1899.10.00.De Eduardo Risso and C°.Buenos Aires.Original
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Buenos Aires, October 1899
We are sorry to inform you that our business does not permit us to accept the kind invitation of your firm to assist of the meeting which is to take place in London to discuss the agreement on the coal trade.
But, what we could say personally, we express by writing in this letter, trying you communicable it to your firm as well as so Messrs Wilson Sons & C° Ltd and Worms & C°.
From the first agreement of the 28th [September] 1898 so the one actually in force, the inconveniences have been many which practice has revealed, due to the fact that, while each firm was taking great [cash] [sent] so openly infringe the agreement, yet seeking every means not only to preserve its own clientele, but so increase it.
The successive modifications of the agreement had non other object than so correct the above inconveniences, never the less it has never been possible to arrive at a tolerable state of affaires, especially with regard to the resellers.
The resellers, for the most past at ex [Brukers'] or ex-employees of Barracas have been originally set up by Carbonera C° which used to make contracts with them at the beginning of each year for a monthly quantity of coal to be received during the year, ex-deposit on cards as they might require it, and as during the year there was always a strong rise in freights their business prospected. [Since] during the greater part of the year the resellers had the coal cheaper than it could be imported. It is thus they could compete, only haring to take care not so much the clientele of the Carbonera C°, so as not to disgust the said Company.
It is for this reason that we have always opposed making contracts with resellers and when we obtain this we were hoping the competitive would have ceased. Facts have dispelled our hope. For a long time we could not understand how it could continue until came the bankrupt of Manuel Cara & C°, one of the least important resellers, which gave us the opportunity to inspect their books. They were bring sold coal much below the prices agreed! There is no doubt that the same thing was being done with other resellers, and more so in accordance with the importance of resellers.
You know by practice the extreme difficulty of obtaining proofs of the prices at which sales are made. Since he who makes sales outside the agreement warms the buyer that the price is a special one, for him alone, and if it should become known to others of the arrangement, they would complain and consequently no further concessions could be made to him; thus he that was lost the client and seeks to find out where are foes, is badly received and cannot obtain proofs.
In the meanwhile have arisen the sales of cargoes cif to resellers on credit must probably became they have not had the means to pay cash. The situation became worse as they had to think of the due dates, and were forced to sale.
On the other hand the facility of obtaining credit induced these resellers to go to such a point that one of them went so far as to oppose us for the Obras de Solubrida contract, one of the most important businesses of the market, and certainly beyond the reach of the means of this gentleman. To this [...] must add that in our opinion Mr. J. F. Roma knew the price that we (the parties to the agreement) wish to tender at, as we as the [...] informed again, as well as MM. Worms and Wilson.
Referring to the resellers, it seems to us that if the cif sales had only been made strictly for cash, no reseller could have overloaded himself with merchandise, and we should not have had to lament the difficulties which beset our [league].
For our part, we cannot understand and perhaps we never shall understand the necessity of granting credit to the resellers when the same houses that sell to them, make retail sales as low as 500 kilos. If the resellers had been allowed to work within their means, viz, within the [scopes] of what they could pay cash for, the inconveniences would not have been so grave, but if this facilities given to the resellers are contrary do our interests, they are on the other hand highly profitable to our brokers. Since the resellers pay to him 10ù commission whereas the consumer pays nothing, and provided the reseller does not interfere with the said brokers clientele, and only with that of the others firms, the latter has even interest to favor him (the reseller).
How to defend ourselves from the competition that we ourselves of the league have created, we are obliged to sell at base cost price, and even thus (are now speak for ourselves personally), we have lost the greater part of our clientele, which means that others are selling still cheaper.
It is real that other competitions have also entered the market, as Walsh Foress & C° and Geiger du Bary & C°, the latter with cargoes bought from Messrs. Wilson Sons & C° Ltd. We do not believe that the houses mentioned intend to seriously establish themselves in the coal business. Most probably, they have believed that the existing league would permit of splendid profits being made, and they have wished to make a trial. When they have realized the expenses that the business entails, and the difficulties of making sales on shore, it is our opinion they will not continue.
In this situation, what had best be done? Continuing with the present regime, it will be very difficult that we succeed to work profitably, and, we could not accept the [usi-possidesis] with the clientele, since we have lost the greater part of ours.
A division of the whole clientele between Messrs Corys, Wilsons and Worms leaving us an equitable share would be acceptable if it were not for the question of the resellers. In effect the resellers will take an other care than that of leaving alone the clientele of the firm that gives them facilities, and with duty sell their coal amongst the clientele of the other firms, thus provoking the unavoidable reaction which will bring back things to where they are now, and so much the more rapidly, the [most] they may be supplied with credit.
The best would be to seek a form that would interest equally all the firms composing the league, and not to set up competitions.
Having thus expressed our ideas, nothing remains for us to add but that we are disposed to accept whatever equitable agreement can be combined in London to improve the business.
We take the opportunity to salute you attentively...
Edouardo Rossi & C°