as tin and copper, in some cases 200 per cent, and in some even more ; and sec- ond, by enlarging the production and exportation of tungsten and antimony, two metals which had never previously entered to any con- siderable extent into international trade from Bolivia. The produc- tion of rubber was also continued and a careful survey was made of Bolivia's agricultural and pastoral resources. The exports of hides doubled, while the value of wool exported increased nearly fiftyfold. The group conference report of the First Pan American Financial Congress stated the live-stock resources of Bolivia in considerable de- tail, and the only new thing to be added is that the Bolivians hope that packing houses will be erected in their country, and that with the large amount of grazing land available, the progress of the pack- ing industry in Paraguay, another interior country, in the last three years, and in Argentina in the last 20 years will also take place in Bolivia. It should be noted that Bolivians, like many other South Americans, prefer to invest their money in farms and ranches rather than in public loans and utilities. Bolivia's international commerce increased by 206 per cent between 1914 and 1918. During this period the trade with the United States not merely increased by one hundred and thirty-sixfold, but whereas the United States was Bolivia's seventh largest customer in 1913, 69 70 SECOND PAX AMERICAX FINANCIAL CONFERENCE. England, Germany, and France being her first, second, and third largest customers, respectively; in 1918 the situation was wholly re- versed, England being Bolivia's largest customer, the United States second, Chile third, France fourth, while Germany took nothing. Fully as striking a change occurred in Bolivia's imports during this same period. The relative rank of the four most important countries which supplied Bolivia with her imports, with the percentage sup- plied by each, is indicated by the following table : 1913 : Per cent Germany 36. 50 England 20.27 Chile 10. 15 United States 7.38 1918 : Per cent. United States 32.51 Chile 23.11 Peru 12. 48 England _ 11.85 Bolivia's imports from the United States in 1918, the last figures available, amounted to 11,311,209 bolivianos arid her exports to the United States 75,991,792 bolivianos, a total trade of 87,313,001 bolivi- anos, or about $33,000,000 United States money. Bolivia's most urgent financial needs are for railway and water- power development and for the sanitation of her principal cities, and also for the refinement of ores in Bolivia instead of sending them out of the country for such processes. In general, it may be stated that the advance of Bolivia can best be accomplished by foreign in- vestment at the present time. lit is noted that the neighboring Re- public of Chile has invested a considerable amount of money in Bolivia. England, France, Germany, and the United States have also invested money in that country, and the increase in investments of the United States in Bolivia has been marked during the past four years. Probably no South American country more urgently needs railway development than Bolivia, and during the war Bolivia spent her own resources on railway construction, borrowing but little for this pur- pose. It should be borne in mind that railway construction and de- velopment are extremely expensive in all parts of Bolivia. Her most important railway needs are as follows : 1. The railway from Atocha to La Quiaca, on the Argentine frontier, concerning which the following resolution was adopted by the Bolivian group committee on January 20, 1920 : Whereas it has been shown that the line from Tupiza to La Quiaca, of 100 kilometers, is now under construction, and it is confidently expected can be completed in 30 months from Janu- ary 1, 1920; and Whereas the stretch from Atocha to Tupiza, of 105 kilometers, would then be the only uncompleted piece of the entire line from the Pacific to the Atlantic, insuring through communication REPORT OF THE CONFERENCE COMMITTEE BOLIVIA. 71 from La Paz via La Quiaca to Buenos Aires, therefore benefit- ing that great section of South America : It is hereby Resolved, That it is the sense of the Bolivian committee that the banking interests of the United States should be encouraged to grant a loan sufficient to complete this line (estimated time of construction, 30 months, and estimated cost, $5,000,000) ; and be it further Resolved, That the Bolivian committee support the steps which the Bolivian Government has already initiated in this matter. 2. The railway from La Paz to the Beni River, through Yungas, and the railway from Potosi to Sucre. The following resolution was also adopted : Whereas Bolivia requires additional transportation facilities to link the mining and industrial districts in the western part of the country with the agricultural districts in the eastern part; and Whereas modern sanitation is very necessary in the large cities; and Whereas Bolivia has enormous undeveloped rich natural re- sources and a debt of only $8.50 per capita : Now. therefore, be it Resolved, That, in the judgement of the Bolivian committee, Bolivia should have credit, in addition to the amount necessary to complete the railroad from Atocha to Tupiza, as approved in a previous resolution adopted by this committee, and that such additional credit should be granted in such amounts for the additional transportation facilities and sanitation require- ments heretofore mentioned as may be mutually agreed upon by the Bolivian Government and bankers of the United States. In reply to the question as to how the required capital and credit facilities can best be extended to Bolivia, it should be stated that Bo- livia's requirements for her public development can not now be met by domestic capital. A large portion of Bolivia's needs must be filled by foreign capital for many years to come, and this foreign capital will not merely be obtained by credit granted to the Bolivian Government, but also through United States branch banks and com- mercial credit granted to Bolivian merchants. The Bolivian common laborer is very effective in mining work, and if the new enterprises entering Bolivia bring the necessary skilled labor to act as instruc- tors it is believed that Bolivian labor can also be trained technically. The present Bolivian public debt, according to the reports of the central executive council of the International High Commission, is $25,933,299.94, of which $15,000,000 is in external loans. The national fiscal system has been fully covered by the reports of the International High Commission. While Section IV of the 72 SECOND PAX AMERICAN FINANCIAL CONFERENCE. effect of the war on transportation facilities only indirectly affects Bolivia, Bolivia is intensely interested in this matter of ocean trans- portation, and desires to participate in any further conferences that may be held in regard thereto. Legislation is now pending before the Bolivian Congress on the subject of commercial travelers, which is hoped will remove all pending difficulties, since it will be national in character. The Bolivian commercial code is being revised, which will be a great help in international commerce. Bolivia accepts the conclusions of the Pan American Conference at Buenos Aires of 1916 regarding patents and copyrights and com- mercial travelers, and she has adhered to the Pan American Con- vention of 1910 regarding these matters. As regards lower postal rates, it seems that the United States pro- posed recently to all the South American countries, Bolivia included, that they reduce their postal rates so that the foreign rate on first- class mail matter equal the domestic. While Bolivia feels that this is desirable, she deems it best to postpone definite action on this im- portant matter for the present. Efforts are now being made to im- prove the parcel post agreement of November 24, 1900, and its sup- plementary agreement of November 30, 1901, between the United States and Bolivia. La Paz and Oruro are the interchange offices in Bolivia and New York and New Orleans in the United States. This convention covers registered packages only and should be ex- tended to other classes of packages. The desire was expressed that more steamers stop at Arica and Mollendo with mail of all kinds for Bolivia. An interesting phase of this matter is the development of an inter- national parcel post between the east and west coast of South America through Bolivia. Bolivia is anxious to have a Pan American postal congress meet at Buenos Aires. Such a conference will be held shortly and the United States has been asked to participate in it. The Bolivian delegates recommend that the United States adhere to the Montevideo postal convention. Bolivia has now a complete wireless system with central stations of 100 kilowatts at Riberalta and Viacha, which cover the whole country. The United States had no consuls in Bolivia before 1919, and it is felt that two or more consulates should be established, one at Oruro and one in the eastern part of the country. Steps have already been taken to reorganize the Bolivian National Chamber of Commerce in order to complete and give effect to an agreement with the United States Chamber of Commerce along the lines of the agreement between the latter organization and the Bolsa REPORT OF THE CONFERENCE COMMITTEE BOLIVIA. 73 de Comercio of Buenos Aires. The Bolivian chambers of commerce are being reorganized. It was resolved by the Bolivian group committee that the secretary of the United States group thereof, Mr. C. L. Chandler, be empow- ered to discuss with the officers of the Bureau of Foreign and Do- mestic Commerce of the United States Department of Commerce the question of specifying the commodities composing Bolivian trade with the United States in such a manner as to show their country of origin, instead of crediting them to Peru. Chile, and other countries through whose ports they may have been exported or imported. The Bolivian committee, a majority of whose members have visited Bolivia, in view of the industrial and economic requirements of Bolivia, desires to express the hope that some additional arrangements may be effected in the near future which will permit it to enjoy a fuller measure of transportation, port, and customs independence. Respectfully submitted. THE CONFERENCE COMMITTEE FOR BOLIVIA, J. L. TEJADA, Chairman. JOSEPH P. GRACE, Vice Chairman. BRAZIL. REPORT OF THE CONFERENCE COMMITTEE. The honorable, THE SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR: The conference committee for Brazil was composed of the following-named gentlemen : Dr. Carlos Cesar De Oliveira Sampaio, chairman; Mr. Oscar T. Crosby, vice chairman; Dr. Manoel Coelho Rodrigues and Mr. P. A. Martin, cosecretaries ; and the following members : Messrs. Chandler P. Anderson, Joseph H. Bagley, William S. Culbertson, Henry S. Dennison, A. H. Dick, W. Cameron Forbes, Edward S. Huxley, W. S. Kies, Frederico Lage, F. A. Molitor, William E. Peck, V. H. Pinckney, Theodore F. Whitmarsh. Messrs. Gerard Swope and A. S. Peabody were unable to be present. Subcommittees were appointed to deal with each topic agreed upon by the Governments of the American Eepublics for submission to the conference. After full discussion of the reports of these subcom- mittees the following statements, recommendations, and resolutions were adopted : I. THE EFFECT OF THE WAR ON THE COMMERCE AND INDUSTRY, MANU- FACTURING AND MINING, AGRICULTURE, AND PUBLIC UTILITIES OF THE EEPUBLICS OF THE AMERICAN CONTINENT. With the sudden outbreak of the war Brazil, like other South American countries, found herself cut off from her banking facilities. While Brazil always has had a large trade with the United States, before the war this trade was financed mainly through the instrumen- talities of the European banking agencies. Just before the declara- tion of war Brazil had under way negotiations looking toward the rehabilitation of her finances. The war terminated these negotia- tions. The Government of Brazil has not been able to borrow any new money during the period of war. Two of her cities, Rio de Janeiro and Sao Paulo, have made loans in the United States. The inability to make loans, coupled with the increase in the ex- penses of the Government, has resulted in an accumulation of deficits, an increase in the national debt, and a financial situation which presents many difficult problems. 74 REPORT OF THE CONFERENCE COMMITTEE BRAZIL. 75 During the war the amount of paper money has been increased rseveral times. The gold reserve has dwindled, and to-day Brazil may be said to be upon a paper basis. The currency, while theoretically convertible, is, in fact, inconvertible. In spite of the increase in the circulating medium and the decrease in the gold reserve, the resources of the country and the demands of business are so great that the new issues of paper money have been absorbed and, as a matter of fact, the milreis in the markets of the world to-day has a higher exchange value than several years ago. To summarize the effect of the war upon the finances of the Brazilian Government, it may be :said that the war has brought additional complications to an already difficult governmental financial situation. Brazil's banking and financial situation merits thoughtful and intensive study with the purpose of developing a comprehensive financial plan to meet the situation. Brazil's resources and her pos- sibilities for wealth are so great that her debt is not burdensome. The immense physical resources of the country and the high moral character of the nation itself furnish a background of security which should facilitate the carrying out of a comprehensive financial program. While the war has complicated the problems of the Government of Brazil, it has brought to the Brazilian people certain advantages in the development of a greater dependence upon their own resources. The war interrupted shipping facilities, commercial relationships, interfered with established lines of business, cut off some of the chief markets for Brazilian products, and in other ways affected the business progress of the country. After the first shock Brazil started to work to do for itself what it could in the development of its resources. It has accomplished much during the war. Vast stretches of land have been put under production. Great impetus has been given to the cattle industry. Brazil has increased its production in cotton, corn, and in other food prod- ucts. Its cotton-manufacturing industry has shown remarkable strides, and to-day at the close of the war Brazil is commercially and economically sound. While prices have risen in many lines, there has been no general inflation. A good many public improve- ments have been carried out with Brazilian money, but Brazil's development has not yet reached the point where it is able to accumulate sufficient capital to build railroads, extend its public utilities, develop its natural resources, and carry out a program of public improvements ; its capital is all put to use in the development of new lands, in the upbuilding of industries based upon its natural resources. It must, therefore, be dependent upon outside capital for years to come for the construction of railroads and the carrying on of large public improvements. The obtaining of money for these 76 SECOND PAN AMERICAN FINANCIAL CONFERENCE. purposes through loans from the United States or any other country depends upon the general credit of Brazil, and this in turn depends; upon the working out of Brazil's financial problem as herein set forth. Brazil has probably attained a greater degree of economic inde- pendence during the war than almost any of the Pan American countries; this on account of diversity of its resources. With the exception of coal Brazil is abundantly supplied with practically all of the important natural resources. Certain low-grade deposits of coal have been developed during the Avar, but Brazil will probably always be a purchaser of coal. In this connection an interesting fact may be noted in that a substantial market for coal from the United States has been developed, but the permanence of this market will depend to a very large extent upon improved shipping facilities- between Brazil and the United States. The development of Brazil's economic independence has been de- layed by the war in so far as it has been unable to raise capital to de- velop those resources which would materially aid it in achieving its economic independence. In this connection may be mentioned the enormous iron-ore deposits in Brazil and the country's ambition to* develop a steel industry sufficient to take care of its needs. URGENT PRESENT PUBLIC FINANCIAL NEEDS. This subject has been covered above in the discussion of Brazil's financial situation. Governmental financing will be difficult without the working out of a comprehensive financial program which will necessitate fundamental changes in the banking and currency sys- tems. The development of public utilities in Brazil has been substantial ; practically every city of any size is well lighted, and all the larger cities have street railways and modern conveniences. The water- power developments in the cities of Rio de Janeiro and Sao Paula have resulted in making Rio de Janeiro one of the best-lighted cities in the world. Power in both of these cities is cheap, and Brazilians have every right to be proud of these enterprises. Railroad develop- ment has been backward and vast areas of extremely fertile land will become accessible by the extension of railroads- New equip- ment and increase of facilities in the case of many existing lines is urgently needed. URGENT PRESENT FINANCIAL NEEDS IN COMMERCE AND INDUSTRY. The banking facilities of Brazil are well developed and the ordi- nary commercial needs of the country are well served. In certain in- dustries capital is needed to install machinery which will result im- REPORT OF THE CONFERENCE COMMITTEE BRAZIL. 77 mediately in increasing production; particularly is this true in the sugar industry. The installation of modern sugar mills would result in a far greater percentage of extraction and a subsequent very sub- stantial gain in actual production of sugar. The .sugar industry in Brazil is in immediate need of capital to do away with the severe economic loss occasioned by the use of primitive methods and antiquated mills. Brazil's rubber industry has prospered during the war. Consider- ing the fact that the cultivated rubber which is used so largely in the rubber industry had its origin in Brazil, we feel that Brazil has op- portunities for great expansion along these lines. Capital in the rubber industry is needed and should produce favorable results. The coffee situation is good. The production and exportation of manganese was largely in- creased during the war and it is believed that the figures then reached will be maintained. Brazil, in common with other American countries, is a great pro- ducer of raw materials, and, considering the world's present need of raw materials of all kinds, it would seem that Brazil and other pro- ducing countries should receive consideration in their needs for capi- tal for the development of the natural resources which will materially contribute toward feeding and clothing the world. II. How CAN REQUIRED CAPITAL AND CREDIT FACILITIES BEST BE PROVIDED ? The subcommittee recognizes that the resources of Brazil are so large that properly to develop them not only can all the available domestic capital be used but also as much foreign capital as might be secured. At the present stage of development, it is our opinion that the best interests of the country require the use of as much domestic capital as possible in commercial and agricultural pursuits and that railroad, public utility, and industrial development can best be financed by foreign capital. The necessary banking and credit facilities for trade between the United States and Brazil have in years past been supplied almost entirely by the agencies in the United States or European banks. Ow- ing to the lack of American banking facilities, the American export- ers were placed in an embarrassing situation at the beginning of the World War owing to the withdrawal of the facilities which had been previously extended to them by the European banks. These facilities have been supplemented in recent years by the establishment of American branch banks which relieved the situation to a considerable extent. In view of past occurrences, however, it is our opinion, that to safeguard properly the commercial interests of both Brazil and the 78 SECOND PAN AMERICAN FINANCIAL CONFERENCE. United States it is of the utmost importance that American banking facilities should be extended to a point commensurate with the trade between the two countries. It also would seem desirable to encourage the establishment of agencies or branches of Brazilian banks in the United States, and the committee therefore recommends that the law r s of the various States, and in so far as necessary the laws of the United States, be so changed as to permit the establishment of branches of foreign banks in the United States under such general conditions as branches of American banks are permitted in such foreign countries, subject, however, to the same general regulations governing deposits and banking practice as are applied to American banks. The committee notes with satisfaction the growth of the use of the acceptance in commercial business between the United States and Brazil. The narrowness of the New York acceptance market due to high money rates has increased the cost of financing foreign business, but as the conditions approach normal and a wider accept- ance market is developed in the United States we believe the accept- ance will be found to be the most efficient instrument in the financing- of foreign trade. There has been developed in recent years, particularly since the beginning of the European war, a limited market in the United States for foreign securities. While the loans floated have been almost entirely of a governmental nature, the American investing public should be encouraged in every possible way to invest part of their capital in foreign securities, as such loans are productive of good feeling and closer relationship between the countries involved. Moreover, the investment of American capital in railroad, public- utility, and industrial enterprises controlling, as it would, the pur- chasing of the necessary materials would insure not only the con- tinuance but the growth of commercial relations between the coun- tries. (See resolutions below.) The important fact must not be overlooked that there is always present the necessity for a close observation on the part of borrow- ing nations of the laws and customs of the countries in which loans are sought, and the committee wishes to emphasize the importance to countries needing outside capital for the development of their resources and industries of a policy of cordial treatment of such capital. Moderate taxation and freedom from annoying or burden- some restrictions will undoubtedly result in encouraging capital to flow more freely into the needed channels. Bearing on the general subject treated by this section of the report, the following resolutions were adopted : Whereas investors in the United States are accustomed to certain corporate forms of organization and to certain legal REPOKT OF- THE CONFERENCE COMMITTEE BRAZIL. 79 safeguards in connection with property pledged as security for bonds, notes, and other evidences of indebtedness: Be it Resolved, That the committee respectfully calls to the atten- tion of ithe South American countries the desirability of so modifying their banking laws as to permit the establishment of banking institutions fulfilling the same general functions as those of the trust companies of the United States. Whereas both in the United States and England the use of preferred stock has been found very convenient in the financing of railroad, public utility, and industrial enterprise; and Whereas the laws of Brazil do not recognize such a form of stock : Now be it Resolved, That this committee recommends that the Brazilian Government take under consideration an amendment of the law regulating the organization of corporations in Brazil so as to permit the issuance of both preferred and common stock, which would facilitate the securing of foreign capital for the develop- ment of the resources of Brazil. Whereas the proper development of railroad facilities, so im- portant to the welfare of Brazil, requires the use of considerable equipment; and Whereas equipment trust certificates have been found ex- tremely useful in the railroad development of the United States ; and Whereas the issuance of such equipment trust certificates is not permitted under the Civil Code of Brazil : Now be it Resolved, . That the committee recommends that the Govern- ment of Brazil take under consideration amending its civil code so as to permit the pledging of railroad equipment as security for equipment trust certificates. III. NATIONAL CREDIT AND THE FACTORS AFFECTING IT. EXTENT AND NATURE OF THE PUBLIC DEBT. In May, 1919, the public debt of Brazil was calculated to be :,104 : 539$272, the equivalent in United States currency equaling >1,133,864,440. The nature of the debt was as follows: (Milreis.) Foreign debt 2, 048 : 965$032 Domestic debt 798:202$760 2, 847 : 167$792 Paper money. 1, 257 : 421$480 4, 104 : 589$272 80 SECOND PAN AMERICAN FINANCIAL CONFERENCE. (United States currency.) Foreign debt $566, 122, 440 Domestic debt 220, 498, 000 * $786, 620, 440 Paper money 347,345,000 $1, 133, 965, 440 Exchange rate used, 3.62 paper milreis equal $1. This figure does not include any State or municipal debts. Taking 25,000,000 as the population of Brazil, the debt per capita, equals $45.35. The debts of the following foreign countries afford means of comparison : Peru $6. 50 Chile 11.50 Argentina r 96.88 Bolivia^ 7. 00 Nicaragua 63. 95 In 1914 the Brazilian Government suspended cash payments of interest and sinking fund, funding interest until 1917. In 1917 the Government resumed cash payments of interest. Resumption of operation of the sinking fund has been postponed until 1927. (Report of International High Commission.) NATIONAL FISCAL SYSTEM WITH SPECIAL REFERENCE TO SOURCES AND ADEQUACY OF REVENUES. As Dr. Sampaio, the distinguished delegate from Brazil, has very ably stated, a country may be said to have a sound fiscal policy if its revenues are sufficiently large to pay all the expenses of the Government and interest and provide for the ultimate extinction of the public debt. Brazil does not show sufficient revenues to meet these requirements. Brazil, until recently, derived its main sources of revenue from import duties, approximately two-thirds of its entire revenue being raised from these sources. While specific duties are paid upon a large number of articles, the duties collected on an ad valorem basis comprise the greater part of the revenue. According to Brazilian law, duties on imports go to the national treasury, while all revenues collected from exports go to the State treasuries, ex- cepting for the Territory of Acre. The failure to secure tonnage and other conditions, arising from the exigencies of war, resulted in a marked falling off in the import tonnage which reflected upon the revenue of the country. The following figures (from reports of the Interantional High Commission) show the decline of imports: . REPORT OF THE CONFERENCE COMMITTEE BRAZIL. 81 Value of imports. 1900 $161. 250, 000 1913 180, 000, 000 1914 251, 873, 850 1916 , 155, 440, 597 1918 259, 224, 110 1919 (first 6 months) 187,932,216 The large increase in the value of imports in 1918 is not due to the corresponding increase of tonnage, but due to the rapid increase of prices. The following table shows the annual deficits for the years 1914 to 1916 : Annual deficits. Gold. Paper. 1914 275-2178876 328, 616:5688204 1915 30, 707:9208601 217,484:1938898 1916 22. 860:2328746 156, 905:4888924 1917 39 004-4778817 205 173-8738959 1918 34, 448:6418582 67,417:1928289 127, 296:4908622 975, 597:3178274 According to the budget of 1919, there will be an estimated deficit of $6,713,714 United States currency. The war caused a correspondingly large decline in the imports of all of the South American countries, imports from Argentina, lor example, falling from $408,711,000 in 1913 to $210,887,000 in 1916. Cuba shows a constant gain in its import trade, this being due, however, to the preponderance of commerce with the United States. The authorities of Brazil have come to the realization that it is not wise to depend too much upon any one source of revenue. It is with great satisfaction that the committee reports that the Brazilian Gov- ernment has already commenced to increase its collections from in- ternal revenues and will not in the future be so far dependent upon the revenue derived only from customs. If the present plans of the Brazilian Government are realized the country will have an excess of revenue over expenditure at a very early date which should reflect itself on the value stability of its currency. Besides taxes levied to produce Federal revenues, there are taxes levied by the States. Just care should be exercised by the Federal and State authorities to prevent such taxes becoming prohibitive. RELATION OF THE FISCAL SYSTEM AND CURRENCY REFORM. The committee is pleased to concur with the economic principles set forth by the distinguished representative from Brazil, Dr. Sam- 1497021 6 82 SECOND PAX AMERICAN FINANCIAL CONFERENCE. paio, that the first step in currency reform is to place the financial operation of the country on a paying basis, and when the steps now adopted by the Brazilian Government shall become effective and the budget shows sufficient revenue to meet all of the obligations of the Government, including interest a"nd amortization of the public debt,, together with an adequate gold reserve and effective methods of con- version, there is no reason why there should be any difference in the market price between official gold milreis and the current paper. Such stability of currency is greatly to be desired and would have a beneficial effect not only upon the internal industries of the country itself but upon the external trade. WHAT GUARANTEES AND REMEDIES ARE PROVIDED BY LAW IN THE CASE OF PROVINCIAL AND MUNICIPAL LAW. The Brazilian Government assumes no responsibility for the pay- ment of principal or interest of State or municipal debts. Foreign creditors have recourse in the Federal courts under the judicial code, which is of Federal enactment, and therefore uniform for all the States, in pleasing contrast to the variety of procedures that prevail in the United States. There is a provision for foreign Governments to bring suits on behalf of the Government or individual citizen in the Federal Su- preme Court. This procedure has not as yet been used. The loans usually carry a clause containing a mortgage provision. IV. THE EFFECT OF THE WAR ON TRANSPORTATION FACILITIES; RE- QUIREMENTS OF THE PRESENT AND IMMEDIATE FUTURE. The subcommittee appointed to study this topic submitted the following resolutions, which were adopted by the conference com- mittee as a whole : Whereas the chairman of the Shipping Board has announced a proposed service to the east coast of South America by pas- senger ships which apparently are limited to 15 knots an hour and of comparatively small tonnage ; and Whereas the committee believes the needs of South America are such that the service as announced is inadequate, and that the interests of North and South America demand quicker and more frequent communications and ships of a larger size to meet the competition of other maritime nations: Therefore, be it Resolved, That this Brazil conference committee place itself on record to the effect that the relations between North and South REPORT OF THE CONFERENCE COMMITTEE BRAZIL. 