38
The Barmen Export Gesellschaft, of Barmen, with branches in Cuba aud the Dutch Indies, contines its activities in Bangkok to the import of German manufactured articles, and also operates a retail store at Samyek.
Deutsch-Siamesische Handels Gesellschaft. This is a comparatively unimportant company conducting a small miscellaneous trade, but nevertheless holding the agency
of....
The Liverpool and London and Globe Insurance Company.
In addition the Germans controlled several of the local dispensaries.
Reasons for the Success of German Competition. Whereas the imports of British and German goods have steadily increased from 1997 to 1913, the ratio is practically the same in each year, so that so far as the actual goods shipped from the United Kingdom compared with those shipped from Germany are concerned British manu- factures are holding their own. The British merchant in Bangkok, however, has not participated during the past ten years in the distribution of the large increase in imports (amounting to 2,900,000.) to anything like the same extent as bis German competitor, and this fact is attributable to three main causes :-
(a) The extensive credit granted by the German merchants to Chinese and native
dealers.
(b) The looser methods of enforcing contracts in vogue with the German firms,
and which have operated in favour of the Chinese and native dealers. (c) The control by German steamship companies of the shipping service between
Singapore and Bangkok.
With regard to the first of these causes, it is interesting to note that some years ago an association was formed by the European importing houses in Bangkok with the object of arriving at a common agreement with regard to the length of credit to be allowed, and it was unanimously resolved to restrict all credits to Chinese and native dealers to a period not exceeding three months. The German firms, while making out their promissory notes for payment within three months, rarely collected them within four months, and granted extensions to six months and even longer without interest being added. It was found that while all the rules of the Siam Importers' Association were being adhered to by the British merchants, the Germans observed them only on paper, and constantly broke then in practice in order to secure an advantage over their competitors. The association was therefore dissolved,
With regard to the second cause, which practically amplifies the first, the regulations of the Siam Importers' Association also covered such questions as the limit of time within which goods must be cleared by Chinese and native purchasers from the importers godowns. The systematic breach of these regulations by the German houses conclusively demonstrated the hopelessness of British and German firms coming into line in actual practice. Speaking generally, the Germans resorted to ways and means of doing business which the average British merchant would not stoop to adopt, but which they found afforded them a large turnover with an increased risk.
The above-mentioned reasons for German success are common to German enter- prise throughout the Far East. The control of the local shipping service, however, is peculiar to Šiam
As the Norddeutscher Lloyd for many years prior to the war con- trolled practically the whole of the transport between Singapore and Bangkok of goods which had been transhipped at the former port, the shipping company's agents in Bangkok, who were themselves a trading firm, obtained a valuable insight into the trading activities of their competitors. All manifests passed through their hands, and they secured all those details in respect to the shipments which are such a valuable asset to a competing merchant. There is no doubt, whatever, that they made the fullest use of this knowledge and also utilised their position in order to coerce business into their hands. This has been particularly noticeable in the case of the import of gunny bags from Calcutta, in piece goods and other imports, and in securing fire and marine insurance agencies.
The distribution by German houses of an increasing proportion of British manu- factured goods notably cotton textiles is due to the home manufacturers requiring a broader outlet for their goods than the local British houses could offer owing to their perfectly legitimate wish to conduct the business on safe financial lines, and having bad bitter experience of the unsatisfactory method of granting long credits to dealers. The German merchants were willing to take the risks, and consequently were able to send home valuable ordera to Manchester and elsewhere. During the war, British
39
merchants have undoubtedly secured an enhanced trade in British textiles and machinery, but it is extremely probable that, unless the German firios are so crippled financially after the war that they cannot afford to give credit, they will tend to regain their position.
A further advantage which has accrued to the German houses from their possession of a large turnover is the number of sound British agencies held by them. These were mainly for imports, insurance, and shipping, and a number of them have already been specified in describing the various firms, I know of no case where a local British merchant has similarly represented German interests. It is desirable that British principals should be urged to place their representation in British hands. Since the war, two British insurance companies have transferred their agencies from a German to a neutral firm; but this is no satisfaction from the point of view of the local British merchant, although it should be noted that it is a distinct advantage to a British insurance company to secure the premium of a large Continental shipper, which can frequently be obtained only by appointing him as agent.
There is no proof obtainable of any direct subsidy being granted to German merchants by their Government. The possession of the virtual shipping monopoly with Singapore and Hong Kong, which can only have been arranged by State subsidies to the Norddeutscher Lloyd, was undoubtedly of great benefit. Furthermore, it is established that the German Minister and consular officials at Bangkok were willing to take up, and actively to prosecute on behalf of their nationals, cases against Chinese and native dealers in which the German claims and rights were of the most shallow description. While the British Legation confined its attentions to bond fide legitimate cases, the German officials were most aggressive in pushing their claims on the Siamese Government, as has already been remarked in the case of the German Director of Railways. There appears to have been a closer connection between the German officials and the mercantile community than existed with other nationalities. As an instance of this, I am informed by the Bangkok agent of the Hong Kong and Shanghai Bank that for some years prior to the war he was constantly requested by the German Consulate for an opinion as to the standing of Chinese and native firms in Siam. No doubt such information, together with similar commercial intelligence gleaned from other sources, was at the disposal of German firms both locally and in Germany.
Danish Competition.--Perhaps the most serious competitor British exporters in Bangkok have had to face in the past is the powerful and enterprising East Asiatic Co., Ltd., of Copenhagen. This firm describe themselves as steam and motorship owners, millers of teak and other woods, oil millers, cement and super-phosphate manufacturers, rubber and cocoanut estate owners, exporters and importers. The firm are keen competitors with British merchants in the produce trade in the Straits Settlements, China and Vladivostok, the possession of their own oilseed crushing plants in Denmark together with the maintenance of their own line of steamers giving them a great advantage. Their activities in Bangkok are mainly concerned with shipping, timber and imports. A regular direct line of steaners, of some 4,500 tons each, is maintained with Europe. A bi-weekly service of coasting steamers is run under the auspices of the Siam Steam Navigation Co. between Bangkok and Singapore via the Gulf coast ports. They operate most modern sawmills in Bangkok and at Bandon on the Malay coast, and conduct a very large import and export trade, including the successful management of the Oriental Stores a retail branch on the departmental stores' plan.
Japanese Competition. The import of Japanese goods before the war was not great, amounting to only 161,000, in 1913-14, but it should be noted that it had quintupled in ten years. Since the outbreak of war, however, active steps are being taken by the Japanese to strengthen their hold on the market. Japan, particularly, is laying herself out to secure the trade formerly held by Germany and Austria in cheap sundry articles, such as enamel ware, hosiery, perfumery, cheap textiles, &c., &c. This competition is not likely to be felt by British interests, unless Japan is able to introduce her cotton goods on to the market on a greater scale. The imports of cottou goods from Japan during the last three pre-war years were as follows:--
1911-12 1912-13 1913-14
22,8602.
52,5902
48,6057.
In this total, however, are included singlets and other knitted goods.
616