16
Dutch Competition. The strongest competition encountered in Java, both in goods and also in general mercantile business, is that of Dutch firms. In 1912 the imports from Holland amounted to 11,000,000l. as compared with 5,000,000l. from the United Kingdom, and the figures for the export trade were 13,000,000%, and 2,000,000% respectively. It should be remembered, however, that a considerable proportion of British imports and exports pass through Singapore. The figures for the British Empire trade with the Dutch islands in 1912 were as follows:--
Imports
17
are able to hold their own in Java, and as the development of the Outer Possessions proceeds, the market is constantly widening Another favourable circumstance is that as the native's standard of living rises, his demand for coloured and fancy goods tends to increase, and it is precisely in these articles that British manufacturers excel.
The value of the Netherlands Indies as a market for British cotton piece goods will be realised from the following figures, abstracted from the " Manchester Chamber of Commerce Record," which shows the values of the actual shipments to the territory during the last three pre-war years 1911-1913. These figures are greater than the ones previously given, as they include exports to all the islands—
605
Export
£
£
United Kingdom -
Hong Kong
5,300,000 600,000
2,300,000
1,800,000
British India
3,100,000
4,700,000
Straits Settlements
6,200,000
10,600,000
Australia
700,000
1,100,000
Total -
15,900,000
20,500,000
Total trade from all sources
33,339,000
49,553,000
1911.
1912.
1913.
Picce Goods—
Grey, unbleached
f 470,498
£ 522,096
£ 422,947
White, bleached
913,275
762,662
1.056,456
Printed
■
1,070,432
1,064.628
1,284,052
Dyed in the piece Dyed in the yard
635,205 217,274
695,890
866,425
202,771
384,579
Total
3,306,684
3,248,047
4,014,459
N.B. The trade with Hong Kong represents mainly Chinese articles on the import side, and raw sugar for the British Hong Kong refineries as regards exports. The Straits trade is a transit one, but some 60 per cent, of the imports are probably of United Kingdom origin.
The statistics of imports from and exports to the Netherlands cannot be said to represent Dutch trade alone. As Rotterdami is the nearest shipping point for German and Belgian goods and Germany's inlet for Java produce, much of the trade which appears as Dutch is in reality German.
The most serious competition which British manufacturers encounter from Holland is in the piece goods trade.
The following table gives the values and percentages of the principal textile articles imported direct to Java during the year 1912-
Bleached-
Value.
Percentage.
46
5!
64
32
$84
Cotton Goods :-
£
Unbleached-
Netherlands
320,490
United Kingdoni
383,397
Other Countries
4,682
Netherlanda
1,385,006
United Kingdom
710.203
Other Countries
97,825
Coloured (dyed, printed or woven)—
Netherlands
650,884
31
United Kingdom
1,289,080
61
Italy
178,794
*
21,083
19
67
14
Farns
Netherlands
United Kingdom
Other Countries
79,167 16,667
262
It will be seen that the competition is particularly keen in bleached goods, but it should be pointed out that a large proportion of the white goods imported from Holland were woven in Lancashire, and sent to Holland in order to obtain the favourite Dutch bleach and finish. The Dutch manufacturers have long made a study of the Java market, and almost invariably consign their goods to their distributors in Java for their own account and risk, the Dutch agent on the spot merely selling on a commission basis. The goods therefore are shipped without being hypothecated to a bank, and the agent is authorised to give credit. The Dutch almost invariably sell their gools to the Chinese dealer on 3-6 months credit, whereas British firms insist on nominal cash (practically 30 days). Nothwithstanding this fact, British textiles
German Competition.-German competition is particularly keen throughout the archipelago, not only in German goods but also in the distribution of British goods. The German houses have taken full advantage of the comparative lack of British enterprise in the islands to consolidate their position. During the years 1902-1912 the direct imports from Germany increased from 260,0001. to 1,700,000l., and the exports to Germany from 200,0001. to 1,200,0007, These figures by no means represent the full measure of German activity, inasmuch as, with the exception of piece goods, a great proportion of the shipments to and from Holland are for German
account.
1. The German bouses in Java, which largely outnumber the British firms, are mostly branches of merchants established in Germany. The home firms, largely by reason of facilities received from their local banks, pay cash against delivery of shipping documents for manufactured goods (whether of British or domestic origin). These goods are sent out to the branches of the firm in the Dutch Indies, free from any draft or financial encumbrance, and they are then sold to Chinese or Arab dealers on long credit terms. In exchange for the goods, the dealers tender promissory notes payable at 3, 4, 6, or even 9 months. These promissory notes are discounted by the Dutch banks in Java, and the proceeds are remitted to Germany by telegraphic transfer, usually through the same banks, inasmuch as the Dutch bankers usually bind their clients to confine their exchange business to them as a quid pro quo for the discounting facilities. These facilities enable the German houses to purchase more goods, and so turn over their capital at a rapid rate. The British merchants are much more conservative in their methods of business, and usually insist upon cash in 30 days. In this they are largely governed by the policy of the agencies of the British banks in Java, which are not allowed to discount dealer's promissory notes, and consequently lose the finance of much of the British and other goods imported into the island. In the long run this is undoubtedly the soundest system, as it enables the British houses to give discounts and only to sell to dealers of sound financial standing who are prepared to tender cash in return for a discount. The risks of the credit business are increased by the custom prevailing in Java that when a dealer becomes involved in financial difficulties, the Dutch banks immediately demand payment of his promissory notes, whether the same are due or not. In such cases the German houses are assisted, if necessary, by further advances from their home banks in order to redeem the dishonoured pro-notes. German banks have not as yet opened branches in Java, as the facilities received from the Netherlands Trading Society or other local banking institutions are so liberal.
It has frequently occurred that, when an Asiatic dealer has been in financial difficulties, one of the German merchants, who happened to be a creditor, would, for a consideration, use his influence with the other creditors to induce them to agree to a compromise. Should, for example, the German merchant be a creditor for 1,000, and a compromise be effected so that the dealer pays 50 per cent. of the claims upon him, the native would probably be willing to pay the sum of 500l. to the German in
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