^
DEPARTMENT OF COMMERCE AND LABOR
BUREAU OF MANUFACTURES
JOHN M. CARSON, Chief
REPORT ON
TRADE CONDITIONS IN
ECUADOR
By
CHARLES M. PEPPER
Special Agent of the Department of Commerce and Labor
TRANSMITTED TO CONGRESS IN COMPLIANCE WITH
THE ACT OF FEBRUARY 26, 1907, AUTHORIZING
INVESTIGATIONS OF TRADE CONDITIONS ABROAD
REPRINTED AND DISTRIBUTED
BY
THE INTERNATIONAL BUREAU OF
AMERICAN REPUBLICS
JOHN BARRETT, Director
No, 2 JACKSON PLACE WASHINGTON, D. C.
Reprinted
WASHINGTON
GOVERNMENT PRINTING OFFICE
19 0 9
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DEPARTMENT OF COMMERCE AND LABOR
BUREAU OF MANUFACTURES
JOHN M. CARSON, Chief
REPORT ON
TRADE CONDITIONS IN
ECUADOR
By
CHARLES M. PEPPER
Special Agent of the Department of Commerce and Labor
TRANSMITTED TO CONGRESS IN COMPLIANCE WITH
THE ACT OF FEBRUARY 26, 1907, AUTHORIZING
INVESTIGATIONS OF TRADE CONDITIONS ABROAD
WASHINGTON*
GOVERNMENT PRINTING OFFICE
1908
CONTENTS.
Page.
Letter of submittal 5
Accessibility and resources 7
Area and population 7
Leading cities 8
Towns and hamlets — Rural residents 8
Trade analysis 9
The commercial metropolis 9
Soil productions 10
Cocoa statistics 10
Limited planting of cacao 11
High value of vegetable ivory 12
Active rubber gathering 12
Coffee and cane growing 13
Tobacco, cotton, and fruits 14
Grain and stock raising 15
Available forestry products 15
Mines and minerals 16
Coal and petroleum deposits 16
National industries 17
Various small factories 18
Railway systems 18
Opposition and benefits L 19
Extensions and projects 19
Public improvements 20
Sanitation plans and waterworks 21
Foreign commerce 22
Share of leading competing nations 23
America the best customer. * 24
Needed improvements 24
American mills could not accept all orders 25
General development 25
Introduction of modern mechanisms 26
Leading mercantile imports 26
Hardware, sewing machines, and motors 27
American textile trade loss 28
Leather goods and foodstuffs 29
Beverages, oils, and drugs 29
Furniture opportunity 30
Shipping situation 30
Tonnage movements 31
Inadequate steamship facilities from Panama 32
Delay of passengers 33
3
4 CONTENTS.
Page.
National riscal system 33
The public debt 34
Maintenance of gold standard 35
Banks of issue 35
Discounts and exchange 36
Merchants and trade methods 37
American representation 37
National exposition — Chambers of Commerce 38
Conclusion v 38
LETTER OF SUBMITTAL.
Guayaquil, Ecuador, January 15, 1908.
Sir: In submitting the appended Report on Trade Conditions in
Ecuador I wish to call attention to the especially favorable pros-
pects which exist for trade with the United States.
Ecuador throjigh its geographical position will be the most di-
rectly benefited of the west coast countries. of South America by
the Panama Canal, and the results of that waterway in the increased
volume of commerce seeking this route are already being anticipated
at Guayaquil. Fuller benefits will be secured when this wealthy
port with its many natural advantages for shipping and its facil-
ities for handling commodities of import and export is protected
from the ravages of tropical epidemic diseases by placing it in line
with modern scientific sanitation as has been done so successfully at
Habana and Panama.
An important means of developing the internal resources of the
country is the American Railway extending from the coast across
the Andes to the capital. With the means of transportation thus
facilitated an increase of commerce should follow, and some indica-
tions of this are now apparent. The full effects in providing an out-
let for Ecuadorian products and in enlarging the market for goods
from abroad ultimately will be shown in the addition to the foreign
trade. There is now an interchange of commodities to the approx-
imate value of $22,000,000 annually. In the actual exchange the
balance is in favor of Ecuador. The country is especially favored in
the tropical agricultural exports which form the bulk of its exports,
for most of them are produced in few other regions and in the face
of lowered values of such staple tropical products as coffee are able
to command higher prices. This is in particular true of cocoa, or
chocolate, which provides more than one-half the total exports.
The products imported comprise textiles, foodstuffs, railway ma-
terial, electrical and other machinery in small quantities as yet, and
a large variety of miscellaneous manufactured articles. The United
States supplies its full share of all the imports except in textiles.
The cotton piece-goods trade, once almost entirely in American
hands, has passed to Manchester.
Financial stability is so important an element in international
trade that I have described briefly Ecuador's monetary system, which
is maintained on the gold standard and facilitates commercial ex-
change by the safeguard it affords against violent fluctuations.
Respectfully,
Charles M. Pepper,
Special Agent of the Department of Commerce and Labor.
To Hon. Oscar S. Straus,
Secretary of Commerce and Labor.
5
TRADE CONDITIONS IN ECUADOR.
ACCESSIBILITY AND RESOURCES.
Ecuador in its geographical relation occupies an advantageous
position among the west coast countries of South America. Accessi-
ble by Panama and by the Straits of Magellan, its value as a future
market for foreign products does not depend so much on ocean
transportation facilities as on the addition to its purchasing power
through the increase in its natural resources such as cocoa, and by
the improvement in the means of communication which will draw
isolated districts together and enable them to get their products to
the coast and receive imported goods in exchange. That the trade
has not advanced more rapidly is due to the slowness with which the
obstacles to internal development have been overcome and also to the
failure to take advantage of favorable natural conditions.
Though on their face the statistics do not show it, the total foreign
commerce of Ecuador for the last five years has ranged approxi-
mately from $18,000,000 to $22,000,000, the merchandise exports ex-
ceeding the imports by from $2,000,000 to $2,500,000 annually, with
no heavy charges to pay abroad, the chief one being interest on some
$12,000,000 of railway bonds funded into a national debt. This and
other remittances, such as to large landowners living in Europe and
drawing their incomes from estates in Ecuador probably establish
an actual equilibrium. The exportation and importation per capita
is difficult to fix with exactness because of the uncertainty as to the
number of inhabitants.
AREA AND POPULATION.
The area of Ecuador is usually placed at 116,000 to 119,000 square
miles and the population estimated at from 1,300,000 to 1,500,000.
The settlement of boundary disputes with neighboring countries
would not reduce the area materially. The number of inhabitants is
more difficult to arrive at. A partial census was taken by the Gov-
ernment in 1900 and since then the official estimate has been 1,500,000,
though the full returns have not been published and some Govern-
ment publications continue to make estimates of taxation and debt
on the assumption of only 1,300,000 inhabitants. This also has been
the basis of calculations of the foreign consuls in Ecuador. The most
7
8 TRADE CONDITIONS IN ECUADOR.
detailed was that of the British consul at Quito in 1892, who took
the countries by districts.
LEADING CITIES. ,
Wide variations appear in such figures as are obtainable. Quito,
the capital, is usually credited with a population of 80,000 and in
Spanish colonial times it did have that number. But the Govern-
ment census taken as recently as 1906 enumerated only 51,000.
Allowing 10 per cent of the inhabitants to have escaped enumera-
tion, which is entirely probable from various causes, the population
of the capital at the present period would be about 56,000. Guaya-
quil, on the other hand, shows an increase. In 1890 the population
was 45,000 and the census of 1899 gave 60,000. Though the float-
ing population at all times is large, there has been an increase in
the permanent residents, as is shown by the large number of new
dwellings that have been erected, and Guayaquil at the beginning
of 1908 may be said to have from 70,000 to 75,000 inhabitants.
TOWNS AND HAMLETS — RURAL RESIDENTS.
After Guayaquil and Quito the largest town in the Republic is
Cuenca, the trade center of the south, whose population is between
35,000 and 40,000. Loja, near the Peruvian border, comes next, and
in the north Ibarra is the largest city. Its population, however,
does not reach 10,000.
The small number of towns which have more than 5,000 inhabi-
tants is usually the basis for the minimum estimate of a total popu-
lation not exceeding 1,300,000 for the whole country, but this is
misleading. The cereal-raising regions of the Andean plateaus
and valleys are well settled and the number of Indian hamlets, each
of which groups several hundred persons together, is large. A
practical means of judging the number of inhabitants in the interior
districts has been afforded during the construction of the Guayaquil
and Quito railway. In seeking laborers invariably many more
would be found than the apparent number of inhabitants indi-
cated, 500 men often being obtained in districts where from the
ordinary indications not more than 200 could be expected. The
general manager of the railway, from this experience and other
observations, estimates the total population of Ecuador at 1,700,000.
The difficulties, in securing a correct enumeration of the Indians,
through their fear of military conscription, taxes, and unknown
harm, are well understood. In view of these difficuJties and of the
experience of the railway management, the probability is that the
population of the farming districts and the interior regions has
been underestimated. For the whole country it may be considered
as 1,500,000, or about 13 persons per square mile.
TKADE CONDITIONS IN ECUADOR.
TRADE ANALYSIS.
With the foreign commerce in commodities taken as $22,000,000
this would mean $14.66 per capita, of Avhich $6 per capita is imports,
as will appear from the figures to be given later. This shows that
the bulk of the inhabitants consume little foreign goods, a condition
which might be expected of a population so primitive as the native
Indians who form the bulk of it. But though a primitive popu-
lation, the majority are farmers or town laborers, and while they
have not yet developed civilized wants in the degree to make them
large buyers of foreign goods, the process has begun and its con-
tinuance will give importance to Ecuador as a market for manu-
factured articles.