83 America are so important and the possibilities of the develop- ment of business between North America and the eastern coast of South America are so great as to make it desir- able that ships be provided for the carriage of passengers, 18 knots per hour and from eighteen to twenty thousand tons in size, and that the service to ports not capable of receiving such steamers be handled by transshipment. The following resolution dealing with both ocean and land trans- portation was adopted : Resolved, That it be suggested to the various Governments here represented that they authorize suitable commissions to consult with other such commissions, with a view to considering in detail : I. OCEAN TRANSPORTATION. 1. The establishment of fast passenger and mail service be- tween North America and the east coast of South America in order to adequately provide this urgently needed service. 2. The establishment of freight steamers which will be as large as economically possible, having in view port depths and facilities in the various harbors. 3. The establishment of suitable combinations between the transoceanic and the coastwise shipping of the various coun- tries, in order that through rates, including transfer services, can be secured and continuous shipments made from larger to the smaller ports at which the transoceanic steamers do not touch. II. LAND TRANSPORTATION. 1. The question of standardization of railroad equipment, in so far as that may be possible. 2. The establishment of through railroad rates and uniform traffic regulations in order to facilitate through shipments be- tween the various States and countries. The committee desires to put itself on record as concurring in the new policy which it is understood has been adopted by the Govern- ment of Brazil when assisting the construction of railroads. This policy is to guarantee interest upon the amount expended in the construction of railroads, the route, distance, specification, and esti- mated cost having been previously determined by surveys approved by the Government. The old system of guaranty upon a kilometer basis was uneco- nomical both for construction and operation. 84 SECOND PAN AMERICAN FINANCIAL CONFERENCE. V. MEASURES TO FACILITATE COMMERCIAL INTERCOURSE AMONG THE AMERICAN REPUBLICS. THE CONVENTION CONCERNING COMMERCIAL TRAVELERS. The convention concerning commercial travelers advocated by the International High Commission has been approved by Brazil, but no authority to sign has been granted. One of the obstacles in the case of Brazil is the autonomy of the Brazilian States. It has been the practice of these States to charge fees to commercial travelers within their borders, and this has become an important source of income for many of these States. In addition to these State taxes, there is also a tax on commercial travelers assessed by the Federal Government of Brazil. This convention, would do away with this practice and also pro- vide for the free entry of samples without commercial value. The United States has signed and ratified this convention with several American Republics. Recommended, That this convention have further consideration by the countries concerned with a view to the removal of the diffi- culties above stated. THE CONVENTION TO ESTABLISH AN INTERNATIONAL GOLD CLEARANCE FUND. This convention, advocated by the International High Commission, has been approved by Brazil in principle but has not been signed. The United States has signed this convention with several Ameri- can Republics, but has not ratified it. Recommended, That the gold clearance fund convention be modi- fied in the light of our war experience and it thereupon be ratified. PARCEL POST FACILITIES AND LOWER POSTAL RATES. A. A parcel post convention has been entered into between the United States end Brazil. The effective operation of this conven- tion would be stimulated by the extention of parcel post facilities in Brazil, which at the present time are confined to comparatively few localities. At present each country retains the receipts which it takes in. The business in parcel post from the United States to Brazil far exceeds the parcel post business from Brazil to the United States. It is possible that a different division of receipts would be advantageous to both countries. Recommended (1) That the postal authorities of both Governments give consideration to the question of making such changes in the convention as may be advantageous for stimulating the parcel post service. REPORT OF THE CONFERENCE COMMITTEE BRAZIL, 85 (2) That the system of parcel post distribution in Brazil be ex- tended. B. Lower postal rates: Lower postal rates are unquestionably de- sirable, but it is questioned whether with the existing facilities and present general conditions this is an opportune time for a recom- mendation. But it does seem possible that with other means of trans- porting mail, in line with the present aerial development, lower postal rates may be brought about, and that this end may be more readily attained ii* there be established an international training ground for the development of an international aviation service, with the idea of establishing at the earliest possible moment an international aerial postal service, including parcel post. CABLE FACILITIES WIRELESS TELEGRAPHY. At present there is no wireless between Brazil and the United States,, and the only means of cable communication is either on the English line via England or on the All- American lines via Argentina and Chile. Inasmuch as communication is necessarily precedent to com- mercial development, it is obvious that before there can be any ma- terial advancement in our commercial relations improved communi- cations are imperative. Improved communications may take either the form of a direct cable connection between the United States and Brazil along the east coast or an extension of the line already exist- ing from here to Colon. In addition there should be established wireless stations for communication between the United States and Brazil, the stations in each country to be owned and controlled by the country in which they are located. One of the obstacles to be overcome in the establishment of direct cable communication between the United States and Brazil along the east coast is a concession presumably granting to a French com- pany the exclusive right to establish cable communications between the United States and Brazil. Resolved, That it be suggested to the various Governments here represented that they authorize suitable commissions to con- sult with other such commissions, with a view to consider tech- nical details of through rates and construction of new cable lines and radio facilities. THE ESTABLISHMENT OF FREE PORTS. The establishment of free ports as a facility of commerce is ap- proved. If established in the United States and at the Canal Zone they would facilitate transshipment trade with the other Americas and a wider distribution of materials and manufactured products throughout the world. If established in Brazil at such points as> 86 SECOND PAN AMERICAN FINANCIAL CONFERENCE. Para they would facilitate transshipment trade up the Amazon with Bolivia and Peru. Where private companies have port concessions their rights must be considered. Recommended, to the Republics of the Americas, That permissive legislation be enacted authorizing the establishment of free ports or zones in any port fulfilling specified requirements having regard to the local conditions, laws, contracts, and the possibility of contra- band activities. VI. THE DEVELOPMENT OF UNIFORMITY OF LEGISLATION. Your subcommittee on Section VI believes that while uniformity of legislation would be highly desirable, yet its consummation is im- practicable. A simplification of procedure and of forms will, we believe, bring about better and more immediate results and will in Itself be an approach to uniformity. In the matter of customs regulations we believe the problems in- volved are local and not susceptible of uniform treatment. Undervaluation of merchandise with intent to defraud is so repre- hensible as to merit drastic treatment. We make no recommenda- tions as to penalties, but offer the suggestion that plans be studied having for their purpose the elimination or reduction of the ad valorem duties where the enforcement of true valuation is difficult. Consular invoices and procedure should receive the maximum of simplification, since it is essential that the minimum of time should be consumed in the preparation of the documents. We suggest that consular invoices be so designed as to permit their being filled out on the typewriter. Columns for the total number of packages and the total weight of shipment seem to be all that is necessary, since the total thus written will preclude change of figures in any separate Items. Errors in the preparation of consular invoices should be per- mitted to be remedied by an explanatory letter. The various con- sulates of any one nation, regardless of their location, should use uniform documents. We regard the matter of simplification of con- sular forms and procedure of sufficient importance to suggest that a consular conference be called at an early date, the membership to be composed of Pan American consular officials. The limited time at our disposal has precluded any intensive study of port dues, sanitary requirements, wharfage, customs classification, and nomenclature, etc. We believe that the matter of negotiable instruments and com- mercial contracts should be approached on the basis of the moral obligations rather than the legislative enactments behind them. Even when laws differ, practice can approach uniformity by the development of mutual agreements based upon the moral obliga- REPORT OF THE CONFERENCE COMMITTEE BRAZIL. 87 tions of good business. Sound practice thus established will be even- tually crystallized into law. We hope that agreements embodying the same principles as those existing bet\veen the Chambers of Com- merce of Buenos Aires, Montevideo, and Guayaquil and the Cham- ber of Commerce of the United States will be speedily concluded with the appropriate business organizations of Brazil. We indorse the purposes of the American International Union for the Protection of Trade-Marks and recommend that it receive the support of all the nations of the Americas. We refrain from recommendations in the matter of uniform admiralty law, believing the subject to require more time for its study than has been placed at the disposal of the subcommittee. ADDITIONAL RECOMMENDATIONS. At the instance of the Hon. John Barrett, Director of the Pan American Union, the conference committee adopted the following recommendations : First. That each government of the Pan American Union shall arrange that regularly and permanently its various depart- ments and bureaus shall deposit in the library of the Pan American Union two copies of all informative official publica- tions, maps, and other data, including the report of the Treasury and other financial agencies ; Second. That each Government consider the advisability of preparing under its direction a comprehensive standard hand- book in English describing its financial, commercial, material, and other conditions, to be distributed through the Pan Ameri- can Union ; Third. That each Government deposit in the Pan American Union, for exhibit whenever necessary, films descriptive of its life and resources; and Fourth. That every effort be made by each Government to make the Pan American Union a practical, up to date central bureau of information. Respectfully submitted. THE CONFERENCE COMMITTEE FOR BRAZIL, CARLOS CESAR DE OEIVEIRA SAMPAIO, Chairman. OSCAR T. CROSBY, Vice Chairman. CHILE. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY or THE TREASURY OF THE UNITED STATES. SIR: On behalf of the Chilean group committee, we beg to an- nounce that after several well-attended conferences and after full discussion of the topics involved, it was agreed to submit the follow- ing report to the Second Pan American Financial Conference : DOCUMENTS PRESENTED BY CHILEAN DELEGATION. The conference group had the advantage of receiving from the Chilean delegation a number of carefully prepared reports covering fully almost all the topics included in the preliminary program placed before the group. These documents are as follows : I. Monetary system. II. Taxation: Custom duties, national taxes, local taxes, annual report of the treasury, external debt, internal debt, currency. III. Banking system. Banking facilities. IV. Bills of exchange and checks. Comparison of Chile's commer- cial code and The Hague conventions. V. Patents and trade-marks. VI. Customs and commercial statistics. VII. Land transaction. VIII. Maritime transportation. There was furthermore delivered before the conference an address by Dr. Victor V. Robles, a member of the Chilean delegation, who gave a short description of the effect of the war on the general in- dustrial and agricultural conditions of Civile. NITRATE SITUATION. The committee wishes to call particular attention to the fact that in some of the documents submitted to the committee, the statement has been made that the nitrate industry had collapsed as a result of the armistice. While it is true that temporarily this industry was 88 REPORT OF THE CONFERENCE COMMITTEE CHILE. 89 affected, it ought to be stated with great emphasis that conditions have since assumed a more normal status and that the nitrate situa- tion has now recovered its usual activity. Dealing more specifically with some of the topics treated in the De- ports submitted by the Chilean delegation, the conference group begs leave to offer the following observations. BANKING AND CURRENCY. The Avar has brought about very drastic changes in the financial conditions of both Chile and the United States. It has greatly strengthened relations that exist between the two countries in finance and commerce, and it is safe to predict that each will rely upon the other in the future to a much vaster extent than in the past. At present Chile is in a position where she can safely consider the adop- tion of a gold standard and the Chilean Government has already evolved a plan to this effect, including the establishment of a central banking system, fashioned along the same lines as the Federal Re- serve System of the United States. The committee heartily indorses these plans and hopes sincerely that it may be possible to bring them to an early realization. It is with particular gratification that the committee takes notice of the plan of the Chilean people to adopt a gold standard which, in accordance with the recommendations of the International High Commission of 1916, will be a multiple of a coin containing 0.33437 gram of gold, and being 0.900 fine, the latter being approximately 20 cents of the United States dollar. The stability of the Chilean exchange which will follow the adoption of the con- templated central banking system, with a definite gold standard, will greatly facilitate the further development of commercial and financial relations, the growth of which is so earnestly desired by both countries. The committee believes that coming years will show a growing intimacy between the banking systems of the two countries. The ac- ceptances available through North American banks for the purpose of financing the increasing trade ought to play a highly important part in this respect. Moreover, it is hoped that when the period of readjustment, in which all nations now find themselves, has passed, the United States will offer a constantly widening market for the secur- ities of American countries. There is all the more reason to expect such a course on account of the fact that not only has the United States become a creditor nation as a consequence of the war but also that European countries, formerly taking a leading part in the de- velopment of this hemisphere, will find an important field of activity in the Old World, where their work of construction and reconstruc- tion will have a first claim on their energies and attention. 90 SECOND PAN AMERICAN FINANCIAL, CONFERENCE. LATIN-AMERICAN BANKS IN THE UNITED STATES. It is important, however, for the purpose of further strengthening the bonds uniting the Americas that not only North American banks go into South American and Central American countries, but also that steps be taken enabling Latin- American banks to open branches in the United States. Efforts should be made along these lines, and the committee recommends that laws be enacted in the leading States of the North American Union allowing the important Latin- Ameri- can banks to open branches in the United States in a similar manner as North American banks open in Latin- American countries. RECOMMENDATIONS TO FOREIGN BANKS OPERATING IN CHILE. The Chilean delegation submits the following recommendations affecting the methods of operation of foreign banks in Chile, which this committee approves : (a) That foreign banks in Chile when making loans endeavor to do so through the medium of direct obligations with fixed maturities rather than through overdraft in current account running for an indefinite period. (b) With respect to credit information the Chilean delegates have suggested that a frank exchange of information be had between the banks of both countries. EQUAL TREATMENT FOR DOLLAR AND POUND STERLING. The American members of the Chilean group pointed to the fact that the laws of Chile give to the pound sterling the privilege of being accepted as legal tender, and the committee therefore sug- gests that, in view of present conditions and in order to facilitate the development of commercial and financial relations, the dollar be endowed with the same privilege as is now accorded to the pound sterling. The committee further recommends that dollar exchange be quoted officially on the stock exchange of Santiago and Valparaiso in the same manner as the pound sterling. The delegates from Chile, agreeing to this recommendation, promised to transmit it to the boards of said institutions with a view to securing favorable action upon the request. TRANSPORTATION. The effect of the war on transportation facilities and the require- ments of the present and immediate future were fully discussed by the general committee on this topic. Its views were conveyed to the REPORT OF THE CONFERENCE COMMITTEE CHILE. 91 Transportation Committee by two delegates duly appointed. The report on transportation will be made to you by the Transportation Committee. PUBLIC UTILITIES. Your committee has considered what may be done in order to en- courage the flow of capital into Chile for the purpose of developing public utilities and similar projects. It has been stated that existing laws, especially in relation to the installation and distribution of electric power, because of the short life allowed for such franchises, do not encourage the fullest possible development of those industries which necessitate large investments of money. The Chilean delegation agreed to this statement, and to the desirability of the modification of the existing laws. It was resolved, therefore, that the modification of the Chilean leg- islation on public utilities, especially hydroelectric and electric de- velopments, should be secured, so that franchises would provide for a life of approximately 80 years before installations constructed by pri- vate enterprise would revert to the Government. IMPORT ASSOCIATIONS. Present American laws have provided measures permitting Ameri- can exporters to organize for the general protection of the interests of the United States. Present laws do not provide, however, a like protection for im- porters, inasmuch as they are not permitted to combine for similar purposes. It is therefore recommended that American industrial enterprises producing abroad raw materials essential for the industries of the United States be allowed under proper governmental regulations to join organizations formed to promote the production of such raw materials, and it is further recommended that the Webb law be so amended as to permit the entrance of American companies into such associations. It is likewise recommended that the Xitrate Producers' Association of Chile establish a committee in New York similar to those now ex- isting in London and Berlin. ARBITRATION OF COMMERCIAL DISPUTES. As a result of recommendations made by Pan American and Inter- national High Commission conferences, arrangements have been per- fected between chambers of commerce of three Latin- American coun- tries and the United States, providing a machinery for the arbitra- tion and settlement of commercial disputes. 92 SECOND PAN AMERICAN FINANCIAL CONFERENCE. Since their organization these arbitration committees have ren- dered excellent services, and the committee strongly urges that prompt steps be taken to perfect similar arrangements between the United States and Chile. It is considered advisable that in contracts for the purchase or sale of goods between the countries involved there be embodied a clause providing for such arbitration of any disputes arising with respect to the quality of the goods or the general fulfillment of the terms of the contract. Costly controversies involving loss of time and money may thus be avoided. PAN AMERICAN HIGH COURT OF EQUITY. A member of this committee, Mr. John Hays Hammond, has sug- gested the idea of creating a Pan American high court of equity to settle commercial disputes. The plan contemplates that this court should hear and determine cases involving solely commercial and financial international relations between Pan American nations. The court is to be composed of judges selected by and representing the various Pan American countries. The committee voted to indorse the suggestion, to present it to the Committee on Resolutions, believing that such court, if established, would prove a contributing factor in removing some of the obstacles that may stand in the way of a free flow of capital into Latin Ameri- can countries. A careful study of the economic problems of Chile and the United States has not failed to impress anew the minds of the members of this committee that as a matter of geography, of logic, and sentiment the two countries are destined to be drawn into a union of constantly growing importance and intimacy. The Panama Canal has opened the door between them, and even without any special efforts the natu- ral evolution will be in this direction. If, however, the present con- ference and its recommendations should succeed in promoting and accelerating this propitious course, it will be a particular gratifica- tion to the signers of this report. Respectfully submitted. THE CONFERENCE COMMITTEE FOR CHILE, Luis IZQUIERDO, Chairman. PAUL M. WARBURG, Vice Chairman. COLOMB A. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY or THE TREASURY OF THE UNITED STATES. SIR: The group conference committee for Colombia, consisting of the delegates from that Republic and the members from the United States, has made a careful study of the topics that were submitted for its guidance and consideration and begs to present the following report of its deliberations on those points that were deemed of especial interest to Colombia and the United States : As a result of the European war Colombia has become more self- sustaining. It now produces various foodstuffs that formerly had to be imported in order to supply the domestic needs of the country and is exporting some of these products to neighboring countries. Stimu- lus also has been given to the growth of manufacturing, especially in the line of coarse textiles. While there was a noticeable shrinkage in the revenues of the Colombian Government during the period of the war, on account of the decline of imports, upon which duties that constitute the princi- pal source of revenue were levied, the financial position of the Re- public has been in no way impaired. On the contrary, Colombia stands forth as one of the American countries whose financial sound- ness and integrity are beyond question. All obligations have been promptly met, and there is only praise to be accorded to those who have been in charge of the nation's finances. On account of the low rate of foreign exchange in Colombia prac- tically all of the gold produced by its mines has remained in the country and is being minted there, increasing thus the amount of gold in circulation. There has been a steadily growing production in practically all lines in Colombia, and the country is more prosperous on account of the higher prices received for its commodities. Capital is needed, however, for the enlargement and completion of certain important public projects, in order that the Republic may develop to the best advantage its rich natural resources and foreign trade. The Government of Colombia is particularly interested at present in three classes of public construction enterprises: (1) The improvement of port facilities; (2) the building of railways; and 93 9 I SECOND PAN AMERICAN FINANCIAL CONFERENCE. (3) the extension of sewerage, paving, and waterworks in some of the larger cities. In regard to railways, the Government of Colombia wishes to con- fine its efforts at present to extending a line northward from Bogota, the capital, to the head of deep-water navigation on the Magdalena River, and completing the Pacific Railway, which is to .connect Bogota with the port of Buenaventura. Of the latter road, 400 kilo- meters have already been constructed, leaving approximately only 300 kilometers to be built. The Government is ready to offer the most ample security to investors who may undertake the financing of these projects, pledging, in addition to the mileage constructed, a proper guarantee from some portion of the national revenues. It is the idea of the Government to carry out this work of railway building gradu- ally, as circumstances may permit, and in accordance with the policy that has made the financial standing of Colombia so secure. There is sufficient local capital for the promotion of relatively small enterprises, but not for larger undertakings, such as railway construction, public works, and the development of petroleum lands and mines. Until recently only people of large means were able to share in the ownership of Colombian enterprises. Xow, through the issuance of capital shares in small denominations, opportunities are opened to small investors and advantage is being taken of them. Since the Pan American Financial Conference of 1915, banking facilities in Colombia have largely increased. The country's own banks have added very materially to their resources. Three large Xorth American banks also have entered the field with branches in the principal commercial centers. All these have prospered. There is undoubtedly room for still further activities in this line of business. The attention of the committee has been directed to certain desir- able changes in banking methods for the facilitation of trade and commerce between Colombia and the United States. Chief among these is the wider use of bank acceptances as embodied in the recom- mendations at the close of this report. Work should be done to arouse general interest in this respect, so as further to encourage the development of commerce. Private investment will find a wide field in Colombia. The Re- public is a country of great agricultural possibilities. It possesses immense areas suitable for grazing, conveniently situated with ref- erence to the sea and navigable rivers. Up to the present time it has been possible to export only a small number of cattle on the hoof, principally to the Canal Zone. But with the completion of packing houses, one under construction and one in prospect, Colombia will be in a position to supply the market for canned and refrigerated meats, both in Europe and America. A number of foreign interests are REPORT OF THE CONFERENCE COMMITTEE COLOMBIA. 