UC-NRLF LIBR^RV University of California. Accession 1 4 ? -i Class n ^'^^^pmg^ L § THE AMERICAN "COMMERCIAL INVASION" OF EUROPE BY FRANK A. VANDKRLIP VICE-PRESIDENT NATIONAL CITY HANK OF NEW VoKK ; lORMERLY ASSISTANT SECRETARY OF THE UNITED STATES TREASURY OF TH! UNIVERSITY REPUBLISHED FROM SCRIBNER'S MAGAZINE 1902 Hf O Copyright, 1902, by FRANK. A. \ANDERLIP THE AMERICAN "COMMERCIAL INVASION" OF EUROPE 1 04704 THE AMERICAN "COMMERCIAL INVASION'' OF EUROPE I E^X,LAXD has been hard hit by the Transvaal War, but is still the richest country in the world; France is without initiative, satisfied with returns on past achievements; Germany shows the greatest energy and initiative in Europe, but has travelled too fast; America has an unparalleled com- bination of natural resources and initiative, and will go on to greater achievements." This was a summing up of national qualifications in the world's industrial struggle, by the Russian ^Minister of Finance, M. de Witte. I had asked AL de Witte to give his views of the relative positions of the great nations in the world-wide industrial con- test. There is no man whose answer to such a (|uestion may be listened to with more interest. Sergius de Witte is a man of whom we have heard much, but from whom we have heard little. In the minds of many he is Europe's foremost states- man. He shapes the policies of Europe's mightiest empire, lie watches with greatest care the varying fmancial currents, and is in the closest touch with cummercial and industrial tendencies. His Excellency was in his private office in the Finance Ministry in St. Petersburg seated at a great tlat-topped desk, piled high with official problems, neatly sorted and tagged t 2 THE AMERICAN ready for his examination. It was Sunday, but he had been hard at work all the morning. While 1 was with him 1 heard him make appointments as late as eleven o'clock that night. It is easy to see why he has gained the reputation for being the hardest worked man in Europe. Broad, strong, forceful, but with the repose and atmosphere of reserve power which mark most great men, his personality gave added interest to his reputation. He reached for a fresh cigarette, from a case he had been steadily depleting, and touched it to an odd elec- trical contrivance on his desk, which automatically lighted it. Then he leaned back reflectively and spoke with a freedom in refreshing contrast to the reserve of many lesser officials. " England is still the richest country in the world." he said. " This Transvaal trouble has had marked ettect on the finances of that country, and indirectly has affected the finances of every country in Europe. If Mr. Chamberlain will stop here, if he does not ])ut the burden of any more such cam- paigns on England, she may be able to maintain her pre- eminent position. Should she have too many Chamberlains and too many Transvaal campaigns she might be ruined. But up to the present time English pre-eminence is not seriously shaken. Tlie nation is still in the strongest financial position of all the great powers, and may reasonably expect to con- tinue there. Erance is like a small rentier. She is contented with a modest income: contented to sit with her laji filled with securities, representing jiast achievements and present investments, and cut off the couj'ions. Erance is not looking for new industrial fields: she is building no new railroads: she is making no commercial coiuiuests. Erance is satisfied iitnv simj)ly to sit down at home, contented to reap the small rewards that are naturally liei'-. While those rewards may seem small, howe\er. they become in the aggregate great enough to ])lace her in the forefmnt financially. Germany, in lier natural resources, is i)oorer than l-'ngland or I'rance. but she is rich in initiative and enersj-v. The C.ennan nation oft'ers •COMMERCIAL INVASION" OF EUROPE the most striking example of initiative and energy that can he found in Euroi)e. Industrially, she ha.s made astonishing strides. But along many lines the ])rogress has been unnat- ural and too rapid, and trouble may come of that. " America is already one of the richest countries in the world; jierhaps, in natural resources. (|uite the richest. There we tind not only remarkable natural richness, but combined with that wealth the most pronounced initiative met with any- where. With such a combination the country is bound to make the ver\- greatest progress. It will go on and on, and will l^e greater and still greater. America is especially fortunate in 1 An America lie Steppes of Russia. that she has no great military burden. Militarism is the night- mare and the ruin of e\ery Eiu-oi)ean finance minister. " The industrial crisis which you tnid here in Russia is not confined to this country. You will find it more or less pro- nounced all over Europe. Alany enterprises -have depended largely upon English capital. England's Transvaal War has forced her to draw in her wealth, and that contraction has had a marked eflect upon the industries of all luu-ope. People who were carrying on business with the aid, directly or indi- rectly, of luiglish loans, have been forced to make other financial arrangements, and fre(|ucntl\- have been compelled to curtail their operations. That reduction of credit and with- drawal of capital have acted and reacted until they have be- 4 THE AMERICAN come important factors in l)rini;ing- aljont wide-spread industrial depression. " England has not been alone, however, in expending large amounts of capital in military campaigns. The powers have all spent great sums in the last year in the military operations in China. The iloating of loans in that connection has made demands upon capital that have further embarrassed industrial affairs. Here in Jxussia we have had, in addition to those unfavorable influences, other embarrassing conditions. The Government has been building less railroad than has been constructed at an}- time during the last ten years. As the Government is the chief customer for railroad supplies, de- pression has naturally followed in all industries depending upon railroad construction. Then there have been industrial enter- prises organized here on a not too sound hnancial basis. But as we get farther away from .some of these special causes of depression, I think the industrial crisis will end." There can be no doubt of the interest of ]\I. de ^^"itte in the sul)ject he was discussing. Russia's need for capital is like Sahara's thirst for \\ater. There is probably no man in Europe more anxious than he to see the whole earth smile under the blessings of jjcace, the particular blessings in which he is inter- ested being a low rate of interest and a market hungry for bonds. I met M. de Witte, as I met all the other finance ministers of Europe, on a tour which J made last year to obtain the Euro])ean ]X)int of view regarding America's industrial exjxin- sion. The European view of the C(.)mpetitive positions which the great nations occupy in the struggle for international trade de- velopment is just now a matter «if keen interest to the people of the United States. As an officer in the financial department of the (iovernment. cliu-ing the jieriod of the most extraordinary development in the whole history of our foreign trade relations, I was especially interested in this subject. I wanted the point of view and conclusions of some of the men who were equally "COMMKRCIAL INVASION" (^F KTROPK 5 interested observers, but who were hmkiiii;' at llic (leveU)i)nicnt from without rather than from within, l-'or four \ cars 1 had seen at close range tlie growth of a faxorahlc trade balance which had assumed a total in that brief ])eriod greater than had been the net trade balance from the founding of the ( lovern- ment up to that time. That was a phenomenon which had had An Amen.an-cqiuppca LLau. Lu.. .>.liuli i'.i:>bes tlie l'yi.unuls «i t^vpt. few parallels in our economic history, and the desire to study it from the European point of view led me to \isit nearly all the countries of Europe. I was offered rather unusual facilities for obtaining the views of men most intluential in political life and commercial affairs. The (lii)lomatic representatives at Wash- ington introduced me to the finance ministers of their home governments, and through the foreign treasiuw officers I was able to meet the heads of all the imperial and state banks; 6 THE AMERICAN ihrungh other cluinncls. i)i-ominent bank officers and industrial leaders. It is my purpose to give some of the observations and deductions which resulted from this tour. The sul)jcct 1 discussed with these distinguished foreigners is one regarding which our i)ub]ic has been pretty thoroughly enlightened in the last live years, and it is one of which the European public has heard almost as much in the English and Continental newspapers, but from quite an opposite point of view. When the amount of our sales to foreign countries passed the $1,000,000,000 mark in 1897, we began to congrat- ulate ourselves on the strides we were making in the markets of the world. The record was followed by steadily growing totals, until now we have, in a twelvemonth, sent to other nations commodities to the value of $1,500,000,000. The mean- ing of that total is emphasized if we look back