Ecuador as such a market may be analyzed in Guayaquil, for the
trade centers here and the city dominates the commerce of the entire
country. It has the advantage of location and this advantage has
been utilized to prevent the growth of rival ports so effectively that
none of importance exists, though several places have good harbor
facilities. Situated on the Guayas River at the head of the Gulf all
ocean vessels are able to visit it and freight is received not only for
distribution to the interior, but also for the coast towns. The steam-
ship lines from Panama maintain a service which touches at the land-
ings on the north, but the effect in decreasing the importance of
Guayaquil by lessening the transshipments is insignificant. Traffic
is carried on up the Daule, the Bode, and other tributaries of the
Guayas by American paddle-wheel river steamers of 30 to 60 tons
capacity, by steam launches of 15 to 20 tons, and by canoes of 15 to
25 tons. Since the building of the railway some change has been
made in the routes of transportation to and from the interior, but
none of them have deviated from Guayaquil as a starting point or as
a terminus, and the city continues both the distributing center for
imported goods and for the exportation of the products of the
country.
THE COMMERCIAL METROPOLIS.
The relation of Guayaquil to the commerce of Ecuador appears
most clearly in the customs-house returns of exports and imports.
For the calendar year 1906 the total exports as officially stated were
21,965,000 sucres, or nearly $11,000,000, and the imports 17,012,000
sucres or $8,500,000. (The value of the sucre is 48.7 cents, but in
reducing in round numbers to dollars 2 sucres may be taken as equal
to $1.) Of the 21,965,000 sucres at which the exports were valued
17,267.000 were through Guayaquil, and of the 17,012,000 sucres of
imports 15,768,000 were also through that port. Of the customs
duties collected on imports and exports Guayaquil received 6,989,000
in a total of 8,269,000 sucres. In previous years the proportions were
about the same.
-09 2
10
TRADE CONDITIONS IN ECUADOR.
The substantial monopoly of trade which Guayaquil has held un-
interruptedly for many years has made it the wealthiest port on the
Pacific in proportion to size and one of the richest cities of the world
in proportion to its population. A large amount of capital has been
accumulated, the commercial community is a concentrated one, the
business being in the hands of a comparatively few strong firms and
individuals, and there, is usually a surplus of home capital to engage
in enterprises which may prove attractive. Yet it is doubtful
whether this accumulated capital is performing the service which
might reasonably be expected of it. This will appear from a review
of the productive resources of Ecuador on which its purchasing power
depends.
SOIL PRODUCTIONS.
The products are so largely those of tropical agriculture that
when these are described there is little left to mention. They include
cocoa, rubber, coffee, hides, vegetable ivory, and fruits. There are
also some fibers, the principal one of which is the paja or Toquilla
grass that is made into straw hats. Notwithstanding the equato-
rial climate the cereals are grown in the Andean plateaus at heights
of 8,000 feet and upward, but they do not suffice for the domestic
consumption. This also is true of sugar cane and cotton.
Cocoa, or the chocolate bean, has become one of the world's food
products for which the constantly increasing consumption has in-
sured a steadily advancing price. It is subject to none of the vio-
lent fluctuations and drops in value which have made coffee growing
so hazardous in most tropical countries. There is no overproduc-
tion, and in view of the increased consumption and the limited
regions in which cocoa can be grown a good market seems assured
for an indefinite period.
COCOA STATISTICS.
Ecuador produces cocoa of superior quality which is always in
demand, but its share in the world's production has fallen from more
than 30 per cent in 1899, when there was a bumper crop which
brought $8,000,000, to less than 20 per cent in 1907. The chief
change in the world's crop has been the gain in the Portuguese
possessions of West Africa. The Ecuador exports in quantities and
values since 1901 have been as follows :
Year.
Quantity.
Value.
Year.
Quantity.
Value.
1901
Kilos.
23,179,095
24,398,416
23,005,012
Sucres.
. 9,232,100
9,811,400
9.546,600
1904
Kilos.
18,584,128
21,127,833
23,426,897
Sucres.
11,746,828
1902
1905
9,331,278
1903
1906
12,198, 481
TBADE CONDITIONS IN ECUADOR. 11
In 1856 the production of cocoa in Ecuador was about 700,000
kilos or 1,540,000 pounds, and the value $500,000, so that roughly it
may be said that the increase in value of the export crop in fifty years
has been from $500,000 to $6,000,000. A poor crop in 1907 has been
partly overcome by a further increase in value. The first ten months
of the year indicated a probable falling off of 20 per cent in the
quantity produced, but this was more than offset by the rise in value.
During 1905 the average price of cocoa in Guayaquil, f. o. b., was 60
English shillings (shilling 24^ cents) per quintal of 112 pounds; dur-
ing 1906, 68 shillings; and for the first ten months of 1907, 94 shill-
ings, or 20 cents per pound. Thus there has been no loss to the
country as a whole in the amount received for the total crop, though
many individual orchard owners have suffered and the Government
has been deprived of considerable revenue, as the export and other
taxes are levied on the basis of quantity instead of value. It should
also be noted that the customs-house declarations are supposed to be
from 20 to 22 per cent below the actual export value, so that $1,000,-
000 might be added to the statistics in seeking to arrive at the real
worth of the Ecuador cocoa crop. From any standpoint this product
gives the country $6,000,000 annually with which to make purchases
abroad and meet foreign obligations. In 1906 it supplied 12,198,000
sucres out of total exportations of 21,965,000 sucres, about 55 per cent.
LIMITED PLx\NTING OF CACAO.
In view of the value of the product and the stability of the market,
comment is often made on the failure of Ecuador further to develop
so valuable a resource, as there is much land in the rich delta region
which is as well adapted to cacao orchards as that now under culti-
vation. This is the more surprising since the causes of the decreased
production per orchard and per tree are known to be permanent and
these only can be offset by planting fresh orchards and systematically
enlarging the areas under cultivation. The increasing dryness of the
climate is an established phenomenon; the sands of northern Peru
are encroaching on Ecuador and this region must be irrigated, while
fresh districts are planted in the delta where the natural moisture in
ordinary years is still abundant. The estimates of the new trees
planted during 1906 vary from 500,000 to 1,000,000, but this is far
from enough.
Absentee landlordism is said to be one cause of the lack of enter-
prise in providing for new orchards. Many of the owners spend the
entire year in Europe, and though their incomes may suffer a slight
diminution the increase in the price of cocoa has kept most of them
in comfortable circumstances and without incentive to make pro-
vision for the future. Another cause of the lack of new planting has
been the length of time required to secure returns on capital outlay,
12 TRADE CONDITIONS IN ECUADOR.
the cacao tree not producing till seven years old and then requiring
three or four years more to reach full productiveness. This is per-
haps one reason, in connection with the unfavorable climate condi-
tions, why foreigners have not gone more extensively into the in-
dustry, but it is not sufficient explanation of the failure of native
owners to renew and extend orchards already producing in order to
insure compensation for the loss of productivity in trees already
bearing. In a few instances foreign capital has met the situation.
Two large estates have been organized into companies with head-
quarters in Hamburg and these are operated very successfully with
regard to the future as well as the present.
HIGH VALUE OF VEGETABLE IVORY.
After cocoa the most valuable export of Ecuador is the wild
product known as tagua or vegetable ivory, from which bone but-
tons are made. The value of the crop ranges from $1,250,000 to
$1,500,000 annually and, as with cocoa, Ecuador is one of the world's
chief sources of supply, the quantity produced being considerably
larger than in the neighboring country of Colombia. Substan-
tially all the vegetable ivory exported is gathered from the wild
palm tree, since it is not valuable enough to encourage cultivation.
It is collected by the Indians, who transport it on their own backs
and on the backs of burros and pack mules from the mountainous
regions to the coast. If this labor were not of the cheapest kind,
the product would not be worth gathering, since it could not sustain
ordinary transport charges.
Nevertheless, in connection with other tropical products, tagua is
an important element in the natural wealth of the country and also
a fairly stable one. In 1870 the exports were valued at $25,000: in
1879, $285,000; in 1889, $250,000; 1899, $460,000; and in 1906, ex-
portations of 21,797,000 kilos brought $1,300,000 as against $1,000,000
received for 19,036,000 kilos in the previous year. Unlike cocoa the
price has varied little from year to year.
ACTIVE RUBBEK GATHERING.
Caucho, or rubber, is becoming increasingly valuable to Ecuador,
the quality of the wild product obtained being good, while expecta-
tions are entertained that artificial cultivation will be made com-
mercially profitable. The wild rubber is obtained in the forest
regions extending from the slopes of the Eastern Cordillera through
the rivers tributary to the Amazon — the Napo and the Putumayo
districts, the latter in the zone of boundaries in dispute with Peru.
The lack of means of communication and of access to the region,
and consequently of facilities for transporting the product when
once obtained, interpose serious obstacles, but they do not prevent
adventurous bands of rubber gatherers from disappearing from
TRADE CONDITIONS IN ECUADOR. 13
civilization for months at a time and reappearing with the product.
In the latter part of 1907 an Argentine rubber gatherer took a band
of Indians into regions which it was believed never had been
reached either from Iquitos and the Amazon or from the slopes of
the Andes. Other parties are making similar quests with chances
that the Ecuador output of rubber will be increased.
One bad result of the search in these wild regions is the reckless
cutting down of the trees. Owing to the remoteness of the dis-
tricts the authorities find it impossible to prevent this destruction,
but with improvement in the means of communication so that the
regions are more accessible this waste may be stopped before it
entirely wipes out the gum forests. Ecuador has the advantage of
possessing the shortest natural route for transporting rubber to
the seaboard. This is by means of the navigable Curaray River
from a point on which a railroad 120 miles long will secure connec-
tion with the existing line to Guayaquil.
The tendency is to measure the value of the crop by its proceeds
in 1900 when the price was high and the product was handled at an
unusually good profit. In that year 10,031 quintals of 112 pounds
each were exported and the price obtained was $1,076,068, or $1.07
per pound. In 1899 the product had amounted to 13,151 quintals,
for which $1,333,364 was obtained, but this was only $1 per pound.