95 now acquiring lands for cattle raising and for sheep raising in the mountain districts. There are many regions in Colombia suitable for the cultivation of sugar cane. One large cane-sugar mill (cen- tral) and several smaller ones are in operation, producing sufficient sugar for domestic consumption. In addition, excellent opportunities exist for those who will engage in this industry for export purposes. Foreign capital will find favorable employment in the development of Colombia's petroleum resources. Much activity is visible in this connection, options having been taken on approximately 900,000 hec- tares (1 hectare 2-J acres of land). The Colombian Government also grants concessions on public lands. These three industries are perhaps the most important as far as new opportunities are con- cerned, but there are many other fields in which foreign capital may profitably engage. Colombia is the largest producer of mild grades of coffee. It is second only to Russia in the production of platinum. It is the sole producer of the finer sort of emeralds. Its coal deposits are quite rich. Colombia is an important exporter of hides, vege- table ivory, tobacco, rubber, bananas, and other tropical fruits. On the basis of present production great possibilities also are offered for the cultivation of long-staple cotton. The national debt of Colombia is almost negligible, amounting to only about $3.50 per capita. The fiscal system is now in process of reorganization. Custom duties hitherto have constituted the chief source of revenue, but direct taxes are now beginning to be levied. The first income-tax act of the Eepublic has gone into effect in the present year. The Government expects that the old system of taxa- tion will soon be revised throughout in accordance with modern ideas. Colombia is now on a gold basis. Exchange on the United States stands at par, or in favor of Colombia. Taxes are levied by the national, departmental, and municipal governments. They are un- usually low. that imposed on real estate, for instance, being $2 per thousand. The total per capita tax rate of the Eepublic amounts to about $6 per annum. One of the results of the war was to reduce the number of steam- ship lines operating to and from European ports, as well as those of the United States. The service of the ships upon which Colombia has to depend is such as to make travel far less attractive than it should be in the mutual interest of both Colombia and the United States. It must be borne in rnind that European steamship lines for- merly plying to and from Colombia are planning to reestablish their service in the immediate future. What is needed, therefore, is faster, more frequent, and better service between Colombia and the United States. Unless this is forthcoming, there is danger that this country 96 SECOND PAN AMERICAN FINANCIAL CONFERENCE. will lose much of the trade that it gained during the war, which it can and should hold. The Government of Colombia is taking an active interest in the removal of obstacles to navigation and deserves commendation for the excellent progress that it is making in this direction. In view of the approaching resumption of service to Colombia by European steamship lines, the committee would also call attention to the fact that such lines will carry freight (as they have in the past) to European ports, approximately twice the distance from Colombia to American ports, at substantially the same freight rates as those charged by American vessels to and from the United States. It sug- 'gests, therefore, the advisability of promptly establishing as low rates as possible in order that this European competition may be met before the trade shall have been lost. It is gratifying to note that the regulations governing commercial intercourse between the United States and Colombia show a marked spirit of fairness. Taxes on commercial travelers and their samples are nominal, and no difficulties are placed in the way of salesmen's activities. Plans for the improvement of cable and telegraph service, as well as for the introduction of the Marconi wireless system, are being worked out, and the committee is informed that satisfactory progress is being made. When this work shall have been completed Colombia expects to have prompt and reliable domestic and foreign communi- cation. Colombia is improving its warehouse facilities in the principal ports, and the Government is taking great interest in the further bet- terment of these important aids to commerce. Since payment by check was until recently unknown in Colombia, the law had not taken cognizance of the practice; but an act has now been passed, as a result of which it is hoped that the check sys- tem will become widely adopted. Colombia, finally, is one of the countries of America which has laws affording adequate protection to the rightful owners of patents, trade-marks, and copyrights. In conclusion, the committee desires to submit the following recom- mendations : 1. That the attention of the various ministries of Colombia be called to^ the desirability of publishing descriptive pamphlets in English for distribution in the United States. Such pamphlets should contain detailed and trustworthy information in regard to petroleum and ore deposits and such industries as cattle raising, sugar, cotton, etc. They should include a brief statement of the laws covering the development of mines and petroleum in prder that REPORT OF THE CONFERENCE COMMITTEE COLOMBIA. 97 capitalists in the United States having money to invest in such enter- prises may know under what conditions investments may be made and safeguarded. 2. That the International High Commission continue its study of the possibility of establishing an international gold clearance fund. 3. That a Pan-American postal congress be called to frame a con- vention supplementing the postal convention of Montevideo so as to facilitate postal interchange between the Latin American Repub- lics and the United States and to consider changes brought about by modern means of communication. 4. That those Latin- American countries which have not yet adopted the recommendations of The Hague Conference of 1912 in regard to bills of exchange, checks, etc., be urged to do so. 5. That the delegates from Colombia bring to the attention of their Government the advisability of modifying the laws governing the shipment of merchandise to that country so as to permit con- signment of goods to order and legalize warehouse receipts. 6. That measures be taken, through the medium of the Chamber of Commerce of the United States and the Colombian chambers of com- merce, for the arbitration of any commercial disputes between citi- zens of Coldmbia and those of the United States. 7. It is deemed desirable to add to these recommendations those already submitted to the Transportation Committee, viz : (a) For th*e betterment of steamship service between the United States and Colombia, it would be desirable, first, to have American steamship lines now plying to Cuba and Porto Kico extend their service to the Atlantic ports of Colombia ; second, to have American vessels now serving such ports proceed to them directly, instead of indirectly by way of other ports on the Caribbean; and, third, to have American ships now passing through the Panama Canal, to and from the west coast of South America, call at Buenaventura, the chief port of Colombia on the Pacific. (b) For the further promotion of oceanic traffic, measures should be taken to remove the sand bar, known as Bocas de Ceniza, at the mouth of the Magdalena River, and carry on such additional dredg- ing as may be required to render it possible for ocean-going vessels to proceed directly up the river to Barranquilla, thus obviating the present necessity of transshipment from steamer to railway at Puerto Colombia. (c) In view, also, of the rapidly growing resumption of service by European steamship lines which carry freight to European ports, ap- proximately twice the distance from Colombia to American ports, at substantially the same freight rates as those now charged by Ameri- 1497021 7 98 SECOND PAN AMERICAN FINANCIAL CONFERENCE. can vessels for the conveyance of merchandise to and from the United States, it is desirable, in the interests of the trade between Colombia and the United States, that the freight rates be placed on as lew a basis as possible. (d) In the interest of transportation within the interior of Colom- bia, it would be desirable to unite the capital city by rail with the Atlantic and Pacific coasts through the extension of a railway north- ward from Bogota to the most suitable point on the lower Magdalena River and through completion of the Pacific Railway. This work of extension, it is gratifying to note, will be carried on by the Colombian Government gradually, as circumstances may permit, and in a man- ner that will insure the maintenance of the policy which has made the financial standing of Colombia secure. Respectfully submitted. THE CONFERENCE COMMITTEE FOR COLOMBIA, POMPONIO GUZMAN, Chairman. WALLACE D. SIMMONS, Vice Chairman. CUBA. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY or THE TREASURY OF THE UNITED STATES. SIR: An able and comprehensive memorandum of the secretary of finance of Cuba, especially prepared for this conference, furnished the principal basis for the discussions at the meetings of the Cuban committee. The prosperous condition of the island, vividly shown by the memorandum, and the growth of her trade with the United States of America furnish a happy example of the mutual benefits which accrue from the close economic cooperation between the United States of America and the Latin- American countries. The problems confronting Cuba are strikingly different from those of the majority of the South American and Central American countries. This is so for several reasons, among which may be mentioned : First. The geographical situation of Cuba is such that her rail- ways may be considered, from a physical point of view, as a part of the railway system of the United States of America, being separated by only 90 miles of water, traversed by ferryboats in six hours. In addition there are long-established steamship lines connecting the principal ports of Cuba. The transportation problem, of such vital importance to so many of the countries represented at this confer- ence, is limited, in so far as Cuba is concerned, to the relatively insignificant question of providing better accommodations and facili- ties by the adjustment and speeding up of railroad and boat sched- ules and otherwise for furthering the convenience of the ever- increasing hosts of tourists and travelers. Problems in regard to cables, postal service, wireless and air communication have almost completely disappeared. Second. In addition to the intimate physical connection, Cuban political and financial relations with the United States of America are closer than those existing between the United States and the other countries of America. The fact that her coinage is based on the gold standard of the United States of America, whose currency 99 100 SECOND PAN AMERICAN FINANCIAL CONFERENCE. circulates and is legal tender in Cuba, reduces the economic problems to a minimum a far different situation from that which exists be- tween the United States and the adjacent countries of Mexico and Canada or between adjacent countries on the South American Conti- The relations between the banking system of Cuba and that of the United States are unusually intimate. Cuban banks, with their innu- merable branches throughout the island, are closely linked with banks in the United States and Canada, either by ownership, affiliation, or long-established daily business contact. In addition, important bank- ing and brokerage firms in Habana keep in constant touch with the New York Stock Exchange in exactly the same manner as do similar houses in the leading cities of the United States. The very rapid growth of banking in Cuba has scarcely given time to work up such close coordination between the different banks as might perhaps be desirable, but it is only a question of time when clearing houses will be established and the banks all found working together for the general good. Third. The complementary relations between the products of Cuba and those of the United States combine with the geographical situation to make the latter country the greatest market for Cuban products and Cuba a most favorable export market for the United States. Iji 1918 about TO per cent of Cuba's exports went to the United States, from which she bought 72 per cent of her imports. These percentages were undoubtedly increased in 1919, the statistics for which are not yet available. These figures indicate that Cuban agricultural and mineral output is needed in the United States, and, conversely, the agricultural and manufactured articles of the United States are needed by Cuba. This fortunate situation, being natural and not artificial, is bound to endure and augurs well for the con- tinued commercial relations between the two countries. Financially, Cuba has prospered during the Great War. For the years 1916, 1917, and 1918 her favorable balances of trade were $106,000,000, $100,000,000, and $113,000,000, respectively, while that of 1919 (the statistics of which have not yet been compiled) is esti- mated at $200,000,000, and for 1920 might even reach $300,000,000. In the invisible balance, expenditures by American tourists help to offset the interests Cuba has to make. Although many of the sugar mills in Cuba are owned by American and English interests, the cane plantations, or " colonias " themselves, are chiefly owned or leased by Cubans ; and the indication in the figures just given of great pros- perity for Cuba is borne out by fact. This is shown not only by the large increase in banking deposits but also in the greatly enhanced value of land in both cities and country, as well as by the construe- REPORT OF THE CONFERENCE COMMITTEE CUBA. 101 tion of buildings, highways, railways, and other public and private works. More perhaps than other countries of South and Central America will Cuba have the means to continue the development of her agricultural and mineral resources, although it may take time and effort to divert her capital more fully in this direction. Perhaps the ideal method of development will be the association of Cuban capital and knowledge of local conditions with American investment, experience and knowledge of construction, engineering, and tech- nical problems in general. Further, it is not unreasonable to suppose, in view of her trade balance, large surplus profits, and the fact that she is buying back her own securities that Cuba may even figure as a creditor nation and be in a position, after providing fully for her own requirement, to furnish credit to the outside world. Her bank- ers now have a certain clientele, for whom they deal in non-Cuban investments, including on a large scale United States Liberty bonds, and it would not seem difficult for them to build up, in connection with those in the United States who have had long experience in such lines, the necessary machinery for the sale and distribution of securities. The necessity for inculcating habits of thrift among her people, and, as shown by the memorandum of the secretary of finance, for curbing undue speculation on the one hand and teaching the prin- ciples of sound investment on the other has been appreciated by the Cubans themselves. Another fortunate phase of Cuba's recent life is that her Govern- ment has provided in her budget to pay ordinary expenses through taxation instead of by issuing bonds or paper money. In 1917 there was authorized an issue of $30,000,000 of bonds for special war pur- poses, guaranteed by special war taxes, of which $10,000,000 were taken by the United States as a guarantee for a loan. The budget for 1918-19 provided revenues of $64,460,000 to cover expenditures of $62,730,000. Of these revenues $37,000,000 came from custom duties, $15,000,000 from land revenues, and $4,000,000 from the national lot- tery. In fact, the actual revenues exceeded by about $6,000,000 the budget figures. The services of the public debt require only $6,000,- 000 for an external debt of $51,500,000 and an internal debt (includ- ing the war debt above mentioned of $30,000,000) of $47,000,000. Additional statistics might be presented without end, all demon- strating the able manner in which Cuban officials and private in- dividuals have met the problems of the recent trying years of war. It is safe to assume that they will meet with equal intelligence the perplexing questions which they, together with the countries of the world, are now facing. Her chief economic problems, as suggested above, are due not to poverty but to a plethora of wealth. Wise con- servation of resources to act as a reserve in future times when condi- 102 SECOND PAN AMERICAN FINANCIAL CONFERENCE. tions may not be as highly prosperous as to-day may confidently be looked forward to. In this connection it is worthy to note that as Cuba's prosperity depends so largely on sugar, and that as the United States will pro- vide a market for only two-thirds of the present enlarged production (double that of prewar days), other markets must remain open. The services that Cuba rendered to the Allies during the late struggle should not be forgotten. Among other services, at their behest, she doubled her sugar output in a short space of time, with scarcely any increase in population. The enormous sugar output in proportion to population is w r orthy of attention, indicating a high degree of effici- ency among the mill owners and of industry among the cane planters. -Cuba promptly accepted price regulations for 1917-18 and 1918-19 crops, strained her credit to the limit to plant a vast area of land in sugar cane and her present prosperity is thus largely due to her initiative and industry. Under ordinary conditions Cuba can meet her competitors in the markets of the world, but should some of the European countries, in order to help pay their war indemnities, revive their former policy of paying bounties to sugar producers, or unduly aiding them in any way, it would place Cuba and the other sugar-producing countries of America in a most unfortunate posi- tion, which would react seriously on the United States. The committee, therefore, desires to call the attention of the com- mittee on form and resolutions to this matter as a subject for con- sideration and makes the following : RECOMMENDATIONS. I. That it be declared to be the sense of the conference that the Governments of the Pan American countries, individually and col- lectively, should take proper measures to forestall attempts to in- troduce any system of sugar bounties, subsidies, or other artificial devices which would in substance be tantamount to unfair competi- tion. II. That the conference urge the advisability of improving tourist accommodations, removing as speedily as possible restrictions upon travelers and taking measures generally for the safety, comfort, and convenience of tourists and travelers. III. That Governments and corporations contemplating the estab- lishment of South American steamship lines be urged to take into consideration the advisability of making Cuban cities ports of call in view of the port facilities and extensive commerce of the Cuban Republic. REPORT OF THE CONFERENCE COMMITTEE CUBA. 103 IV. That the recommendations of the Pan American Union in re- gard to the deposit and dissemination of official information be ap- proved and acted upon. V. The committee feels confident that the Chamber of Commerce, Industry, and Navigation of Cuba, especially in view of the fact that arbitration has already taken place under its rules, will be glad to cooperate in any general movement for the furtherance of commer- cial arbitration, and recommends that it be approached for this pur- pose. VI. That the attention of American exporters and manufacturers and of Cuban importers be called to the advisability of routing mer- chandise to Cuba by the most economical lines. Respectfully submitted. THE CONFERENCE COMMITTEE FOR CUBA, CARLOS MANUEL DE CESPEDES, Chairman. MILTON C. ELLIOTT, Acting Vice President. THE DOMINICAN REPUBLIC. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY or THE UNITED STATES. SIR : Whereas from a study of reports and material concerning the Dominican Republic furnished the Conference Committee for ex- amination, and from information supplied by the official delegation, it has been established : (a) That the financial condition of the Dominican Republic, as a result of the currency reforms and fiscal system described in the an- nexed report, is excellent, and that the finances are established on a sound basis which will permit the further growth and development of the Republic. (b) That the development of the country requires that the Domini- can Government's program of roads, port improvements, and other public works be carried through to a conclusion, and that the negoti- ation of a loan in the amount of $5,000,000, to be secured by a first lien on all the revenues other than the receipts from duties upon im- ports and exports, is justified. (c) That the adoption of the proposal of the Dominican Govern- ment that a trade agreement of a reciprocal nature be executed be- tween the Dominican Government and the United States along the lines proposed by it would be of material assistance to both countries in the development of their trade. It appears that certain measures should be taken as hereafter enu- merated. MEASURES WHICH THE DOMINICAN REPUBLIC SHOULD TAKE. 1. The abolition of tonnage dues. 2. The reduction in customs tariff and liberal treatment for foodstuffs, chemical products, pharmaceutical products, manufactures of iron, steel, building material, etc. 3. The abolition of export duties on Dominican products. MEASURES WHICH THE UNITED STATES GOVERNMENT SHOULD TAKE. 1. The admission of Dominican sugar, tobacco, cigars, cigar- ettes, cacao, honey, and castor beans, and other Dominican exports on terms equal to those accorded the Republic of Cuba. 104 CONFERENCE COMMITTEE THE DOMINICAN REPUBLIC. 105 It appears that the position of the Dominican .Republic, geographi- cally near to the United States, and to a large extent economically de- pendent upon the United States, and the grave moijal and political responsibilities of the United States toward the Republic, entitle this latter to the concessions requested : (d) That the shipping facilities to and from the Dominican Re- public are quite inadequate, for the following reasons : 1. The passenger steamers employed in the service between the United States and the Dominican Republic are slow, old, and do not afford suitable accommodations for the traveling public. The passenger service between San Pedro de Macoris and New York, with one stop, takes an average of 10 or 11 days, as compared with 4J days between New York and San Juan, P. R., approximately the same distance. 2. Direct communication between New York and Santo Do- mingo depends entirely on one steamship line, and freight rates are extremely high and seemingly based on the maximum that the traffic will bear, rather than upon the basis of a reasonable profit over the cost of operation. This operates as a heavy handicap upon the outgoing and incoming freight of the Domini- can Republic as compared with her nearest neighbors, Cuba and Porto Rico. 3. An express service from Santo Domingo City and San Pedro de Macoris, on the south of the island, direct to the port of New York would facilitate commerce and reduce the time required for the voyage between the said ports by five days, cutting the present time required for the voyage practi- cally in half. 4. A freight and passenger service from the port of New Orleans to Santo Domingo would aid the introduction and dis- tribution of American products and manufactures of the South- ern and Middle Western sections of the United States into the Dominican Republic, with profitable return freights of Do- minican products, to the mutual advantage of both countries. 5. The Dominican Republic is revising its laws relating to shipping and ports to conform to the best modern practice; is engaged upon the improvement of its ports and port facilities, including the deepening of its southern ports ; and tonnage dues will soon be removed : Now, therefore, be it hereby Resolved, (1) That this committee indorses the policy heretofore and at present pursued in establishing currency reform and a fiscal system, which has resulted in the present satisfactory financial con- dition of the Republic and which will permit of the further growth and development of the Republic's resources ; 106 SECOND PAN AMERICAN .FINANCIAL, CONFERENCE. (2) That this committee heartily indorses the public works pro- gram of the Dominican Government, and believes that the loan pro- posed by the sa^d program is amply justified by the projects and by the condition of the revenues ; (3) That this committee is of the 'opinion that the trade agreement proposed by the Dominican Kepublic would be of mutual benefit to the United States and the Dominican Republic, and does hereby recommend it to the favorable consideration of the United States Government ; (4) That the committee finds that the Dominican Republic is tak- ing active steps to provide for liberal treatment of shipping and to aid and encourage it in every way; that it is the belief of the com- mittee that the Republic is justified in asking for better steamship service to the United States. The committee therefore recommends that the Shipping Board include in its program the provision for a proper and adequate passenger and freight service from New York and New Orleans with reasonable rates as compared with the neigh- boring islands ; and (5) That in view of disagreements arising out of acceptance or rejection of merchandise entering Dominican ports, this committee recommends the establishment at the various ports of boards, named by the respective chambers of commerce or otherwise, to hear such complaints and recommend terms of adjustment. Respectfully submitted. THE CONFERENCE COMMITTEE FOR THE DOMINICAN REPUBLIC. Luis GALVAN, Chairman. CHARLES J. RHOADS, Vice 'Chairman. ECUADOR. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR: The Ecuador conference committee composed of the official delegation of the Ecuador Government, the special representatives of the Secretary of the Treasury, and the United States members of the group committee, as a result of the committee conferences, begs to submit the following report : I. THE EFFECT OF THE WAR ON COMMERCE AND OTHER ACTIVITIES OF THE REPUBLIC. 1. Upon the information submitted to this committee it is of the opinion that the recent European war during its continuance pro- duced the following results in the economic and business interests of Ecuador : First, a very considerable stimulation and increase in the country's production of foodstuffs, such as grains, sugar, potatoes, etc., to a point where the country was enabled to raise a surplus sufficient for export; second, a very considerable stagnation in the matter of the import business on account of the scarcity of ocean transporta- tion, and this condition also raised the price of all commodities to the detriment of the purchasing power of the people; third, as a result of both of the foregoing, the Government of Ecuador was prejudiced during the war to some extent in its revenues. 2. Regarding the urgent present public financial needs, the report of Dr. Luis Felipe Borja, member of the Ecuadorian section of the International High Commission, under date of November 10, 1919, states that a foreign loan of $50,000,000 to $60,000,000 is indispensable to place the country on a sound financial footing, the proceeds to be used to refund the public debt, establish a national bank, to complete the present railroad program, and develop the natural resources of the country. Thereupon, after discussion, the following resolution was adopted : I Resolved, That the conference committee approves in principle the recommendation contained in the report of Dr. Borja, under 107 108 SECOND PAN AMERICAN FINANCIAL, CONFERENCE. date of November 10, 1919, providing, as it does, for the refund- ing of the present internal and external debt of the Republic of Ecuador as a means to the improvement of the Republic's credit, thereby enabling it to secure the capital required "for the develop- ment of its resources II. HOW CAN REQUIRED CAPITAL AND CREDIT FACILITIES BEST BE PROVIDED. 1. In answer to the question, to what extent these requirements can be met by domestic capital, it was explained by the delegation from Ecuador that a surplus accruing from internal industries in 1919 of approximately $4,000,000 was available for domestic loans. 2. In answer to the question with regard to what extent foreign capital is required : (a) Reference is made to the above-mentioned report of Dr. Borja, Discussion of this question in detail brought out the statement from the delegation from Ecuador that the establishment of an American branch bank or banks in Ecuador would be of great value to that Republic, as its banking facilities are very limited and very expensive. Ecuador has banks for internal business, but needs American banks to assist in credit and commerce. Thereupon the following resolution was adopted : Resolved, That this committee recommends to the American banks the desirability of establishing branches in Ecuador to improve credit facilities, exchange, and investment information. (b,c,d) The following resolution was adopted: Resolved, That this committee is of the opinion that the exten- sion of our open discount for market acceptances would greatly aid the financing of ^Ecuadorian foreign trade. The education of American investors in the field 'of foreign loans would also aid in a large measure the development of business between Ecua- dor and the United States and likewise result in the encourage- ment of the entrance into Ecuador of United States industrial and commercial companies. III. NATIONAL CREDIT AND THE FACTORS AFFECTING IT. 1. The total foreign debt of Ecuador is 35,206,723.20 sucres (ap- proximately $17,603,362) and the total internal debt 21,000,499.21 sucres (approximately $10,500,249). The foreign debt is composed of condor bonds issued to liquidate a small balance of the old foreign debt incurred by Greater Colombia at the beginning of the past century ; common bonds issued by the North American Quayaquil & Quito Railroad Co., under contract for the construction of a road, signed June 14, 1897, guaranteed by the Government of Ecuador at 6 per cent annually, later reduced to 5 REPORT OF THE CONFERENCE COMMITTEE ECUADOR. 