and find it compares with an average during the ten years ending 1896 of $825,000,000. While our sales to foreign countries have grown so pro- digiously, the other side of our financial account during these last five or six years has shown no i)roi)ortionate increase. We have bought from the foreigners an average of only $800,- 000.000 a }ear, and that total has shown little tendency to expand. It was this fact, this mighty development of our sales, while our jiurchases \\erc, comj^jaratively. on a declining scale, which ])i1ed u]) in half a dozen ye;n"s a favorable trade balance so enormous as to startle the world. In the last six years we have sold in merchandise, produce, and manufactures 82,000,000,000 more than we have bought; while in all our history, from the l)eginning of the Government uj) to six years ago, the foreign trade balance in our fax'or had aggregated a net total of only v$383, 000,000. The significance of these sur})rising totals was recognized on both sides of the Atlrmtic. An .malysis of them brought out features more imi)ortant than the \astness of the aggre- gate. Heretofore our sales had been made up almost whollv COMMERCIAL INVASION" OF EUROPE Drawn /'rom a pholograp/i The span of the bridge for ihc automatic railways is 328 feet, and the bridge is movable for about one thousand leet on the wharl. Drawn from a /•/wtogr,i/>h The capacity o( each elevator is from forty to fifty tons per hour. Tlic wt-iKhi ol each eli-v.ilnr. with its corresponding bridge, is about one hundred ions. American Coal-handlini,' Machinery (Elevators and Automatic Railways) in Germany 8 THE AMERICAN of foodstuffs and raw materials. Europe was the workshop. But that has changed, and we find, year after year, an aston- ishing increase in our exports of manufactured articles, an in- crease that in the last two or three years reached totals which gave anijjle basis for the popular talk of our invasion of the European industrial fields. Our exports of manufactured articles in the decade prior to 1897 averaged $163,000,000 annually. In 1898 our sales of manufactured articles to foreign customers jumped to $290,000,000, the next year to $339,000,000. the next to $434,000,000. These figures, showing a steady invasion by our manufact- urers of foreign industrial fields, have a natural corollary. As exports of manufactures increased, our imports of the handi- work of foreign .shops showed an even more rajMd decline. Our manufacturers were not onl}- inxading the foreigner's own mar- kets, meeting him at his threshold with a new competition, but they were taking away from him his greatest market — the United States. We have in the last half- dozen years 1)een manufacturing for ourselves a vast amount of goods, such as we have been ac- customed to buy abroad. One can turn from a contem- plation of these great totals to an examination of the records made in recent years by individual indus- tries, and find in detail facts upon which to base a belief that the United States has acquired, or is acfjuiring. supreiuacy in the world's markets. So many industries have been sending rapidly increasing contributions to swell the rising tide of our foreign conunerce that it is difllcult to tell anv detailed story of .\mcrican commercial expansion without making it read ^5W Drif.fn from a (•hot.T^rafih. An American Type-writer in Ui;and "COMMERCIAL INVASION" OF EUROPE 9 like a trade catalogue. The increase in our exports of manufact- ured articles can. in the main, be traced to advances made in the manufacture c)f iron and steel, and to the display of inx'cntixe talent in the making of machinery. The dcvclojiment of our Drawn from a photograph. An American Cash-register in Durban. grasp on the world's markets for articles manufactured' from iron and steel has been no surprise to those who early recog- nized the position of America in respect to the raw materials from which those articles are produced. America unquestion- ablv possesses advantages, in respect to her iron ore and her coal mines, far suj^crior to those of any other country, and. based solidly upon that superiority, has already become the greatest producer of iron and steel in the world. American locomotives, running on American rails, now whis- tle past the Pyramids and across the long Siberian steppes. They carry the Hindoo pilgrims from all parts of their empire to the sacred waters of the Ganges. Three years ago there was but one American locomotive in the United Kingdom: to-day there is not a road of im])ortance there on which trains are not being pulled by .American engines. The .\merican loco- motive has successfully invadefl France. The Manchurian Rail- wav. which is the real beginning of oriental railwav-building. ,0 THE AMERICAN bought all its rails and rolling-stock in the United States. American bridges span rivers on every continent. American cranes are swinging over many foreign moles. Wherever there are extensive harvests there may be found American machinery to gather the grain. In ever}- great market of the world tools can have no better recommendation than the mark " Made in America." We have long heUl supremacy as a producer of cotton. We are now gaining supremacy as makers of cloth. American cot- tons are finding their way into the markets of every country. They can be found in Manchester, as well as on the shores of Africa and in the native shops of the Orient. Bread is baked in Palestine from flour made in ^Minneapolis. American wind- mills are working east of the Jordan and in the land of Bashan. Phonographs are making a conquest of all tongues. The Chry- santhemum banner of Japan floats from the palace of the Mikado on a flag-staff cut from a Washington forest, as does the banner of St. George from Windsor Castle. The American tvpe-setting machines are used by foreign newspapers, and our cash-registers keep accounts for scores of nations. America makes sewing - machines for the world. Our bicycles are standards of excellence everywhere. Our tvpc- writers are winning their way wherever a written lan- guage is used. In all kinds Draum /rem a /■hotog, „/•>!. of clcctrical appliauccs we American-equipped Electric C.irs in Cairo ha\e become the foremost producer. In many F.u- roperm cities American dynamos light streets and operate rail- ways. Much of the machinery that is to electrifv T.ondon tram lines is now being built in Pittsburg. The American shoe has captured the favor of all Europe, and the foreign makers "COMMERCIAL INVASION" OF F.UROPE ii are hastening to import our machinery that they may compete with our makers. In the Far East, in the capital of Korea, the Hermit Nation, there was recently inaugurated, with noisv nuisic and tlving hamiers. an electric railway, built of American matc- Dravm from a plwtogt American-equipped Electric Cars in Caii rial, by a San Francisco engineer, and now it is operated l)y American motormen. One might go on without end, telling in detail the story of American industrial growth and commercial expansion. In the list of our triumphs we would fmd that American exports have not been confined to specialties nor limited as to markets. We have been successfully meeting competition everywhere. America has sent coals to Newcastle, cotton to ^lanchester. ,2 THE AMERICAN cutlery to Sheffield, potatoes to Ireland, champagnes to France, watches lu Switzerland, and " Rhine wine "' to Germany. (Jur public has generally looked upon the development of our foreign trade as only one of the incidents in the remark- able period of prosperity which we have been enjoying, and has not, i)erhaps, clearly analyzed its full significance. The European, 1 found, had come nearer to a real understanding of the situation. A distinguished Berlin economist outlined an idea which seemed to me interesting. " Two or three generations ago,"' he said, " there were families in .America living a life of almost complete industrial independence. Not only was all the neces- sary food raised, but within the household there were spinning and weaving and the ai)i)lication of all necessary trades. The invention of machinery, the development of factory life, the specialization of industry, made such independence impossible. That which happened to the family a hundred years ago has hapijencd now to the nation. Specialization has gone on, and concentration, combinations, and trusts have made it as impos- sible for the small manufacturer to compete with the great as it was for the hand-loom and the spinning-wheel to compete with the factory. The ]>crfect and instant comnnmication be- tween distant parts of the world, the cheapening of transpor- tation, the wider knowledge of every countrv. its products and its needs, have brought about an interdependence of nations that is now almost as great as the dependence of one class of industrial workers on another. This national (lependence. this necessity of every country to more and more largelv bnv and sell in foreign markets, is forcing every nation, whether it wills or not, into participation in an international industrial struggle. That is the key-note of the new century. Whoever will fore- cast the future of nations can now make no more useful study than an examination of their comparative industrial equipment. " TTistory is becoming more and