« PredošláPokračovať »
COMMERCE AND FINANCE
A WEEKLY ARTICLE BY THEODORE H. PRICE
THE COMMERCIAL OPPORTUNITIES OF THE UNITED STATES. "THE GREAT ILLUSION" AND A WORD OF CAUTION TO THE OPTIMISTS
R. ASQUITH'S great speech in the Guildhall, in London, in which he described England's share and duty in the present war as a moral and spiritual one, sounded a note of heroic altruism that has evoked a sympathetic echo in the United States, and, while it reflects the egoism that has always enabled England to persuade herself that the cause she espoused was just, it also marks a very distinct advance in the morality of her ideals of national and international good faith.
Hardly more than fifty years ago James Russell Lowell made Hosea Biglow say:
"I tell ye England's law on sea and land
Has ollers ben, 'I've gut the heaviest hand.'
These lines were written in the fear that motives of commercial self-interest would lead England to espouse the cause of slavery and the Confederacy. Fortunately, the spirit of unselfishness and humanitarianism triumphed, and since that time the influence of both English and American democracy has generally been exerted in behalf of morality and the righteousness which exalteth a nation. Germany's violation of the " scrap of paper" which guaranteed Belgian neutrality was England's casus belli. She refused to remain an unprotesting party to a broken contract, and the willingness of the English people to fight rather than default must immensely increase the confidence with which every English promise will hereafter be regarded throughout the world. The same statement might be made with regard to. President Wilson's insistence upon respect for the Panama tolls provision of the HayPauncefote Treaty, an insistence which in the light of subsequent events seems to have been the height of political wisdom.
Both matters are, however, but fresh demonstrations of the truism that in politics, as in business, "honesty is the best policy," and that the Machiavellian theory that princes
and nations may repudiate treaties at will cannot any longer be applied by a government that would retain the world's respect.
It is because England's action has had the effect of raising the great European war to the level of a struggle for right as opposed to might, and not for the "might made right" which was nationalized by Nietzsche, that the defeat of Germany is a foregone conclusion.
It is for the same reason that as the white heat of battle clarifies the issue a more confident optimism with regard to the outcome is perceptible, despite the varying fortunes of the preliminary campaign.
It is because the German Emperor has himself come to feel the moral disadvantage of his position that he is making such strenuous efforts to organize a propaganda that will win for him the sympathy of the neutral nations of the world, and it is because of his signal failure in this purpose that his military triumphs are destined to be so short-lived and his ultimate defeat is assured.
Even Napoleon could not long defy the power of public opinion, and since his time' the moral consciousness of the world at large has been so quickened, and when in agreement has become so invincible, that even the most powerful men or nations must yield before it.
The end of the war is therefore in sight of those who believe in the triumph of the right; and while an admission of defeat by the Powers that are even now morally disarmed may be delayed, we can commence with confidence to reckon upon and provide for the return of peace.
For those of us who are engaged in business the outstanding lesson of the war is that the best preparation we can make for the opportunities that await us is to keep the contracts to which we are committed, and to avoid any new undertakings that we cannot perform.
In a comparatively recent address Nicholas Murray Butler said that civilization was "the triumph of faith over fear "-the faith that
contracts would be kept and law respected, over the fear that force would compel the weaker to surrender their rights to the stronger. Those of us who live in England or America believe that the present war is being fought for the preservation of the rights guaranteed to nations by the contracts which are called treaties, and that German disregard of these treaties has already opened to the United States opportunities for the expansion of our foreign trade previously undreamed of.
We must realize, however, that confidence in our promises is the first essential of success in trade with distant and alien peoples. They must learn to trust us, and we must learn to trust them. It is said that the internal trade of the United States exceeds in the aggregate that of all the rest of the world taken together. No one knows whether this
is true, but the purchasing power of our people and the traffic of our railways give color to the statement. Ninety per cent of this enormous commerce is, however, conducted upon a basis that presupposes a very limited application of the credit principle.
Goods are sold for cash, or, where credit is allowed, it is for short periods, and is granted upon the strength of statements by the debtors with regard to their solvency, which, if false, are criminal. Drafts are drawn with documents attached and loans are made against the hypothecation of property that may be realized upon in case of default. It is true that our banks invest largely in single-named paper, but their purchases of such obligations are based more upon balance-sheets than upon character, and the practice of bankruptcy law has become a highly specialized and important department of the legal profession.
Hitherto such export trade as we have been able to do has been financed largely through the medium of credits granted by London bankers, and it has not been practicable to arrange these credits in the United States because the cryptic letters C. O. D. have expressed the spirit in which most of our commerce has been conducted.
This lack of confidence has been reciprocal, and the nations of South America and the Orient have preferred to trade where they were trusted.
An elderly and distinguished lawyer said to me the other day that he believed that the abolition of all laws for the collection of debts would greatly improve the security of credit; and those who contemplate engag
ing in the export trade may as well realize at once that it is a field in which recourse to the collection of debt by legal process is not practicable.