109 per cent ; salt certificates issued by the Ecuador Government in pay- ment of three coupons of the common bonds issued by the said rail- road company and guaranteed by the nation. At the opening of the group sessions it was announced that the matter of the Guayaquil & Quito Railroad would be excluded from discussion by the group. It was therefore not considered. The following resolution was also adopted : Resolved, That the committee approves the recommendation contained in a report of the Chambers of Commerce of Guaya- quil and Quito to the President of Ecuador, dated July, 1917, urging the desirability of increasing the collection of revenues. 2. The national fiscal system is based on direct and indirect taxes. The principal revenues are those of the customhouse, which are im- port duties, revenue taxes on tobacco and spirituous liquors, and real estate taxes. 3. Ecuador adopted the gold standard in 1898 and the standard coin minted is called the condor, representing the value of 10 sucres, equal to about $4.86, parity. 4. Municipal loans are made only by authority of the Central Gov- ernment and are guaranteed by liens on municipal revenues and municipal properties. IV. EFFECT OF THE WAR ON TRANSPORTATION FACILITIES. Before the war the steamships of the following lines touched regu- larly at Guayaquil, according to the information given us: Pacific Steam Navigation Co., Peruvian Line, Chilean Line, Cosmos Line; and steamships of the following lines touched irregularly, besides tramp steamers occasionally : W. R. Grace & Co.'s Line and Lamport & Holt Line. Since 1914 the only steamers calling regularly have been those of the Pacific Steam Navigation Co. It is announced that a steamer of a new line, the Ecuador Line, will shortly begin sailings from New Orleans to Guayaquil. In general the service is stated to be the worst in a period of 25 years. The imports in 1917 and for 10 years previous were $10,000,000 an- nually. The exports in 1917 amounted to $16,000,000, an increase from a former average of $12,000,000. Due to the changes caused by the war, it is stated that now about 80 per cent of the foreign commerce of Ecuador is with the United States, mostly New York. In the address of Chairman John Barton Payne, of the United Shipping Board, it was stated that it is designed to run vessels from 110 SECOND PAN AMERICAN FINANCIAL CONFERENCE. New York to the west coast of South America, stopping at Callao and other ports to the south, which seems to omit Guayaquil. The sentiment of the delegation and group committee as to the shipping needs of Ecuador is expressed by the following resolution duly adopted : Whereas the Ecuadorian delegation reports that the port of Guayaquil has for 10 months been free of yellow fever ; and Whereas since the beginning of the war the trade between the United States and Ecuadorian ports has increased about four times : Therefore be it Resolved, That Ecuador would be greatly benefited by more prompt and regular steamship service between the United States ports and Ecuadorian ports, especially between the ports of New York and Guayaquil; Therefore effort should be made to induce the United States Shipping Board and other appropriate agencies to establish regular service as above stated. The following resolution was also adopted : Whereas the opinion of the committee, from the information laid before it, is that the future commercial growth of Ecuador is dependent on adequate transportation facilities and the im- provement of the port of Guayaquil : Resolved, That the deepening of the Guayas River at certain points to enable the admission of vessels of a larger tonnage and the construction of a dock at Guayaquil of such a nature as to permit bringing vessels of maximum tonnage alongside, thus obviating delays and doing away with the expensive lighterage charges, are two measures of imperative importance. What has been perhaps the chief obstacle to regular shipping, it is stated, has been the presence in the past of yellow fever at Guaya- quil. But this has now been removed. The Government of Ecua- dor, with the assistance of the Rockefeller Foundation, under the personal direction of Gen. Gorgas, has eradicated yellow fever from Guayaquil since March, 1919. In view of this important fact it is urgently set forth that the commercial union of Ecuador and the United States be closer bound by an allotment of necessary transportation to carry the commerce of the two countries. V. MEASURES TO FACILITATE COMMERCIAL INTERCOURSE. 1. A convention between the United States and Ecuador concern- ing commercial travelers was signed December 31, 1919, and was approved by the United States Senate and is awaiting action by the Congress of Ecuador. REPORT OF THE CONFERENCE COMMITTEE ECUADOR. HI 2. This committee recommends the adherence by Ecuador to the convention to establish an international gold clearance fund. 3. Inasmuch as there is already in force between the United States and Ecuador a parcel post convention, no action other than a recom- mendation for the improvement of the existing service and a recom- mendation for better packing on the part of shippers from the United States is considered necessary. VI. THE DEVELOPMENT OF UNIFORMITY OF LEGISLATION. 1. The following resolution was adopted by the committee : It is urgently suggested to the Government of Ecuador that the recommendations of the meeting of the International High Commission held at Buenos Aires in 1916 in regard to uniform consular invoices be adopted. Also, that a strict enforcement be given to the terms of bills of lading. In connection with this subject it is also suggested that the Republic of Ecuador take under consideration the adoption of a law on bills of lading simi- lar to the act of Congress of the United States (Federal bills of lading act). The following resolution was also adopted : Resolved, That the committee recommends the adoption by Ecuador of a special law dealing with conditional sales, leases, and chattel mortgages by which the consignor may be more fully protected against sale of the goods by the consignee. The chairman laid the following communication before the com- mittee : The Director of the Pan American Union most respectfully suggests that each group recommend: First. Each Government of the Pan American Union shall arrange that regularly and permanently its various departments and bureaus shall deposit in the library of the Pan American Union two copies of all informative official publications, maps, and other data. Second. That each Government consider the advisability of preparing under its direction a comprehensive standard hand- book, in English, describing its financial, commercial, material, and other conditions, to be distributed through the Pan American Union. Third. That each Government deposit in the Pan American Union, for exhibit whenever necessary, films descriptive of its life and resources. Fourth. That every effort be made by each Government to make the Pan American Union a practical, up-to-date central bureau of information. 112 SECOND PAN AMERICAN FINANCIAL CONFERENCE. The foregoing recommendation was upon motion unanimously approved by the committee. The committee members representing the United States desire to express in a formal manner its appreciation of the opportunity given by this conference to confer with the delegation from Ecuador in re- gard to the commercial, financial, and other topics of interest and con- cern mutual to our two countries. Not only will practical good fol- low in a material way, but the acquaintance formed will tend to bind our two peoples in those closer bonds of friendship which it is evident that both desire to encourage and which will be of common benefit. The committee appreciates the visit and presence of the distinguished delegates' from Ecuador and considers it an honor to have had the privilege of association with them for the furtherance of good rela- tions. Our best wishes go with them on their return to their native land and we desire, in our capacity as representatives of the people of the United States for the purposes of this conference, that they be ex- tended to His Excellency the President of Ecuador, and the people of that Republic. Resolved, That the thanks of the members of the committee be ex- tended to the chairman and vitee chairman of the group committee for the splendid manner, in which the transactions of the group have been conducted and the courtesy extended to all of its members ; and That the committee of the Second Pan American Financial Con- ference wishes to record its thanks to Col. George T. Weitzel, of Washington, for the efficient and helpful manner in which he has dis- charged the duties of his office as secretary of the committee. Respectfully submitted. THE CONFERENCE COMMITTEE FOR ECUADOR, R. H. ELIZALDE, Chairman. E. M. HERR, Vice Chairman. GUATEMALA. REPORT OF THE CONFERENCE COMMITTEE, The honorable the SECRETARY OF THE TREASURY or THE UNITED STATES. SIR: The group committee for Guatemala has devoted itself to the consideration of the subjects in the program of the Second Pan American Financial Conference, and has the honor to submit the following report, which was unanimously adopted by its members: I. THE EFFECT OF THE WAR ON THE COMMERCE AND INDUSTRY, MANU- FACTURING AND MINING, AGRICULTURAL AND PUBLIC UTILITIES OF THE REPUBLICS OF THE AMERICAN CONTINENT. The war was the source of many difficulties for Guatemala in that it diminished its imports and reduced the price of its coffee, while, on the other hand, it caused the price of commodities coming from abroad greatly to increase. In 1918 there was a distinct decrease in the capital available for investment in real estate mortgages, whether in national paper currency or in gold currency. Nevertheless, the high prices which coffee has brought since the war are tending to stimulate the development of the coffee industry and the improved plantations already in existence. During the war the Government enacted several laws with a view to encourage further the develop- ment of the natural agricultural resources of the country and to increase the cultivation of those products for which its soil is so excellently suited. The resulting increase in the production of many different articles of consumption offset in a large measure the effects of the war, which were therefore felt less keenly in Guate- mala than in many other countries. The most urgent need not only in commerce and industry, but in all branches of the national development, is for foreign capital. Local funds are not readily available for large undertakings, inas- much as available local capital is being absorbed in the process of reconstructing Guatemala City, lately razed; by an earthquakje. Another vital necessity for the development of the commerce and industry of Guatemala is the adoption of the gold standard, and the establishment of an equitable exchange rate for the conversion of the paper currency and its ultimate redemption. 1497021 8 113 114 SECOND PAN AMERICAN FINANCIAL CONFERENCE. II. How CAN REQUIRED CAPITAL AND CREDIT FACILITIES BE PROVIDED ? Your committee considered particularly the question of monetary and banking reform, a matter now under serious consideration on the part of the Government of Guatemala. Two projects of reform were considered, of which the first has been drawn up by a commission designated some time ago by the Guatemalan Government for the purpose of establishing a national bank of Guatemala, and the second of which was to be found in the report of Prof. E. W. Kemmerer, prepared at the request of the President of the Republic and deliv- ered to him September 6, 1919. These proposals were found to be similar in character and to differ only in details. After sustained and careful review of the two plans, the com- mittee reached the conclusion that, at the present time, a reform of the banking and currency situation of Guatemala could be effected with less difficulty than at any other time in the economic history of the Republic. Nothing less should be undertaken than a complete and thoroughgoing reform, calculated to give the country perma- nently a modern and scientific currency and banking system as good as any in existence. The committee believes that the monetary unit of the Republic should be one-half gram of pure gold, based on the metric system and divided into 10 pesos or 100 centimos, the peso to be worth 10 centimos. This unit would then be worth one-third of a gold dollar of the United States, after adding a slight coinage charge of approximately 0.003. Guatemala should coin on Government ac- count new fiduciary silver coins having a gold value larger than the value of their respective silver content. With a view to preserve the parity of gold new silver coins and the minor coins of bronze, nickel r and copper, the excessive issue of the various classes of coins and de- nominations of money should be prevented by legislation. A gold reserve to be known as the gold standard fund should be created by the Government and all coins in circulation should be ac- cepted by the Government in payment of taxes and other Government dues. The gold reserve should be a trust fund, separate from other Gov- ernment moneys, and used exclusively for the purpose of maintain- ing the parity of the fiduciary coins with gold. Part of this fund should be kept on deposit under proper security with bankirig houses of high standing abroad. The Government should obligate itself to redeem its fiduciary currency fwhen offered in amounts not less than a fixed sum, either in gold or in demand of the gold drafts issued on foreign financial centers in which the gold-standard fund would be deposited. In other words, the fundamental principles of the gold-exchange stand- ard should be followed. REPORT OF THE CONFERENCE COMMITTEE GUATEMALA. 115 For the purpose of placing the currency and banking system of Guatemala upon the most modern and scientific basis, there should be established a national bank, with the powers and duties usually possessed by national banks in other countries. It should have an authorized capital of sixty million gold units ($20,000,000 United States gold), and a paid-up capital of not less than fifteen million gold units ($5,000,000 United States gold). This capital should rep- resent as widespread a financial interest as possible. The bank should be subject to a reasonable kind of Government supervision, and the Government ought to participate in any profits accruing above a fixed percentage of capital. The national bank should be given liberal rights of note issue, rights which ultimately ought to be exclusive. The note-issue privi- lege, however, ought to be restricted in such a way as to prevent circulation in excess of three times the amount of the cash paid-in capital. The national bank ought to be in a position to make loans to the Government, in the form of advances of its own notes and at a reasonable rate of interest, for the payment of the debts of the Government to the several banks. Subject to certain qualifications, the banks now in existence should be required to retire at once the outstanding notes to an amount equal to four-fifths of the sums paid them, respectively, by the Govern- ment in the settlement of its debt to them, provided that notes to an equal amount are outstanding, and provided further, that a limited note circulation be allowed to banks of issue, the charters of which have not expired, for the remaining years of the respective conces- sions. After the expiration of existing charters the national bank should receive the exclusive right of note issue in the Eepublic. Notes of the national bank should be unlimited tender as long as they are redeemable on demand in gold or in its equivalent. The national bank should be authorized to make loans, discounts, and rediscounts of short maturities on self-liquidating paper, but it should not be permitted to make capital loans on real estate or on other not readily negotiable securities. The national bank, however, should be permitted to advance money on mortgages where guaranty is given by an existing bank, but the funds so employed should be limited to one-third the amount by which the paid-up capital and surplus exceeds 150 per cent of the debt due it from the Government. IV. THE EFFECTS OF THE WAR ON TRANSPORTATION FACILITIES, EEQUIREMENTS OF THE PRESENT AND IMMEDIATE FUTURE. There should be established one or more lines of vessels between the ports of Guatemala and the ports of other American Republics. The recommendation is offered that, in so far as may be possible, the ship- 116 SECOND PAN AMERICAN FINANCIAL CONFERENCE. ping companies of the United States reestablish well-fixed routes in existence before the war. Your committee is inclined to recommend that the freight rates be restored as soon as possible to what they were before the war, taking into account the increased cost of operation; that steamship com- panies give the greatest care to the good treatment of passengers and that, where necessary, changes be effected to make the trips as com- fortable as possible. In the traffic on the Pacific between the ports of North America and those of South America, it is essential that shipping schedules include ports of Central America. It is imperative that those companies of the United States to which commercial and transportation concessions have been accorded should not adopt policies involving discrimination in rates or methods of procedure in respect to the several patrons and localities with which they deal. V. MEASURES TO FACILITATE COMMERCIAL INTERCOURSE AMONG THE AMERICAN REPUBLICS. The committee believes that, in so far as may be possible, consular and other trade representatives appointed to serve the interests of the United States in Latin America, and vice versa, should be able to speak and write without the aid of an interpreter the language of the country to which they are sent ; and in this way many unnec- essary and vexatious delays and costly misunderstandings will be avoided. The committee furthermore believes that it would prove mutually advantageous if there were established on as broad a basis as possible scholarships at the leading universities of the United States for earnest students from the universities of the other American Re- publics, and that, as well, there should be established an annual ex- change of professors between the leading universities of the United States and those of the other American nations. The committee also believes that the United States should be urged to consider the advisability of adopting the metric system of weights and measures, which is now in use on the part of the other American Republics and, as well, in almost all the European countries. The committee is also of the opinion that the United States should, through the Department of Agriculture, send to the other American Republics from time to time skilled agriculturists and experts in the cultivation of medicinal plants, so as to gather information re- garding the horticultural and agricultural products capable of being produced in the American Republics for food and medicinal or other purposes. REPORT OF THE CONFERENCE COMMITTEE GUATEMALA. 117 Your committee likewise feels that the students in our schools and educational institutions ought to be given better and more fre- quent opportunities for agricultural information concerning Latin America, through the display of maps, charts, and diagrams of those countries, so that the future citizens of the United States may become better acquainted with those countries and aware of the advantages of entering into relations with them. It is likewise believed by your committee that in order to encour- age, stimulate, and facilitate commerce and intercourse between the American nations, the United States Government ought to be pressed to consider the advisability of establishing free ports or free zones in its great commercial terminal centers; while, on the other hand,, establishment of similar free ports or free zones ought to be recom- mended to the other Republics as well. Exporters of the United States should regularly grant to their Latin- American customers terms of credit of not less than 90 days for the payment of merchandise purchased. It is also agreed by your committee that agents ought to be sent to Latin America who are not only well acquainted with the manner of presenting their goods, but who also are of such a sort as to pay particular attention to the characteristics of their Latin- American clientele, in order that its requirements may be learned, so as better to promote business intercourse with merchants of the United States. The convention to establish an international gold clearance fund has already been signed by Guatemala and the United States. VI. THE DEVELOPMENT OF UNIFORMITY OF LEGISLATION. The uniformity of customs regulations is a difficult matter to achieve in a practical way because of the different conditions and peculiarities of countries and even of ports. However, by careful study those of the rules and regulations which do not affect in any special way any one of the countries can be reduced to uniformity. In accordance with this belief the Government of Guatemala has sent to the office of the commission at Washington the customs law of 1894, which is now in force. Not infrequently it happens that prices given in consular invoices are below those that the merchandise is known to bring in the mar- kets of the country of origin. This should not be so. It is a situation capable of being avoided, if consuls will require that the original commercial invoice be produced and investigate prices in the markets and exchanges. For the sake of greater emphasis your committee ventures to repeat the recommendation with regard to uniformity of customs regula- tions and classification of merchandise, which is to be found in the 118 SECOND PAN AMERICAN FINANCIAL, CONFERENCE. report made by the section of the United States of the International High Commission to the commission at Buenos Aires (Reports of Committees, Washington, 1916, Topic III, pp. 16 and following). The laws of Guatemala on bills of exchange, checks, and notes are those of The Hague convention and uniform rules. These laws were approved by the national assembly in decree No. 874, May 12, 1913, and were ratified by the executive power May 30, 1913. Conse- quently that international agreement constitutes the law of Guate- mala in this respect. This committee indorses the recommendations of the Internatioi High Commission with respect to Topic 2, section 6. A contract covering a consignment of merchandise is generally based on stipulations approved by the parties to the instrument, and also on the usages accepted in the trade. The exportation of the coffee crop and the loans effected on an obligation to consign the prod- ucts which can readily be exported have no appropriate legislation among the commercial laws of the several nations. Those cases for which provision is not made in the contracts usually entered into are decided under general dispositions contained in the codes under the heading " Commission merchants " and " Purchase and sale of condi- tional loans." Guatemala has no chamber of commerce. Until this important agency shall have been established, it can not be expected that agree- ments can be entered into between the chambers of commerce of the different countries and Guatemala, nor can the latter Republic co- operate with the others in the development of uniform legislation on the subject of commercial arbitration. This committee recommends the establishment of a chamber of commerce in Guatemala with a view to carry out arbitration of the commercial disputes which may arise between persons resident in Guatemala and those living in other American nations, and with a view also to give effect to the important aims generally had by cham- bers of commerce. Guatemala has incorporated into her legislation the Buenos Aires trade-mark convention. It has approved and ratified the conven- tion and the result of such action now depends on the functioning of the international office set up at Habana. The measures taken for the regulation and protection of art and of literary property rights in accordance with constitutional princi- ples are those embodied in the convention of *Buenos Aires on this subject, and this has already been approved and ratified. The same is to be said concerning patents and industrial models and designs. The Buenos Aires convention on this matter was ratified by Guate- mala May 10, 1912. REPORT OF THE CONFERENCE COMMITTEE GUATEMALA. 119 Book III of our Commercial Code is taken up exclusively with sea- borne trade, the persons who take part therein, maritime contracts, the perils of transportation, the subject of insurance and analogous matters. Our Government has concluded conventions and treaties for the protection of its commerce and the regulation of cases of shipwreck and danger. The ports of Guatemala are open to the commerce of the world and ships touching them are subject to the following charges: United States gold. Lighthouse dues $10. 00 Health certificate 4. 50 Wharf dues . 50 Unloading charges (per 1,000 pounds) 1.50 Loading charges (per 1,000 pounds) 1.00 At the ports of San Jose, Champerico, and Ocos there have been established private agencies to which dues for services rendered are paid. .Respectfully submitted. THE CONFERENCE COMMITTEE FOR GUATEMALA, Luis TOLEDO HERRARTE, Chairman. JOHN CLAUSEN, Vice Chairman. HAITI. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR : The conference committee on the Republic of Haiti, composed of the official delegates of the Republic of Haiti and the American members of the group committee, having met and duly considered the program of topics agreed upon for discussion, has the honor to submit the following unanimous report. I. THE EFFECT OF THE WAR ON THE COMMERCE AND INDUSTRY, MANUFAC- TURING AND MINING, AGRICULTURE AJXD PUBLIC UTILITIES OF THE REPUBLIC OF HAITI. 1. Due to the withdrawal of shipping needed by the nations at war r transportation of practically all products of agriculture which con- stitute the bulk of Haiti's exports, was entirely shut off at the begin- ning of hostilities, with the exception of the limited amount of goods shipped to the United States. The crops of coffee, cotton, and log- wood had to be stored or sold at sacrifice. During the first months of the war there was no incentive to produce more in crops than actually needed for local use. To meet the urgent requirements of the United States for castor oil, attention was directed to raising castor beans, and its export was reaching considerable proportions when the armistice closed that channel. Logwood production and export reached high figures during the war, meeting a demand due to scarcity of dyestuffs and synthetic dyes. Latterly the production of sugar, corn, coffee, cacao, and cotton has increased, interest in agriculture has been stimulated, and a large corporation from the United States has finished the construction of sugar warehouses at Port au Prince. Much land of great fertility and good depth of soil is found in the valley sections. Native labor is pronounced capable, strong, and willing, and can be procured at the^very favorable rate of 2 gourdes per day. 2. Other than the public debts, external and internal, existing financial obligations are of a private nature and are liquidated in a 120 REPORT OF THE CONFERENCE COMMITTEE HAITI. 121 satisfactory manner. Capital is urgently needed for the develop- ment of public utilities, good roads, agriculture, and the varied indus- tries which the country with its wonderful natural resources can sup- port. More American money has been invested in Haiti since the treaty, and particularly since 1916, than ever before. The suggestion of the official Haitian delegation that some means of disseminating information in the United States regarding the resources and commercial opportunities in Haiti, by organized propaganda, be established was approved by the conference commit- tee as being one of the best means of attracting capital to Haiti. II. HOW CAN REQUIRED CAPITAL AND CREDIT FACILITIES BEST BE PROVIDED ? 1. Domestic capital suffices for the present for the small develop- ment of the agriculture and internal trade relations of the country. 2. Foreign capital is required for the development of the full natural resources of the island. The American Foreign Banking Corporation, the Royal Bank of Canada, and the National Bank of Haiti are established and meeting the present needs of the island, the latter institution maintaining branches in the principal towns on the coast and in the interior. Assurance is given that these banks are abundantly able and willing to extend the fullest facilities to assist in the development of trade and commerce in the Republic as their growth requires. III. NATIONAL CREDIT AND THE FACTORS AFFECTING IT. The national public debt consists of the external loans of 1875, 1896, and 1910, amounting in the aggregate to approximately 95,000,000 francs. The loan of 1875 bears 5 per cent interest and is secured by a tax of 33J cents on each 100 pounds of coffee ex- ported from the Republic. The loan of 1896 bears interest at the rate of 6 per cent and is secured by the proceeds of a tax of $1.20 gold on each 100 pounds of coffee exported from the Republic.. The loan of 1910 bears interest at the rate of 5 per cent per annum and is secured by a tax of $1 gold on each 100 pounds of coffee ex- ported and by a special 15 per cent additional tax, in gold, on the import duties. Haiti has established a high record for probity in its service of the public debt. Under the terms of the protocol a new currency system has been established, providing a currency secured by a gold reserve of 33J per cent and the balance in two-name commercial paper. 