more the story of indus- trial development." be continued. "The strength of a nation COMMERCIAL lN\'ASION " OF EUROPE '3 becomes more nearly measured by iis wealth, its importance in the world's progress by its relative commercial position. His- tory will more and more be written in Icd<;ers and balance- fi-ii-tun front n phnfn^rnph. An American Windmill Pumpinu Equipment lor lrri^lltion al Buiiibay. The windmill is thirty feet in diameter. sheets, in trade statistics, and in the figures which show the results of industrial conquests or defeats. ^Modern iron-clads and smokeless powder have largely taken out of warfare the element of personal bravery, and have substituted technical hy Otto 11. Backer from a (•Iwtcgmf'h. AN AMERICAN BRIDGE IN BURMA IN THE COURSE OF CONSTRUCTION. The Gotkeik Vi,duct over the Chungzoune. Burma. The completed viaduct is 2.260 feet lonR. and at this point is 820 feet high. It was made in sections in America and shipped a distance of 15,000 miles. '•COMMERCIAL INVASION" OI- EUROPE 15 skill and executive ability. Many uf the same qualities which win great industrial battles are to-day potent in deciding the results of military campaigns. Connnercialism in its highest sense has been the real ol)ject back of half the military move- ments of the last decade, it ma\ all seem \er}- sordid and unromantic, but 1 believe that a study of the comparative price-currents of nations, an analysis of trade balances, an un- derstanding of the statistics of production and consumption, will give the data which are now neetled in making a forecast of a nation's history." There are two phases to the signihcance of the American grasp of the world's markets. The obvious phase is the devel- opment of our own industries which must follow such a con- quest. If our factories are to be great enough to supply our own wants and in addition turn out a surplus so large in volume and so low in price as to become one of the most important factors in the world's markets, we can count on an industrial growth of which we have heretofore hardly dreamed. There is another phase to our conquest of foreign ma'rkets, however, and that is its efTect upon the other nations of the world. If a much larger share of the world's manufacturing is to be done in America, it means a lesser share will be done elsewhere. The pictures which some entluisiastic observers of our foreign trade delight to draw, of a time when our exports have so increased and our imports so diminished, that we will not only make everything we want for ourselves, but a very large part of what the world wants besides, is a picture which offers neither a probable forecast nor a desirable result. Natu- rally we cannot go on selling to the world a great surplus of food products and manufactured articles without buying from the world in return. Statistics indicate tliat we have for the last two or three years been sending Europe annually some- thing like $600,000,000 more than we have been buying. Europe has not been paying for this in gnUl. During the six years in which we built up a sur])lus foreign trade balance of i6 THE AMERICAN $2,744,000,000, we have received from the rest of the world a net balance in gold of only $132,000,000. Une of the must unanswerable of linancial conundrums is how the world has settled its debt to us in the past and is to settle it in the future. If these statistics of our foreign trade are to be depended upon, it would seem as if we had placed the world in our debt in the last six years to such an extent that we ought to be about ready to foreclose our lien. As a matter of fact international finances do not show that we have any unusual command in the world's money markets; our bankers have no extraordinary credits with their foreign corre- spondents. There seems to be no vast accumulation of funds upon which we can draw at will, nor is there other evidence that any large part of this balance is still unsettled. The question of how a $600,000,000 annual trade balance is to be settled has been a rather interesting puzzle to our financiers; to European finance ministers and bankers, to man- ufacturers and workmen, it is a subject of the most intense and inmiediate interest. The answer as to how that trade balance has so far been settled requires a good deal of explanation which must be based on very unsatisfactory data. The i)rediction as to how it is to be settled in the future leads to most interesting speculation regarding financial conditions. In tlie first place the problem is not so dif^cult as it looks on its face, ^^1^ile Government reports show that we have sold to Euro]ie roundly $600,000,000 a year more than we have bought, it may be certain that the total is considerably below those figures. I have been close enough to the making of Government customs statistics to know something of the difficulties. No fault can be found with the thoroughness of the work, but it is (juitc impossible to strike any accurate in- ternational trade balances when the figures on one side of the ledger must come from importers, who have the strongest motives for undervaluing imports in their statements. I would "COMMERCIAL INVASION" OF EUROPE 17 hardly like lo make a j;uoss regarding the axerage percentage of undervaluation tor all our imports, but it can, at the outset of the consideration of this problem, be set down as a very large amount. Then there are items of great importance of which our customs statistics can take no note. Our lun'opean tourists are generally supposed to spend $100,000,000 a year. We pay for freights to the owners of foreign steamship lines perhaps $75,000,000 more. There is a great stream made up of numberless small remittances, sent home by prosperous im- migrants. And lastl}-, and most important of all. there has l)cen going on a repurchase by American investors of our securities which have been held in foreign markets. This, in the aggregate for the last ten years, assumes enormous proportions. The best of statisticians can do nothing more than guess at the amount, but it has been great enough, in the main, to counterbalance the excess of our foreign sales over our purchases, after the totals of travellers" expenses, ocean freights, and the home contributions of immigrants have been deducted. This return of our securities cannot go on forever; indeed, there is pretty good reason to believe it cannot go on much longer, for the reason that there are now few ^Vmerican securities held in Europe to return. It is the j^ractice of the great banks of Europe, particularly of Germany, to take charge of the securities owned b\- a vast clientage of investors. \\'hen in the Imperial Reichsbank and in the Deutsche Bank in Berlin, 1 was taken into great vaults whose walls and floors were covered with cases like an inmiense library, containing stocks and 1)onds belonging to clients of the banks and held there for the collection of coupons and for safe- keeping. In each of the banks there were securities re])resent- ing some 2.000,000.000 marks. It was interesting to be .shown great cases of empty shelves which had formerly been set apart for American securities, and which now held only here and there scattered packages. This was the visible evidence of what an examinatirjn of investors' strong boxes would show in r i8 THE AMERICAN all those European countries ^vhich have in years past found in America the most protitable tielcl for investment. If our foreii^n trade is to continue to hold the same relation between imports and exports that has been ruling for the last few years — if we are to go on selling Europe, say, $600,000,000 a vear more than we buy — there will be then, after liberal re- ductions for travellers' expenditures, ocean freights (an item which the development of American shipping may materially decrease), and immigrant remittances, a balance due us of c ILscJ on ail AiiKMicin K.iilri.,id— Weight hii;ln}-ei-ht Tons (without tender). $300,000,000 or $400,000,000 a }ear. How is that balance to be paid? That question is. perhai)S, the most interesting of any that can be pro])Ounded to-day in the held of international finance. I a.sked every finance minister of Europe and the head of every imperial bank for an answer to it. I found it a (|uestion over which thc'N- had pondered much and ne\er with feelings of sat- isfaction. 1"hat h'urope camiot ])a_\- such a l)a]ance in gold is obvious; that we would not desire to have it paid in that way is clear. The conclusion which I found nearly every important European linancier had already reached, was tluit America will COMMERCIAL INVASION" OF EUROPE ^9 sooner or later enter the l-luropean seeurity markets; that the tables in international investments are to be completely tnrned; that we are to hear nd more df the I'.n^iish ur llie (ierman syndicate making- investments in America. Inn rather of the American syndicate l)ecoming- a most important factor in the foreii^n investment held. The low interest rates which for the most i)art have been rnling in America for several years, have everywhere attracted attention. The belief is growinQ- that New York is to become the lowest money market in the world. There has been par- ticnlar interest in the ad\ances made in the market price of .i^5or5f.