Asia, Africa, and South America do not possess and cannot obtain the gold with which to pay us for the things we may be able to sell them. We must trust them until they can sell to us or some one else the commodities which provide their only means of payment; and if we require an English guarantee of their responsibility convertible into a transferable credit at the London Clearing-House, the chances are that their purchases will be made where their credit is obtained.
Then, too, these foreign buyers must come to feel renewed faith in the American contracts that profess to guarantee the quality, packing, and delivery of our goods.
One reason why we have not succeeded hitherto in retaining any substantial hold upon the export demand is that it has been chiefly regarded as a spillway for our surplus production when business was dull at home. The goods shipped have therefore been irregular in quality and put up in a way that did not appeal to foreign taste or meet foreign requirements.
In a general way, our theory has been that if these un-American peoples would adopt American ways we could supply them, but that otherwise it was not worth while.
We insisted that they pay cash, or buy on short time and be willing to take the same class of goods that were used in the United States, packed just as we pack them for shipment by boat and railway instead of carriage by stage or pack-mules.
Such commercial ineptitude has naturally made against our success as exporters, and though our merchandise shipments to foreign countries are valued at nearly $2,500,000,000 a year, they go chiefly to Europe, are mostly unmanufactured, and are nearly all financed through the use of English credit.
Even if we ship cotton to Japan or automobiles to Buenos Aires, we draw upon London for the proceeds, and, conversely, American purchases of Brazilian coffee or East Indian jute are paid for by remittances to London.
The reason for this is that the people of these far-off countries can procure in England the credit that is denied to them in the United States, and naturally they prefer to buy where they are trusted.
COMMERCE AND FINANCE
That the English Government appreciates the importance of this factor in enabling Great Britain to hold its trade is most convincingly shown by its recent action in guaranteeing to the Bank of England the collection of moneys advanced against acceptances made prior to August 4. Thus the Government says, in effect, to those foreigners who are indebted to the English bankers: "We believe you will pay, although your ability to do so may be temporarily impaired by the war, and we will guarantee your obligations at the Bank of England when accepted by an English banker."
Many of the bills so guaranteed are drawn by citizens of the countries with which England is now at war, and the confidence thus expressed will probably be an influence of the first magnitude in enabling England to extend her trade both during the war and afterward.
The English people have behind them the experience of two centuries in supplying foreigners with goods and credit, and if the merchants of the United States are really in earnest in their desire to meet the world's demand for manufactured articles we will do well to follow English methods.
These methods have been successful because they embrace the following essentials :
1. The fulfillment of contracts without legal compulsion.
2. An application of the credit principle which recognizes that trade is but barter with money as the measure of values; that it frequently takes at least a year to consummate a bargain which involves an exchange of goods between the people of two distant countries; that meantime such people can do business only by trusting each other; that it is the function of the banker to promote this mutuality of confidence by interposing his guarantee and to give credit to both parties to the bargain as long as it may be reasonably necessary.
3. A willingness to produce and sell what the buyer wants, packed as he desires.
If the much-discussed invasion of foreign markets by American manufacturers is to take place, patient and persevering adherence to these cardinal principles will be necessary.
It will be well, however, for us to realize that even the convulsion of a world-wide war is not likely to make the commerce of the belligerents permanently ours unless we are willing to work unremittingly to retain it. The channels of trade are hard to change.
In the competition that is certain to ensue England will have many advantages over us, and even a Germany in which militarism is dead may be a Germany in which industrialism and commercialism will develop with increased vigor. Angell's book "The Great Illusion is one that may now be profitably read by many Americans who are assuming that German commerce is dead because German military power is doomed.
The very reverse may prove to be the case, and, in any event, we may be certain that the prizes now apparently within our reach will not be unsought by others.
It is for us to consider seriously whether we desire or can successfully handle the large share of the world's commerce that our imaginative optimists have already appropriated.
Is it not better for us to be specialists and direct our energies toward the tasks for which we are best equipped? We talk about an American mercantile marine, but forget that it implies an enormous increase in the navy required for its protection. We hear much about increasing the output of our factories, but ignore the fact that although we are essentially an agricultural people with enormous areas of uncultivated land, we found it necessary last year to import corn from the Argentine and are unable to-day to supply the domestic demand for beef.
The "back to the farm" movement that every one agreed should be encouraged until the clash of arms in Europe changed the current of our thoughts was economically sound and should not be abandoned.
We cannot supply the needs of all the world or do all the business of the universe, and before we embark upon ventures that may be disappointing let us, avoiding the hysteria of the moment, soberly consider what we are best fitted to accomplish by experience, equipment, and environment.
