"Are machines like yours made in England?"
"Yes," replied the director; "but they have never been practical or commercial."
Then he produced the record of the machines he had sold to the government. Each one saved the labour of eight persons and considerable office s.p.a.ce. This made a distinct impression and the company got permission to import two hundred tons of their product. But not even an application for more can be filed until the first of next year. Only the dire necessity for this article, coupled with the fact that it is without British compet.i.tion, got it over.
I cite this incident to show what many Americans in England believe to be one of the real reasons behind the prohibition, which, summed up, is simply this: England is trying to keep out everything that competes with anything that is made in England or that can be made in England!
For some time after the war began our motor cars went in free. Then followed an ad-valorem duty of thirty-three and a third per cent.
Despite this handicap, agents were able to sell American machines, which were both popular and serviceable. The tariff was imposed ostensibly to cut down imports, but mainly to please the British motor manufacturers, who claimed that the surrender of their factories to the government for making munitions left the automobile market at the mercy of the American product, which meant loss of goodwill.
Subsequently a complete embargo was placed on the entry of American pleasure cars and the business practically came to a standstill. What is the result? Let the agent of a well-known popular-priced American car tell his story.
"Before the war and up to the time of the embargo," he said, "I was selling a good many American automobiles. With the embargo on cars also came a prohibition of spare parts. It was absolutely impossible to get any into the country. Many of my customers wanted replacements, and, when I could not furnish them, they abandoned the cars I sold them and bought English-made machines whose parts could be replaced."
All through the motor business in England I found a strong disposition on the part of the British manufacturer and dealer to create a market for his own car as soon as the war is over. Some even talked of a large output of low-priced machines to meet the compet.i.tion of the familiar car that put the automobile joke on the map. The only American comeback to this growing prejudice is to build factories or a.s.sembling plants within the British Isles. This will save excessive freight rates, keep down the costly-tariff "overhead," and get the benefit of all the goodwill accruing from the employment of British labour.
A by-product of British exclusion is the inauguration of a Made-in-England campaign. Buy a hat in Regent Street or Oxford Street and you see stamped on the inside band the words, "British Manufacture."
This English crusade is more likely to succeed than our Made-in-U.S.A.
attempt, for the simple reason that the government is squarely behind it.
This same spirit dominates newspaper publicity. You find a British fountain pen glowingly proclaimed in a big display advertis.e.m.e.nt, ill.u.s.trated with the picture of men trundling boxes of gold down to a waiting steamer. Alongside are these words:
"The man who buys a foreign-made fountain pen is paying away gold, even if the money he hands across the counter is a Treasury note. The British shop may get the paper; the foreign manufacturer gets gold for all the pens he sends over here. What is the sense of carrying an empty sovereign-purse in one pocket if you put a foreign-made fountain pen in another?"
Behind all this British exclusion is an old prejudice against our wares.
There has never been any secret about it. I found a large body of opinion headed by brilliant men who have bidden farewell to the Hands-Across-the-Sea sentiment; who have little faith in the theory that blood is thicker than water when it comes to a keen commercial clash.
What of the human element behind the whole British awakening? Will organised labour, an ancient sore on the British body, rise up and complicate these well-laid schemes for economic expansion? As with the question of practicability of the Paris Pact, there is a wide difference of opinion.
On one hand, you find the air full of the menace of post-war unemployment and the problem of replacing the woman worker by the man who went away to fight. To offset this, however, there will be the undoubted scarcity of male help due to battle or disease, and the inevitable emigration of the soldier, desirous of a free and open life, to the Colonies.
On the other hand, there is the conviction that unrestricted output, having registered its golden returns, will be the rule, not the exception, among the English artisans. England"s frenzied desire for economic authority proclaims a job for everybody.
I asked a member of the British Cabinet, a man perhaps better qualified than any other in England to speak on this subject, to sum up the whole after-war labour situation, as he saw it, and his epigrammatic reply was:
"After the war capital will be ungrudging in its remuneration to labour; and labour, in turn, must be ungrudging in its output."
No one doubts that after the war the British worker will have his full share of profits. As one large manufacturer told me: "We have so gotten into the habit of turning our profits over to the government that it will be easy to divide with our employees." Here may be the panacea for the whole English labour ill.
But, whatever may be the readjustment of this labour problem, one thing is certain: Peace will find a disciplined England. The five million men, trained to military service, will dominate the new English life; and this means that it will be orderly and productive.
With this discipline will come a democracy--social and industrial--such as England has never known. The comradeship between peer and valet, master and man, born of common danger under fire, will find renewal, in part at least, when they go back to their respective tasks. This wiping out of caste in shop, mill and counting room will likewise remove one of the old barriers to the larger prosperity.
England wants the closest trade relations with her Dominions. But will the Colonies accept the idea of a fiscal union of empire, which practically means intercolonial free trade? Or will they want to protect their own industries, even against the Mother Country? Like the French, they are willing to risk life and limb for a cause, but they likewise want to guard jealously their purse and products. They have not forgotten the click when Churchill locked the home door against them.
This leads to the question that is agitating all England: Will peace bring tariff reform? Both English and American economic destiny will be affected by the decision, whatever it may be.
Canva.s.s England and you encounter a widespread movement that means, as the advocates see it, a broadening of the home market; security for the infant "key" industries; a safeguard for British labour--in short, the end of the old inequality of a Free England against a Protected Germany.