In 1904 the rubber exports marketed were 480 tons ; in 1905, 575 tons ;
1906, 620 tons. In 1906 the amount obtained for the crop was
$775,000. The product for 1907 is not yet known, but the price was
satisfactory. The Government seeks to encourage the cultivation of
rubber by giving a bounty on plantations of 500 trees and upward
after five years growth of the trees.
COFFEE AND CANE GROWING.
Coffee is grown for domestic consumption and some for export, but
this crop is not a factor in the world's markets. The export tax was
removed several years ago and when prices are high shipments of
the best grade are made to the United States and Europe, but the
market on which Ecuador depends is Chile. The nature of the west
coast commerce facilitates the interchange of coffee for flour, wheat,
and vegetables. The home consumption is estimated at 6,000,000
pounds. The exports in 1905 amounted to 1,579,382 kilos valued at
about $400,000 and in 1906 2,657,000 kilos valued at $465,000. An
export crop worth $500,000 is not probable unless there should be a
very marked rise in price. Under present conditions the only pros-
pect of augmented exports comes from increased Chilean consump-
tion.
While there is much land suitable for cane raising, sugar has never
given promise of becoming an extensive industry, though there has
14 TRADE CONDITIONS IN ECUADOR.
been some development in the coast region. A group of plantations
in the Yaguachi district enjoy good transportation and other facili-
ties and have central mills. They are managed on a partially mod-
ern basis, being organized into a trust. In other districts the methods
of cultivating and grinding the cane are quite primitive. Increased
production must depend on augmented domestic demand, for the
reason that the raw sugar can not be exported in competition with
Peru. When there have been exports this has been because of pro-
duction above the normal home demand. But the condition more
often has been the reverse, and when the tariff duties have permitted
there have been importations to make up for the deficient home sup-
ply. In 1904 a few hundred tons were exported, but in 1906 the
supply, which was 7,000 long tons, was not sufficient for the demand
and 1,200 tons were imported from Peru, notwithstanding the pro-
tests of the planters against the removal of the duty.
The cane-sugar industry acquires some importance from the by-
product of rum or aguardiente. This is distilled in some form in
every part of the country, often secretly in order to avoid the taxes,
and its consumption among the Indian population is by far too
general to be a national good. There are no exports of aguardiente
except for special reasons.
TOBACCO, COTTON, AND FRUITS.
Tobacco of fair quality is raised in the coast districts by small
landowners, but its cultivation on a systematic scale is not common,
though the soil is not unfavorable. In past years it was grown in
quantities sufficient for a small surplus to be exported, but this has
almost ceased and the crop is limited to the domestic consumption,
which is about 4,500,000 pounds annually. The exports in 1906 were
140,000 pounds valued at $11,000.
During the civil war in the United States cotton was grown in
Ecuador for export to Lancashire. When the war ended and the
price became normal this cultivation ceased and it has not since been
resumed on a large scale, though there is a large area in which the
soil is suitable. The present production is not always sufficient for
the few native cotton mills and during the past year some raw cotton
has been imported by them. The possibility of cotton again becoming
an export crop is too remote to call for further consideration.
Tropical fruits, especially oranges and pineapples, are grown
plentifully and their cultivation could be greatly augmented if the
demand could be created for them, but the markets of the north are
not accessible since transshipment across the Isthmus of Panama
would be necessary. The country is therefore limited to supplying
its west coast neighbors, Peru and Chile, the bulk-of the trade being
with the latter. This commerce is important enough to encourage
TRADE CONDITIONS IN ECUADOR. 15
the establishment of a fast line of small refrigerator steamers which
has been proposed by an American company.
GRAIN AND STOCK RAISING.
Ecuador heretofore has not produced the cereals in quantities suffi-
cient for the needs of its own population, though with better means
of distributing the crops of wheat, corn, barley, etc., which will come
from the railway making the isolated districts more accessible, there
will be some increase in the crops grown. This will not be for export.
Eice is grown in the delta districts of Yaguachi and Guayas and
in some years there have been small exportations, but this was due
usually to quantities of imported rice from China and India, of
which there was an overstock. Rice is the food of the poorer classes,
cheapness is essential to it, and since the imported article can be sold
cheaper than that of native production its cultivation offers little
probability of being extended.
Cattle raising is one form of agricultural industry that affords
something for export as well as for native consumption. Grazing
lands are abundant both on the coast and in the plateaus and valleys
of the interior. Hides command remunerative prices and the exporta-
tions vary from $350,000 to $400,000 annually. A few thousand
dollars' worth of goatskins are also exported and a larger amount of
alligator hides.
In the inter- Andean regions sheep are raised both for the mutton
and for the wool. The equable climate makes the conditions ideal.
The mutton is of good quality, but more regard is paid to the fleece.
The wool is not so good as that from sheep in the northern regions,
but it is good enough to figure in the world's wool market if it were
produced in quantities sufficient for export and this could be done
by increasing the flocks, for which there is ample room. All the
wool now produced is utilized for the local needs, most of it being
woven into a coarse baize cloth.
AVAILABLE FORESTRY PRODUCTS.
Ecuador has timber resources and some dyewoods and fibers in-
cluding the century plant, but none of these figure largely in the
foreign commerce. These resources are, however, utilized for do-
mestic purposes. Guayaquil is a city of bamboos and cane reeds
covered with mortar and plaster, the use of pitch pine being for-
bidden as a precaution against fires.
The kopal or cork tree is used in the local boat-building industry
and the balsas or native rafts are entirely constructed of it. The
remarkable qualities possessed by this wood have been frequently
described. It is obtained in the immediate neighborhood of Guaya-
quil and for a hundred miles or more up the rivers. The tree grows
16 TRADE CONDITIONS IN ECUADOR.
io a height of 175 feet and from the trunks logs of 70 to 75 feet in
length are obtained. The wood is exported to Peru and Chile for use
in the barren coast districts which are treeless, and recently some
shipments have been made to Great Britain and to the United States
for testing in the construction of naval vessels, with satisfactory
results. This tree is also known as the ceiba or cotton wood, and
from it is obtained the fine fiber known as silk cotton.
Bamboos or bamboo splits are exported to the nitrate region of
Chile for building purposes similar to the use made of them in Guay-
aquil. A more valuable forest product is the guayacan, a species of
lignum vita?. This hardwood exists in abundance and has special
utility for railroad ties, but it has not yet become an export com-
modity. Most of the ties for the Guayaquil and Quito Railway
Mere imported.
MINES AND MINERALS.
The value of Ecuador's mineral resources is yet problematical.
They consist in gold and unexploited coal deposits. In the north
or Esmeraldas district large sums were spent by British capitalists
in exploiting the Playa de Oro properties, but without result, and
these were definitely abandoned in 1906. In the south better success
has attended the large investments made by American capitalists.
The South American Development Company, a New York corpora-
tion, is enlarging its facilities for working the low-grade ores of the
Zaruma district, and shipments of gold bars and concentrated cyan-
ide slimes are now being made regularly. The total of these expor-
tation for the recent year is reported to be about $250,000, of
which $100,000 was gold bars and the balance cyanide slimes. The
slimes, which consist of gold, silver, zinc, and iron, are shipped to
San Francisco for treatment. The prospecting that has been done
indicates valuable ore deposits in southern Ecuador, but the condi-
tions are not such as to invite the- heavy investments of capital nec-
essary for their development until transportation facilities are im-
proved by getting railroads into this region.
COAL AND PETROLEUM DEPOSITS.
It has been demonstrated that the coal deposits which lie near the
main line of the Guayaquil and Quito Railway on the Columbe River,
and which it was expected would furnish fuel, can not be worked.
There were vertical outcrops with veins varying in width from 18
inches to 5 feet. The veins were reached by a tunnel from the base
of the mountain and by cross cutting. It developed, however, that
in this region of heavy landslides the mountain is still in motion and
the coal veins, which lie between clay and solid rock, are constantly
TRADE CONDITIONS IN ECUADOR. 17
being ground to powder, so that their exploitation is not feasible.
Coal beds about 60 miles distant are not subject to this process and
later a branch of the railroad may be built to them at an estimated
cost of $3,000,000. But in view of the conditions coal is not likely
to become an article of export from Ecuador.
Petroleum exists in the sandy coast strip of Santa Elena and the
crude product is extracted and utilized for fuel by the brewery and
the electric-light companies of Guayaquil, but for illuminating and
lubricating purposes it is cheaper to make importations than to ex-
tract it from these fields. There is also some asphalt, which is not
sufficiently promising to exploit for commercial purposes. The salt
mines, which are operated as a Government monopoly, supply a
small quantity for export to Colombia, in addition to meeting the
domestic demand.
NATIONAL INDUSTRIES.
Toquilla straw or paja is one of the most valuable agricultural
resources that the country possesses, but as it is the basis of manu-
factured articles of export I have reserved the subject for separate
consideration. It may be said to be the one national manufacturing
industry of Ecuador, though not a factory one in which machinery
can be used, since its nature requires handicraft in making the hats
and it always will be a cottage industry.
The conditions governing the production of the straw and the
manufacture of the hats have been so well and so fully described by
Consul-General Dietrich in his various reports that the relation of
the straw hat to foreign trade is all that calls for consideration on
my part. Hat making for export has always been carried on, and as
far back as 1857 there were exports to the value of $150,000. These
rose and fell through various causes and it is only since 1900 that
the foreign market has been firmly established, the demand being, if
anything, in excess of the supply and prices having risen more than
proportionately to the increase in the cost of the raw material. In
1900 the total value of the hats exported was $150,000, or about what
it had been in 1857. In 1903 the value of the manufactured hats
exported was $350,000; in 1906, $1,125,000, and for 1907 the estimate
is from $1,400,000 to $1,500,000. The growth of this cabin or cot-
tage industry appears to be limited only by the production of the
raw material which is its basis. The exports form a notable national
asset in providing the means for foreign purchases and the manu-
facture of the hats adds materially to the resources of some thousands
of persons who are engaged in it, particularly in the districts of
Cuenca and Manta.