---i,t~-<-i Type of Passenger Locomotive Used on the Orient Express, Pans to Constantinople —Weight about Fifty-eight Tons. investment sccnrities. The cpiotations which ha\e been made for high-grade bcjnds have been the wonder of Enrojje. While market ({notations ha\e shown United States two per cent, bonds selling at iio, the three per cent, bonds of the Imperial German Empire were (pioted at 8(S. English consols bearing- two and three-qnarters per cent, sold at 93, Russian four per cent, gold bonds at 96, and Italian Government issues at prices netting the investor over four per cent. These comparisons are anything but pleasing to lun'opean treasury of^cials. They are (pnck to see. ho\\e\er. tluat such a com])arisc)n is not entirel_\- fair. ( )in- ( loNcrnment bonds are 20 THE AMERICAN free from taxes, and, even more important than that, they have a special use and vakie to national banks. A national bank may issue circulation against deposits of these bonds with the United States Treasury, or may receive public deposits if it puts u]) Government bonds as security, and so the market value of our Government issues, and particularly of our two per cent, bonds, cannot be taken as a measure of the investment return which capitalists are willing to take. It is a fact, however, that there are over $500,000,000 of our Government bonds not held by national banks to secure circulation or as a basis for public deposits. Those $500,000,000 are held solely for investment, and are maintained at market prices which net the investor less than one and three-quarters per cent., quotations which cer- tainly put the credit of this Government far above that enjoyed by any other nation. There are other evidences that the United States is becom- ing the best market in the world for the highest grade of industrial securities. First-class railroad bonds, as, for example, those of the Pennsyhania or New York Central, sell on a basis that nets the investor as low a rate as do English railroad bonds, while on the Continent the highest grade of corporate securities sell at i)rices to realize higher rates of interest to the investor than do our best securities. That the I'nitcd States gives promises of reaching a posi- tion of industrial supremacy in the world's trade, is acknowl- edged to-day the world over. Undoubtedly we have been too flamboyant in some of our claims. The industrial world as yet is bv no means prostrate at our feet, ^^'e have before us a long campaign of hard work and intelligent i)rosecution of evcrv advantage which we have, before we reach such a posi- tion of industrial sui)remacy as occasional newspaper writers on both sides of the Atlantic have given us credit for. That we have the foundation upon which to build such industrial supremacv, however, cannot be doubted by anyone who is familiar with tlie resources and abilities shown in our own in- ^'COMMKRCIAL INVASION" OF EUROPE 21 dustrial tiekl, and makes iincl]ii;cm ct)nii)aris(>n with llic con- ditions that obtain abroad. It ought cicarly to be kept in mind thai the road to the commercial domination of tlie world is not a ck-ar one for us, and that as vet we are a long wax from the end of it. J'^vidences of that will be found in studying current sialisiics of our man- ufactured exports. The rapid increase which has been going on for a nundjer of years has halted, and for the last fiscal year reports show a decrease. That decrease can be accounted for bv the fact that our shipments to Porto Rico, Hawaii, and the Philippines are no longer counted foreign exports, but it is, neverthless. evident that a halt has come in the triun.ii)hant march of American manufactures toward European markets. An important reason for this is in the very force of the success we have made. There have been serious inroads made in the prosperity of many foreign manufactures by our successful competition. The depression has been reflected in lower wages and in decreased purchasing power, and a lower level of prices which has reacted on us in common with the foreign manu- facturers. In a good many directions we have much to learn in re- gard to a successful prosecution of foreign trade. The Germans could give us valuable lessons. They are strong in two par- ticulars — strong in the line of technical education, though per- haps not superior to us, and strong in ccMnmercial training specially adapted to the needs of their rei)resentatives in foreign countries. In this last particular we are lamentably weak. We do not learn languages readily, and we have been too busy with our home afi'airs to cultivate what facility we have. It is a comparatively difficult thing to find trained business men, born m America, who speak fluentl\ two or more Continental languages, and it follows from that dit'licultx that we send commercial representatives to Iun-oi)e who are under the almost hopeless handicap of not speaking the language of a cotnitry m which thev wish to do business. Were it not for the coming 22 THE AMERICAN universality of tlic ICnj^lish language, the handicap would be far greater than it is. Unfortunately the bad equipment of many of the commercial representatives who are sent abroad is not confined to their lack of knowledge of languages. Frequently thev have but vague ideas of the commercial geography of An American Steel Hopper-butturn Coal Car Capacity loo.cxx) pounds. Europe. They are not at all clear as to what particular sec- tions are given over to this form of manufacturing or that field of production. More than half the failures that have come to manufacturers who have tried to extend their foreign business have resulted from the lack of qualifications in the representa- tives they sent abroad. Another condition that is not favorable to our development is one that is being thought of a good deal more in Europe than at home. We no longer are occupying the leading posi- tion in scientific mvestigation having special commercial appli- cation. ]\Iany of the most notable discoveries of the last few years in commercial chemistry, electricity, and other fields of scientific work having direct relation with industry have been made l)y foreigners. The X-ray and the wireless telegraph are illustrations which would occur to everyone, but there have been numberless important discoveries of great value in indus- trial operations for which we are obliged to pay royalty to foreign inventors. The L'nited States Government is to-day "COMMERCIAL INVASION" OF EUROPE 23 paying a royalty to a Gorman inventor for the use in the mints of a method of rehning gold ])y electrolysis, a method which proved much cheajjer than that which had been in com- mon use in the Cio\ernment and commercial refineries up to within a year or iwo ago. Many such illustrations could be gi\en. One of our particular points of strength has in it danger, when carried too far. of being an element of decided weak- ness. We have profited greatly by our genius for specialization, and our adoption of standard models of machines, which can be made in great quantities at extremely low cost, in holding closely to these standard designs, we have fre(inently lost sight of foreign prejudices. Small concessions to those prejudices might have meant large sales, but our manufacturers have de- clined to make them. In AIoscow, for instance, I talked with a merchant who had l)ranc]ies all through Sil)eria. and who bought large consignments of ploughs in .America. The Rus- sians do not harness their horses as we do, and our method of hitching a team to a ])longh is not adapted to their use. ' This merchant found it im])ossible, however, to get our plough manufacturers to adoi)t the slight changes which he suggested, even when his orders were for very large quantities, and he A Type of Freight Car in Use on French Railroads. had to have made in (lermany the t\])e of clevis which his customers demanded and attach it to his ini| natations of Amer- ican ploughs. The most important of all obstacles that the develoi)ment of our foreign trade is likely to encounter is the same one which has proved the most dangerous rock in the path of 24 'IHK AMKRICAN Mni^lish industry — tlic ^rdwtli uf a spirit in trades-unions which attempts to regulate tlie business of employers in other matters than those relating- to wages and hours of labor. 1 be- lieve the decline of English industry can be attributed to the success of labor organizations in restricting the amount of work a man may be permitted to do, more than to any other single cause. We have encountered that spirit too frequently in our own labor field, and it is one which, if successfully persisted in, will cut the ground of advantage fn>ni under our niannfaciurers (juiv-ker than anything else 1 know of. It is generally understood that our natural resources arc in many important particulars unjiaralleled. We patrioticallv be- lieve that the ability of the average American workman is superior to that of his competitor in other countries. We are all confident that our form of government olifers the solidest foundation ui)on which to build national prosjierity. Our in- ank of France, he does not. as with xou in America, borrow a bank credit and have his loan merelv added to his balance on the books of the 26 THE AMERICAN l)aiik. With us the nicrchanl, when lie makes a loan, gets the actual money and takes it away, lie pR)l)ably has no bank account with us. Jle writes no checks. When the loan is due he does not, as would he tlie case in your hanks, come in and pay his indebtedness \\ith a check; insteatl of that we send a collector to him, and that collector is rei)aid the loan in actual currency. Two hundred men start out from the Bank of France every morning to collect matured loans. Several days each month it is necessary to send out 400 men, and on the hrst and the fifteenth of each month 600 collectors go out." These collectors were uniformed men carrying leather pouches in which they have the matured notes and which are later hlled with currency as the collections are made from the bank's borrowers. I .'