Protection in England, hitched to a world-wide freeze-out business campaign against Germany, would doubtless divert a whole new international discount business to New York. German exporters under these circ.u.mstances might refuse payments from their other customers on London, demanding bills on New York instead. To hold this business, however, we should need direct banking and cable connections with all the grand divisions of trade, adequate sea-carrying power, dollar credits, and a government friendly to business.
Then, there is the middle English ground which demands a "tariff for revenue only," and subsidy--not protection--for the new industries.
Combating all this is the dyed-in-the-bone free trader, who points to the fact that free trade made England the richest of the Allies and gave her control of the sea. "How can a nation that is one huge seaport, and which lives by foreign trade, ever be a protectionist?" he asks.
If he has his way we shall have to struggle harder for our share of universal business. More than this, it will block what is likely to be one of Germany"s schemes for rehabilitation. Here is the possible procedure:
Germany"s financial position after the war will be badly strained. She can be saved only by an effective export policy. To do this she must seek all possible neutral markets; and to get them quickly she will offer broad--even extravagant--reciprocity programmes. They may conflict with the proposed Franco-British programmes of protection and embargo against neutral trade interests.
But if the Franco-British programme leaves the allied markets for goods and money open, as before the war, the German reciprocity scheme will fail of its effect by the sheer force of natural compet.i.tion. Hence England can throttle the re-establishment of German credit by a free and liberal trade policy, open to all the world. Though poor, after the war she can actually be stronger, in view of her great army and navy, her new individual efficiency, and renewed commercial vitality.
Will all this keep Germany out? There are many people, even in England, who think not. Already Germans by the thousands are becoming naturalised citizens of Holland, Spain, Switzerland and Denmark; building factories there and shipping the product into the enemy strongholds, stamped with neutral names. Much of the "Swiss" chocolate you buy in Paris was made by Teutonic hands.
A French manufacturer who bought a grinding machine in Zurich the other day thought it looked familiar; and when he compared it with a picture in a German catalogue he found it was the identical article, made in Germany, which had been offered to him by a Frankfort firm six months before the war began. Only certificates of origin will bar out the German product.
Amid the hatred that the war has engendered, England wonders at the price she will pay for German exclusion. Men like Sir John Simon solemnly a.s.sert in Parliament: "In proportion as we divert German trade after the war we throw the trade of the Central European Powers more and more into the hands of America, with the result that, unhappily, if we became involved in another European war we should not be able to count on the friendly neutrality which America has shown in this war." Others inquire: "What of the future trade of India, the great part of whose cotton crop before the war went to Central Europe?"
Sober-minded and fa.r.s.eeing men, in England and elsewhere, believe that, despite the ravage of her men and trade, Germany will come back commercially.
"You must not forget," said one of them, "that, no matter how badly she is beaten, Germany will still be a going business concern. She will have an immense plant; her genius of efficiency and organisation cannot be killed. Through her magnificent industrial education system she has trained millions of boys to take the vacant stools and stands in shop and mill. England and France have no such reserves. Besides, if we pauperise Germany, no one--not even Belgium--will get a pound of indemnity."
You have now seen the moving picture of half a world in process of significant change, wrought by clash of arms, and facing a complete economic readjustment with peace. Whether the Paris Pact is practical or visionary, no matter if England is free trade or protectionist, regardless of Germany"s ability to find herself industrially at once, one thing we do know--the end of the war will find the Empire of World Trade molten and in the remaking.
Fresh paths must be shaped; the race will be to the best-prepared.
Whatever our position, be it neutral or belligerent--and no man can tell which now--we shall face a supreme test of our resource and our readiness. What can we do to meet this crisis, which will mean continued prosperity or costly reaction?
Many things; but they must be done now, when immunity from actual conflict gives us a merciful leeway. More than ever before, we shall face united business fronts. Therefore, co-operation among compet.i.tors is necessary to a successful foreign trade.
Since the coming trade war will rage round tariffs, it will be well to heed the resolution recently adopted by the National Foreign-Trade Council: "That the American tariff system, whatever be its underlying principle, shall possess adequate resources for the encouragement of the foreign trade of the United States by commercial treaties or agreements, or executive concessions within defined limits, and for its protection from undue discrimination in the markets of the world." In short, we must have a flexible and bargaining tariff.
We must train our men for foreign-trade fields; they must know alien languages as well as needs; we must perfect processes of packing that will deliver goods intact. With these goods, we must sell goodwill through service and contact. Secondhand-business getting will have no place in the new rivalry.
Our money, too, must go adventuring, and courage must combine with capital. Our dawning international banking system, which first saw the light in South America, needs world-wide expansion. Dollar credit will be a world necessity if we capitalise the opportunity that peace may bring us. No financial aid should be so welcome as ours, because it is nonpolitical.
This trade machinery will be inadequate if we have no merchant marine.
Chronic failure to heed the warning for a national shipping will make our dependence upon foreign holds both acute and costly.
Our trade needs more than a government professedly friendly to business.
It requires a definite co-operation with business. An advisory board of practical men of commercial affairs would be of more constructive benefit to the country than all the lawmakers combined.
Here, then, is the protection against organised European economic aggression, the armour for the inevitable trade conflict. Unless we gird it on, we shall be onlookers instead of partic.i.p.ants.
III--_American Business in France_