* (5*091— 09 3
lo TRADH CONDITIONS IN ECUADOR,
VAHIOl S SMALL FACTORIES.
Ecuador hardly can be said to have other national industries. In
Guayaquil there are small boat-building and ship-repair yards and
foundries, breweries and ice factories, cigar factories and candle
and soap factories, as well as a confectionery establishment and a
small sugar refinery, yet these can not be considered more than local
industries. The cotton mills at Otovalo in the north have been suc-
cessful with the native labor, but the example has not been followed
by establishing mills in other sections, and their output is for neigh-
borhood consumption, the cloths rarely being seen in Guayaquil or
Quito.
At several places in the interior there are flour mills which grind
the wheat of the districts in which they are located, but all of these
are operated on a modest scale. Breweries are established in Quito
and Cuenca and there is little else in the way of manufactures. It is
clear that for a long period yet to come Ecuador will not be a market
for installations of machinery with which to supply the means of
providing for its own wants: but will continue to purchase manu-
factured articles and some foodstuffs with the proceeds of the cocoa,
the vegetable ivory, the rubber, coffee, hides, and hats that are ex-
ported.
RAILWAY SYSTEMS.
How far the exports may be increased and also the imports depends
on various considerations. The possibility and the necessity of
adding to the cocoa and other agricultural crops T have already indi-
cated. Another phase of the same subject relates to the encourage-
ment to be given to production by providing the facilities for ex-
changing and marketing the products of the country. The most
important of these is facilities of transportation and among them
nothing approaches railway systems in importance.
The one central system which Ecuador possesses is the Guayaquil
and Quito Line, better known as the American Railway, since it has
been built and is operated by Americans. Its construction has taken
ten years, and at this writing the rails have been laid so near to Quito
and the trains are running to within so short a distance of the capital
that the central line may be considered as finished. The distance from
Duran, on the Guayas River opposite Guayaquil, where extensive
terminal facilities have been constructed, to Quito is 290 miles.
The railroad crosses the productive tropical plains of the delta
and strikes abruptly into the canyons of the Cordilleras, reaching the
inter-Andean plateaus where the cereals and other products of the
temperate regions are grown, though on the equatorial line. These
crops are produced and flocks are pastured at elevations ranging
from 5,000 to 12.000 feet. The railroad gage is :>>] feet. The heaviest
TRADE CONDITIONS IN ECUADOR. ] 9
o-rade is 5^ per cent. While there are many bridges both of stone
and of iron and steel there are few tunnels. The most serious of the
many obstacles to railway building which nature had interposed
were overcome by means of a switchback up the Pistichi Mountain,
better known as the Devil's Nose, and the bold Alausi loop. The
heart of the Andes is penetrated 2 miles above sea level, or at about
i0,650 feet, in the Palmira Pass; but the flanks of the giant extinct
volcano Chimborazo are traversed at an elevation of 12,000 feet.
OPPOSITION AMD BENEFITS.
This brief indication of the engineering features of the railway is
equivalent to stating that it has been a costly piece of mountain rail-
way construction, but this subject need not be gone into. The sig-
nificance is that at the beginning of 1908 Ecuador has a railway
which has crossed the Andean wall and brought the interior into
quick and direct communication with the coast. Its economic and
commercial effects have not had time to be demonstrated, but one
result has been to improve the material condition of a section of the
population by the chances it has given for work at good wages.
This has aroused the opposition of some of the great landowners,
who until the coming of the railway were able to employ the peons
for a few cents a day. The shifting of freight from mule pack trains
and bullock carts to the railway cars, a process which is still going
on, also has caused opposition and this opposition, as in the case of
the landowners, has been manifested somewhat violently. But such
incidents are temporary and do not interfere with the real utility of
the line as a means of distribution for freight and of development of
new traffic that the mules and the bullock carts never could have
created.
One of the earliest results of the railroad has been to provide better
means for distributing the cereal products of the isolated districts
among one another and also to enable these products, whenever there
is an excess above the local demand, to be brought to Guayaquil and
the coast. Wheat is not yet produced in quantities sufficient to render
the importations from Chile and California unnecessary, but barley
and alfalfa have already found a valuable outlet. On imports the
effect of the railway will be very beneficial, for it will enable the
manufactured articles to be transported to the interior more cheaply,
and when the price, in which transportation heretofore has been so
heavy a factor, is cheapened, the consumption will increase.
EXTENSIONS AND PROJECTS.
These effects will further be felt when the north and south exten-
sions of the railway which are part of President Alfaro's general
20 TRADE CONDITIONS IX ECUADOR,
project are carried out. These include a line from Cuenca in the
south, 95 miles, to join the Guayaquil and Quito at Huigra, and a
branch north to Ibarra, 100 miles from Quito. The commerce of the
southern district is large and on this account the Cuenca branch will
be the first one to be built.
A line from Ambato on the Guayaquil and Quito Railway to the
Curaray River, Avhose waters are navigable to the affluents of the
Amazon, also has been surveyed. The distance is 120 miles. The
condition of the national finances does not indicate that any of these
lines is likely to be of immediate realization, yet with the central
trunk in operation, these north and south feeders are certain to be
built ultimately. In the meantime the improvement of the cart
roads and the mule trails in order to reach the existing railway
more easily is assured to the benefit both of the internal commerce
and of imported merchandise.
Other railway projects have for their object the connection of
the minor ports with the producing territory back from the coast.
There are five of these projects: From Puerto Bolivar to Machala,
from the Bay of Caraquez to Chone, from Manta to Santa Ana,
from Salinas to some point on the coast near Santa Elena north of
the Gulf of Guayaquil, and from Santa Rosa to Zaruma. Little
progress has been made with any of them. Some rails which had
been paid for with public funds were laid in the Bahia cacao district
toward Chone. but the work was abandoned. On the line between
Puerto Bolivar and Machala there has been some extension into
the cacao districts and to provide for the seacoast traffic.
PUBLIC IMPROVEMENTS.
The corollary to the completion of the Guayaquil and Quito Rail-
way across the Andes to the capital should be a well-matured plan
of public works and particularly of sanitary works if Guayaquil
and the whole country are to reap the full benefit of improved
transportation facilities. This is of especial importance both to the
import and the export trade. Commerce now pays heavy tribute to
the unsanitary conditions. Steamers are compelled to anchor well
down the river at a point opposite the Matadero or slaughter house.
and it is estimated that the Guayaquil merchants pay $200,000 a
year for lighterage which might be saved.
The interruption of west coast traffic which is experienced with
the bubonic plague always threatening and yellow fever always
existing would justify a heavy expenditure .jointly by the munici-
pality and the national Government in order to put the port into
sanitary condition by permanent works which would insure the
continuance of that condition. Bubonic plague has not yet invaded
TRADE CONDITIONS IN ECUADOR. 21
Ecuador, but it is an ever-present menace, and the yellow fever
record of Guayaquil, with its heavy percentage of fatalities for
foreigners, is common history. Smallpox also is frequently epidemic,
with a larger number of deaths than is credited to yellow fever, and
from this disease the natives are not exempt. Its ravages are chiefly
among them.
SANITATION PLANS AND WATERWORKS.
Plans have been prepared under the direction of the board of
health for a very complete system of sewerage, paving, and other
improvements, which if carried out would go a long way toward
the sanitary reconstruction of Guayaquil, and whether put into effect
or not the information published in connection with them affords
valuable suggestions. The idea is that a company or syndicate may
be formed to undertake the work or to provide the necessary funds
under an arrangement with the municipality of Guayaquil. If this
project should be carried out the improvement in the general health
conditions undoubtedly would be of much benefit to commerce.
However, it does not fully meet the situation as to yellow fever, as
there is no provision for control by preventing the mosquito infec-
tion as has been done so successfully by the United States authorities
on the Isthmus of Panama. By putting into practice the regulations
of the international Pan-American sanitary convention, through
a treaty or other arrangement which would permit the coopera-
tion of the United States sanitary authorities, Guayaquil could be
shielded against yellow fever and other epidemics as effectively as
are Panama and Colon, and the gain to commerce in general and to
Ecuador's commerce in particular would be immense.
That the municipality is capable of meeting the situation, if it
chooses, is shown by what it already has done in the way of public
works. An American contracting engineer brought water down
from the mountains and under the river, thus providing the city
with a complete system of waterworks, which insures a sufficient
supply at all times. The destructive fires which swept the city at
regular intervals have been minimized by rebuilding with streets not
less than 100 feet in width and the installation of a pumping system
that has proved very effective and has caused the heavy premiums
formerly paid for fire insurance to be materially reduced. Garbage
crematories of the most modern kind have been installed for the dis-
posal of the city's refuse. These improvements show that public
.spirit is not lacking. All that is needed is for this public spirit to
be directed into the broader channels which will make Guayaquil a
healthful port and insure to it the benefits of the commercial advan-
tages which its geographical position on the west coast gives it the
opportunity to realize.
22
TRADE CONDITIONS IX KCIWDOR.
FOREIGN COMMERCE.
Since I have described the products of Ecuador which form the
basis of its foreign purchases, the international commerce may be
studied in its entirety before analyzing in detail the country as a
market for foreign goods. Statistics are somewhat backward, but
the full details for the calendar year 1906 are given and it may be
said that the general movement of importations and exportations dur-
ing 1907 showed no marked variation from the previous year. Fol-
lowing are the figures for 1900 (the value of a sucre being 48.7 cents) :
EXPORTS.
Articles.
Value.
Sucres.