122 SECOND PAN AMERICAN FINANCIAL, CONFERENCE. A new loan is now being undertaken to provide adequately for the refunding of the old external and internal loans, the development of internal improvements, particularly highways, irrigation projects, the building of schools and other educational facilities. The Haitian Government is undertaking, coincident with its mone- tary reform, a reform of its commercial code and those laws affecting foreign investment in such a way as to make their legal system attractive to foreign capital; the same holds good of the judicial system. IV. THE EFFECT OF THE WAR ON TRANSPORTATION FACILITIES REQUIRE MENTS OF THE PRESENT AND IMMEDIATE FUTURE. During the war ships were very largely taken out of the Haitian trade, and for weeks at a time no ships made any Haitian port. At present the Panama Railroad Steamship Co. and the Royal Dutch Line furnish a reasonable dependable freight and passenger service, but, of course, all cargo space available for Haiti is more or less sub- ject to the demand of more southern countries. Several steamship companies are known to have expressed their willingness to estab- lish routes to Haiti upon the appearance of dependable cargo. Many now make occasional trips, but all at rates that seem high. These rates are probably not excessive by comparison with those to other ports. We would recommend the encouragement of additional and better steamship facilities, and the Haitian Government offers to cooperate with the United States Shipping Board toward that end. Interior transportation would best be served by the construction of more complete systems of wagon roads, as the material to be moved, pending further development of the country, is compara- tively light and movable over great distances by the present method of bull carts, burros, individual carriers, and coastwise vessels. The laws and regulations regarding transportation both by steamer and by rail are being impnwed, but apparently still remain as a hindrance to the best service. Numerous dues are put upon ocean traffic, such as lighthouse, wharfage, and other port dues, but these are not considered excessive, excepting the lighthouse dues, which will cease to be charged after the 1st of next March, when the original lighthouse concession expires. It would appear that a quarantine station should be established at Port-au-Prince as no facilities are now available for disinfecting inbound vessels, which is admitted to be highly important. In conclusion, we again mention the necessity of more extended wagon roads over the country as a development that should exceed any additional railroad construction at the expense of the Govern- - EEPORT OF THE CONFERENCE COMMITTEE HAITI. 123 ment. The building of such wagon roads should be the principal item of Government expense and as the revenues for such purposes are somewhat limited, additional funds should be made immediately .available through the projected loan. V. MEASURES TO FACILITATE COMMERCIAL INTERCOURSE AMONG THE AMERICAN REPUBLICS. The Republic of Haiti desires to adhere to all the measures which are drawn up for the promotion of Pan American relations and will give such measures its most earnest consideration. 1. The convention concerning commercial travelers. The Haitian Executive has signed this convention, and it will be submitted for ratification at the next meeting of the legislature. 2. The convention to establish an international gold clearance fund. This convention has been very recently signed by the Haitian Government, and will be submitted for ratification. 3. Parcel post facilities and lower postal rates. Haiti is a signa- tory to the International Convention of 1907, but would support at this time the recommendations of the International High Commission for an inter- American convention on parcel post, particularly fixing weights, adjusting charges, regulating the size of packages, and the abolition of surtaxes. 4. Cable facilities; wireless telegraphy. At the present time in Haiti there is a single cable company operating under an exclusive concession. There is also a United States Government wireless sta- tion which accepts commercial messages. The rates on both cables and wireless^ messages are excessive and every effort should be made to bring them to a reasonable basis as an encouragement to larger commercial intercourse. A strictly commercial service is much needed. The Haitian delegation strongly recommends the adoption of a convention based upon the principles adopted at Buenos Aires in 1916 with relation to the establishment of uniform telegraph tar- iffs for American States and cooperation among the States to facili- tate freer cable and wireless communication. (5) The establishment of free ports. No proposition has hereto- fore been made or submitted for free ports, but Haiti would be will- ing to consider any proposal which would come to her looking to the establishment of a free port and improved warehouse facilities. VI. THE DEVELOPMENT OF UNIFORMITY OF LEGISLATION IN RELATION TO I 1. Uniform customs regulations; the prevention of the under- valuation of merchandise in export and import declarations. The conference committee agrees with the wish, expressed by the Haitian 124 SECOND PAN AMERICAN FINANCIAL. CONFERENCE. delegation, that there should be a uniform regulation of this matter and that the customs regulations be so improved as to render trans- actions as simple as possible, and it believes it is necessary, among other things, that the consular vise on the bill of lading be dis- pensed with as well as on the certificates of origin, and that the only consular vises required should be on the manifest and invoice. 2. The Haitian delegation believes that the metric system should be adopted in customs transactions. 3. Contracts regarding the consignment of merchandise in foreign trade and the conditions of acceptance or rejection of merchandise. The Hague rules in regard to such contracts have not heretofore been carried out on account of internal difficulties, but it is the present intention to include the rules suggested by the International High Commission in the revision by Haiti of its commercial code. 4. Commercial arbitration; agreements between the chambers of commerce of the American Republics, with special reference to the agreements between the Chambers of Commerce of Buenos Aires, Montevideo, and Guayaquil, and the Chamber of Commerce of the United States. The conference committee approves the resolution of the Haitian delegation in favor of adopting a Pan-American con- vention looking toward compulsory arbitration for the settlement of commercial disputes based upon the agreement now existing between the Bourse de Commerce of Buenos Aires and the Chamber of Com- merce of the United States. 5. Patent and copyright law; the protection of trade-marks, espe- cially through the establishment of the International Trade-mark Bureau at Hob ana and Rio de Janeiro. Copyrights are regulated by a law, adopted in Haiti subsequent to the ratification of the Berne convention of 1884, the same law governing registration of patents. Haiti also has adhered to the Pan-American copyright convention providing reciprocal privileges among the Latin- American Nations. The Government of Haiti has adhered to and ratified the con- vention of Buenos Aires on the registration of trade-marks and the law of June 9, 1919, carried this ratification into effect. Respectfully submitted. THE CONFERENCE COMMITTEE FOR HAITI, FLEURY FEQUIERE, Chairman. EDWARD HIDDEN, Vice Chairman. HONDURAS. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR : The conference committee on matters pertaining to Honduras has the honor to report the following outline of conditions at pres- ent existing in Honduras, an4 which it was the province of your com- mittee to consider with reference to the development of the natural resources of that country, which might prove to the mutual advan- tage of Honduras and the United States, if this could be brought about by cooperation. FACTURING AND MINING, AGRICULTURE, AND PUBLIC UTILITIES OF THE REPUBLIC OF HONDURAS. The general economic conditions of Honduras have not been im- proved or stimulated to any appreciable extent by the World War. While it is true that the exports of Honduras have steadily increased during the years 1913-14, 1914-15, 1915-16, and 1916-17, amounting in each of such years, respectively, to the. sums of $3,421,331, $3,458,- 000, $4,190,565, and $5,353,452, and while it is also true that this in- crease has continued to the present day, yet it is also" true that such increase is rather in the value of the expoits than in the quantity and volume of the goods and products exported. Both the units of pro- duction and the units of export have failed to increase during the above periods, due to many factors, some of which will be adverted to later ; but at this time we will note that the lack of proper ship- ping facilities contributed largely, not only to the arresting of the development of many of the natural resources of the country, but was instrumental, in some instances, in completely paralyzing certain industries. Prior to the advent of the World War the steamers of three steam- ship lines touched at the port of Amapala, on the southern or Pacific coast of Honduras, to wit, the Ward Line, the Cosmos Line, and the Pacific Mail Steamship Co. The ships of the first two companies touched at Amapala two or three times a month, while those of the last-named company maintained a fortnightly service. During the war the Ward Co. and the Cosmos Co. withdrew their ships from serv- 125 126 SECOND PAN AMERICAN FINANCIAL CONFERENCE. ice at the port of Amapala, a condition which still exists, while the Pacific Mail Line has continued a very irregular and unsatisfactory service and schedule, its steamships touching at said port sometimes once a week and sometimes once a month. Your committee is not aware of the reason for the above-noted irregularity in the schedule of this last-named company. The withdrawal of shipping facilities, such as they had been, from the port of Amapala resulted in the inability of the people who inhabited and cultivated the large southern zone, which natu- rally looks to that port for purposes of exportation, to export any perishable or semiperishable products, and resulted also in the com- plete stoppage of the exportation of timber through this port. This naturally resulted in the loss of much revenue to the Government and also to the people engaged in such industries in that particular section of the country. On the other hand, the World War did not affect and has not affected sea-transportation facilities between the ports of Honduras, situated on the northern or Atlantic coast, and the United States to as great an extent as on the Pacific coast. The ex- ports through the Atlantic ports have continued much the same in quantity and character as they were prior to the war, and their value steadily increased in keeping with the general advance in the price of commodities throughout the world. In a general way it may be said, however, that what Honduras has gained in the value of its ex- ports through its Atlantic ports it has lost through the reduction in quantity of its exports through the port of Amapala. This condi- tion is susceptible of easy remedy the establishment of the proper shipping facilities at Amapala, either by allocating new ships to that port or by increasing the number of ships of the Pacific Mail Co. which call thereat, and by Jiaving a regular and permanent schedule of. sailings therefrom. Your committee, therefore, begs to report in reply to inquiry No. I, Title I, that the World War has not resulted in any appreciable increase in the development of the domestic resources of Honduras so as to create a greater economic independence. As to inquiry No. 2, Title I, in the special case of Honduras, your committee is of the opinion that the answer thereto involves the consideration of matters not within its province. As to inquiry No. 3, Title I, we beg to refer to that part of this report comprehended under Title IV. II. HOW CAN REQUIRED CAPITAL AND CREDIT FACILITIES BEST BE PRO- VIDED ? Your committee begs to report, in reply to inquiries 1 and 2 undei this title, that it is very apparent that in Honduras sufficient domestic capital is not available for the development of the natural resources- REPORT OP THE CONFERENCE COMMITTEE HONDURAS. 127 of the country, but that the Government of Honduras is endeavor- ing by every fair and equitable means to encourage the investment of foreign capital in such development. The many natural resources of Honduras, rich as it is in minerals, such as gold, silver, copper, iron, coal, marble quarries, opals, platinum, aluminum, and petro- leum; and in timber and valuable woods, such as cedar, mahogany, balsam, rosewood, and many other hardwoods, offer a particularly attractive field for the investment of capital. The fertile soil of the country makes it susceptible of easy cultivation and abundant pro- duction, and Honduras is particularly rich in its grazing lands, making it capable of supporting millions of live stock more than at present exist. As to subdivisions A, B, and C, under inquiry No. 2 of Title II, the committee reports that at present Honduras enjoys fair banking facilities, which, however, would have to be improved and enlarged upon the investment of any great amount of capital in the develop- ment of the resources of the country. In this regard the use of ac- ceptances should be inaugurated and encouraged, and the Govern- ment stands ready to render encouragement to any improvement upon present banking facilities. At present no market exists in Honduras for the distribution of foreign government and corporate securities. There is no room for the investment of capital in foreign enter- prises, as it is required for the home country itself. I III. NATIONAL CREDIT AND THE FACTORS AFFECTING IT. Referring to inquiry No. 1 under this title, your committee is pleased to report that the condition of the internal debt of Honduras is satisfactory and is improving, having undergone a reduction since 1914. In regard to the external debt of Honduras, the committee is again of the opinion that this involves consideration of matters not within its province. Inquiry No. 2 : Honduras is working under a good budget system. Its sources of revenue are duties on imports and exports, with a 5 per cent (gold) surtax on imports and there also exists a system of excise and personal taxes. The net revenue of the country has de- creased practically $1,000,000 between 1914-15 and 1917-18, owing largely to insufficient shipping facilities. As to inquiry No. 3 of this title, it is the constant effort of the Government of Honduras to place the country upon as solid a finan- cial basis as possible, to have it harmonize, as far as practicable, with the fiscal systems which obtain in the other countries of America. Toward this end Honduras has declared United States currency legal 128 SECOND PAN AMERICAN FINANCIAL, CONFERENCE. tender, at the rate of exchange of 2 to 1, and Honduras to-day is practically upon a gold basis. As to inquiry No. 4, the committee finds that the Provinces of Honduras are not empowered to create debts, but that the munici- palities may contract loans with the approval of the General Govern- ment. The principal and interest of such loans is provided for under the general taxing powers of the municipal government. IV. THE EFFECT OF THE WAR ON TRANSPORTATION FACILITIES; REQUIRE- MENTS OF THE PRESENT AND IMMEDIATE FUTURE. As to No. 1, the committee believes it has fully set forth the facts pertinent thereto in its statement under Title I, in so far as sea trans- portation is concerned. As to No. 2, it is the opinion of the delegates from Honduras, and your committee concurs in the same, that for the present there is nothing to suggest in this regard. As to No. 3, your committee can speak generally as to the great importance of this topic, but has no specific recommendation to submit in regard to Honduras, other than the presentation of actual conditions in that country respecting land transportation and the crying need for its immediate development. If an opportunity is to be given to the inhabitants of Honduras to develop the many rich and natural resources of the country, it is essentially necessary that there exist a trunk line or road con- necting the coast on the Atlantic side with the coast on the Pacific side. At present there exists an excellent macadam road between the capital city of Tegucigalpa and San Lorenzo, on the Bay of Fon- seca, thus giving the capital access to the port of Amapalpa, on the Pacific. From the city of Tegucigalpa northward in the general di- rection of Puerto Cortes, there is an excellent macadam road as far as the town of Comayagua, a distance of about 100 miles. From Puerto Cortes there exists a railway, the Ferrocarril Nacional, run- ning as far as La Pimienta, a distance of about 56 miles. By con- necting La Pimienta with the terminus of the macadam road at Comayagua by means of the construction of a macadam road be- tween these two places, the much-desired, long-prayed-for, and im- peratively required trunk line from coast to coast would become a reality, and Honduras would be placed in a position which would make it possible for its people to develop the natural resources of the country an opportunity never before enjoyed. This road be- tween La Pimienta and Comayagua, the building of which is urgently recommended by your committee, would be about 135 miles in length. Its construction is just as important, in the opinion of your com- mittee, to the development and progress of the commerce and life of Honduras as the improvement of shipping facilities. It is abso- REPORT OF THE CONFERENCE COMMITTEE HONDURAS. 129 lutely necessary, in connection with the establishment of steamship facilities, to provide good roads in the interior and all facilities at the ports for loading and unloading. We summarize this by saying : Necessity No. 1. Excellent interior macadam roads for the trans- portation of products to the ports ; Necessity No. 2. Improved shipping facilities at Atlantic and Pa- cific ports ; Necessity No. 8. All necessary facilities for loading and unloading. In this connection the committee incorporates the following reso- lution which was adopted at its conference : Resolved, That it is the sense of this committee sitting on the - affairs of Honduras to state their position in the following manner : We consider it an imperative duty on the part of the United States and its citizens to give every possible encouragement to the establishment of a steamship line between the United States and Central and South American countries. We consider these steamship lines shall be organized, in the first place, for the pro- motion of personal travel, so as to allow the citizens of all coun- tries to become personally acquainted with the features of the respective countries; and in the second .place, we consider it of the utmost importance that the commercial intercourse be promoted in every possible way between the countries of Central and South America and the United States. We regard this step as not only important for the interests of the Central and South American countries, but as import- ant for the manufacturing and commercial interests of the United States. Important facilities for the interchange of commodities between the respective countries are very essential for friendly and profitable relationship between all our countries. However, we can not but recognize that the promotion of steamship facilities is a vain act if conditions in a country are such as to make it impossible for that nation to transport its products to the ports for exportation. Hence, having in mind the special conditions which now obtain in Honduras, we heartily concur in and adopt the follow- ing recommendation presented by the delegates from Honduras to the Committee of Transportation. 1. With the purpose of making effective such water transpor- tation facilities as may now or in the future exist in connection with the commercial intercourse between our country and the United States of America and other nations, we believe that facilities for land communication should be developed simulta- 1497021 9 130 SECOND PAN AMERICAN FINANCIAL CONFERENCE. neously, for without the latter facilities for maritime transporta- tion such as this conference had in mind would avail us little. Therefore, having in mind the peculiar circumstances or con- ditions of our country, its small population, and consequently its small production, it would not be possible for it to construct and maintain railway lines which require an investment of large amounts of capital for their construction, and a large quantity of traffic for their maintenance or support; therefore the dele- gation from Honduras is of the opinion that for the present it should limit its aspirations in this regard to the construction of good roads, which would permit the development of the natural resources of the different sections of the country, and which would give exit to the products of the country to foreign markets. In order to realize this object, our Government would study a comprehensive plan of the various routes which would be opened in order to place in communication with each other the different sections of the interior with ports and would accept any equitable . arrangement for acquiring funds necessary for this purpose. 2. With reference to the maritime service or transportation, this delegation suggests the necessity for improvement on the Pacific literal or coast of our country by increasing the number of steamships of the present line or by establishing a new line, so that there may be a fixed and permanent schedule of at least weekly sailings between Panama, Amapala, and San -Francisco, and further there should be established a line of steamships with direct sailings between New York and the various ports of the northern or Atlantic coast of Honduras. The committee is strongly of the opinion that proper measures should be taken as soon as possible looking to the linking up of the present gap between the terminus of the National Railroad and the macadam road (carretera) running from Tegucigalpa toward the Atlantic coast, thus connecting the port of Puerto Cortes, on the Atlantic coast, with the port of Amapala, on the Pacific coast, by a central highway or trunk line. The great possibilities which seem apparent in the country of Honduras after development of its railroads and its country-road facilities will find their proper outlets when sufficient shipping facili- ties have been allocated to the ports on the Pacific, as well as the Atlantic Ocean sides. In making this recommendation we desire to say that it is useless to duplicate facilities on the Atlantic Ocean side, but to give every possible attention to the increase of facilities on the Pacific Ocean side, particularly at the port of Amapala, and we recommend that regular sailing and permanent schedules be estab- lished, so as to foster the enlargement of the trade between Honduras and the United States. REPORT OF THE CONFERENCE COMMITTEE HONDURAS. 131 The committee tenders its hearty support to the plan which is being considered for establishing a Pan American railroad through Central and South America and the building of a link for this rail- road across Honduras, crossing through the towns of Nacaome and Choluteca. V. MEASURES TO FACILITATE COMMERCIAL INTERCOURSE AMONG THE AMERICAN REPUBLICS. As to No. 1 under this title, the committee finds that laws and regulations referring to commercial travelers at present existing are entirely satisfactory. As to No. 2, the committee wishes to express its approval of the establishment of an international gold clearance fund. As to No. 3, the committee suggests that every possible facility be given by the postal department to the establishment of low postal rates for parcel post facilities, as well as regular postal rates for mail dispatch, in order to increase in every possible way the business relations between Honduras and the United States, and this committee further recommends the adoption of an international return postage stamp system instead of the existing coupon system. As to No. 4, the committee strongly recommends that the establish- ment of wireless, cable, and telegraphic facilities for the public trans- mission of messages on lines that would best promote the commer- cial and social intercourse between nations and their citizens should be encouraged by all Governments. As to No. 6, the committee takes pleasure in reporting that the warehouse facilities are considered sufficiently good. VI. THE DEVELOPMENT OF UNIFORMITY OF LEGISLATION IN RELATION TO UNIFORM CUSTOMS REGULATIONS, ETC. As to No. 1, your committee is informed, and so begs to report, that the Government of Honduras stands ready to cooperate by every means in its power in the adoption of laws and regulations calcu- lated to bring about uniformity of customs regulations. So far as the State of Honduras is concerned, its tariff laws are uniform throughout the country and its tariff duties are not based upon the ad valorem system, but rather on the weights and measures system,, leaving but little opportunity for the undervaluation of merchan- dise, either in export or import declarations. As to No. 2, your committee suggests that it is highly desirable that Honduras adopt the United States negotiable instruments act and suitable rules and regulations similar to those of the United States and some Central and South American Republics in regard to bills of lading and warehouse receipts. 132 SECOND PAX AMEEICAX FINANCIAL, CONFERENCE. As regards No. 3, the committee reports that it is of the opinion that the existing laws of Honduras with reference to contracts regarding consignments of merchandise and foreign trade and the conditions of acceptance or rejection of the same are fair and just, and that the Government has always shown a willingness to coop- erate in the adoption of any law tending to promote trade and justice in commerce. As to No. 4, the committee recommends that Honduras place itself as speedily as possible in line with the system adopted by the Chambers of Commerce of Buenos Aires, Montevideo, and Guayaquil and the Chamber of Commerce of the United States concerning commercial arbitration. As to No. 5, your committee finds that in regard to patent and copyright law and the protection of trade-marks, Honduras has joined the International Trade-Mark Bureau of Habana, and it recognizes the importance of protection for inventors and owners of copyrights and trade-marks in the States of Honduras and the United States. As to No. 6, the committee reports that its information is that the existing admiralty laws, in so far as Honduras is concerned, are entirely satisfactory, and that it has been unable to learn of any instance in which they have proven unsatisfactory. Your committee further begs to report that it has adopted the fol- lowing resolution : At the suggestion of the Director General of the Pan American Union, the committee recommends that- First. Each Government of the Pan American Union shall arrange that regularly and permanently its various departments and bureaus shall deposit in the library of the Pan American Union two copies of all informative official publications, maps, and other data. Second. That each Government consider the advisability of preparing under its direction a comprehensive standard hand- book in English describing its financial, commercial, material, and other conditions, to be distributed through the Pan Ameri- can Union. Third. That each Government deposit in the Pan American Union, for exhibit whenever necessary, films descriptive of its life and resources. Fourth. That every effort be made by each Government to make the Pan American Union a practical, up-to-date central bureau of information. Your committee is of the opinion that the problems of Honduras do not appear difficult of solution. In many respects they are similar REPORT OF THE CONFERENCE COMMITTEE HONDURAS. 133 to those of other Central American countries. All can be settled expeditiously and effectively under the impetus of a comprehensive plan of development energetically carried forward and sustained by the rich resources of these countries and by the splendid devotion of their peoples to the advancement and welfare of their respective nations. It has been suggested, however, that there is something more im- portant at this time to assure the establishment of enduring busi- ness relations between North and South and Central America, in- cluding the West Indian countries, than purely material aid. This something more is unquestionably a closer fraternal relationship, a better understanding and higher appreciation of the manners and customs of Latin Americans and an unreserved acceptance thereof as essential to unrestrained social and commercial intercourse. We recognize the peoples of these countries as worthy of the high- est respect and profoundest admiration. Their dignity, intellec- tuality, industry, and patriotism have won for them the warmest regard and fullest confidence of the peoples with whom they have been brought into more intimate relations. We submit that it is necessary to the strengthening of the present association of the north and the south that this subject be given careful consideration, and that a more respectful attitude be substituted for the indifference too often manifested toward the southern peoples. As a means to this end we recommend that the characteristics of Latin American life be made a topic of special study in the schools and colleges of the United States, and that the Govern- ment of the United States cooperate with the Latin American Republics in establishing at some suitable place a Pan American University, where students from the United States and students from Latin American countries can be brought into intimate association and receive the fullest instruction in all matters per- taining to their respective nations. Your committee has refrained from entering into statistical matter and data, as it is available in numerous pamphlets and books on Honduras on file at the Pan American Union Building, which any- one interested in the subject may secure. The undersigned committee unanimously submits this report to the Pan American Financial Conference and recommends that it be referred for further consideration and action to whatever body is created or may already exist for the purpose of giving effect to the proceedings of this conference. Respectfully submitted. THE CONFERENCE COMMITTEE FOR HONDURAS, JUAN E. PAREDES, Chairman, JOHN W. THOMAS, Vice Chairman. MEXICO. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY or THE UNITED STATES. SIR : Your committee has the honor to submit the following report : ORGANIZATION. * The organization of the Mexican conference committee was ef- fected at its first meeting by the election of Mr. K. S. Brookings as permanent chairman. Mr. Brookings invited his excellency Am- bassador Bonillas to act as chairman of the conference, which Mr. Bonillas declined to do. At the suggestion of the ambassador from Mexico, the proceedings followed in accordance with the final program. EFFECT OF THE WAR ON MEXICO'S TRADE. The war considerably restricted the imports of Mexico, making her more extensively dependent upon the United States. At the same time, Mexico w r as obliged to market her output almost exclu- sively in the United States, owing to the shortage of transportation facilities. The cutting off of her exports seriously hampered her agricultural development. The restrictions of the War Trade Board, and especially those inspired by the enemy trading list, had the effect of reducing her commerce, and at the same increased the difficulties attendant upon trade. It was shown effectively that the real cause of Mexico's difficulties during the war lay in the fact that she did not have an adequate merchant marine of her own. SEA TRANSPORTATION. An address was given by Dr. Carbajal on sea transportation, showed that owing to lack of material resources Mexico's shipping facilities had never been sufficiently developed, consequently the war found a great scarcity of ships plying between Mexico and the United States. The result of these conditions was that land trans- 134 REPORT OF THE CONFERENCE COMMITTEE MEXICO. 135 portation was resorted to more extensively than ever before, and what overseas shipping was carried on was done almost entirely by such American ships as were allocated to the Mexican runs and by foreign ships. Mr. Carbajal described the service at present existing on the east and west coasts of Mexico, showing that all lines are for- eign with the exception of two or three insignificant Mexican com- panies with an aggregate tonnage of about 45,000. Mr. Carbajal ex- pressed regret that Mr. John Barton Payne, in his address of last evening, said nothing which foretold any considerable development of Mexican shipping or any intention on the part of the American Shipping Board to give Mexico any better service. Mr. Carbajal suggested the desirability of the establishment of a service through the Panama Canal connecting the Gulf of Mexico with the Pacific. At present, passengers from Mexico for Pacific ports find it neces- sary to go to the United States in order to obtain a boat for the Pacific coast of Mexico. In view of the fact that 96 per cent of Mexico's trade is with the United States, Mr. Carbajal felt justified in recommending that the United States give special attention to Mexico's needs. The speaker also showed that there is a higher proportionate freight rate between Mexican and American ports than between American ports and other ports of the world. He showed that the rate between Salina Cruz and San Francisco is higher than the combined railroad and steamship rate between Chi- cago and Yokohama. Mr. Carbajal stated that one of the causes of the high freight rate charge on goods shipped to Mexico was the fact that American railroads quote local rates for shipments to Mexico rather than through rates. Mr. Carbajal discused the subject of the coastwise trade, showing the necessity of developing same and pointing out the dependence of this trade on international commerce, it being true, he said, that goods can not be exported when there are no local boats available to carry goods from the smaller ports to exporting ports. Mr. Carbajal pointed out that there was a good field for American enterprise in the Mexican coastwise trade, but that in order to go into this business it is necessary for a foreign company to incorporate under the Mexican law, since foreign ships are only permitted to carry goods between the international ports of Mexico. RAILROAD TRANSPORTATION. Mr. Sobral briefly discussed the railroad situation in Mexico, point- ing out that about 70 per cent of the traffic between Mexico and the United States is carried by rail. Fifty-one per cent of the total capi- tal invested in the Mexican railroads is controlled by the Government. 136 SECOND PAN AMEKICAN FINANCIAL. CONFERENCE. The gross earnings of Mexican railroads for the following typical years is given by Mr. Sobral : Gold pesos. 1918 : 66, 000, 000 1908 53, 000, 000 1910 61, 000, 000 1911 62, 000, 000 1912 61. 000, 000 PUBLIC DEBT. At the afternoon session of Tuesday, January 20, Dr. Sobral dis- cussed the financial situation of Mexico and the means of funding the Mexican public debt. He outlined the various items of the na- tional debt, these being mainly the original foreign loans to the Gov- ernment with interest pledged on same, fiat paper money, indebted- ness covering the reserves of banks seized by the Government, losses caused to individuals by the revolution, and debts incurred by Madero and Huerta. He estimated the total public debt of Mexico at 894,- 130,000 pesos Mexican gold. This debt is guaranteed by 62 per cent of the total customs duties, but this part of Mexico's obligations has not been met. So impor- tant is it considered that Mexico should make a beginning in the payment of her debt that for 1920 she has set aside the sum of 10,- 000,000 pesos to be paid thereon. FEDERAL REVENUES. The import and export duties aggregate 49,000,000 pesos a year. The Mexican export duty is a new emergency source of income, origi- nating with the needs of the Carranza Government. Consular fees aggregate 6,000,000 pesos a year, and other sources of federal income are the stamp tax on gross sales, the inheritance tax, tobacco tax, tax on alcoholic beverages, tax on cotton manufactured products and sil- ver. The petroleum tax in 1918 yielded 14,000,000 pesos, and 8,000,000 for the first six months of 1919. A mining royalty tax yielded 2,000,000 pesos. The total estimate for federal revenues in 1920 is 170,000,000 pesos. The largest single item of expenditure of the Mex- ican Government is for naval and military defense, on which, in 1919, 120,000,000 pesos were spent. The revenues of Mexico have not been adequate to pay the national debt, nor are they even adequate to meet guaranteed expenses, as is shown by the fact that the salaries of Government officials and em- ployees in Mexico are not paid in full, only f 5 per cent of same being so paid, the remaining 25 per cent being given employees in nontrans- ferable Government bonds, the holders of which thus become creditors of the nation. REPORT OF THE CONFERENCE COMMITTEE MEXICO. 137 FINANCIAL NEEDS OF MEXICO. Mr. Sobral enumerated what he considered as the most urgent financial needs of Mexico, which are 1. The establishment of a sole bank of issue, 2. The establishment of a mortgage bank, and 3. The creation of an agricultural bank to establish rural credits. The aggregate of these three propositions presents a requirement of 1,000,000,000 pesos. The example of the United States, however, in the creation of its successful Federal Reserve System, with an initial capital of $50,000,000, which has since grown to have a paid-up capi- tal of $75,000,000, was urged by Mr. Williams as a possible proof that the banking needs of Mexico did not require so extensive a sum as Mr. Sobral estimated. Other needs are the construction oi railroads from Yucatan to' Tehuantepec, Mexico City to Pacific ports, and harbor improvements at such points as Progreso, Tuxpan, and Tampico. So impressed was the group conference with Mr. Sobral's presen- tation of the financial needs of Mexico that it was resolved that he be requested to present this subject to the general conference in an address of not less than 20 minutes' duration on Thursday afternoon, January 23. MEANS FOR FACILITATION OF COMMERCIAL INTERCOURSE BETWEEN UNITED STATES AND MEXICO. Ambassador Bonillas expressed the opinion that Mexico would be willing to enter into arrangements with the United States Govern- ment with a view to having the wireless service between the two countries placed on a commercial basis. A resolution was adopted by the group committee to the effect that the Governments of the United States and Mexico be requested to give consideration to the development of a wireless telegraph service between the two nations for the purpose of assisting commercial intercourse. MEXICAN MONETARY SITUATION. The increase in the price of silver has driven the old silver coins out of circulation, including the old pesos, the 50-centavo coins, the 20-centavo coins, and the 10-centavo pieces, respectively. On advice from an American authority the Mexican Government adopted a new system of coinage, with a view to reducing the amount of pure silver contained in the coins, so as to make their real value inferior to their commercial value and thus retain them in the country. The steadily increasing value of silver forced the Mexican Government to alter the 138 SECOND PAN AMERICAN FINANCIAL, CONFERENCE. percentage of silver contained in her coinage in 1917, 1918, and 1919, respectively. Mr. Sobral stated that the question of retaining silver coinage in Mexico constituted a real problem because the future status and value of silver is uncertain, and the employment of small gold coins has not been found satisfactory. Mr. Williams was called upon to discuss the silver situation in the United States and to make any suggestion which might be of assist- ance to the Mexican delegation. He stated the belief that this prob- lem would probably be solved by the great increase in the produc- tion of silver all over the world, as a result of the present high price of the metal. In view of the desirability of meeting the Avorld's present demand for silver, Mr. Williams urged the necessity of a continuance of the maximum production of silver in Mexico as a real solution of the problem. He stated frankly that the United States is looking to Mexico for help in this matter, adding that he knew of no country that had as great possibilities in that regard. The question of free ports in Mexico was then discussed, Mr. Sobral stating that, properly speaking, Mexico does not have free ports, but that there are general warehouses wherein merchandise can be accepted, held, and reexported without paying duties. The question of Mexican consular invoice fees was also referred to, the complaint being repeated that they are very large and practically amount to a tax upon every import into the country. There is also a system of fines which exposes American exporters to very serious losses if there be error in the consular invoices. Mr. Sobral admitted that Mexican consular fees are very high, which he stated was a measure imposed upon his country from sheer necessity, but which he regarded as temporary. He promised to communicate this criticism to the secretary of the treasury of Mexico and to sug- gest the advisability of minimizing these difficulties. FOREIGN INVESTMENTS IN MEXICO, THEIR PRESENT STATUS AND THEIR FUTURE. Mr. Sobral explained the Mexican policy of concessions, stating that Mexico is especially inclined to foster those investments which will develop her future possibilities. He stated that Mexico has always followed the policy of seeking foreign capital; that Mexico had come to realize that investment is no longer an end in itself, but an instrument designed to bring about better conditions ; that Mexico was inclined at all times to grant to investors not only full rights under the law but also protection, and to go to considerable sacri- fice to foster investments which contribute to the development of her natural resources. REPORT OF THE CONFERENCE COMMITTEE MEXICO. 139 The classes of investments are: (1) Agricultural, (2) transporta- tion, (3) banking, (4) commercial. BANKING CONDITIONS. Mr. Sobral called especial attention to the liberality of the attitude of the Mexican Government toward banks. The law of Mexico is no respecter of persons, no license is required to operate, and all that the Government concerns itself with is that the investor complies with the law that exists. The following limitations are placed by the Government upon the banks : 1. A deposit of 30 to 40 per cent reserve is required. 2. The policy of the Government is to supervise the bank, with the object of protecting investors. 3. The Government guarantees publicity and inspects the bank's account. MINING INVESTMENTS. Mr. Sobral stated that mining is a natural industry which is profitable to foreign investors, but proceeded no further with the discussion. EDUCATION. No figures were given as to the number of students in the schools, nor the amount of money expended for education by them ; the great drawback connected with the educational system of Mexico is that an intellectual and social structure can not be built successfully when the economic condition of the student or teacher is unsatisfactory. Respectfully submitted. THE CONFERENCE COMMITTEE FOR MEXICO, YGNACIO BONILLAS, Honorary Chairman. ROBERT S. BROOKINGS, Chairman. NICARAGUA. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR : Your committee has the honor to submit the following report : I. EFFECTS OF THE WAR. The war stimulated greatly the development of the various natural resources of Nicaragua, such as the natural woods, the castor bean, corn, sugar, etc. These increased developments have naturally tended toward greater economic independence. Owing to the loss of the European markets after the United States entered the war, the price of coffee was so lowered that it approxi- mated the cost of production, so that at this period the war tended strongly to delay the development in that field. Likewise, for a short period, the embargo on hides and skins lessened the revenue and caused considerable loss on the part of cattle men and shippers. Since the signing of the armistice, however, the conditions have stimulated production. II. TRANSPORTATION. The chief problem of Nicaragua at the present time is the develop- ment of a general system of good roads, railroads, and inland water- ways. In view of the financial situation of Nicaragua, it seems clear that they can finance a bond issue of $5,000,000 for railroad construc- tion. The Government proposal, which we recommend, of a rail- road between Lake Nicaragua and the Atlantic coast would afford means by which the Pacific and Atlantic coasts would be connected through railroad and water transportation. The financial condition and future prospects of Nicaragua are such as to make the proposed project an attractive financial investment. The committee recommends that a further detailed study of devel- opment projects, especially highways, public utilities, and similar enterprises, be undertaken by the Government, and that an effort to the extent that the Republic's resources warrant be made to carry out these projects as a unified plan. 140 REPORT OF THE CONFERENCE COMMITTEE NICARAGUA. 141 III. AGRICULTURAL BANK. In view of the fact that the interest rate on farm loans ranges from 12 per cent to as high as 36 per cent maximum per annum, the necessity of an agricultural bank to finance the needs of the small farmer is apparent. In view of the further fact that the Government of Nicaragua is willing to cooperate in this matter, we recommend that measures be taken to establish an agricultural bank, supported by American capital, to furnish farm loans at a reason- able rate of interest and with a long amortization period. IV. NATIONAL CREDIT AND THE FACTORS AFFECTING IT. Since the United States Government and financiers have been co- operating with the Nicaraguan Government in questions of finance and currency there has been established a sound currency system on a gold-exchange basis ; the public debt has been reorganized, consoli- dated, and materially reduced; a national bank has been estab- lished; a large volume of paper currency, formerly irredeemable, has been converted into a currency on a par with gold; the customs tariff has been thoroughly revised, the service has been completely reorganized and has been so efficiently administered that the cost of collection has been greatly reduced, while the revenues have been considerably increased; the railroad, which had been inefficiently managed and had not been able to earn dividends, has been greatly improved both in condition of road and equipment and in the char- acter of operation, and is now paying reasonable dividends. The use of $1,400,000 of the canal treaty funds for the refunding of the internal debt substantially increased the prosperity of the coun- try, with a consequent increase of Government revenues. All of these improved financial measures which have been carried into effect have raised to a very high degree the national credit of Nicaragua and its citizens, both at home and abroad. The operation of the financial plan through a budget adapted to the real needs of the country has enabled the Government not only to pay a portion of its foreign debt before maturity but has left a substantial surplus available for internal improvements and the service of the internal debt. The minister of finance of Nicaragua in his preliminary statement affirms that this beneficial association with the United States has promoted not only the economic welfare but likewise the financial and political independence of his country. V. CHAMBERS OF COMMERCE. The group committee on Nicaragua favors the establishment, wherever practicable, of chambers of commerce, whose duty it shall be to further the business welfare of the countrv concerned, pri- 142 SECOND PAN AMERICAN FINANCIAL CONFERENCE. marily through increasing the cooperation between themselves and the chambers of commerce of other North and South American countries. VI. ARBITRATION. The committee believe that commerce between the different coun- tries would be promoted by the establishment of proper measures to secure the settlement of commercial and financial disputes through a high court of equity or proper board of arbitration. VII. REGULATIONS REGARDING CONSULAR INVOICES AND BILLS OF LADING, Nicaragua was one of the first countries to follow the recommenda- tions of the First Pan American Financial Conference in instituting a standard form of consular invoice and similar regulations of bills of lading on the lines ox the United States on that subject; and these measures have greatly facilitated the trade relations between Nica- ragua and the United States. As a consequence of these experiences it is earnestly recommended that the Committee on Resolutions set in motion the proper machinery to study the best methods of securing promptly by other Pan American countries the simplification, unifi- cation, and adoption of a standard form of consular invoices and bills of lading. VIII. MISCELLANEOUS. Resolved, That due consideration for our mutual interests with friendly nations the accurate exchange of official communica- tions and the maintenance of successful financial intercourse be- tween the Pan American Republics demands that as far as may be practicable all ambassadors, ministers, and consuls hereafter sent from one of such Republics to another, shall be able to speak and write without the aid of an interpreter the language of the country to which they are sent, for in this way many un- necessary mistakes, vexatious delays, and costly misunderstand- ings may be avoided. Respectfully submitted. THE CONFERENCE COMMITTEE FOR NICARAGUA, OCTAVIANO CESAR, Chairman. W. L. SAUNDERS, Vice Chairman. APPENDIX. The difficulty of securing foodstuffs obliged Nicaragua to grow more cereals. The growing of wheat was stimulated and windmills will be imported. Recently there has arisen the manufacture of tex- tiles, the tanning of hides for footwear and saddlery, and a furniture REPORT OF THE CONFERENCE COMMITTEE NICARAGUA. 143 factory for ordinary and high-grade pieces which were formerly imported. The war through lack of shipment and governmental embargoes almost paralyzed business. Shipping was reduced 50 per cent during war time, and ocean freight and passenger rates were enormously high. Nicaragua needs reduction in ocean freights and particularly on parcel post packages. It is hoped and believed that marine in- surance will be reduced below war-time rates. Private finance needs lower interest rates and longer maturities. National capital can contribute to the extent of only 20 per cent for this purpose. The needs along new business are those of railroads, coast-wise shipping, turtle and pearl fishing, and the exploitation of manganese, coal, and other minerals. The Republic plans the substitution of another form of revenue for the present government income from the monopoly in the sale of all alcoholic beverages. There are excellent lighthouses at the four principal ports of entry two on the Atlantic coast and two on the Pacific coast. At Bluefields and Corinto ships discharge alongside of wharves. The Republic of Nicaragua has signed the convention concerning commercial travelers with the United States. On December 1, 1919, a postal money order convention between the United States and Nicaragua went into effect. With reference to the international gold-clearance fund, the mone- tary system and the financial situation of Nicaragua are such that there is no immediate need for such a fund. Radio installation for governmental purposes is also contemplated, and a school for wireless operators is now in existence. The Hague convention on bills of exchange and checks has been adopted. It has been recommended to the Government of Nicaragua that there be incorporated in the commercial code provisions in reference to merchandise shipped on consignment. Nicaragua has already ratified the convention for the registration of trade-marks in Habana and Rio de Janeiro. FINANCIAL CONDITION. The financial, economic, and internal conditions of Nicaragua are in an excellent situation. The budget of the Republic is $95,000 per month, and in case of urgent need this can be increased by $26,666.66, or an annual admin- istrative budget, excluding debt service, of $1,460,000. Under pres- ent contracts the Republic devotes 50 per cent of its surplus revenues for redemption of foreign debt (partially suspended during the war), 144 SECOND PAN AMERICAN FINANCIAL CONFERENCE. and the balance is used for public improvements and the service of the internal debt. For the calendar year 1918 these surplus revenues amounted to $544,000. For the six months ended June 30, 1919, they aggregated $606,000, and from cable advices recently received they have jumped to $645,000 for the last half of the .year 1919. Internal and customs revenues have shown large increases for 1919 as compared with 1918, and this is not only the result of increased business, but also more efficient financial administration. In the past two years Nicaragua has paid $5,000,000 toward redemption of and interest on its foreign and internal debt. Under the law providing for the issue of internal bonds (December, 1917) it is provided that the high commission 1 shall act as trustee and fiscal agent for this bond issue. While the internal-debt service is not entirely covered by specially hypothecated revenues at present, the prompt payment of interest and regular as well as special amor- tization have caused the price of these bonds in a purely local market to advance from 30 to 62 within the past 18 months. Through the work of the commission on public credit (from March, 1917, to June, 1919) the internal debt had been successfully revised and consolidated, and the percentage of creditors, both foreign and national, who did not accept its awards is so small as to be almost negligible. The high commission also collaborated with the other ministries of the Government, and the following projects have been completed or are under way : classified budget ; accounting, reporting, and fiscal system ; municipal finance. With Nicaragua occupying a strategical position in Central Amer- ica and its raw materials and wonderful natural resources, coupled with the governmental aid and encouragement given to all legitimate business enterprises, the American investor and business man can advantageously put his money into Nicaragua. There is not only the possibility but also the probability that in the not remote future the Nicaraguan canal will be built. Under the Chamorro-Bryan treaty of 1916 the United States Government has an option in perpetuity for its construction. 1 The " Alta Comlsi6n," to which reference is here made, is distinct from the Nic raguan section of the Inter-American High Commission. PANAMA. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY or THE TREASURY OF THE UNITED STATES. SIR : Your committee has the honor to submit the following report : TRANSPORTATION. One of Panama's greatest problems is that of transportation, especially as it relates to domestic commerce. With regard to for- eign commerce, Panama's greatest asset is its strategic position on the canal, the connecting link for shipping between the two oceans. Panama has a vital internal transportation problem to solve, but ex- ternal problems are few, since the shipping of the world focuses naturally on the two mouths of the canal, near which are located the cities of Colon and Panama. Panama's problem in respect to trans- portation is to connect the Republic by a system of highways and waterways with the main transportation arteries, namely, the Panama Railroad and the Panama Canal. It would be beneficial if in the Republic of Panama there were con- structed a system of branch highways which would lead by land and water from the interior and distant Provinces to the main highway with terminals at Colon and Panama City. While Panama greatly desires the completion of the Pan American Railway, yet with mod- ern highways and motor trucks, the economic distribution of her products could be to a large extent effectively handled. The coastwise commerce of the Republic would be greatly stimu- lated if there existed further vessels specially adapted for use on the many rivers and harbors and on the oceans in marketing the products of the country, to the end that the produce of Panama may be con- veyed to the shipping points, thereby facilitating her commerce with the United States in particular. The United States has already surveyed a system of highways crossing the Isthmus and also at right angles to the canal and encir- cling the elevations. For the economic development of that part of the Republic adjacent to the Canal Zone, Panama's road-building program could be carried out, in cooperation with the United States, by extension of this system of highways, to the benefit of both coun- tries. 1497021 10 145 146 SECOND PAN AMERICAN FINANCIAL CONFERENCE. The Republic is at present largely dependent upon the Panama Railroad, owned and operated by the United States Government, for trans-Isthmus freight and passenger transportation. Closer relations should be established between the Republic of Panama and the United States to the end that the latter not only extend every consideration possible consistent with economic handling of the property but also adopt as its policy a plan of cooperation with the Republic. It is recommended that a cooperative agreement might appropriately be reached, giving more consideration to the economic needs of Panama in the development of its foreign and domestic commerce. In view of the above report, Mr. Clarence J. Owens moved, Mr. George Mixter seconded, and the committee unanimously adopted the following resolutions : i. Resolved, That a commission should be appointed consisting of representatives of the Republic of Panama and of the United States to consider the operation of the Panama Railroad and its steamships with a view to granting to the merchants in Panama further consideration in regard to freight rates and facilities for the movement of the commerce of the country. Resolved, That the cooperation of the United States with the Republic of Panama in the construction of a system of highways in the Republic would be most helpful to the economic develop- ment of Panama and to the successful operation, maintenance, and protection of the canal. Resolved, That regulations regarding storage for the com- merce of the Republic of Panama should be established by the Panama Railroad and Canal Zone similar to those prevailing in the case of goods coming from foreign countries. Resolved, That the United States and the Republic of Panama should at all times cooperate with the end in view that the Panama section of the contemplated Pan American Railroad be constructed at the earliest date possible. i ii. Whereas the United States is desirous of carrying on exten- sive commercial intercourse with Pan America : Now, therefore, be it Resolved, That all articles should be weighed, marked, and shipping documents prepared in the American system and the metric system at the same time. REPORT OF THE CONFERENCE COMMITTEE PANAMA. 147 III. Whereas the monetary system of North and South America is a decimal system, but varies in standard of value in' different countries : Now, therefore, be it Resolved, That careful consideration should be given to the question of harmonizing and standardizing coins in the countries of the American Continents so that they may bear direct rela- tionship to the dollar and conform as closely as possible to the coinage of the United States and Panama in respect to standard of value. Respectfully submitted. THE CONFERENCE COMMITTEE FOR PANAMA, J. A. ARANGO, Chairman. JAMES BROWN, Vice Chairman. PARAGUAY. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY or THE TREASURY OF THE UNITED STATES. SIR: Your committee has the honor to submit the following report : Paraguay has increased her trade from $14,000,000 in 1913 to $25,000,000 in 1919. This is but a beginning of the progress she can confidently be expected to make when her great and varied resources are developed. In order to develop them Paraguay requires : 1. Permanent investment of capital. 2. Improved transportation. 3. Improved monetary system. 