HEN"the movies were in their
infancy, ere they developed to their present challenging importance as a public institution, with a Board of Censors of their very own, troupes of indiarubber thespians agonizing up hill and down. dale, and even their own magazines, it did not make so great a difference what manner of music was played while they flickered and-surpassing the leopard-changed their spots. The Spectator, in the primitive era, never could rid himself of the sense of the machine; his eyes grew tired of the speckled flutter, and the music did not help him, for it was such a soulless, impersonal affair. would have fitted any sort of transaction. It had no imagination, no afflatus. Very plainly it was "made up as the tired fingers went along it did not raise its drooping head to. know whether its text upon the screen was grave or gay; one could not help a twinge of sympathy, as before a caged creature at the Zoo, for the player condemned to the digital treadmill, and bound to deliver, like bricks from a hod, his poor little assortment of arpeggios, runs played as with a porter's whisk-broom, insensate modulation and chords mere sound and fury.
The other evening the Spectator strolled into a moving-picture establishment of the newer order and was amazed by what he heard. The stage was flanked on either hand by the gilded glory of a pipe-organ-no show-window of a bargain in brass bedsteads was ever a grander sight; when the organ was not going, the notes of a piano floated somewhere in the offing; suddenly violins, a harp, and a French horn impinged upon the concord of sweet sounds, and the Spectator subsequently learned that the players were members of a Symphony Orchestra of parts. The pianist was drawn into con
versation. He was a young Cuban of quaint idioms. "When I dare," said he, "I give them Bach; and, anyway, no matter what I do, I make each note just so perfectly as can, for my artistic conscience "-and most of his stipend goes for tutelage with a firstrate instructor. Indeed, with the august, imperial precedent of him who fiddled while Rome was burning, has not the "movies" orchestralist a proud opportunity to play up
to? The subconscious self of the auditor, even when the dynamite goes off, or the villain hustles down the elevator shaft, or the locomotives meet head on, absorbs the music out of the atmosphere as a flower at evenfall imperceptibly drinks the dew. And it is distinctly not according to Hoyle to talk at a photo-play. If the audience lacks the éclat of the opera box, it lacks the chatter too. It is a serious business, this, to keep pace with the plot, to read these epistles that are flashed up just long enough, or these white legends on a black ground that let us into the true inwardness of the hero's moving lips or the heroine's tangled emotions and the lack of team-play in her features. It takes at least the Dead March from "Saul" to do full justice to the Calabrian earthquake and the lava writhing from the fissures of Etna. The Harvard and Yale crews paddle grandly to the start to the noble tune of Rubinstein's " Melody in F." A tantalizing hint of something like Debussy's "La Mer or "Reflets sur l'Eau" subsides into the banality of the Barcarolle from "Hoffmann" to help persuade us that we are breasting the deep to Coney Island with barges of a floating hospital. Or the heroine of tabloid drama stands pensive in her garden where the moonlight lends its ghostly pallor to the foxgloves, and, of course, she must think in accord with the sirupy strains of the Meditation from "Thais " or possibly the love duo from the first act of "Bohème." The prodigal son gives his wine supper with damage to the crockery, while the faithful piano lustily whales forth Frederick Bullard's rousing. "Stein Song," and when next day the young giver of the feast ruefully turns out his pocket lining to find but ten dollars whereon to subsist for a month, lo! the commentator of keys and wires, with cruel irony, breaks forth like a Greek chorus into Dvořák's "Humoresque."
The sort of temperamental adroitness and ready adaptability that the "movies " pianist. should have the Spectator once saw most prettily illustrated by Adele aus der Ohe at a country house in which the film of a camera, in the depravity of inanimate things, had uncurled its length on the floor to the despair
greene country town he planted. cert began with Wagner's "Rienzi and Sibelius's "Valse Triste" from the band, with a gay, harmless little jig-tune by way of encore. The director of the singing had the voice of a very pleasant and friendly bull of Bashan and the unquenchable vitality of a Billy Sunday. He discovered that those who couldn't sing could at least swell the tidal wave of sound by "roaring like thunder," as the rule-book of the Tyringham Shakers used to prescribe. Whether the song was Old Black Joe" or "Annie Laurie or Lead, Kindly Light" or "The Blue Bells of Scotland," he galvanized the most diffident into surprising themselves. "Now let's have that verse again-and let's try what it'll sound like if the ladies sing and the men whistle." It is strange that even with a trifling discrepancy in time between the whistling obligato and the soprano unison, there was an ethereal sweetness of sound. Birds of the woodland know nothing of the metronome, yet when thrushes warble their "native wood-notes wild," who complains of the ensemble ? There are places where the asperities of professional criticism were better withheld.
Other urban and suburban bands in Philadelphia this summer, the Spectator was gratified to note, have played such music as Beethoven's Eighth Symphony, Schubert's
Unfinished," Dvořák's "New World," Grieg's "Peer Gynt" suite and a movement from his piano concerto in A minor, Weber's concertino for clarinet, Sibelius's tone poem
Finlandia," Tschaikowsky's "1812" overture, Brahms's "Hungarian Dances," excerpts from "Rheingold," "Tannhäuser," and "Parsifal." Who shall despair for the future of popular music in America when there is at hand such reassuring evidence of the progressive elevation of musical taste?