Sleuths of Foreign Sales

NORMAN REILLY RAINE February 15 1927

Sleuths of Foreign Sales

NORMAN REILLY RAINE February 15 1927

Sleuths of Foreign Sales

No romantic novel has more color than the story of the growth of Canada's foreign trade

NORMAN REILLY RAINE

GOVERNMENT SERVICE—AND YOU

BECAUSE the water in Holland contains too many chemicals, the hair of a cow in a Canadian field may take a sea voyage to the Netherlands. Over the mountains and through the steaming jungles of far-away Sumatra there are few railroads, but a fair number of highways. Therefore, Canadian manufacturers of motor cars make radical and expensive additions to the baggage-carrying equipment of their product.

Peculiar little things, these, yet essential, in the intricate mosaic of Canadian foreign trade. To you it may not greatly matter if the trimming of your winter ‘woollens’ match in color the rest of the garment; but, in the United Kingdom, people prefer a contrasting shade, and neglect of this minor point by Canadian manufacturers may mean the loss of an order worth thousands of dollars, and defeat at the hands of keen English, American and German salesmen, hungry for business, and quick to pay heed to these national preferences.

To collect such items of information for the guidance of Canadian exporters, to find and develop markets abroad, to bring together the local seller and the foreign buyer— these are just a few of the main duties of the Commercial Intelligence Branch of the Department of Trade and Commerce at Ottawa, which maintains twenty-three foreign trade commissioners, most of them graduates of Canadian universities, at strategic, economic points across the world.

Every trade commissioner and assistant commissioner is a businessman and an economist, familiar with Canadian products, manufactures and resources,

In Great Britain, with its great and sharply defined centers of trade, and industry, are four representatives of the Commercial Intelligence Service. One, at London, covers the Home counties, Southeastern counties and East Anglia. The Liverpool man keeps tabs on the north of England, Lincolnshire, North Midlands and North Wales.

From Bristol, an official keeps a knowing finger on the economic pulse of the west of England, South Wales and South Midlands, and Glasgow is headquarters for Scotland and North Ireland.

There is one man in the United States, with headquarters in New York City.

The Irish Free State is handled from Dublin. Belgium and France, both ready markets for Canada, each have an office.

The commissioner in Hamburg has an important territory, for Hamburg is a free port, and

many large importing firms of Germany, Russia, the countries on the Eastern shore of the Baltic Sea, Poland and Czecho-Slovakia, maintain offices there for the purchase of goods.

Rotterdam is the seat of operation for the commissioner for Holland. It was he who directed the attention of

Canadian tanners and kid glove manufacturers to the possible market, in Holland, of cow hair, a by-product of this trade.

Something in the water in which Dutch tanners was*1 their product, has the effect of hardening the fibre an^ thus depreciating its value. The Canadian hair is used by manufacturers of felt, sealskin, travelling blankets and carpets, and the softer the hai the better. Clean Canadian cowhair is worth seven or eight cents per pound more than the Dutch article, and the market is a ready one.

The Oriental Market

TN THE Orient, with its -*• vastly different life and customs, highly specialized knowledge is necessary, before it is safe for the Canadian manufacturer to enter. Not all firms can afford to maintain their own intelligence system, so, in order that so large a field shall not lie fallow, Canadian trade commissioners are posted at Kobe, to take care of Japan, and at Shanghai, to cover North and South China. The man in Batavia, Java, in the Netherlands East Indies, has a large and interesting territory but not the safest in the world to cover. He roams continually through the-Dutch East Indies with its savage Sea Dyaks, British Borneo, the land of the head hunters, Siam, and the Straits Settlements, and, in addition, makes periodic trips to French Indo-China. An excerpt from a recent report of the commissioner for that district may be of interest as illustrating the comprehensiveness of the work:

‘From the opening of an office in the Middle East, a steady growth in Canadian exports to this territory has taken place. The total trade in 1923 was $428,314. In 1925-6 (fiscal year) it had increased to $2,518,198, an improvement of almost 500 per cent. Canadian cotton duck manufacturers are not interested in this market, owing to the lightness of weight required in these countries, but progress has been made in sales of hose, bathing suits, etc. There is a possible market for men’s hats if samples were supplied. Canadian shoe laces are too high priced. Business might be done in singlets if firms would send samples and appoint agents. Canadian sunproof fabrics cannot compete with European in price. Small colored tuques might sell if Italian prices could be met.

‘A beginning has been made with the shipment of Canadian honey, but. the small ôpening in oats and chicken ' feed has not been developed. Atlantic sardines were introduced into

Straits Settlement, Saigon,

(Indo-China) and Siam, and the products of five candy makers, as well as canned fruits, meats and lobsters have been received. Canadian jams, biscuits, and flour, are too high priced. Shipments of canned chum to the Dutch East Indies have been average, and Siam has received good quantities.