12,900
12,198,4S1
931,369
29,150
1,546,189
722,703
4,422
11,999
108,793
Articles.
Value.
Cotton . „ ..
Gold ore and bars..
Sucres.
309, 432
Cocoa—
Gold specie.. _ .
547,091
Coffee
Silver coins _
7,480
2,390,810
22,113
Cascara bark
Rubber _ . _ ... .
Tobacco
Hides:
Tagua (vegetable ivory)
2,615,337
Cattle
Goat
Miscellaneous :
Total-.
508,436
Alligator . _. ._ .. _.
21,964,714
Fruits
IMPORTS.
Alimentary articles:
Animal
Vegetable
Mineral
Textiles
Raw material:
Animal
Vegetable
Mineral
Vestments, line cloths, jewels, and
articles of personal adornment
Machinery, tools, and instruments..
Household furnishings, articles of
domestic use, furniture, etc
Sucres.
1,371,032
1,244,298
314
3,533,208
181,960
124,915
1,540,834
1,975,759
1,598,821
Railway and telegraph material, lo-
comotives, etc
Tobacco and cigars
Mineral and metallic substances
Articles for the fine arts, scientilic
instruments, etc
Drugs and medicines
Firearms and accessories :
Specie and bank notes
Miscellaneous
Sucre*
74,
310,
518,
136,
1,982,
623,
354
553
403
922
841
377
910
402
Total 17,011,
The total imports and exports amounted to 88,976,319 sucres.
It will be observed that specie and bank notes figure in the re-
turns as part of the commercial movement. To get at the merchan-
dise they should be eliminated. Thus with the gold and silver coin
which was exported during 1906 to the amount of 554,571 sucres
deducted, the total exports should be 21,410,143 sucres. Similarly,
with the 1,982,910 sucres of specie and bank notes which figure in the
imports deducted, these would amount to 15,028,095 sucres, showing
that the commodities purchased are considerably less than those
which are sold. Yet this apparent loss in merchandise is made up by
the addition of 20 per cent to the valuations as given in the official
statistics, which the mercantile community of Guayaquil is in the
habit of making to both exportations and importations, in order to
arrive at the true value of the foreign trade. With these deductions
and additions allowed the movement of merchandise in and out of
Ecuador during 1906 would be $22,000,000.
TRADE CONDITIONS IN ECUADOR.
23
Tlie commerce by countries in 1906 is exhibited in the appended
tables, as shown bv official statistics:
Country
United States
Germany
United Kingdom
Argentina
Australia
Austria
Belgium
Bolivia
Brazil ^.
Central America
Colombia
Cuba
Other West Indies--
Chile
Imports.
Exports.
Sucres.
Sucres. j
4,656,895
6,785,039
3,095,144
3,595,716
5,560,343
1,327,505
856
132,012
9,770
200
40,875
115,065
776,248
15,325
1,000 ;
10,000 !
54,773
40,797
49,664
27,413
4,041
40,450
20
15,038
198,552
818,698
Country.
China
Spain
Prance
Holland-
Italy
Mexico
Peru
Panama-
Uruguay..
Venezuela-
Norway--
Imports. ! Exports.
Sucres.
55,221
492,224
1,275,797
545
521,684
205,953
5,890
7,110
Total ; 17,011,605
Sucres.
"II6oi~529
6,821,211
73,400
343,572
43,441
683,583
35,020
20,725
6,000
21,984,714
SHARE OF LEADING COMPETING NATIONS.
The imports from the four leading countries may be studied from
the following comparisons for a series of years, with the explanation
that specie, which is drawn principally from England, is included:
Year.
United
States.
1900
Sucres.
3,434,430
3,966,308
2,982,660
2,898 537
1901
1902
1903
1904 _
4,897,848
4,542,272
4,656,895
1905- . .
1903
United
Kingdom.
France.
Sucres.
Sucres.
3,974,807
1,240,677
3,575,100
1,995,693
5,750,785
1,588,030
3,196,481
1,011,738
4,009,757
1,234,516
4,558,547
1,118,793
5,560,343
1,275,797
Germany.
Sucres.
2,577,290
2,712,467
2,085,900
2,000,001
2,985,114
3,101,957
3,095,144
Some features of this trade as distributed among the various coun-
tries call for explanation. While the imports from the European
nations can be rather accurately accounted for, the exports do not
measure the real commerce of Ecuador with several of them, because
so large a proportion is taken " for order " and distributed from
Southampton, Havre, or Hamburg, Thus in 1906 of the imports
credited to France— 6,821,000 sucres— cocoa constituted 6,072,000
sucres, and it is known that Germany and other continental countries
reimport it from France in large quantities, Germany in particular
supplementing its own direct importations from Ecuador.
In the imports Great Britain supplies much less of the merchan-
dise than would appear, since the imports of specie are almost en-
tirely from that source and in 1906 the importation of sovereigns was
£200,000 or 1,000,000 sucres. Similarly, specie to the amount of
547,000 sucres should be deducted from the exports to Chile and
Peru in order to measure the merchandise exports to them correctly,
since both these countries draw English sovereigns from Ecuador.
24 TRADE CONDITIONS IN ECUADOR.
AMERICA THE BEST CUSTOMER.
The trade of the United States and Ecuador is not subject to the
deductions or additions which are necessary in the case of other conn
tries. The Ecuador products imported into the States are consumed
there and the exports to Ecuador consist of general merchandise —
specie exports being rare. The total trade in 1906 approximated
$6,000,000. The United States is a large buyer of all the leading
Ecuador products. In the year for which the statistics are given it
took cocoa to the value of 2,369,000 sucres; rubber, 1,209,000 sucres:
hides, 640,000 sucres; tagua or vegetable ivory, 638,000 sucres; and
straw hats, 1,133,000 sucres. Its position as the best buyer of Ecua-
dor products fairly entitles it to be the largest seller to that country
and it maintains the geographical advantage. The bulk of the com-
merce both ways is through New York, but Mississippi Valley prod-
ucts are shipped through New Orleans to the value of $250,000 yearly
and San Erancisco and the other Pacific coast ports have a direct
trade.
Germany, which is a heavy buyer of vegetable ivory, cocoa, and
straw hats, clearly is next to the United States in the actual exchange
of commodities though the statistics appear to give Erance the lead
by reason of the cocoa imported for transshipment. Great Britain,
after the deduction of specie shipments, is still able to show commodi-
ties exported to more than twice the value of those imported. Its
control of the cotton piece goods trade is the basis of this advantage
as compared with other countries. It also ships coal and a variety
of iron and steel products. Its largest purchase is of cocoa, the
amount being 800,000 sucres, and after that straw hats, 300,000 sucres.
France in addition to the cocoa imported for consumption and dis-
tribution takes vegetable ivory to the value of 374,000 sucres and
hats, 135,000 sucres. China and Australia provide a small trans-
Pacific trade, rice and silks being imported from China and coal
from Australia.
needp^d improvements.
In considering Ecuador as a future market the prospect or the
probability of public works such as harbor improvements and the
sewerage and sanitation of Guayaquil must be taken into account,
but this can not be done with definiteness. A new market house has
been constructed in Guayaquil but nothing has been done toward the
new custom-house. The extensive iron pier and wharf and similar
improvements for which concessions have been given by the National
Congress to various parties at different times make little headway.
When these works and others like them are once entered upon it will
mean a decided demand for iron and steel products. In the mean-
time some public works in other cities are in a more promising state.
Quito has an insufficient water supply and a new system of water-
TRADE CONDITIONS IN ECUADOR. 25
works is declared to be imperative. A contract was made for the
system, but it has been in abeyance. Now there is said to be a pros-
pect that it will be put into effect. In the town of Biobamba a
contract has been made with an American engineer for a system of
waterworks.
AMERICAN MILLS COULD NOT ACCEPT ALL ORDERS.
The importation of steel rails and railway material may for a
time show a falling off as compared with 1906 and 1907. The com-
pletion of the Guayaquil and Quito line to the capital probably will
be folloAved by the construction of some short spurs and extensions
in the delta district, but until the building of the larger branches
from Cuenca and Ibarra, respectively, to the main line is begun,
or the Government finds itself in a position to finance the Curaray
River branch in order to get to the rubber district of the navigable
tributaries of the Amazon, large purchases of rails and railway ma-
terial are not to be expected. The Guayaquil and Quito Railway has
been supplied with American rails and rolling stock except when* the
inability of the mills of the United States to fill the orders in time
caused some purchases to be made abroad. While there will be some
falling off in rails this loss will be likely to be made up by gains in
other iron and steel products. Should the price of rails drop that
also may encourage the revival of some of the projects for railroad
building. With the freight and other charges the rails for the Guay-
aquil and Quito line cost on an average $3G per ton laid down on
the wharf at Duran.
GENERAL DEVELOPMENT.
Electrical installation is likely to be continued on a larger scale
than during the past. Up to the present time there have been few
electrical power plants established, though the available force
abounds in the waters of the Andes. Guayaquil has an electric-light
system which is utilized in business blocks and private dwellings and
on the wharves and river landings, but the streets are lighted by gas
and the change to electricity awaits the convenience of the gas com-
pany, which has shown no disposition to forego the advantages of its
contract with the municipality unless compensating concessions are
made. So also the company which proposes to substitute the trolley
for horse cars has not yet been able to put into effect an arrangement
for electrifying the tramways. But these changes are sure to be
made.
A project has been formed by Ecuadorian and American capitalists
for transmitting power to Guayaquil from the Chimbo River, 55
miles distant, which will be ample for lighting, traction, and such
light manufacturing as exists. When this installation is made the
purchases of machinery will be an important item.
26 TEADE CONDITIONS IN ECUADOR.
The Anglo-French company which has the electric power con-
cession in Quito has extended its plant and the facilities for illumi-
nating the city have been enlarged and the number of lights increased.