^tood at the paying-teller's desk as I went farther along in my tour of the Bank of France. As I halted there the man who ha])])erieil to be at the window at the moment ])resented a check for 50,000 francs. Ihe monev was counted out and handed over to him, stored away in a big wallet, and he passed on. I asked if it were not unusual for a man to draw out so much currency, and was told that it was not. It was but another illustration of how undexeloped is the banking system of Ccjntinental IunM])e in its uses ])y the general public. A story that was told nie on the highest authority in \'ienna sounds ludicrously incredible, but it is true. The Aus- trian Government bought a tele])hone line from an English company. There was a payment of 1,000.000 guldens (about $400,000) to be made bv the cabinet officer corresponding to our Secretary of the Interior. The representative of the Eng- lish comj)an_\- wishecl to lie j)aid b\ merely receiving a credit at the Austro-I lungari.'in State Uank. The minister regretted that there was no jjrecedeiit for such a method and insisted on sending to the bank, which is the government's fiscal agent, bringing the actual money to his office, and counting it out to the I'Jiglishman. who in turn took it back to the same 1)ank, "COAIAIERCIAL INVASIOX" OF EUROPE 27 where it was again coiintocl ami put back in ilic vault fioni which it had been taken an hour before. As cuie gets farther east the methods of banking become more primitive. The Russian jieasant freiV>?r 0> American Electric Cars in Seul— Tiie East Gate. An electric railway in the capital of Korea built of American material, by an American engineer, and operated by American motormen. which permits a manufacturer to successfully work out a standard article, and then j)r()duce an enormous (|uamity <>f that exact type, is the most secure basis upon which to build a foreign trade. We alone have that advantage. Xo Euro- pean maimfacturer can successftilly follow in our lead." \\'hen M. de \\'itte said that militarism is the nightmare .^nd the ruin of everv fmance minister, he spoke a trtith that 32 'I'HE AMERICAN has an aj^plication tu this question of industrial rivalry. The evidence of militarism is one of the most ob\ious things in Europe. In Russia one is never out of sight of a line of brown-coated, stolid-faced soldiers. A tremendously effective display of military strength is everywhere encountered in Ger- many. One is impressed by the cost of the brave attempts of poor Italy to keep up military appearances in the company of first-class powers, a company to which she has not the natural right to aspire. Xo one can see this universal display without contrasting its cost and the burden which that cost throws on industry, with the comparative freedom from that weight in the United States. Europe spends annually for military and naval establish- ment $1,380,000,000. With our army on something of a war footing, as it is at present, we have only spent in the last year for the army and navy $205,000,000. Marked as is this difference of cost, it by no means meas- ures the real weight which militarism puts on the European powers; it is not alone that Europe spends $1,380,000,000 a year to maintain the military establishment, but very much more important, from the industrial stand-poin.t, is the fact that Europe takes out of her |)roductive capacity 4,000,000 men. These millions are just in the fulness of their youth and would be a tremendous factor in industrial production. The male industrial population of Ein"0]:)c, men l^etween the ages of twenty and sixty, may be estimated at about .\ 00,000,000. To withdraw from productive industry for military purposes 4,000.000 men means a loss of four per cent., and that is in addition to the taxes necessary to raise the $1,380,000,000 for the annual maintenance of the military estal)lislimcnts. W'licn we perceive the full weight which militarism has hung upon the neck of industry in Europe, we see another enormous handicap which is acting year after year in our favor. Tn the course of a conversation with one of the most emi- nent of Euro]:)ean financiers, a man who has added the dis- "COMMERCIAL liNVASlON " OF tUROPE 3;^ tinction of notable ])ul)lio service Xo a business career wliicli made his name familiar in every linancial centre, 1 said that one of the things which had occurred to me in my observation of Euro])ean affairs, after seeing the ircmeniktus clTect upon I'-iig- land herself and through her ui)on all the ct)unlries of b",ur<)i)e of the expenses of the Transvaal War, was that if a small war under modern conditions was to cost so much as the Transvaal War had cost, and was to produce such an effect upon industry and commercial conditions throughout liurope, no great war would in the future be possible. *' You are wrong," he said. '' That is not clear to me," I replied. " Let us take Russia for illustration. Suppose Russia was to begin a great war, \\ here is she to get the money? " '' Let me tell you a little of a war of which I know something." he said. " I happen to control nearly all the railways of ^Furkey. Turkey had a war with Greece. Now let us see liow she paid the expenses. She raised an army; she i)aid her army nothing. She transported that army of 60,000 men from the interior of Asia Minor to the Greek border. How did she do that? She commanded our railroads to carry them. Did we carry them? Yes. Have we any pay for it? No; nor will we ever ha\e. So she ])aid nothing for the transj^ortation of her army. Then she had to arm it. What did she do? She bought arms in Germany. Has she paid for them? No. So she raised her army, trans- ported it. and armed it. The whole cost of that campaign, in fact, was managed without any real expenditure of money. " So it would be with Russia. I was once in the interior of Persia. I met there, 2,000 miles from tlie sea, two German tramps. I asked them where they were going. They said : * The Pacific Ocean is off here somewhere, and we rue making our w ay toward the Pacific Ocean.' I asked them. ' What can you do?' One said, 'I can play a trombone.' The other said: ' I can weave straw baskets.' ' Well.' I said, ' how ha\e you got here?'' * We can walk, and the people are good.' was the answer. 34 THE AMERICAN " So it is w itli tlic ann\ . 'Jlic} can walk, and the people are good. If the ]jeoi)le are not good, the army gets its provisions any way. The exi)enses of a war in Russia, so long as it was in Russia, would be to that nation very small, and the financial sit- uation is not a commanding condition in an\- considerations of peace or war." " What is the future of the world with respect to America? " 1 asked. " If America is to go on in anything like the way she has heen going in the last three or four years with her foreign trade — if America is to sell to Europe $600,000,000 a )ear more than she buys — what is to be the outcome? " " Something always happens, and something will happen here. 1 do not know what it is; I cannot foresee it. America so far seems to be making no mistake, but something will haiJjKMi. Things cannot go on as they are going. It may be that it is your colonial policy. At present there are 4,000.000 soldiers in Eu- rope, the best of her }()ung manhood, who not only are taken awa}' from ])ro(luction. but are i)aid for being taken away from production, and Europe is pa\ing six milliards a }ear to support them. That six milliards does not measure the cost. It is that, plus the loss to production, which hampers commercial Europe, and it is there that }c)U ha\ c the great advantage. lUit what of your future? W'e are glad t(^ see vou going in.to the Philippines. We will welcome the time if you are going to measure strength with us as a military power. Commercially you are supreme, but if it comes to a test of military strength, if you are going to weight yoursehes with the militarism which is the burden of lui- rope, then we can sec some light." I asked if the tendency in Tun-ope is in the direction of a re- duction of military forces. " Xot at all." he said. " h'rance hates England, and England hales l-'rance: (iermany detests Erance, and France detests German}-; l\ussia hates (iermany. and Ger- many hates Russia. There it is all around. There is no hope of reduction. It is impossible. England has hoped to come to some understanding with Russia. I spent soiue time at the home "COMMERCIAL INVASION" OF EUROPE 35 of Mr. Chamberlain not long ago, and there was a strong lu)pe in his mind that England could come to a better understanding with Russia. But it is impossible, just as it is impossible for France and Germany to come to an arrangement. We are no longer afraid of France. W'e beat her from a military stand- point, we have beaten her now from a commercial stand- point, and there is nothing else. Commercially we hold a pretty strong" position with France. After the war we had a treaty which provided that we should be equal to the most favored nation. France began making special treaties, but as soon as she concluded one we took a place equally favored and strength- ened our commercial position. \\'e have beaten her commer- cially, and I see nothing to fear from France." 