‘The business opened up in Canadian gas and water pipes in the Straits Settlements has been maintained. Hand-tool prices are too high, but a few forges have been sent. The shoe-tack trade is good, but Canadian prices are coming out of line. Sales of a few lawn mowers have been made, and the scale trade has been over the usual quantity. Now is a good time for Canadian firms to enter seriously into the local wire trade. A small amount of machinery, such as portable gasoline saws and pumping outfits has been sold, and Canadian branch companies in Sumatra hold the largest share of the automobile business. In motor car parts and accessories there has been a substantial all-round increase to the Straits, the Dutch East Indies and Siam. Trade in canvas rubber-soled shoes is being maintained and there should be an increase for the year in the sales of rubber belting.

‘Patent leather has been introduced in Singapore and Siam. Canadian prices are not competitive in electrical goods, asbestos goods, and photographic films. Initial orders have been received for gramaphone records, automobile paints, pipe cleaners and typewriter pads. In Bangkok, interest in the import of bottles has been revived. The trade in wardrobe trunks, created three years ago, continues in Singapore and should be extended to Java. A sample shipment of leather shoes was brought in, and the Commissioner believes that, with adequate samples and c.i.f. prices, business might be done with Java.

‘Singapore is Canada’s largest market for wood shooks, which are used for crating petrol cans, but Japanese prices have undercut Canadian, with the result that for the first six months of the present fiscal year, exports from the Dominion were nil to the Straits, as against $202,448 for the same period last year.'' The new markets invaded with bond paper were Penang and Bangkok.’

This will give an idea of the cut-throat rivalry among nations in the fight for foreign trade, and shows the importance of having Canadians on the ground to watch every trend, not only in this territory but in every country where there is the slightest possibility of profit for the Canadian exporter.

New Zealand, South Africa, Australia, Mexico, Italy, Brazil and the Argentine Republic, all lucrative fields for trade, are covered, each by its Canadian foreign trade commissioner and his staff, and the British West Indies, where Canadians have so many friends, has two. One man in Port of Spain, Trinidad, handles Barbados, Windward and Leeward Islands, (names of romance in the Spanish Main) British Guiana, Porto Rico and Venezuela, while an office at Kingston, Jamaica, covers that island, Cuba, Hayti, San Domingo, Central American states, Colombia, Bermuda and the Bahamas. India and Ceylon,' because of the prosperity of the tea business, the advances in jute prices, the development in use of motor vehicles the strength of the rupee sterling exchange, and a notable absence of monetary stringency, have become susceptible to profitable Canadian export ventures. A Canadian patent medicine manufacturer who was induced to invade this field at the instance of the trade commissioner in Calcutta, reported that the response to bis initial venture

was so gratifying that he has since established agents in Madras, Bombay and Calcutta,

Traffics and Discoveries

npHE Canadian foreign trade commissioners fill many roles, but all to one end— the greater development of the Dominion’s export trade. Foreign governments look upon the trade commissioners as government representatives of the Canadian people, and nowhere was this brought to the front so forcibly as in the recent trade agreement consummated by Canada and Spain. The entire negotiations were handled by W. McL. Clarke, who is now director of the Commercial Intelligence Service, but who then was trade. commissioner in Italy. He spent some time in Spain, went into all phases of the question with the Spanish authorities, made his terms and a commercial agreement was signed by the British Ambassador on behalf of Canada. This is the first time a treaty has ever been put through by a Dominion trade commissioner and its effect was immediate. Canadian exports to Spain increased in eleven months from $178,096 to $832,547.

On another occasion a Canadian trade commissioner in Greece was instrumental in having lifted a long-standing embargo on Canadian flour, and our Canadian mills, operating on information furnished them by the Depart-

ment, immediately entered the market and captured large orders in the face of bitter opposition.

In Italy, in 1923, the import of Canadian salmon amounted to about $30,000 and even this moderate amount was brought in through the recommendation of the Canadian trade commissioner there, who saw that there was a chance for the Canadian product. Up to then the market practically had been monopolized by United States and Alaskan salmon. Canadians went after the trade in earnest. The Italian people soon learned to recognize, and ask for, the far superior grades supplied at competitive prices by the Dominion. Brands other than Canadian lost ground, and in 1925 the Dominion shipped to Italy $687,000 worth of salmon

A particular Canadian commodity sold in one Trade Commissioner’s area in the United Kingdom, in 1924, totaled $18,000. In 1925 this business had been increased in one district alone to $300,000, all of it written directly through the office of the trade commissioner. In another trade commissioner’s office in the United Kingdom, $420,000 worth of new business was directed to Canada last year, and the total of initial business of yet another trade commissioner’s office in the same country was $610.00. All of this trade formerly went to foreign countries.