A more important extension is the projected trolley tramway system.
The hilly streets of this ancient capital of Inca civilization have to
be traversed on foot just as in the time of the Incas. Many of the
streets are too steep for vehicles and a horse-car system would be im-
practicable. So up to the present the only means of getting about
has been by strenuous pedestrianism. Work will be begun on the
trolley installation during the year.
INTRODUCTION OF MODERN MECHANISMS.
Some of the smaller cities may follow the example of Guayaquil
and Quito and provide for electric lighting. Extensions of the Gov-
ernment telegraph and telephone lines will be made and there is a
slow spreading of local telephone systems. Cooling appliances are
quite common in Guayaquil. Most of the electrical installation of
all kinds, even where European capital is engaged in the enterprise,
is made by American companies and the setting up of new plants
means increased importations from the United States.
Agricultural machinery is one of the lines for which markets are
yet to be created in Ecuador Irrigation plants are vaguely com-
prehended, but some Ecuador landowners look forward to introduc-
ing them in the southern coast section of the country where the cocoa
production is falling off so markedly on account of the increasing
dryness of the climate. That this change would come had the au-
thority of as high a scientific authority as Alexander von Humboldt
a centurv ago. Xow it is coming with a sAviftness that enforces the
necessity of turning to artificial means in order not to lose the rich-
ness of a soil whose productivity has been demonstrated through a
long series of years.
Suggestions have been made for pumping plants in the Santa Rosa
district where the drying up of the coast lands is most noticeable and
the sands are encroaching most rapidly on the alluvial soil, but there
is no definite project. Makers of irrigation machinery in the United
States might find it worth while to send an expert to study this
region and provide local landowners and capitalists with specific
statements of the kind of plants which should be installed and esti-
mates of the expense, for the landowners, while recognizing the
agricultural situation, are slow to act on their own initiative.
LEADING MERCANTILE IMPORTS.
Thrashing machines and even harvesters are not likely to find a
market soon, though some of the grain fields in the inter- Andean pla-
teaus are extensive enough to call for them. But the owners of the
big estates are satisfied with the results they obtained from the cheap
TRADE CONDITIONS IN ECUADOR. 27
labor of the peons through scythe and sickle and hand flail. For
plows there is a better prospect. The Indian cultivator still clings
to the wood prong both for turning up the soil on his own little
patch of the mountain side and on the larger farm of the landowner.
In the majority of the regions of the interior no other kind of plow
ever has been seen. Yet the railway is already working a change.
At Ambato, which is the center of a somewhat sandy agricultural
district, some modern plows are in use and they are employed in a
few other districts. Dealers in Guayaquil now keep them in stock
and seek to interest their customers in them.
In farm hand tools there is a fair use of those of American manu-
facture, but this trade is divided with England and Germany. High-
quality machetes of New England make control the market in the
coast region where the sugar plantations are. Hoes and adzes are
imported chiefly from Germany and England and shovels from
England and the United States. Axes and hatchets are from the
United States. There is a growing use of wire fencing both barbed
and woven, with a tendency to favor the woven wire.
Machine tools, while not extensively used, find a good market, and
the bulk of them are from the United States, though some of fine
grade are imported from France. Ecuador natives are noted for
their skill in woodwork and carpentry. Lathes, drills, and chisels
of good quality are therefore acceptable to them. The best Phila-
delphia handsaws also find a market, though the change of some of
the local industries to steam sawmills has partly diverted the demand
to saws of that class.
HARDWARE, SEWING MACHINES, AND MOTORS.
The market for builders' hardware is a good one, yet largely local
in its character. During 1907 some 300 new houses were built in
Guayaquil, though many of them were not large ones. But all of
them call for more or less builders' hardware and much of this is
supplied from the United States. Wire nails are almost an American
■monopoly, but in bolts, locks, keys, etc., England and Germany com-
pete with the American articles. The use of sheet-iron roofing is
growing in the interior as well as on the coast. The United States
is getting a little of this trade, but can hardly expect a large share
until the price is lowered to a level with the English quotations for
corrugated iron. England also has a fair proportion of the trade in
iron bars, tubes, and tinplate. American manufacturers do not ap-
pear able to meet the English prices for cheap iron cots and bed-
steads, for which there is a very good market. England sells some
tinware and cutlery, but Germany has the advantage in most of the
articles of household hardware, though not to the exclusion of the
United States.
28 TRADE CONDITIONS IN ECUADOR.
The Guayaquil dealers make attractive displays of the different
lines of machine tools, builders' hardware, cutlery, etc., and American
manufacturers find it advantageous to exhibit complete sets of their
manufactures in this manner.
There is some competition in the sale of sewing machines, but it
is not strong enough seriously to affect the purchases from the United
States. Typewriters and iron safes are of course of American manu-
facture. Printing press machinery is from the United States. Some
of the Guayaquil newspapers have the latest improved presses and
one of them has introduced linotypes.
Good roads are not extensive enough to provide a large market for
motor vehicles, but there is a field for them. The national highway
from Quito to Ambato, 75 miles, is kept in repair by an automobile
transportation company under arrangement with the Government,
and owners of private motors have the benefit of this arrangement.
American motors were the first ones introduced into Eucador, but
the French makers came into the market and for a while controlled
it. Now motor cars from the United States are again being imported.
Motor boats have not come into vogue, though they would natu-
rally supplement the steam launches which are imported from the
United States for use in the Guayaquil Harbor and the rivers where
the native balsas or rafts ply.
AMERICAN TEXTILE TRADE LOSS.
The trade in textiles is one on which the United States has little
reason to congratulate itself. At one time in Ecuador the trade in
prints meant American prints. Now cotton piece goods are almost
a Manchester monopoly. The story is told in the customs-house
returns of importations, which have this item : " Cotton cloths in
general, Great Britain, $500,000; United States $25,000." Such
headway as has been made by other countries in getting a small
share of this market has been by Germany and Italy. The United
States still sends some sheetings, drills, and coarse prints, but with
little regard to the special- requirements of the market, which are
the same as in other South American countries where both the
torrid and the temperate climates obtain and the fondness of the
natives for bright -colored and gaudy cloths governs their purchases.
Some drills are supplied from England that could be furnished as
well by the United States. Baizes and ginghams, for which there is
a good demand, are controlled by Manchester. Italy and Germany
supply casinettes. Germany divides with England the trade in
cotton blankets and England supplies the sewing cotton and the
satin.
In textiles other than cotton England and Germany are the prin-
cipal competitors and their competition is with each other. Eng-
TRADE CONDITIONS IN ECUADOR. 29
land supplies the larger share of the cashmeres and linens and Ger-
many the woolen shawls and ready-made clothing. Stiff hats are
from England, which also furnishes carpets and jute bagging. Italy
has most of the trade in felt hats. Silks and fine dry goods, for
which the demand in Guayaquil is considerable, are imported from
France, but silk and cotton mixtures are chiefly from England, and
silk mantillas are imported from China. German hosiery has the
market for this class of goods.
LEATHER GOODS AND FOODSTUFFS.
A variety of leather goods are imported, including trunks and
valises from England and saddles from the United States. The
petaca or small leather trunk which is so essential for mountain
traveling is manufactured locally to a small extent, but the material
is imported. Germany, France, and the United States supply the
tanned leather, Germany having two-thirds of the trade. American
boots and shoes continue to hold the favor they gained some years
ago, and this market is worth $150,000 annually. Imitations of the
American styles have been attempted and importations have been
received from Spain which were sold at a lower price. But the
quality was inferior and notwithstanding that the American style
was adopted the fit was unsatisfactory. The hot and humid climate
deteriorates leather goods rapidly, and this is one condition which
makes it desirable for the American boot and shoe factories to main-
tain the quality.
In foodstuffs and provisions the United States has no strong com-
petitor. Wheat flour is occasionally shipped by Chile, but not in
large quantities. The American importations in some years amount
to $250,000, while a few thousand dollars' worth of corn meal is
taken and small quantities of oatmeal and breakfast foods. Lard is
supplied entirely from the United States, the value of the imports
in 1905, which was an average year, having been $330,000. Hams,
bacon, and other packing-house products are imported in small
quantities and there are some importations of tinned goods. The
imports of cotton-seed oil from the United States in 1905 were
valued at $1,500 and olive oil from Italy, Spain, France, and other
European countries at $26,000. Italy supplied butter and cheese to
the amount of $35,000. Vegetables of various kinds, peas, beans,
lentils, onions, are imported from Chile.
BEVERAGES, OILS, AND DRUGS.
The trade in wines, liquors, beverages, and mineral waters is
rather curiously distributed. Notwithstanding that there are local
breweries the imports of beer have increased, possibly because of the
lowering of the duty. This trade is divided between Germany and
30 TRADE CONDITIONS IN ECUADOR.
the United States, about 75 per cent of it being held by Germany.
In cognac and cheaper brandies and champagnes France has nearly
all the business. Whiskies, of which the imporations are small, are
divided between Scotland and the United States. Ordinary wines
are from Spain, France, the United States, and Italy in the order
named. Italy has the monopoly of vermuths. Small quantities of
mineral waters are imported from Germany, France, and the United
States.
In petroleum and other oils, paints, varnishes, medicines, and
drugs and chemicals, the United States holds a leading place. Pe-
troleum is supplied to the exclusion of other countries. Drugs and
medicines from the United States in 1905 were more than double the
imports from all other countries. Fine soaps are furnished by Bel-
gium, Germany, and France in the order named, but some toilet soaps
and perfumes of American make have an established market which
they hold in spite of competition. The trade in stearin candles to
the value of $150,000 annually is in the hands of Belgium and
Germany.
FURNITURE OPPORTUNITY.