1 asked what he thought of the great consolidations of Amer- ica, such as the steel combinations. '* An autocracy is good or bad according to the autocrat. If he is a good autocrat it is the very best thing possible. If he is a bad autocrat, it is the worst. Who is going to control your trusts? That is the whole question. It is true you have "man- aged your Standard Oil in a way that is creditable, and that has brought satisfaction to the country. The Sugar trust has been in a measure managed as well. But what assurance have we that this great Steel trust is to be managed so well? That is the whole problem. It is the question of men. Undoubtedly it makes you a much more formidable competitor, ])ecause it con- solidates your interests. But you are a young nation. Vou are a young people. You are young in this business of consolida- tion. What has been the world's history when you put great power into the hands of young men? It has sometimes been abused. \\'e shall watch with great interest the course with you in this enormous combination." And that is what all Europe is doing — watching with the keenest interest our course as it afifects our position in the world's industrial contest. II IxXDUSTRIALLY it is no longer the Old World. It is New Europe and Old America ! It is New Europe, a land of undeveloped possibilities, abounding in ojjportunity for keen captains of industry. It is mature America, the exemplar of modern industrial methods, perfected mechanical ideas, and ripe economic policy. This conception of a new Europe, looking toward mature America for the l)est illustrations of industrial development, was novel enough when I first encountered it, but it becomes familiar as one goes from country to country and sees field after field rich in opportunities for the introduction of better methods, the application of better mechanical ideas, and the planting of more correct economic policies. It was in Rome that I first met this thought of a new Europe. I was told that Italy was but thirt\- years old, that the present economic life dates back only to 1870, and that the modern Roman is to-day an industrial pio- neer in a virgin country. Such a thought applied to almost the oldest European civilization is especially striking, but every other country of Europe oft'ers illustrations of the truth of the paradox. We not only find that Italy has suddenly awakened to the possibilities of conserxing the force of her enoruKnis water-power, and is beginning a great movement to turn into electrical energy numberless cascades and rajiids, but an ex- amination of the industrial side of ever\- other nation shows nuich that is still unhewn and unwrought. Austria has just "COMiMKRCIAI. INVASION" OF KIROI'K fornnilatod a loi^islalive plan for a s;real iiul-work of caiiab which will cost huiulrods of millions of llorins and revo- lutionize the transporta- tion of the empire. Ger- many, from this indus- trial point of view, is a picture of youth — new factories on every hand, new development every- where, and the spirit of the industrial pioneer in all the ])eople. Eng- land, wedded as she is to industrial precedent, turning instinctively from methods that mean change, holding close to the ways that were the ways of the fathers, presents a field unploughed when looked at from the point of view of the opportunity ofTered for the introduction of the best in- dustrial methods and the most economical mechanical ec|uii)ment. France, with her satisfaction over her minute subdivision of own- ership and her contentment with small things, offers virgin fields for the exploitation of modern ideas of specialization, combina- tion, and community of interests. \'ast Russia, enormous in extent and population, is immaturity itself, new industrially beyond anything America has known for two generations. When we see that Europe is an industrial field, still unde- veloped: that in many directions the methods and practices current in industrial life are as wasteful and expensive as arc operations in some new country, we perceive at once that such Count Agenor Goluchowski, Foreign Minister of Aiistria-Hiini;ary. 38 THE AMERICAN a condition has two important relations to our own industrial life. If our foreign competitors are not making the most of their opportunities, their time, and their labor, gauged by our standards, it means that they are under a handicap in com- petition with our industrial output, and so long as our methods are superior to the methods in vogue in Europe we may look for continued advantage in international competition. The idea of an undeveloped Europe is of decided interest to us, however, from another point of view. With such a field for development as we have had at home we have be- come experts in seeing new opportunities, and have become quick to disregard precedent and long-established conditions, and to perceive the advantages \\hich may come from new- combinations, modern equipment, and specialized work. An undeveloped Europe, therefore, offers a tield in which this special genius of ours may profitably exploit some of the same industrial methods and policies which have proven so success- ful at home. This is not a mere theory. There are already notable illustrations of success in exactly that sort of thing, and there are promises of many more successes to come. Our great electrical coni]ianics have established works in England. France. Germany, and Russia. There are tool-works in Ger- many cc|uippcd with complete sets of American models. Amer- ican machines, and Yankee foremen. Important portions of London interurban transportation systems have come into American hands and are feeling the vivifying intluence of American ideas. The electric street-railroads and lighting- plant:., in a number of important cities of France are controlled by American interests, and the transportation system of Paris itselj is a field which is tempting close investigation on behalf of American capital. Some attention has lieretofore been drawn to the extraor- dinary balance in America's favor which the last half-dozen years of foreign trade has built ui^ The scitlcmcnt by Europe of "COMMERCIAL INVASION" OF KUROPK 39 these annual trade balances is a problem which has been out- lined, and attention has been called to ihc opinion of many European and not a tew American financiers that ullimalely the settlement of this trade balance must be effected by America investing in European interests and securities. .\ few years ago it would ha\c sounded absurd to have talked of the possibility of American capital seeking investment in luu'ope. The idea is hardly }et so familiar as to make it seem reason- able. It is hard to believe that America, with her endless op- portunities, unparalleled richness of natural resources, and admitted pre-eminence in iiulustrial methods, should not con- tinue for a long time to l)e a more profitable field for the investment of capital than can possibly be found in luiroi)e. For us the disadvantages of distance, of foreign laws and cus- toms, and of competition with great funds of accumulated capital have heretofore seemed to preclude any possibility of our becoming investors across the Atlantic. But this annual trade balance which we have been piling up has been so ex- traordinary in itself that it seems likely to lead to other unusual features; and among those it now seems easily possible that we shall see American capital become an important factor in Eu- ropean fields. Xaturallv. few Americans have gone to Europe to look for investment opportunities. Travellers' descriptions have been endless, but few of them have told us of European conditions from an American investor's point of view. We have in times past had a good many financiers go abroad to convince Eu- ropean capitalists of the credit and good prospects of enter- prises that we were developing at home, but it is only wilhin the last few months that Americans have been going abroad to measure investment possibilities, to investigate offerings of securities, and to look into opportunities for profit in new developments, new combinations, and the application of new- methods. 