When American capitalists tried to establish a line of ships from New York to Brazil some years ago, the venture failed. One reason for this was the higher cost of American ships and crews. Another was extravagance, especially in providing terminal facilities at Rio de Janeiro. Old merchants in Brazil still smile when they talk of what the American line did in that way. But the most important reason for failure was the advantage enjoyed by British rivals in the triangular line route followed by their steamers. In the currents of commerce on the Atlantic the British manufacturer ships large quantities of goods to South America, the South American producer ships large quantities of coffee to the United States, and the American producer ships large quantities of food-stuffs to Great Britain. The British ships had profitable cargoes from home to Brazil. At Rio de Janeiro and Santos they cut the rates far below cost, and then on arrival in the United States they secured cargoes for home at a profitable rate. The profits on the two trips enabled them to endure the cut on the middle passage. But because American manufacturers had little to ship to Brazil the American ship lost money on both passages. Every business man understands the advantages of one who is well-established in any trade, over one who is just beginning, but one method by which established lines of ships hold their trade must have mention. The merchant who sends all his goods by the established line receives a rebate of 10 per cent on the amount of his freight bill, the rebate being calculated once in six months, say, and the payment being made six months later. If the merchant ships an ounce of stuff by a rival line he loses all the rebate, and he may be punished in addition, if the rival is a new line. The merchant, having rivals in trade, feels the loss of the rebate seriously; his rivals by loyalty to the established line continue to enjoy the rebate even when rates are cut below those of the new line, and below cost. In such trades as that between New York and Rio de Janeiro, where a number of lines are plying, the established lines unite their entire resources to kill off a new line trying to enter the trade.