A Canadian trade commissioner was on the job immediately after the terrible earthquake and fire in Japan two years ago. He gave what assistance he could to the stricken people, and incidentally linked up trade threads which drew to the work of reconstruction millions of dollars’worth of Canadian lumber. This Trade Commissioner is now the Inspector of the service.

Results are relative, of course, and what, to one business man, may be profits hardly worth bothering about because of the magnitude of his operations, to another may mean his economic salvation. A smoking car conversation was repeated to the writer not long ago. The participants were an executive of an immense machinery corporation, and the proprietor of an apple cider press in the Maritimes. The apple man had remarked that, through the efforts of a Canadian trade commissioner abroad, he had been induced to enter the export field, and there had booked orders to the extent of eight or ten thousand dollars.

“That’s very nice, of course,” the machinery man commented, “but you’d hardly call it a great economic victory, would you? Why, we often make that much in net profit on a fair sized contract, right here in Canada.” “In my case,” the apple man returned quietly, “it meant one hundred per cent, success. Had it not been for those foreign orders, which utilized my surplus and could have taken more, I would have been closed down, for there wasn’t sufficient domestic business to make it pay. We are a small community in the country, and now work full time, sell all we can produce, and are a little group of contented Canadian homes in consequence. What means nothing to you, meant an extraordinarily big thing to each of my workers’ families. Happiness isn’t a bad thing to include with your net yearly profits.”

Many small firms cannot afford to maintain their own representatives abroad, and the trade commissioner’s work to them is invaluable. And even with big corporations often it is felt that the commissioner’s highly specialized knowledge of the territory he is in is of¿far greater value than the efforts of those who make periodic

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trips to the territory in which the firm sells.

The initial organization of the service took place in 1892, when the latent possibilities of foreign trade for Cañada were brought to partial fruition. Contact with the West Indies was becoming more closely knit, and a number of Canadian firms were doing business there. But with the lack of adequate representatives there were serious losses. Manufacturers, unfamiliar with the territory, in some cases appointed agents who had interests to further which were of benefit to themselves rather than to their principals, and instances of double dealing were not unknown. Then an order-in council was j: assed which authorized the appointment •of six part-time representatives in the West Indies, and they at once justified the move, in the increased volumeof Canadian exports to the Islands. Two years later, the first full time official was sent to Australia—the forerunner of the present system.

With F. C. T. O’Hara, the present Deputy Minister of the Department of Trade and Commerce, as Superintendent of Commercial agencies, the Commercial Intelligence Service of Canada grew apace.

In 1912, á special arrangement was made with the Imperial Secretary of State for the Colonies whereby the services of British commercial diplomatic officials as well as those of the British consuls, were available for Canadian exporters, in countries where a Canadian trade commissioner was not established.

To-day, Canadian structural steel may be found spanning great chasms in the Andes; Canadian porcelain insulators are part of the electrical equipment of obscure firms in the settlements of the Australian back-blocks; Canadian lumber, bought for construction purposes, looks out upon the quaint, many-colored populace of ■Japan; Canadian steel rails carry civilization through the forests of equatorial Africa, where crocodiles dwell in their hidden pools; Italian bambinos feast upon salmon that once breasted the current of a British Columbia river; the swarming industrial towns of the United Kingdom welcome Canadian wheat; camel caravans guarded by warlike riders of the Nubian desert, pad silently along on their journey from Ubangi-Shari to the Red Sea, beside a railway upheld by creosoted ties that once were trees upon a Western Canadian mountain side. The coolies of Shanghai, Hongkong and the interior of China, far beyond the Great Wall, are nourished by flour that grew upon our prairies; Canadian agricultural implements garner the crops of Bolshevik Russia; motor cars from Ontario speed past the Maori settlement at Wanganui, in far-off New Zealand; over all the wide world, in wellknown cities, in lonely outposts far from

the ragged edge of civilization’s last frontier, on the surf-ringed islands of the South Pacific as well as in the seething bustle of great trade centers, Canadian products reach out, find root, and settle, propagate and grow, fostered and guarded by the skilful hands of our foreign trade commissioners.

What is a Trade Commissioner?

'“THE importance of this work as a profession for young Canadians was not long in establishing itself, together with the necessity for obtaining men of the highest intellectual type, and of sound moral character. The trade commissioner’s job is peculiar in that he always is in the public eye in the foreign country to which he is assigned. His conduct, personal and professional, is regarded as a reflection of the land he represents, and whatever he does is news, and will be interpreted by the inhabitants according to their, perhaps, peculiar lights. Therefore, he must be a man of tact and sound common sense, in addition to his economic qualifications. Definite cognizance of this was effected in 1914, when regulations were laid down that all future trade commissioners were to be graduates of Canadian universities, and could be appointed only through competitive civil service examinations.