40 THE AMERICAN If a trade balance of some hiiiKlreds of millions of dollars is to be settled by our taking European securities, it becomes decidedly interesting for us to begin to study, from an in- vestor's point of view, the economic conditions prevailing there. It is from such a point of view that 1 intend to present some of the points that appealed to me as particularly interesting in several of the European countries. The countries forming the Triple Alliance — Germany. Aus- tria-Hungary, and Italy — offer the most widely divergent in- dustrial conditions; but because of political bonds there has been a close relation between the financial and commercial interests of the three nations, and an interchange of capital, so they have come to form a natural industrial group as well as a political alliance. Of all the European powers the industrial newness of Italy strikes one most sharply. That is true both as to the actual lack of develo])mcnt. and from the fact that one naturally asso- ciates Roman surroundings with age. \\'e are inclined to think of Italy as a land of cathedrals and art-galleries, blue skies and sunshine, where the rich go for ]-)leasure. and the jioor stay to beg; and the industrial importance of the country is not a sul)ject that many of our ovn ])eoi)le have considered deeply. While Italy abounds in glorious history, and is a land of great memories, it has in modern times held a comparatively small place in the industrial history of the world. Devel(^]iments are going on there now. however. ]\articularly in the north, which promise to luring the measure of Italy's industrial importance much higher u]-) in the cohnnn of totals. Soul hern Italy is hopelessly handicapjied for a U^ig time to come by the system of land-ownership, the hardshijis of taxes, the extreme ]nn-erty of the peo])le, and their consequent deterioration from an in- dustrial ])oint of view, and by excessive illiteracy. The element- ary and secondary schools there are incredibly bad: leaching is the least honored of the learned professions. ConditiiMis are far better in the north. There are foiuid small individual owner- "COMMERCIAL INVASION" OF EUROPE 41 ship of land, and an independence and thrift, in strikint;- con- trast to the south. The jieople take more reachiy to iiuhistrial pursuits, too, and there is really striking- progress in the recent upbuilding of many industries. Prior to 1871, when Church and State were separated, and the pres- ent political regime in- augurated, the industries of Italy were compar- atively i n s i g n i ti c a 11 1, viewed from the stand- point of international trade. The population was largely given up to agriculture. In the thirty years that have elapsed there has been notable industrial growth, and that growth is now going forward at a steadilv ac- Koloman von Sz^ll, Prime Minister ot Hun- gary; also Minister of tiie Interior. .celerated pace. One-third of all the silk used in the world comes from Italy. Nearly as great progress has been made in the weaving and si)inning of the silk cloth as in the production of raw silk. In three years the exports of woven silk have risen from $65,000,000 to $100,000,000. Great progress has also been made in cotton-weaving. The in- dustry did not exist twenty-five years ago. while now it emplovs 80.000 men and produces annually an output valued at $60,000,000. The cheap labor of Italy and its comparative efficiency have attracted English manufacturers. Two or three of the best known of the English glove-makers have large factories in 42 THE AMERICAN Xai)les. I saw gloves there being turned out, by the thousands, stamped with the imprint of well-known English names, and eompleted by the addition of buttons bearing the legend " iMade in England " — a bit of commercial artitice that must be con- fusing to customs officials when they later attempt to classify England's exports. Endless cartons of beautifully fashioned artificial riowers, believed by the people who buy them to have been created by the deft touch of Parisian fingers, are likewise made in Naples, antl later have loo per cent, or more added to their value by having French names pasted on the boxes. The industrial development of Italy has two distressing im})ediments. One is the high rate of taxes, the other the high cost of fuel. In army-ridden Europe there is no other country where the per capita cost of maintaining the military establishment is so great as it is in Italy, and no other country where the people are so little able to aft"ord the glories of armies in the field and of fleets at sea. Italy as a nation is out of her rank in attempting to maintain a first-class war footing, and, until her military expenditures are reduced to a point commensurate with her i)opulation and wealth the military bur- den will be an almost insurmountable obstacle to the desire of her commercial citizens to have the country take foremost rank as a producing nation. A hinderance to industrial growth, second in importance to that of the demand of the war-chests, is the lack of coal. All the coal used on the railroads and in the factories is shipped from other countries, and Italy's trade balance is reduced each year by the full amount of her fuel l)ill. This not onl\- has a most unfavorable effect on her balance df trade, but it means that the cost of fuel in Italy is very nuicli higher than is the cost in any of the countries with which she must compete in- dustrially. At Italian seaports the ]M-ice of coal ranges from «$7 to $io a ton. In Alilan luanufacturers pay $12 a ton for coal for which German manufacturers pay SC). which the Eng- lish manufacturer can get for $4, and which is laid down at "COMMERCIAL INVASION" OF KTROPK 43 many factories in the United States at $2.50 a ton. There is only one locality in the kini^cloni where coal is mined, and the output is small and the (luality pour. There seems to be more prospect ahead for Italian indus- tries being relieved from the burden of high fuel charges than from the weight of excessive military taxes. Italy abounds in water-power, and there is just now a great awakening in regard to the development of that latent energy. Manufacturers are coming to understand that future development will most likely be reached along lines of securing power at low cost. Italy is remarkably favored with water-power. To the north are the Alps, and the Apennines run far south along the centre of the Peninsula. The country is an immense water-shed, down which innumerable streams flow, none of them very large, but all falling a great distance, and developing in their descent a prodigious amount of power. Engineers who have made a study of the situation estimate that the rivers of Italy can be made to furnish more than 2,500,000 horse-power, which has a value equivalent to coal now costing $125,000,000. More than 1,000 companies have been organized in the last few years to erect power plants along these streams. Italy is lacking in any large fund of capital available for aiding her industrial development. Investment in stock com- panies has not yet become popular. The Italian is extremely distrustful in finance; his distrust has a fundamental basis in a fear even of banks and bank accounts. He wants to keep his property out of the sight of a tax-gatherer, and he does not put great dependence in the commercial signature of his fel- low. The use of bank-checks in current daily business is almost unknown. There are large savings-bank deposits, but the people have not reached a point in commercial develop- ment where they will give their capital an effective aggregate by investment in corporate securities. Before Italy cut loose from France and joined her political fortunes with .Austria and Germanv. French capital hansidered as the expression of a private citizen, but as having oflicial character, for the Cham- ber of Commerce is an of^cial advisory institution for the aid of the government in the preparation of legislation. The best judgment in Europe and America is, I believe, pretty well agreed on the futility of a European tariff alliance against the United States. Not one of our ambassadors or ministers be- lieves it is a feasible programme for the European States, no matter how antagonistic European statesmen may become toward us on account of our commercial success in foreign fields. I found no important banker or manufacturer who thought it probable that the contacting interests of the various States could be brought to any harmonious point of view from which to formulate such a tarilT. Undoubtedly it is a dream in the minds of many people who have not .a clear idea of the difficulties involved, but certainly the best june of the large boiler-works in this country. He had been inter- ested in making comparisons of the cost of lalK)r and of the The Bourse, Vienna. methods of work in the Viennese factories, an.l 1 fonn.l htm amazed at the wasteful methods and the high labor-co>t ih.it resulted from the Austrian manufacturers failing to use mod- ern machinery. "I was informed in one sho])," he t<.Id me. "that a boiler of about 150 horse-power cost for labor alone $75t' which was there entrance for vessels of the deepest (h'auj^ht: a larj^e system ol slmllow rivers; fertile valle\s in the south and wc^t. but cnxcrini; nut oxer mic-tenth of the area of the country; large ilept>sits of low-grade iron ore; a coal area limited in extent with deejjdying seams from which came a product of poor quality; small deposits of cop- The Bank of Italy, Koine. per, lead, and zinc; a large forest in the smith; a small com- merce; a manufacturing industry hardly worthy of the name; a disordered currency, a disorgani7,ed hanking system, a deranged financial system, a confused foreign policy; a people divided into twenty-three States with only the tie of a common customs union, the coercion of the I'russian hegemony, and a common language and literature— such were the materials of thirty live 54 THK AMERICAN years ago, out of which modern Germany was to he con- structed. A popuhuion numl)crinj;- 5^). 