In the long list of miscellaneous articles there are some of which
a larger quantity could be supplied by the United States. One of
these is furniture. Germany now has this market. Paper and its
manufactures are also staple imports from Germany. The United
States supplies printing paper but does little in writing paper and
similar stationery. In earthenware, crockery, glassware, porcelain,
and similar household articles the trade is almost entirely in German
hands. The United States supplies more lampware than Germany.
Cheap enamel ironware is not in extensive use, but the bulk of what
is used comes from Germany. Belgium and France supply some
fine crystal ware. Among other household articles the United States
is the source from which brushes and sweeping brooms are drawn.
Sanitary appliances are from England and the United States.
Pianos and other musical instruments are from Germany. Common
muskets are imported from Spain and France, revolvers from Spain
and England.
SHIPPING SITUATION.
The commercial movement of Ecuador as to shipping might be
divided geographically into the trans-Pacific trade with Australia
and China, which is not of much importance ; the coast Pacific trade
from Portland and San Francisco and intervening ports on the
north and from Valparaiso and intervening ports on the south ; and
the trade via Panama and the Straits of Magellan, respectively. The
bulk of the traffic is by the latter two routes, though the coast
Pacific trade is considerable, covering as it does the cargoes to and
TRADE CONDITIONS IN ECUADOR.
31
from Oregon and California, Mexico and Central America, and
Peru and Chile.
The nationalities of the vessels which have the carrying trade of
Ecuador appear from the following exhibit of the Guayaquil ship-
ping for two years :
1905.
1908.
Nationality and class.
Number.
Tonnage.
Number.
Tonnage.
British steamers
106
2
53
36
3
2
10
172,141
2,680
86,820
78,421
7,891
3,858
6,737
97
3
51
33
3
153,116
4,787
85,272
88,495
9,590
Foreign sailing vessels
8
8,813
Total - - -
212
358,548
195
350,073
The British vessels are chiefly those of the Pacific Steam Naviga-
tion Company which ply between Panama and Valparaiso, and the
Chilean steamers are of the Compahia Sud Americana de Vapores,
which follow the same route. The German ships are mostly of the
Kosmos Line, whose itinerary is from Hamburg to San Francisco,
though there are also some direct voyages of German ships between
Hamburg and Guayaquil. The other vessels indicated come under
the designation of the " tramps " which compete with the regular
liners, and some of the ships of British and German nationality be-
long in the same class. The Lamport and Holt and the Gulf Line
and the Merchants Line from New York dispatch occasional vessels
by way of Magellan Straits.
TONNAGE MOVEMENTS.
Measured by actual freight tonnage the shipping of Guayaquil in
1906 amounted to 70,000 tons, of which 5,000 tons was local coastwise
traffic. In the import cargoes there figured 14,000 tons of coal
brought by both steamers and sailing vessels and 3,000 tons of rail-
way material. There were 6,000 tons of merchandise for coast ports
other than Guayaquil. Exports were 32,500 tons, distributed as
follows :
Tons.
South American coast ports 5, 500
North Europe via Magellan 8, 500
North Europe via Panama : 9, 400
United States via Panama 7,500
Spain via Panama 1,600
Total 32, 500
Freight imported via Panama was 7,500 tons and by way of
Magellan an equal quantity. The noticeable feature of the shipping
is that the traffic by way of the Straits is decreasing relatively and
82 TRADE CONDITIONS IN ECUADOR.
that via Panama is increasing both relatively and absolutely. Dur-
ing 1904 and the early part of 1905 there was an increase of the
cargoes brought through the Straits and several of the steamship
lines added to the number of their vessels using that route, but this
was checked by a temporary cause which has a permanent effect*
The prevalence of the bubonic plague at some of the Atlantic as well
as the Pacific ports has proved a serious interference with shipping.
Vessels coming through the Straits are fumigated at one of the lower
Peruvian ports and then if they proceed to Guayaquil another fumi-
gation is required before they will be received. These fumigations
are both costly and vexatious. While the bubonic plague has thus
had a tendency to divert cargoes from the Magellan route it has not
been the leading cause. Guayaquil is only 835 miles from Panama,
and Panama is the natural route for the bulk of the commerce of
Ecuador. Shipping facilities and freight rates on the west coast
have been discussed very fully in two official reports which review
the whole situation.0
INADEQUATE STEAMSHIP FACILITIES FROM PANAMA.
The information given in those reports has a special interest for
Guayaquil since it is one of the leading west coast ports. This infor-
mation need only be supplemented by again stating that notwith-
standing the nearness of the ports of the United States no advantage
is had in shipping rates and European shippers appear able to neu-
tralize the advantage American shippers have in time and distance.
A more important matter is the inadequacy of the existing facilities
to provide for the increased traffic via Panama and the increased
trade generally. Guayaquil merchants complain Nof the losses to
which they are subject by the delay and uncertaintj^ in receiving the
consignments and in this they have common ground with the mer-
chants of other west coast ports.
Whatever the situation in the past may have been, I have heard no
complaints that the Panama Railway now fails to get the freight
across the Isthmus. The trouble of the west coast importers is in hav-
ing it taken from Panama by the steamers. Some of them send special
representatives to Panama to labor with the steamship agents. In
the latter part of October a steamer of the Chilean Line sailed one
day and one of the British company the following morning. Yet
these two steamers left 5,200 tons of freight and some frantic ship-
pers on the dock. The two companies are supposed to have a work-
a(l) Report to the Secretary of War by Joseph L. Bristow, Senate Document
No. 429, Fifty-ninth Congress, first session. (2) Report on Trade Conditions in
Central America and on the West Coast of South America, by Lincoln Hutchin-
son, special agent of the Department of Commerce and Labor.
TRADE CONDITIONS IN ECUADOR. 33
ing agreement as to sailing schedules and other matters but appar-
ently it is observed only in maintaining freight and passenger rates,
the latter being comparatively the highest in any part of the world.
DELAY OF PASSENGERS.
The demoralization in the sailing schedules often puts passengers to
a heavy expense. Nominally the companies dispatch their steamers
from Panama alternate weeks, Thursday or Friday being the sailing-
day, so that passengers leaving New York, Southampton, Hamburg
or Cherburg are supposed to be able to continue their voyage with a
detention of not more than one to three days. But during October
passengers from Europe and the United States had to wait intervals
of eleven and again of twelve days in order to take their passage for
Guayaquil and the other ports. I am informed that this delay was
exceptional, yet it is admitted that no reliance can be placed on the
published schedules. Increased trade on the west coast has increased
the number of business men and others traveling, and they are en-
titled to some consideration both in preventing loss of time and in
incurring expenses.
The question of freights, however, will be the controlling one and.
in view of the permanent addition to traffic by way of Panama the
necessity of improved shipping facilities through the present lines en-
larging their service or by the establishment of competing ones is
most important to the commerce of Ecuador and to the entire west
coast of South America.
NATIONAL FISCAL SYSTEM.
The fiscal system of Ecuador does not bear heavily on imported
commodities, many of these being articles of prime necessity which
could not stand too large an impost. Though the various surtaxes,
warehouse and wharf charges, and miscellaneous dues must be taken
into consideration in connection with the customs schedules the total
does not amount to figures that are formidable. With a few excep-
tions the tariff rates are specific and are based on net and gross
weight according to the metric system. Articles free of duty include
a wide range of construction material, steel rails, iron and steel
bridge work, agricultural and other machinery, instruments and
apparatus, building material, etc. During the periods of domestic
agricultural scarcity wheat and other cereals are admitted free
while the duties are reduced on various food products, but that on
flour is high. Textiles bear a large part of the duties that are
collected.
The proportion of the import and export taxes is about $2 on
imports to $1 on exports. In 1900 the customs income from import
duties was 5,649,000 sucres and from export duties *2,(>20,000 sucres.
34 TRADE CONDITIONS IN ECUADOR.
The internal-revenue receipts are from taxes on the consumption
of liquors, land transfers, the stamp tax, the salt monopoly, and
miscellaneous sources. The post-office system and the Government
telegraph and telephone lines produce no net revenue, both being
operated at a loss. The national- revenues from all sources vary
from 11,000,000 to 12,000,000 sucres, or $5,500,000 to $6,000,000.
After the current expenses of the Government are met this leaves
little if any surplus for guaranteeing railway construction and
carrying on public improvements of a national character. President
Alfaro's administration is strongly committed to railway construc-
tion, but it has to take into account that the Government of Ecuador
is poor and its wishes in this matter can not always be converted
into deeds. HoAvever, the recognized public debt, foreign and inter-
nal, is not so large as to preclude the probabilities that sufficient
guaranties may be afforded foreign capital to induce it to undertake
some of the projects which I have outlined in treating of railways.
THE PUBLIC DEBT.
The latest official information concerning the public debt of
Ecuador is contained in the report of the minister of hacienda (sec-
retary of the treasury) for 1906. The obligations comprising the
foreign debt consisted of the bonds issued for the Guayaquil and
Quito Railway: the consolidated debt or loans from the banks of
Guayaquil to the Government; credits to be consolidated; and the
loan from the French Finance Corporation. These debts are usually
described in terms of condors, the condor being the coinage basis
of the Ecuador gold monejr system, equal to 10 sucres, and the exact
equivalent of the English pound sterling. In July, 190-1, gold bonds
for the railway had been issued up to $9,500,000 and later additions
increased the amount to about $12,300,000, making allowance for the
redemption or amortization. Some questions in dispute between
the Government and the company relating to the full amounts due,
the interest payments, etc., presumably will be settled by the arbi-
tration that is now in progress. In 1906 an issue was made of
$1,000,000 gold custom-house bonds redeemable at par in payment
of 50 per cent of the general export duties and 100 per cent of the
export duties on vegetable ivory. The proceeds of this loan were
for the payment of the Guayaquil and Quito Railway bond coupons.
It was taken by the local merchants and the banks.