And so it stands to-day. The examination is a stiff one, and the successful applicant thoroughly earns his post. After passing, the candidate becomes a cadet and commences training in Canada, under the Director of the Commercial Intelligence Service, with the title of Junior Trade Commissioner. He retains this rank during one year’s probation, after which he is made Assistant Trade Commissioner, and is attached to one of the foreign posts. In due course he is promoted Trade Commissioner and has charge of an office of his own.

The work of the trade commissioner abroad, is varied, but simple and direct in its application. The fact that he may be seen having a leisurely hour on the estancia of some South American beef baron, or discussing nothing in particular with a brush-haired Prussian in the lounge of the Adlon in Berlin, does not mean that he is not on the job. When he seems least engaged in the concerns of trade and business may be the time when he is contributing his most important share to the 26,000 annual inquiries from abroad for Canadian goods.

In essence, his job is to inform Canadian manufacturers of a present or prospective demand for their goods abroad, with particulars of foreign and local competition. He finds markets and exploits them —and hard experience has taught him the best methods of so doing. He points out the best sales methods, and obtains credit

reports on prospective customers—although in this case no responsibility is assumed. Specifications of articles in particular demand are sent to Ottawa, for dissemination to those Canadian exporters likely to be interested, and he submits monthly reports, or short summaries of business and economic conditions, generally, in his field.

If you are a Canadian manufacturer desirous of enlarging your overseas trade, the Canadian trade commissioner in any country—or all of them, if so desired, will without charge, advise you as to possibilities, and, if they are promising, will recommend responsible agents, buyers, or distributors. The trade commissioner, in addition, will introduce your representatives to influential men or associates who may buy Canadian goods. Confidential information is secured, on occasion, and when requested, as to the activities of your representatives.

It is possible, too, to get a report from the trade commissioner, on prospective customers abroad. Many shady firms, particularly in the Far East, make a business of getting in touch with North American manufacturers who have limited experience in the export field, and, by means of impressive letterheads and forged references, secure consignments of merchandise which are whisked off into the interior as soon as they arrive. When collection times comes around, the consignee has vanished—to appear elsewhere under another trade name and repeat the game. The writer was told in Hongkong of one Canadian firm which had been rooked three times by the same crowd, operating from Canton, Tsing-tao, and Tientsin.

That a trade commissioner must be a keen business man goes without saying. One trade commissioner was responsible for placing an order amounting to $84,875 for chemicals with a Canadian firm, and in acknowledgement of that service the firm wrote as follows:

‘This order reached us when we were urgently in need of business, and we are greatly indebted to the trade commissioner for the manner in which the transaction was handled. You will be interested to know that this trade inquiry was in the hands of at least three United States manufacturers and as many more brokers. In the face of this, we were fortunate to secure the business, and recog-

nize the fact that we have the trade commissioner alone to thank.’

A trade commissioner’s salary is from $3,000 to $5,760 a year, with living allowance of $800 to $3.000, depending upon where he is stationed. He is recalled to Canada every three pr four years. This recall is in the nature of a furlough which lasts three to four months, but in this time he has little opportunity for leisure. He travels the Dominion from coast to coast, meeting and advising manufacturers, addressing business men’s clubs and refamiliarizing himself with conditions, so that when he returns to his territory abroad he will be in a position to go after new business, and open additional channels of trade. If he is stationed in a tropical or semi-tropical country, his leave comes with slightly more frequency.

The Commercial^Intelligence branch of the Department of Trade and Commerce is for the use of every bona fide Canadian exporter or firm of exporters, free of charge. The foreign trade commissioners secure lists of names and addresses of foreign importers, with particulars, and samples if possible, of the commodities wanted, and these are sent to Ottawa. Ottawa maintains a record of Canadian exporters and their products, and suitable inquiries are sent out to them, and, also, are published in the Commercial Intelligence Journal, a weekly government paper, printed in English and French. Each inquiry from abroad is given a number in the Journal so that the information cannot be secured by any except Canadian firms.

The citizens of the United States are proud of the record of their trade commissioners abroad in building up their export business. We, in Canada, cursed by a quite unnecessary inferiority complex, are prone to sit back and wonder; but a wholesome fact like the following should prove a powerful corrective.

The United States has a population, roughly of 110,000,000 people. The population of Canada is hardly more than that of the city of London. The United States organization which controls foreign trade representatives is fifty times as large as that of Canada, and yet, thanks to the Canadian Commercial Intelligence, the export trade of the United States is •only four and one half times that of the Dominion of Canada. That comparison is worth thinking over.