4. Increased immigration. PERMANENT INVESTMENT OF CAPITAL. The Paraguay committee at the Second Pan American Financial Conference, held in Washington in January, 1920, believes that it should put in the forefront of this brief report the record of perform- ance which Paraguay has made in carrying out the program of the First Pan American Financial Conference, which met in Washington in 1915. This record is a hopeful guaranty of Paraguay's determi- nation to insure fair treatment to citizens of the United States seek- ing trade or investment within her borders. The International High Commission has reported to the present conference that Paraguay has ratified the patent and trade-mark convention. Under the terms of this convention Paraquay belongs to the southern group of Latin- American countries, which is to have an International Bureau for the Registration of Trade Marks at Rio de Janeiro similar to the one in operation at Habana. But Paraguay, awaiting the ratification of the convention by certain countries belonging to the southern group, has independently taken action protecting trade marks. And Para- guay -favors the use of the Habana bureau until the Rio de Janeiro bureau is opened. 148 REPORT OF THE CONFERENCE COMMITTEE PARAGUAY. 149 Another measure which has been pressed by the International High Commission is the convention concerning commercial travelers, proposed by the central executive council of the commission and based on recommendations of the commission made at Buenos Aires, April, 1916. This convention was signed by Paraguay and the United States on October 20, 1919. Another measure of great significance for the future is the treaty for the establishment of an international gold clearance fund. This convention was proposed by the central executive council of the In- ternational High Commission based on recommendations of the com- mission at Buenos Aires, April, 1916. Paraguay was the first country to sign this convention. With respect to the uniform measures as to bills of exchange, which measures are the modified Hague rules of 1912, as modified according to the recommendations of the International High Commission, made at Buenos Aires, 1916, Paraguay has introduced bills in its Congress embodying provisions for the revision of the commercial code in accordance with the recommendations. Arbitration of commercial disputes proposed by the United States Chamber of Commerce on the basis of recommendations of the First Pan American Financial Conference has been accepted by Paraguay, and an agreement between the Chambers of Commerce of the United States and Asuncion was completed in Washington while this Pan American Financial Conference was in session. The uniform statistical classification of merchandise based upon the Brussels convention of November, 1913, and the uniform classifi- cation recommended by the International High Commission at Buenos Aires, 1916, has been adopted by Paraguay. As regards customs regulations, the provisions relating to sanitary visits outside regular hours and advance preparation of cargos have been adopted by Paraguay, while the recommendations relating to simultaneous loading and unloading of cargoes are now under con- sideration. This record of prompt performance by Paraguay of practically all of the program proposed at the First Pan American Financial Conference, together with the facts in regard to the conditions and resources of Paraguay, which have been presented in detail by the delegates from Paraguay, have resulted in the opinion on the part of the group committee that private capital of the United States can with safety consider investment in the securities of the Paraguayan Government and in Paraguayan private enterprises. As to the proper returns to be expected from such investments, no exact rate can reasonably be fixed, but will have to be determined in each specific case, which primarily must be governed by the law of 150 SECOND PAN AMERICAN FINANCIAL CONFERENCE. supply and demand. It is fair to presume, however, that the net re- turns on such investments should be somewhat larger than the lender of capital would normally receive from similar investments within his own country. Furthermore, the returns from capital invested in Paraguay will necessarily have to be as large as those obtainable from similar investments in neighboring countries to become at- tractive. As an important investment fact it is reported that three large packing plants, affiliated with three of the largest Chicago packing companies, have been established in Paraguay since the First Pan American Conference met in 1915. In regard to commercial credits, the committee learned with satis- faction that Paraguayan business houses are growing accustomed to the practice, common in the United States, of supplying financial statements as the basis for credit. The committee believes that it would be most advantageous for the merchants of Paraguay to advise their bankers regarding the person- nel of their organizations, number of years established, nature of business, capital employed, turnover per year, value of stocks car- ried, and their latest balance sheet. With this information the busi- ness houses would become internationally known and credits desired would undoubtedly be secured. IMPROVED TRANSPORTATION. Paraguay, being an inland country, needs better transportation. The present transportation facilities between the United States and the River Plate are but little better than during the war, and the lack of sufficient tonnage and the infrequency of sailings constitute a serious handicap not only to trade between Paraguay and the United States but to all other economic relations as well. At times more than two months are required to reach the River Plate from New York, and travelers between the United States and Paraguay often find it necessary to go by way of the west coast of South America. The committee strongly recommends that steps be taken at once to establish a service providing at least fortnightly sailings from both New York and Buenos Aires, and that the sailing time be reduced to a time no longer than that required for a voyage between Europe ,and the River Plate. The chief outlet for Paraguay's foreign trade is the river route by way of the Paraguay and Parana Rivers, and except in times of low water this river route is navigable for boats of 12- foot draft as far north as Corrientes and for boats of 7- foot draft from Corrientes to Asuncion. There are three or four bad spots in the river between REPORT OF THE CONFERENCE COMMITTEE PARAGUAY. 151 Corrientes and Asuncion which could probably be kept open easily and cheaply by dredging, thus avoiding transshipment of cargo, which now increases the expense of shipping by 20 per cent. The river traffic is now almost entirely in the control of a single line, which in recent years has absorbed three of its largest competitors. The high rates charged for river traffic are said to discourage Para- guay's trade, and the establishment of a new line of river steamers has been suggested as a means of remedying the situation. With Paraguay's steadily increasing commerce, it is thought such a line would be profitable. The International Products Co. has announced that it will put two new boats of 1,000 tons each into this river serv- ice about August, 1920, which will be available for carrying two or three hundred tons of outside freight downstream and full cargoes upstream. Besides the river route, Paraguay has an outlet to the River Plate over a railway line to Buenos Aires from Asuncion. This line, however, is in the control of four different companies, and its terminus in Buenos Aires is several miles from the docks. Except for high-priced freight, therefore, the line does not afford effective competition with the river route. The existing port facilities at Asuncion, the chief city of Paraguay, are inadequate, and an improvement in them would bring a distinct economic benefit to Paraguay's freight trade. The telegraph service between Buenos Aires and Asuncion is poor ; the part of the line going through Argentine territory is owned and operated by the Argentine Government and that part going through Paraguayan territory is owned and operated by Paraguay. A joint inquiry by representatives of both Governments would probably result in improvements, which would be very beneficial to commerce between the United States and Paraguay. For internal transportation Paraguay needs good highways for motor trucks and teams as feeders to the present railway and the river systems, and, as the country develops, will need more and more short branch railways for the same purpose. If such improved means of transportation and communication are made available, the economic developments of Paraguay will be greatly stimulated, as these new roads and railways will open much productive land to colonization. A railway line which is projected to connect Paraguay with the Brazilian seaport of San Francisco has been constructed part of the way to the Brazilian border, but its continuation must await con- struction of the Brazilian section. This extension would benefit Paraguay very greatly, as it would give Paraguay a second outlet to the Atlantic Ocean, and would decrease the time 6f the journey to the United States by about five days. 152 SECOND PAN AMERICAN FINANCIAL CONFERENCE. IMPROVED MONETARY SYSTEM. Paraguay is making arrangements to procure the services of a financial expert, probably from the United States, to reorganize its fiscal-revenue system. At present import and export business wholly, and some other business partially, are based on Argentine gold dollars. The prin- cipal medium of circulation is the Paraguayan paper peso, of which 125,000,000 have been issued by the Government during the course of many years. Against this issue the "Oficina de Cambios" (Exchange Office) holds about $1,500,000 gold, which, at present rate of exchange, represents about 25 per cent of the total issue. Measures have been taken to increase the reserve or stock of gold to 50 per cent of the value of the currency issued, when the conversion rate will be fixed. The continuous fluctuations in the local value of the paper peso is a serious drawback to all business; this will disappear when the conversion rate is fixed. INCREASED IMMIGRATION. Paraguay's progressive policy in encouraging immigration was highly commended by the conference committee. Immigration has been steadily increasing, and is expected to increase still more as the country's transportation and agricultural interests are devel- oped. Laborers in various parts of Europe, particularly in central Europe, have shown great interest in the possibilities of obtaining land in Paraguay, as evidenced by the numerous applications re- ceived by the Government for information on that subject. Para- guay now pays the fare of immigrants from Buenos Aires to Asun- cion and gives them a month's subsistence free of charge. It also affords them opportunity to obtain good land at very low rates. Such policy, if continued, should result, in the committee's opinion, in supplying Paraguay with the labor which it now needs to bring out the riches of its fields, forests, and mineral resources. PARAGUAY'S RESOURCES. Paraguay has many promising lines of economic development. The most profitable of these at present is cattle raising, which has been greatly stimulated by the building of packing companies, al- ready referred to, which have come into the country in recent years and erected establishments which employ 3,000 to 4,000 workers each. Their policy of affording good food and housing facilities to their laborers 'has had an excellent effect in the country in popu- larizing United States enterprise. There are now some 5,500,000 REPORT OF THE CONFERENCE COMMITTEE PARAGUAY. 153 head of cattle in Paraguay, and there is room for over five times that number. The natural increase of cattle is 20 to 30 per cent annually, and cattle diseases are uncommon. Grazing land is plen- tiful and is valued at $6,000 to $12,000 per square league, or $1.30 to $2.60 gold per acre. Paraguay's world-famous quebracho industry is capable of fur- ther development, and constitutes one of the country's chief sources of wealth in the future as it has in the past. The tanning extract is its present important product, but the hard, durable wood is also most valuable in railroad and other construction work. Paraguay also has many most valuable woods for general building purposes. Paraguay cotton ranks in quality with the best in the world, and the cotton-growing industry is one of the most promising in the country. Through the Banco Agricola the Government is giving encouragement to the industry, at present by maintaining fixed prices for cotton. Cotton is now raised in small tracts, being essen- tially a " home industry." It is expected that in a few years Para- guay will begin to export cotton. A plant producing a fiber very similar to jute has been introduced from Africa and has been found to grow well in Paraguay, giving promise of a future source of material for making bags for containing products of the country. The Government of Paraguay is especially interested in giving the fullest information to inquirers in the United States regarding the resources of the country, and will send full collections of sam- ples of Paraguay products for permanent exhibition to any respon- sible association desiring them. One such collection is to be placed in the Philadelphia Commercial Museum. Through such exhibits the study of Paraguay's resources by United States investors and those interested in the commerce of the country will be greatly facilitated. Respectfully submitted. THE CONFERENCE COMMITTEE FOR PARAGUAY, EUSEBIO AYALA, Chairman. LEWIS E. PIERSON, Vice Chairman. PERU. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY or THE UNITED STATES. SIR: As the result of the First Pan American Financial Confer- ence in 1915, the cordial relations which have for so many years ex- isted between the Republic of Peru and the United States have been further strengthened. It is highly important to both countries that these relations should be constantly and progressively developed. The commerce between the two countries has increased, and with a proper extension of shipping facilities, it is quite certain that the trade of Peru with the United States, which is already its largest customer, will steadily increase. The recommendation of the group committee report of 1915, which is hereby reaffirmed, with respect to the establishment of branches of American banking institutions in Peru, has been acted upon by several of the largest banks of the United States. Two American branch banks have already been established, and serve as important instrumentalities for developing closer commercial and financial relations between the two countries. The Republic of Peru embraces a territory of 2,000,000 square kilometers and has a population of 4,500,000. The exceptional cli- matic conditions of the Peruvian coast make it an ideal country for tropical and semi tropical agricultural growth, while there is little doubt that its resources of raw materials are very great, in- cluding sugar, cotton, wool, hides and skins, rubber, copper, vana- dium, tungsten, iron ore, petroleum, coal, gold, and silver. The development of these natural resources has been very limited, due to the lack of adequate railroad facilities, and it is quite ap- parent that, given the necessary capital for such development, the Republic of Peru could greatly increase its contribution to the world's need of these raw materials, at the same time vastly increasing its production of food supplies so generally required throughout the world. The Government of Peru has evolved a comprehensive financial program, based upon sound economic principles, which aims at the development of these extensive natural resources. 154 REPORT OF THE CONFERENCE COMMITTEE PERU. 155 The Peruvian delegation has presented the before-mentioned com- prehensive plan of financial reorganization and development, nota- bly the establishment of a national bank, under proper protection of the Government and supervision of its officials. This bank is not to be a bank of deposit, but a consolidation of the various col- lecting companies of that country and a bank of issue, such issues to be secured by 60 per cent in gold and 40 per cent negotiable se- curities, such subsecurities being representative of its agricultural, industrial, mineral, and railroad investments, the bank thus main- taining at all times the necessary fundamental gold reserve and at the same time holding a volume of securities, the interest or divi- dends upon which would constitute an additional source of profit. The financial needs have been summarized by the Peruvian dele- gation as follows : Railroads $40, 000, 000 Roads 6, 000, 000 Sanitation 10, 000, 000 irrigation and colonization ^ 55, 000, 000 Docks and ports improvements 6, 000, 000 National bank, including conversion of debts 29, 000, 000 Iron mines 1, 500, 000 Coal and petroleum 2,000,000 Electrolytic copper refining 1, 000, 000 Manufacture of explosives for mining purposes 1, 500, 000 Total 152, 000, 000 It is purposed to secure the amount required by the issue of national bank debentures, the security for which will be the resources of the bank; the profits accruing from their various collecting con- tracts (which are said to be large), and the total resources and assets of the various projects to which these moneys will be applied. These debentures will bear a fixed rate of interest, and will also participate in the profits of the national bank and its various subsidiary com- panies, which make them an attractive investment. To insure the underwriting and sale of the securities of the National Bank of Peru, the Government of the Eepublic of Peru should guarantee their payment, principal and interest, providing for the payment of the principal by adequate annual amortization, out of the revenue of the Government, as collected by the bank. It is to be noted that the plan presented contemplates the retiring of the entire national debt of the Republic of Peru and the refunding of all such obligations into the one issue by the national bank. The present debt of the Republic of Peru is about $27,000,000 with an annual income of $25,000,000, and its revenues in the year of 1918 exceeded its expenditures approximately $3,000,000. The exports of Peru were close to $100,000,000 in 1918 and its imports about $50,000,000. 156 SECOND PAN AMERICAN FINANCIAL CONFERENCE. The plan presented by the delegates from Peru, in the judgment of the Peruvian group, is sound in principle and should command the support of American investors. The realization of the plan would not only result greatly to the advantage of Peru but likewise confer collateral advantages upon the United States by increasing the commerce between those countries while adding substantially to the world's production of essential commodities. The financial con- ditions now existing, however, are not such as to make it practicable to attempt such an extensive financial operation in this country. The requirements for enormous capital expenditures in the United States incident to the reconstruction of its own and the economic and in- dustrial life of its associates in the war has advanced interest rates to the point where it would make it quite difficult to exploit such an enterprise in its investment markets. A recent act of the Congress of the United States, known as the Edge bill, authorizes the incorporation of companies to develop and encourage international financing, and it is recommended that the plan presented by the Peruvian delegates be referred for considera- tion and development to such companies created under this act of Congress. The committee is gratified to be able to report that the Republic of Peru has already advanced far along the line of development of uniformity of legislation in relation to the six subheadings undei Topic VI of the program of topics agreed upon for submission to the conference. In particular a classification of imports and exports has been adopted conforming to the Brussels convention. In as far as these matters are dependent upon further international agreement the Re- public of Peru is not only willing but anxious to cooperate. There is still a lack of means of wireless communication between the several countries of South America and between South America and the United States. It is the opinion of the Peruvian conference com- mittee that better facilities in this direction should be developed, and therefore it is suggested that a committee be appointed from the countries interested to consider further and report upon this matter. The Peruvian conference committee desires to record its satisfac- tion in having been afforded this opportunity for conference and dis- cussion, the fruits of which it is hoped will further cement the friendly and cordial relations which have for so many years existed between the peoples and Governments of Peru and the United States. Respectfully submitted. THE CONFERENCE COMMITTEE FOR PERU, F. C. FUCHS, Chairman. JOHN H. FAHEY, Vice Chairman. EL SALVADOR. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR : The conference committee to consider relations, financial and commercial, between the Republic of Salvador and the United States begs to submit the following report of its deliberations. There were present : The official delegation from Salvador, His ex- cellency, Dr. Jose Esperanza Suay, minister of finance of Salvador, and Dr. Reyes Arrieta Rossi; as special guest of the Secretary of the Treasury, the minister of Salvador, Senor Salvador Sol ; as special representative of the Secretary of the Treasury, Hon. James H. Moyle ; and the following United States members of the group com- mittee : W. S. Rowe (chairman), O. C. Fuller, Otto N. Frenzel, jr., George H. Harries, James T. Keena, George C. Luebbers, George E. Macomber, G. A. Northcott, Harry Harwood Rousseau, Dayton Shel- ley, Jerome Thralls, Charles W. Warden, Oscar Wells, and Walter F. McCaleb (secretary). The discussions of the various problems resolved themselves into two heads : 1. Transportation and communication. 2. Banking facilities and trade relations. After giving careful thought through the sessions of the conference on Monday, Tuesday, and Wednesday of the present week, we submit the following conclusions. At the First Pan American Financial Conference, held in May. 1915, it was reported that better transportation by sea was greatly needed by Salvador, so that mails, passengers, and products could more readily and speedily pass between Salvador and the United States. This condition exists at the present day, and as a result of com- plications arising out of the war to even a greater degree than ever before. Prior to the war Salvador was served not only by the Pacific Mail Steamship Co. with a dozen ships, but also by several European steamship lines, including the German Kosmos. The Salvador Rail- 157 158 SECOND PAN AMERICAN FINANCIAL CONFERENCE. road Co., an English association, also had three small steamers in coastwise service. At the present time Salvador is served only by the Pacific Mail Steamship Co. with four steamers, and your com- mittee feels that the need of better and more frequent steamer service is urgent. Such need would be filled by the allocation of additional cargo and passenger vessels that will give more frequent and better service between Salvadorean ports and Atlantic and Pacific ports of the United States. Your committee recommends for specific considera- tion in this connection the inauguration of a special monthly steam- ship service from some Atlantic port, such as New York, Baltimore, or New Orleans, running direct to Salvadorean ports, passing through the Panama Canal. This line would speedily demonstrate the de- gree of its usefulness and make further planning something more than conjectural. The Salvadorean Government has agreed to forward all efforts looking to improved communication with the United States. It freely proffers special concessions to those of pur steamers which touch regularly at its ports and is prepared not only to reduce or eliminate port dues but has announced that a reasonable subsidy would be practicable where the arrangements were mutually satisfactory. Rail transportation in Salvador was not affected to any appre- ciable extent by the war. New construction of the International Railroad Co. of Salvador has been and is still being greatly delayed through the difficulty in obtaining materials for the construction of the branch line from La Union to the capital. Increased steamship facilities will aid in removing this difficulty. Your committee considers particularly important not only the foregoing extension but also the branch that will connect the city of Santa Ana with Zacapa in the Republic of Guatemala, which will result in the completion of a through rail route from La Union on the Pacific to Puerto Barrios on the Atlantic and will give Salva- dor a direct outlet to the Atlantic through Guatemala. This will reduce the tune of journey from Salvador to New Orleans and New York to five and eight days, respectively. These extensions will serve amply when the necessary 150 miles, more or less, have been built. We renew the recommendations made at the conference in 1915 favoring an increase of first-class highway mileage, for without soundly constructed and maintained highways the distribution prob- lem can not be economically solved. On this point it is a satisfaction for your committee to state that Salvador has constructed in the last three years a macadam highway from the port of La Libertad to the capital, a length of 40 miles, REPORT OF THE CONFERENCE COMMITTEE EL SALVADOR. 159 thus affording to commerce an additional easy outlet and inlet for its exports and imports. Your committee on the subject of transportation begs to suggest: That steamship lines can be greatly strengthened and devel- oped through the sympathetic study of the commercial and credit needs of the American States in general, and especially we hold this to be true in the case of Salvador. In a word, steamship lines must eventually become self-sustaining if they are to continue to operate, and this will depend on the develop- ment of permanent and mutually satisfactory commercial bases as between our country and the other American States. The solu- tion of this problem, then, involves close study of definite prob- lems, and it is our opinion that such consideration is of funda- mental importance in the matter of extending and furthering happy relations with our neighboring Republics. This could best be done, probably, through a special committee of this conference. Studies should be made at first hand and the results reported as widely as possible. ii. At the present conference, as at the one held five years ago, the paramount need of increased banking capital and an increase in the circulating medium was given special consideration by the financial delegation representing Salvador. Since 1915, as your committee believes, there has been a marked tendency toward the establishment of branch banks in Latin- American countries by banking institu- tions of our country, and that the process of creating new branches in new localities is a continuing one, and, in a more limited way, perhaps, the creation of independent banking concerns by banking organizations has been inaugurated. Legislation through the enact- ment of the Federal reserve act, as well as the passage of the Edge bill, is favorable to the growth of invested capital in other countries, so Salvador may reasonably hope for independent capital. Still, in the opinion of your committee, the location of branch banks, even without issuing powers, would be most beneficial because of the resultant employment of such forms of currency as may be sent into the territory intended to be covered by such new branches in lending and investment operations. These will have the effect of increasing the actual money per capita in the Republic entered. The establish- ment of such branches or of independent banks supported by capital from the United States would not only tend to meet the recognized needs of Salvador with respect to an increase in banking facilities and a greater supply of currency, but would become at once a poten- tial factor in developing trade relations between our respective coun- 160 SECOND PAN AMERICAN FINANCIAL CONFERENCE. tries, involving not only the buying and selling of merchandise, but the question of commercial credits as well. Believing that Salvador is typical of other Latin- American countries into which banking capital from our own country has not yet entered, we beg to make the following recommendation to the general committee on forms and resolutions : That there be appointed a committee charged with the respon- sibility of making a careful study of the banking laws of Sal- vador and other Central and South American countries, first, with the view to suggest such changes in the laws as will enable their respective banking systems to respond most readily and effectively to the seasonal and unusual demands of commerce and industry; and, second, to propose such changes as will attract banking capital from other countries. We are told by the Salvadorean representatives that local capital is timid and to a degree suspicious, and your committee is of the opinion, furthermore, that employment of foreign banking capital would render more stable the available supply of local capital and credit. The actual establishment of an institution, whether bank or branch, must of necessity be left to negotiation between the agencies interested in the Republic of Salvador and the representa- tives of private capital seeking to expand their banking facilities in the Latin- American countries, and to both of these we commend the subject of increased banking capital in Salvador as one of interest and the source of practicable as well as mutual benefit. Respectfully submitted. THE CONFERENCE COMMITTEE FOR EL SALVADOR, JOSE E. SUAY, Chairman. W. S. ROWE, Vice Chairman. URUGUAY. REPORT OF THE CONFERENCE COMMITTEE. The honorable the SECRETARY OF THE TREASURY OF THE UNITED STATES. SIR : The conference committee for Uruguay desires to call atten- tion to the satisfactory condition of the finances of Uruguay, its increasing wealth, and its strong, favorable trade balance; the development by its Government of port and transportation facili- ties and other means of external and internal communication, and in particular its excellent educational system. The committee recommends to the favorable consideration of the Government and the banking and commercial interests of the United States : 1. The further development of maritime transportation facilities for passengers and freight. The committee has adopted two resolutions with a view to the fulfillment of this purpose, copies of which are attached to this report. The United States section of the committee has also adopted a resolution favoring the award to the Government of Uruguay by the repa- rations commission of the eight German ships seized by that Government during the war. A copy of this resolution is attached. Bancroft! 