The Guayaquil Bank loans to the Government vary according to
the hitter's necessities and the willingness of the banks to provide for
them. In 1906 the sum was 4,207,000 sucres or $2,100,000. Provision
is made for paying the interest and the amortization fund on these
loans by making over the collection of the export and import duties
TRADE CONDITIONS IN ECUADOR. 35
out of whicli the banks retain the amount that is to be applied to
interest and redemption.
The internal consolidated debt amounted to $300,000 and the float-
ing debt consisted of obligations to Government employees and
similar items which scarcely can be figured as part of the national
debt. The loans from the French Finance Corporation totaled
$440,000 and were contracted in order to meet the railway coupons.
Guayaquil has a municipal debt of about $1,000,000. The city is
rich and solvent and could add largely to this sum in carrying out
the project of sanitation without in any manner impairing its credit.
MAINTENANCE OF GOLD STANDARD.
One source of strength to Ecuador which gives stability to its com-
merce with foreign nations, particularly during periods of political
revolutions and other uncertainties that in some of the South Ameri-
can countries so seriously hamper trade, is its monetary system. It
easily maintains the gold standard, there are no violent fluctuations
in exchange, and the value of products bought in the country or of
goods shipped to it never is in doubt. The legislation providing the
gold standard went into effect in 1900. The real basis is the English
pound sterling, which was declared by law to be current and legal
tender. This provision accounts for the importations of English
sovereigns and their employment as part of the gold reserve of the
banks. In addition to the gold coins the circulation is of silver and
paper notes. The unit of circulation is the sucre and 10 sucres equal
a gold condor or English sovereign. The sucre is issued both as
silver coin and as a bank note, but the more convenient form of the
note is preferred and the silver circulation is more of the minor coins.
Bank notes are issued in the denominations of 1, 2, and 5 sucres and
upward.
The Ecuador law requires a gold reserve of 50 per cent and an
additional 10 per cent of silver for banks of issue. There are three
banks of issue whose notes are in circulation: Banco del Ecuador
and Banco Comeicial y Agricola, of Guayaquil; and the Bank of
Pinchincha, of Quito. The latter is a new institution and was started
chiefly with American and other foreign funds with a capital of
$300,000.
BANKS OF ISSUE.
The total outstanding circulation of the banks of issue as of the
year 1906-7 is 8,308,000 sucres, divided as follows: Banco del Ecua-
dor, 4,098,000; Banco Comercial y Agricola, 3,9~)0,000; and Bank of
Pjchincha, 320,000. This does not mean that the business of the
country is conducted entirely on 8,368,000 sucres or $4,184,000, since
there is the movement of species, principally sovereigns imported
36 TRADE CONDITIONS IN ECUADOR.
from England. In 1906 the exact importations were £196,000 and
of this amount £47,000 was transferred to Peru and Chile against
drafts on London. At the beginning of 1906 the circulating medium
in the hands of the public was $11,666,824, divided into bank notes,
$6,367,000; gold notes. $2,504,869; and silver notes, $2,794,955.
Besides the three banks whose notes are in circulation two mort-
gage loan banks — the Banco de Credito Hipotecario with a capital
6f $500,000, and the Banco Territorial with $200,000 capital— are
organized on a basis which gives them the right to issue notes. The
'mortgage banks issue warrants or " cedillas " for each operation they
make, these warrants bearing 9 per cent interest and being guaranteed
by the mortgage on the property and by the bank's capital. The
Banco Comercial y Agricola also has a mortgage loan department.
The total deposits in all the Guayaquil banks, including the sav-
ings banks, at the beginning of 1906 was $4,115,762.
DISCOUNTS AND EXCHANGE.
- The rate of discount for the quarter of century preceding 1905 was
12 per cent. Then it was lowered temporarily to 7 per cent, with
subsequent increase to 8 per cent. Banking has been a very profit-
able means of investing capital, as appears from the summary of the
operations of the leading financial institutions. The Bank of
Ecuador paid a dividend of 15 per cent in 1906 and this has been its
prevailing rate for a number of years, except when it paid 16 per
cent. The Banco Comercial y Agricola paid 12 per cent; the Banco
de Credito Hipotecario 15 per cent, and the Banco Territorial 10
per cent. The average dividend on approximately $5,000,000 was
13 per cent. All of these institutions paid good dividends through
the previous years, although in 1902, owing to a commercial crisis,
the Banco Comercial called in the whole of its unpaid capital,
passed its dividend and in the following year paid only 6 per cent.
In 1906 all the banks, in addition to the dividends paid, added to
their reserves. That the financial community of Guayaquil is a
strong one is apparent from its banking operations.
The facilities for international commerce are provided by means
of drafts on London and Xew York, but the transactions are for the
most part conducted through London. Ninety-day commercial
' drafts on London, Paris, or Hamburg with the bill of lading attached
are discounted at from 1 to 2J per cent. For NewT York the time is
usually sixty days. These commercial drafts are drawn by the ex-
porters against shipments of cocoa, ivory nuts, rubber, hides, straw
hats, etc. Bank drafts on New York and London are at three days'
.sight and | to 1 per cent premium.
TRADE CONDITIONS IN ECUADOR. 37
MERCHANTS AND TRADE METHODS.
The commerce of Ecuador, the banking, exporting and importing,
is principally in the hands of strong native firms, though foreigners
are partners in some of the houses, particularly those who are inter-
ested in shipping. Most of the exporters are also engaged in the
importation of general merchandise. Italians and Germans are
about evenly established in the jobbing trade and they are the only
ones who are at interior trading points as well as at Guayaquil.
The Italians, however, are more numerous in retail business. The
English are well represented. The cocoa trade is the basis of the
French firms and several Spanish houses are also represented.
A compact Chinese commercial circle whose members do their own
importing has a profitable share in the retail trade of Guayaquil and
is showing a tendency to spread out through- the country in spite of
native opposition. At Quito business men have protested against the
Chinese opening stores and at some of the smaller cities their places
have been attacked by mobs. Ecuador has a rigid Chinese exclusion
act and the local merchants claim that the Chinese who are trying to
open business in the interior have got into the country surreptitiously
instead of being members of the Guayaquil colony who were estab-
lished in business before the exclusion act was passed. Notwith-
standing the opposition which their presence causes the Chinese
mercantile colony is to be viewed as a permanent and an influential
one. Turkish subjects, Syrians, are also making their entrance into
the trade of the country in spite of opposition.
AMERICAN REPRESENTATION.
American interests are fairly well established. The Guayaquil and
Quito Railway, which is its own purchasing agent, is naturally the
largest single buyer of the manufactured products of the United
States. New York leather interests, which are the principal buyers
of hides, in order to facilitate their business have established a trad-
ing company which imports and sells general merchandise. Its head-
quarters are in Guayaquil, with branches in Quito and other towns
in the interior, Americans are owners or partners in several Guaya-
quil mercantile houses and the members of many of the native firms
are frequent visitors to the United States, so that it can not be said
there is a lack of knowledge of American goods. On the contrary
the commercial communication is close.
As to the means of increasing trade it may be said that while
circulars and catalogues do some good, samples, exhibits of the actual
articles, demonstration, and personal solicitation by commercial
travelers who understand the requirements of Spanish- American
38 TRADE CONDITIONS IN ECUADOR.
people and the business methods will do much more good. Guayaquil
by through steamer schedule is ten or eleven days distant from New
York and also from New Orleans. Quito by the railway is two days
distant from Guayaquil, and the trip there affords the means of learn-
ing the commercial wants of the inhabitants of the inter- Andean
plateaus and also of those in the Oriente region which stretches from
the slopes of the Eastern Cordilleras through the fertile valleys that
are watered by the tributaries of the Amazon. The best time for
visiting the country is the healthy season, comparatively speaking, at
Guayaquil, which is from June to December. The coolest and most
pleasant months on the coast are June and July.
NATIONAL EXPOSITION CHAMBERS OF COMMERCE.
Opportunity for the exhibit of actual goods and the working dem-
onstration of their utility is offered by the national exposition which
opens at Quito in August, 1909. This should prove an especially
good chance for making known American farm tools, such as plows
and the simpler implements. Information regarding the conditions
and the details of the Ecuador National Exposition can be obtained
later — when the plans are further advanced — through the Bureau of
Manufactures.
Valuable means of information, especially in regard to the finances,
export commerce, and the resources of Ecuador are the Chambers of
Commerce of Guayaquil and Quito, respectively. The Guayaquil
organization has been in existence for several years. Its annual
reports, containing a full review of the trade movements, are pub-
lished in English. The Quito Chamber has recently been organized
and is the mouthpiece of the commerce of the capital. One of its
objects is to secure the establishment of a customs-house at Quito.
This is looked upon as a natural result of the construction of the
railway. Other aims are to stimulate the agricultural development
of the interior and to foster direct export and import trade. Its
secret ary may be addressed in English. (Lists of the members of the
Guayaquil and the Quito Chambers of Commerce are filed with the
Bureau of Manufactures.)
CONCLUSION.
In concluding this review of the commercial conditions in Ecuador
with a statement of the stable financial system and the extent to
which foreign interests are identified with the trade, I can only ex-
press the belief that if the abundant natural resources are developed,
as they may be, the foreign trade will be increased proportionately.
American enterprise, by building the railway, has opened up the
heart of the country and added to the area whose products may be
TRADE CONDITIONS IN ECUADOR. 39
marketed abroad. The accumulated capital of the Guayaquil busi-
ness community can find profitable employment in developing and
marketing these products and the commerce with all countries will
be rendered more extensive and more profitable by placing Guayaquil
on the modern sanitary basis of other leading ports.
.The geographical proximity of the United States, its position as a
buyer of Ecuador's products, and its function in supplying the manu-
factured and other articles that are demanded by the Ecuador market
indicate that the present intimate commercial relations between the
two countries will become closer. The Panama trade influence is
already felt and this offers the opportunity for cooperation in so im-
portant a matter as international sanitation.
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