2. The further consideration of commercial conditions for the purpose of effecting a larger interchange of commodities between the two countries. In this connection the committee heartily indorses the arrangement made between the chambers of commerce of the two countries for the arbitration of commer- cial disputes. 3. The study of industrial conditions in Uruguay with a view to the establishment of industries there or their encouragement with United States capital and industrial skill. 4. The publication of a descriptive pamphlet on Uruguay for general distribution in the United States. The committee has appointed a subcommittee to work in cooperation with the Uru- 1497021 11 161 162 SECOND PAN AMERICAN FINANCIAL, CONFERENCE. guayan minister in Washington and the Uruguayan consul in New York to revise and bring up to date the descriptive pam- phlet prepared in 1915 by the Uruguayan conference committee of the First Pan American Financial Conference. In the committee's opinion the excellent economic and financial condition of Uruguay fully justifies a great extension of financial relations between the United States and Uruguay when the world's economic situation shall have become normal. Bespectfully submitted. THE CONFERENCE COMMITTEE FOR URUGUAY, RICARDO VECINO, Chairman. HARRY A. WHEELER, Vice Chairman. VENEZUELA. REPORT OF THE CONFERENCE COMMITTEE, The honorable the SECRETARY or THE TREASURY OF THE UNITED STATES. "SiR: The conference committee, consisting of the official delegation and of the United States members, organized on January 19, 1920, with the election of Dr. Vicente Lecuna (president of the Interna- tional High Commission, Venezuelan section) as chairman of the conference committee; of Mr. Kobert H. Patchin, of New York, as vice chairman; and of Mr. Clarence H. Haring, of Connecticut, as secretary. The conference committee has surveyed the financial, commercial, and economic relations of Venezuela with the United States and the other Republics of America. The official delegation of Venezuela, consisting of Dr. Vicente Lecuna, Mr. Enrique Perez Dupuy, and Dr. Nicholas Veloz Goiticoa, submitted a comprehensive report prepared by them for the Interna- tional High Commission, dealing with all topics agreed upon by the Governments of the American Republics for submission to the Second Pan American Financial Conference. That report abounds in so much valuable and pertinent material relative to the present finances, commerce, transportation, and other economic conditions of Vene- zuela that the committee has not ventured to traverse all of that ground, but transmits the report herewith (with a translation in English) with an urgent recommendation that it be published in both Spanish and English as a part of the official proceedings of this conference. As a result of its deliberations, the conference committee begs to submit the following report : PRESENT CONDITIONS. Venezuela has emerged from the war period with greatly enhanced prosperity, and with several pressing economic problems requiring early solution. One effect of the war has been to emphasize the naturally reciprocal relation of Venezuela and the United States. 163 164 SECOND PAX AMERICAN FINANCIAL CONFERENCE. PUBLIC FINANCES. The public finances of Venezuela are in a gratifying condition, the total public debt having been reduced from 190,000,000 bolivares ($38,000,000 United States) in 1901 to 142,000,000 bolivares ($28,- 500,000 United States) in 1918. Through all the trials imposed by the war upon international finance Venezuela punctually met its public- debt service. COMMERCE WITH THE UNITED STATES. Prior to the outbreak of the European war the United States, in the year 1912, participated in the total foreign commerce of Vene- zuela to the following extent : Per cent. United States ' proportion of total Venezuelan imports 33 United States' proportion of total Venezuelan exports 38 United States' proportion of total Venezuelan trade 3fr In 1917 the United States' share of this commerce had increased as follows: Per cent. United States' proportion of all Venezuelan imports 70 United States' proportion of all Venezuelan exports 55 United States' proportion of total Venezuelan trade 62 COMMERCE WITH EUROPE. The greater part of Venezuelan foreign commerce other than with the United States is with Europe. It is natural and just to expect a certain readjustment and increase of the proportion of the trade formerly held by Europe, as compared with that of the United States, but the United States must nevertheless continue to be considered Venezuela's chief market for raw materials. This is equally to the advantage of Venezuela as an exporter of natural products and of the United States as a consumer of raw materials, indispensable to prosperity and stable operation of labor and industries. During the war the manufactured products of the United States have become better known to the people of Venezuela, and their con- tinued exportation to that country is necessary in partial payment for the greater value of imports from Venezuela, the trade balance being always adverse to the United States. TRANSPORTATION. The fact that the natural relations between Venezuela and the United States are truly reciprocal is proven by the fact that this interchange of products, both before and since 1914, has been accom- plished despite meager steamship communication as compared with KEPORT OF THE CONFERENCE COMMITTEE VENEZUELA. 165 the steamship facilities between Venezuela and Europe. Before the war only one regular line connected the United States and Venezuela, as against seven steamship lines operating between the chief Vene- zuelan ports and England, Spain, France, Italy, and Holland. Two American lines are now operated, but only one operates passenger vessels. The abnormal conditions which have existed during the war, and the suspension of shipping facilities between Venezuela and Europe, have doubtless contributed to some extent to increase the commerce between Venezuela and the United States. As normal conditions are rapidly being restored, it is only fair to assume that the same facili- ties which formerly existed between Venezuela and Europe will be reestablished, and even increased; and consequently, if the United States is to hold the commerce which has been created during the war, it will be absolutely necessary to provide additional transportation facilities. In this connection it should be pointed out that the interchange of commerce depends not only on the character and price of goods but largely upon the personal relations between merchants. So far, the travel between Venezuela and the United States has been greatly handicapped. At the present time the facilities for passenger travel to the United States are inadequate as compared with those provided by the European lines. In order to induce Venezuelan merchants more freely to visit the United States, or to come to the United States on their way to and from Europe, passenger facilities should be greatly increased. The Venezuela conference committee recognizes that improved steamship communication is an essential factor in Pan American co- operation, and recommends to the United States Shipping Board and o the existing American steamship companies calling at Venezuelan ports the early enlargement and improvement of their services for both passengers, freight, and mails ; and also recommends to the In- ternational High Commission that the needs of Venezuela for im- proved steamship communication with the other countries of America be given careful consideration. The natural advantages of the ports of Venezuela for transship- ment are manifest ; and, in the opinion of the committee, the interests of Venezuela will be distinctly served by a reduction of port dues, tonnage taxes, and other Government charges on shipping to such points as will cover the actual cost of the services rendered. This would be in conformity with the practice of all nations which seek to attract the world's shipping to their ports. The committee also recommends that the present port regulations of Venezuela be altered so as to permit the simultaneous loading and unloading of vessels. 166 SECOND PAN AMERICAN FINANCIAL, CONFERENCE. UNIFORM LEGISLATION. It is further recommended to the official delegation, and through them to the Venezuelan Government, that the Government of Vene- zuela cooperate, through the International High Commission, with the other countries of South America in the establishment of uniform customs regulations, and legislation and regulations affecting bills of exchange, 1 checks, bills of lading, warehouse receipts, contracts in foreign trade, patent and copyright laws, and uniform admiralty laws. COMMERCIAL AGREEMENTS. The encouragement of commerce between Venezuela and the United States through the negotiation of commercial agreements, such as are authorized in the present American tariff law, is desir- able in principle, as a means of securing to each country reciprocal advantages in ftie markets of the other. SILVER. While the currency of Venezuela is on a gold basis, and the finances of the country in a sound and prosperous condition, the rising price of silver presents to that Government a serious problem in connection with its subsidiary coinage very similar in character to that which will confront the Government of the United States if the price of silver should reach a much higher point. As this problem is common, in a greater or less degree, to all countries with a silver subsidiary coinage, the Venezuelan conference committee recom- mends that it be given the early attention of the International High Commission. Venezuela has $10,000,000 in silver in circulation. It needs more now than it did five years ago, due to the fact that its commerce has grown. During the harvest season silver has gravitated toward the har- vesting centers, returning later to the 28 agencies of the Bank of Venezuela. During the last three years the return of silver has been in lessen- ing quantities. In later years there has been an increased use of bank notes guaranteed by gold deposits. Due to the increase in value of silver in the subsidiary coins, it is feared that this currency may disappear from circulation. 1 The Hague rules of 1912 relating to bills of exchange and checks with certain modi- fications recommended by the International High Commission were incorporated into the Venezuelan Commercial Code effective in December, 1919. Editor. KEPORT OF THE CONFERENCE COMMITTEE VENEZUELA. 167 Venezuela, with reference to her population, needs more silver coins than other countries, because the use of checks and bank notes is not so general. The bank notes of the four national banks of issue in Venezuela are exchangeable for gold or silver on presentation at any of the 28 agencies of the Bank of Venezuela. The Venezuelan Government is now preparing to mint a gold coin worth 10 bolivares (equal $2 United States gold). Venezuela's monetary system is the same as that of France before the war; but silver coins in Venezuela, even those 0.900 fine, are re- ceived as legal tender only to a limited amount. METRIC SYSTEM. One obstacle to the accomplishment of a greater degree of eco- nomic Pan Americanism is the difference between the metric system of weights and measures everywhere legally established and univer- sally used in Latin- American countries and the English standard which, notwithstanding its obvious defects, continues to obtain in the United States. The tariff laws and customs administration of all the other Republics of America are in metric terms. American ex- porters are increasingly accommodating themselves to the use of the metric system in foreign commerce. It is steadily growing in do- mestic industry. If it could be established in the United States, a long step would be taken toward more effective commercial relations with Latin America in particular, and with many other countries of the world. As a partial step to this end, the committee strongly recommends increased instruction in the metric system in the public schools, counsels exporters to its wider use, and advises importers to adopt it wherever possible. The practice of many exporters in using metrical equivalents, wherever they use the English standards in catalogues, price lists, labels, etc., has been most useful, and this method should be more generally followed. INCREASED STUDY OF THE SPANISH LANGUAGE. The increased study of the Spanish language in the high schools, colleges, and universities of the United States, and through private instruction, with but slight governmental or business encouragement, is in itself evidence of the cultural richness of this language and of Spanish literature, as well as of a growing public appreciation of its value as a commercial medium. A large part of the present United States was formerly Spanish, and Spanish influence in the develop- ment of the United States has been far more potent than is generally realized. Indeed, even at the present day it must not be forgotten 168 SECOND PAN AMERICAN FINANCIAL CONFERENCE. that the United States has extensive territory in Porto Eico and the Philippine Islands, where Spanish is the language of the people. Furthermore, the literature and traditions of Spain itself have come down to us as a heritage from that nation. The committee cordially urges the more general study of Spanish for cultural quite as much as for commercial reasons. In Latin America the study of English is increasing in a corresponding man- ner, and it is hoped will meet with the encouragement of all govern- ments. The considerable number of the youth of Venezuela attending edu- cational institutions in the United States is gratifying; and the at- tention which colleges and universities are giving to the study of Latin- American affairs and the special measures which the universi- ties of America are taking to attract students from the sister republics is most commendable and useful. As the first Pan American Financial Conference paved the way for the negotiation of agreements for commercial arbitration between commercial organizations in Latin America and the Chamber of Com- merce of the United States representing American business, the com- mittee has learned with gratification that the Chamber of Commerce of Caracas has instructed two of the members of the Venezuelan offi- cial delegation (who are also members of that chamber) to negotiate with the Chamber of Commerce of the United States an agreement for the arbitration of commercial disputes. The committee feels that such a mechanism will go far to improve trade relations between the two countries. The committee is moved to record its appreciation of the construc- tive accomplishments of the International High Commission and its central executive council as a permanent body for realizing the pur- poses of the Pan American financial conferences. The committee recommends that the official delegation recommend to the Venezuelan Government that it shall deposit in the library of the Pan American Union two copies of all informative official publi- cations, maps, and other data; that it consider the advisability of preparing a comprehensive, standard handbook in English describ- ing the financial, commercial, material, and other conditions of Vene- zuela to be distributed through the Pan American Union; that it deposit in the Pan American Union for exhibit, whenever found de- sirable and practicable, films descriptive of Venezuelan life and re- sources; and that every effort be made to make the Pan American Union a practical, up-to-date, central bureau of information. Respectfully submitted. THE CONFERENCE COMMITTEE FOR VENEZUELA, VICENTE LECUNA, Chairman. ROBERT H. PATCHIN, Vice Chairman. INDEX. Page. Acceptances, resolution on 13, 57 Aldao, Dr. Ricardo C., address 55 Alexander, Hon. J. W., chairman of the committee on transportation and communications + 45 Arag6n y Etchart, Dr. Florencio, address 50-51 Argentina : Conference committee 21 Report of 65-68 Argentine and American Chamber of Commerce, 68; bank- ing, 66; census, 67; commercial arbitration, 67; commer- cial attache's, 68; monetary unit, 66; taxation, 67; trade- marks, 68; transportation, 65-66; uniform legislation, 68. Banks and banking: Argentina, 66; Chile, 89-90; Colombia, 94; Cuba, 100; Mexico, 139; Nicaragua, 141 ; Peru, 155 ; Salvador, 15&-160. Resolution on establishment of branches 57 Banquet tendered delegates 54 Barrett, Hon. John: Ex officio member of all group committees 19 Remarks 43 Bolivia : Conference committee 22 Report of 69-73 Capital and credit facilities and necessities, 71 ; chamber of commerce, 72; commercial attache's, 72; commercial trav- elers, 72 ; debt, 71 ; effects of war, 69 ; financial needs, 70 ; fiscal system, 71 ; international commerce, 69, 72 ; patents and copyrights, 72 ; postal relations, 72 ; railways, need of, 70-71 ; wireless system, 72. Recommendation of the extension of financial aid to Europe by the United States through the purchase of Government securi- ties of the republics of Central and South America now held in Europe 52 Brazil : Conference committee 28 Report of 74-87 Capital and credit facilities, 77-78; commercial travelers, 84 ; debt, 79-SO ; effects of the war, 74-76 ; financial needs, 76-77; fiscal system, 80-82; gold clearance fund, 84; recommendations, 87; transportation and communications, 82-83, 85; uniformity of legislation, 86-87. 169 170 INDEX. Page- Budget system 50 Address on ' 49 Cable and telegraphic service, Colombia 7 9& (See Transportation and communications.) Capital and credit facilities : Bolivia, 71; Brazil, 77-78; Ecuador, 108; Guatemala, 114-115; Haiti, 121; Honduras, 126-127. (See also Financial needs.) Census : Argentina 67 Resolution on 14, 58 C4spedes, Dr. Carlos Manuel de : Member of committee on resolutions 56 Presiding officer at the first general session 44 Chambers of commerce : Argentina, 68 ; Bolivia, 72 ; Nicaragua, 141-142. Checks, resolution on uniformity of 14r Chile : Conference committee 24 Report of 88-92 Banking and currency, 89-90 ; commerce, 91-92 ; commercial arbitration, 91; nitrate situation, 88-89; public utilities, 91; transportation, 90-91. Debt, public ~_ 46 Field for investment 4$ Classification of merchandise : Paraguay, 149 ; Peru, 156. Colombia : Conference committee 25 Report of 93-98 Banking facilities, 94; cable and telegraphic service, 96; commercial travelers, 96; currency, 95; debt, 95; distribu- tion of information concerning ore deposits and industries, 96; effects of the war, 93-95; fiscal system, 95; freight rates, 96; patents, trade-marks, and copyrights, 96; rail- ways, 93-94; recommendations, 96-98; warehouse facili- ties, 96. Commerce : Bolivia, 69, 72; Chile, 91-92; Cuba, 100; Peru, 154; Uruguay, 161; Venezuela, 164. Commercial arbitration : Argentina, 67 ; Chile, 91 ; Guatemala, 118 ; Nicaragua, 142 ; Paraguay, 149 ; Uruguay, 161 ; Venezuela, 166-168. Resolution on 15, Commercial attache's: Argentina, 68 ; Bolivia, 72. Resolution concerning 14, Commercial intercourse : Ecuador, 110-111 ; Guatemala, 116-117 ; Haiti, 123 ; Honduras, 131 ; Mexico, 137 ; Panama, 146. Commercial travelers : Bolivia, 72 ; Brazil, 84 ; Colombia, 96 ; Paraguay, 149. ; INDEX. 171 Committees : Page. Group conference 21-39 Resolutions 20 Transportation and communications 20 Cuba: Conference committee 26 Report of 99-103 Banking system, 100 ; commerce with the United States, 100 ; currency, 99; effects of the war, 100; relations with the United States, 99-100; recommendations, 102; sugar, 100, 102 ; taxation means of paying ordinary expenses, 101. Currency : Address on 46-49 Chile, 89-90; Colombia, 95; Cuba, 99. Debt: Bolivia, 71 ; Brazil, 79-80 ; Colombia, 95 ; Mexico, 136 ; Peru, 155. Documentation. (See Transportation and communications.) Dominican Republic : Conference committee 27 Report of 104-106 Financial conditions, 104 ; loan for improvement of roads and ports, 104 ; measures which the Republic should take, 104 ; measures which the United States should take, 104. Duties, prohibitive, resolution on 59 Ecuador : Conference committee 28 Report of 107-112 Capital and credit facilities, 108; commercial intercourse, measures to facilitate, 110-111 ; effects of the war, 107-108, 109-110; national credit and the factors affecting it, 108- 109; recommendations, 112; transportation facilities, 109- 110 ; uniformity of legislation, 111-112. Education : For foreign service, 58 ; Mexico, 139 ; Venezuela, 167. Elizalde, Dr. Rafael H. : Member of committee on resolutions 56 Presiding officer at third general session 45 Federal reserve bank of New York, visit of delegates to 55 Financial needs: Bolivia, 70; Brazil, 76-77; Dominican Republic, 104; Mexico, 137; Nicaragua, 143-144; Peru, 155-156. (See also Capital and credit facilities.) Fiscal system: Address on 47-49 Brazil, 80-82 ; Colombia, 95. Foreign corporations, resolution on 13, 57, 60 Freight rates, Colombia 96 General sessons__'_ 40-^1, 43-60 Glass, Carter: Addresses 43,54 Announcements 44 Presiding officer 17, 43 172 INDEX. Gold clearance fund: Page. Brazil, 84 ; Paraguay, 149. Resolution on 13, 57 Guatemala : Conference committee 29 Report of 113-119 Capital and credit facilities, 114-115 ; commercial arbitration, 118; commercial intercourse, 116-117; effects of the war, 113; patents and copyrights, 118; port dues, 119; recom- mendations, 118; trade-mark convention, 118; transporta- tion facilities, 115-116; uniformity of legislation, 117-118. Haiti : Conference committee 30 Report of 120-124 Capital and credit facilities, 121; commercial intercourse, 123 ; effects of the war, 120-121, 122-123 ; national credit and the factors affecting it, 121-122 ; transportation facili- ties, 122-123; trade-mark convention, 124; uniformity of legislation, 123-124. Harding, Hon. W. G. P., address 51-52 Honduras : Conference committee 31 Report of 125-133 Capital and credit facilities, 126-127; commercial inter- course, 131 ; effects of the war, 125-126, 128-131 ; national credit and the factors affecting it, 127-128; recommenda- tions, 132-133; transportation facilities, 128-131; uni- formity of legislation, 131-133. International High Commission 44 Resolution adopted for change of name 13, 56, 59 International Trade-Mark Bureau at Havana, resolution on 58, 60 (See also Trade-marks.) Investments : Mexico, 138-139 ; Paraguay, 148-150 ; Uruguay, 161. Lansing, Hon. Robert, address 43 Loans : Dominican Republic 104 Granted to Latin American countries by repaying Latin American obligations held in Europe 15, 59 Marshall, Hon. Thomas R 55 Martinez Sobral. Dr. Enrique, address 52 McAdoo, Hon. William G. : Addresses 44, 55 Presiding officer at second general session 44 McCormick, Hon. Medill, address 49 Members of group committees. (See Committees.) Metric system. (See Weights and measures.) Mexico : Conference committee 32 Report of 134-139 Banking conditions, 139; commercial intercourse, 137; debt, 136; education, 139; effects of the war on Mexican trade, 134; financial neeAs, 137; foreign investments, 138-139; mining investments, 139; monetary situation, 137, 138; railroads, 135-136; revenues, 136; transportation, 134-135. INDEX. 173 Page. Monetary situation, Mexico 137-138 Monetary unit : Argentina, 66 ; Paraguay, 152. Moore, Hon. John Bassett : Chairman of committee on resolutions 20 Address on the work of the International High Commission 44 Address, Pan American Society banquet 55 National credit and the factors affecting it : Brazil, 79-80; Ecuador, 108-109; Haiti, 121-122; Honduras, 127- 128; Nicaragua, 141. New York City, trip to 55 Nicaragua : Conference committee 33 Report of 142-143 Agricultural bank, 141; chambers of commerce, 141-142; commercial arbitration, 142 ; effects of the war, 140 ; finan- cial condition, 143, 144; national credit and the factors affecting it, 141; recommendations, 142; transportation, 140. Officers of the conference 17-18 Official delegations 19, 21-39 Panama : Conference committee 34 Report of 145-147 Commercial intercourse, 146; transportation needs, 145- 146; uniformity of legislation, 146-147. Paraguay : Cbnference committee 35 Report of 148-153 Classification of merchandise, 149; commercial arbitration, 149 ; commercial travelers, 149 ; customs regulations, 149 ; gold clearance fund, 149; increased immigration, 152; in- vestment of capital, 148, 150; monetary system, 152; needs of, 148; patent and trade-mark conventions, 148; resources, 152-153; transportation, 150-151; uniformity of legislation, 149. Paredes, Gen. Juan E. : Member of committee on resolutions 56 Presiding officer at the fifth general session 51 Patents and copyrights: Bolivia, 72 ; Colombia, 76 ; Guatemala, 118 ; Paraguay, 148. Resolution on 14, 58 (See also Trade-marks.) Payne, Hon. John Barton, address 44 Peru: Conference committee Report of 154-156 Bank, establishment of branches, 155 ; classification of mer- chandise, 156; commerce, increase of, 154; debt, 155; financial needs, 155-156; natural resources, 154; rail- road facilities, need of, 154; recommendations, 154; uni- formity of legislation, 156; wireless communications, lack of, 156. 174 INDEX. Peters, Hon. Andrew J. : Page. Address 46 Member of committee on resolutions 56 Philadelphia, trip to 55 Port dues, Guatemala 119 Postal facilities: Bolivia, 72 ; Brazil, 84. (See also Transportation and communica- tions. ) Preliminary meeting of official delegations 42 Public utilities, Chile 91 Railroads : Bolivia, 70-71; Colombia, 93-94; Mexico, 135-136; Peru, 154. (See also Transportation and communications.) Raw materials: Resolution on 15 Reservation to resolution on 16 Recommendations : Brazil, 87; Colombia, 97-98; Cuba, 102; Dominican Republic, 104; Ecuador, 112; Guatemala, 118; Honduras, 132-133; Nicaragua, 142; Peru, 154. Reports of: Group conference committees . 45, 65-168 Argentina, 65-68; Bolivia, 69-73; Brazil, 74-87; Chile, 88-92; Colombia, 93-98 ; Cuba, 99-103 ; Dominican Republic, 104-106 ; Ecuador, 107-112; Guatemala, 113-119; Haiti, 120-124; Hon- duras, 125-133; Mexico, 134-139; Nicaragua, 140-144; Pan- ama, 145-147; Paraguay, 148-153; Peru, 154-156; Salvador, 157-160; Uruguay, 161-162; Venezuela, 163-168. Committee on resolutions 54, 56-60 Committee on transportation and communications 45, 56, 61-64 Resolution adopting part of 13, 56, 59 Secretary general to the Secretary of the Treasury 12, 54 Secretary of the Treasury to the President 5-11 Resolutions adopted 13-15 Reservations to 15-16 Report of committee on resolutions 56-60 Resources, natural: Chile, nitrate, 88-89; Cuba, sugar, 100, 102; Paraguay, 152-153; Peru, 154. Revenues, Mexico 136 Robles, Dr. Victor, address 46 Rodriguez Beteta, Dr. Virgilio, address 49 Rowe, Hon. Leo S. : Secretary general of the conference 18, 42 Address 55 Announcements 42,45 Report 12, 54 Salaberry, Dr. Domingo E. : Address 54 Member of committee on resolutions 56 Remarks- _ 54 INDEX. 175 Salvador : Page. Conference committee 37 Report of 157-160 Banking facilities and trade relations, 159-160; transporta- tion and communications, 157-159. Sampaio, Dr. Carlos Cesar de Oliveira: Address 53 Member of the committee on resolutions 56 Taxation 50 Argentina, 67; Cuba, 101. Resolution on 13, 16, 57 Telegraphic service. (See Transportation and communications.) Tejada, Dr. Luis: Addresses 52-53,55 Member of the committee on resolutions 56 Thompson, Hon. Huston, address 45 Topics discussed *at conference 40-41 Trade-mark convention : Argentina, 68 ; Colombia, 96 ; Guatemala, 118 ; Haiti, 124 ; Paraguay, 148. Recommendation for adoption of 14, 58, 60 Transportation and communications: Argentina, 65-66 ; Brazil, 82-83, 85 ; Chile, 90-91 ; Ecuador, 109-110 ; Guatemala, 115-116; Haiti, 122-123; Honduras, 128-131; Mexico, 134-135; Nicaragua, 140; Panama, 145-146; Paraguay, 150-151; Peru (wireless), 156; Salvador, 157-159 ; Uruguay, 161 ; Venezuela, 164-165. Discussion on 44 Improvement of ocean and land transportation 44, 65 Resolution concerning 13, 15, 56-57, 59 Uniformity of legislation : Argentina, 68 ; Brazil, 86-87 ; Ecuador, 111-112 ; Guatemala, 117-118 ; Haiti, 123-124; Honduras, 131-132; Panama, 146-147; Peru, 156; Venezuela, 166. Resolution concerning 14, 57 Uruguay : Conference committee 38 Report of 161-162 Commercial arbitration, 161; distribution of descriptive pamphlets, 161-162; increase in financial relations with the United States desired, 101-162; increased trade with the United States^ 161 ; investment of United States capital and industrial skill, 161 ; transportation development, 161. Vecino, Dr. Ricardo: Member of committee on resolutions 56 Presiding officer at fourth general session - 46 Venezuela : Conference committee 39 Report of 163-168 Commerce with the United States, 164; with Europe, 164; commercial arbitration, 166, 168 ; debt, 164 ; effects of the war, 163; greater study of Spanish language, 167-168; metric system, 167 ; public finance, 164 ; recommendations, 168; silver, 166-167; transportation, 164-165; uniform legislation, 166. 176 INDEX. War, effects of: Page. Bolivia, 69; Brazil. 74-76; Colombia, 93-95; Cuba, 100; Ecuador, 107-108, 109-110 ; Guatemala, 113 ; Haiti, 120-121 ; Honduras, 125- 126, 128-131 ; Mexico, 134 ; Nicaragua, 140 ; Venezuela, 163. Warburg, Hon. Paul M., address 47 Webb law 16,45 Weights and measures : Resolution on 15, 58 Venezuela 167 Wireless communication : Bolivia, 72; Colombia, 96; Peru, 156. (See also Transportation and communications. ) Zuberbuhler, Mr. Luis, address 45 o