000,000. hrmly united into a great national state; a system of internal connnunicaticMi the second largest in the world; a foreign commerce inferior only to that of England and the United States, wliich has reached out to the uttermost i)arts of the world in its conciuest of mar- kets, and has won its place in the face of long-standing com- mercial connections: a system of industry which has utilized to the full every resource the nation jiossessed, which has l)rought the Avaste places under culti\ation. and by careful methods of scientific agricultiu-e has dexeloped the }ield of the soil more than threefold, creating- dc mnv the beet-suqar industry; a system An American Cash^r^fister m Austria which has (|uadrupk'd the i)roduction of coal and tripled the pro- duction of iron; which has developed the greatest chemical trade. the second largest electrical industries, the third textile, iron, and "COMMKRCIAF. INVASION" OK KIROPK 55 steel industries, and the second shippini; system of the whole ivorld: Avhich has tripled the city population, reduced a hnj^e and Interior of an Electric Manufactory in Germany. The Maciiines in the F-.reuround were Made in America. threatening emigration to insigniticant i)roportions. raised wages, increased the value of land, and tripled the revenues of the State; a strong, self-reliant, progressive, prosperous nation— such is modern Germany, the result of thirty years of nati(Mi-l)uilding. Never before in the industrial history of the world, unless we except the victory of the same race in the Low Coinitries 56 THE AMERICAN over the waves and tides of tlie German Ocean, has such suc- cess been achieved against such heavy odds. England has succeeded, but England was never cursed by invasion and civil war. luigiand's soil is fertile. Her coasts are indented with fine harbors. Her security made her the home of the great inventions, and those inventions gave her the commerce of the world for more than three-quarters of the nineteenth century. The United States has succeeded, but the United States was blessed with the richest heritage of natural wealth that ever fell to the lot of any people. Planted in the midst of a continent, with a soil of extraordinary richness; with the coal seams lying- open on the river-banks, and iron only needed to be quarried from the surface; with river systems penetrating every part of the country, and a chain of lakes to supplement the rivers; with great harbors to receive and send out foreign trade, and with the hungrv multitudes of Europe in sore need of our sur- plus — with all these natural adxantages, and with only one serious catastrophe to our national development fc^r eighty years, it is no wonder we have succeeded. Germanv had none of these advantages. Germany must needs dredge her seajiorts, deepen her rivers, su])])ly her defi- ciencies in raw material by im]M:^rtation, import the machinery for her factories, and the technical skill to direct the machinery; build a railroad system to carry her manufactured goods long distances to the sea-coast; and when she has done all this nuist fight her wav into markets which I'.ngland and h'rance had long since occujiied. 1'o do all this while guarding against invasion on both frontiers, and bearing a heavy burden of tax- ation and military service, to succeed with no other aids than those of the national genius for hard work and the national ambition for a great and commanding place among nations, and to win such success in the face of such difficulties is an achievement before which both England and America should uncover in adnu'ration ami sm-prise. If the measm-e of sticcess which a nation acliie\es o\-er ad\ersc cii'cumslances is the "COMMERCIAL INVASION" OF KrR()IM% 57 test of greatness, then (lernian) is the greatest nation in the world. I reached Germany fresh from a stndy of most of the otlier Continental eonntries. In none of them had 1 fonnd an\ thing Endless Ch.im II ■.! 1 to lessen the conviction \\ith which every American goes ahrcxid. that his own conntry is sni)crior in every respect t.> all other nations. Most of those nations are in one resi)ect or another unmodern and unprogressive. They are snccecding slowly, and in few of the eonntries are the whole i)eople imited in an effort 58 THE AMERICAN to achieve success. Their industrial regeneration is only just beginning: the United States has little to learn from them. But in Germany we find not only a state with apparently a great future, but a state which has begun to realize that future in a thoroughly modern way. The system of education, ele- mentary, secondary and university, certainl}- rivals, and is prob- ably superior to our own. It is a system which leaves less than three per cent, of the population illiterate, and sifts out the brightest minds and trains them for the service of the State. The State in turn is eager and anxious to avail itself of the services of men who have won intellectual distinction. There is a system of commercial education whose founders realized that successfully to deal with foreigners requires a speaking and writing knowledge of their language. There is a national and municipal administration which in their effectiveness and abso- lute integrity must bring shame to the resident of almost any American city when he compares them with conditions sur- rounding him at home. The Government has encouraged commerce and foreign trade with great intelligence. It has established the gold standard and so organized the Reichsbank, that the mechanism of exchange has the foundation of secure confidence. It has aided in the establishment of German banks abroad, and placed German traders in the position of distinct advantage in pushing their commercial conquests. A trained consular service has been developed, composed of men who speak the language of the country to which they are sent, and who use the language to find out whatever may be of service to the German exporter. The Government has pursued a consistent policy in its trade relations and commercial treaties, which has all along been wisely adapted to the needs of the national economy. While the industries were getting a foothold, they were pro- tected by high duties. \\'hen their development had reached the stage of independence, and when their chief need was new markets, the government made concessions to neighboring "COMMKRCIAI. INVASION" OF KIROPK 59 States ill the customs tariff, and. by a series of treaties com- ])lete(l in 1893. admitted raw materials at low dnties in return for similar privileges conceded to (iernian manufactured ex- ports. The Government early saw that private railway man- agement in Germany was unfavorable to the export trade, be- cause it had not learned the lesson of scientific rate-making, which we in the United States ha\e only in recent \ ears mas- tered. rercei\ing" this fact, the German ( ioxernment took "^. An American Sewint; Machine in Belgium. most of the private lines, and addei used. If lie ilocs lu.l use it himself lie has a reason that is sal- isfaetorv to him. The Germans are more conservative than the Americans. " This fact can be ilhistratccl, i)erhai)S. by the antomobile cab system. A superficial observer, knowini;- that these cabs were in use in American cities, would draw the conclusion that W. R. Koch. Director of the Gjrin.ui InipLMi.il auik. Germany was not so progressive as America. But if he hap- pened to know that the companies in Boston and Chicaj^o ha.l been financially unsuccessful, his conclusion mio;ht not be .so unfavorable to the German. The German has considered the advantages of the electric cab very carefully, and has not in- troduced them in the German cities simply because he has decided that they would not pay." Somewhat along this line Mr. Magee spoke of the Ger- man.s' ability in the field of science, and commended their habit of stimulating and encouraging in.Iependent investigation. He 62 THE AMERICAN regarded the Germans in this respect as superior to the Amer- icans. " Americans are brilHant/' he said, " and many splendid ideas — which the Germans call epoch-making — such as the cot- ton-gin. have come spontaneously. In the main, however, this is not the case. The great discoveries of the world have come, as a rule, as the result of patient effort and study. In this the Germans are adepts. In Germany every encouragement is given to a man to devote time and thought to new ways of doing things. ]\Ir. ^Nlagee spoke of the Xernst lamp in this con- nection. This discovery of a German professor will make it possible, it is believed, to secure illumination from electricity with only half of the current used that is now necessary. It will throw into the hands of many thousands of people the possibility of using this form of illumination. '* It is quite pos- sible," Mr. Magee said. " that improvements on this lamp may come from America. It will still be the Xernst lamp, however. What I want to see is a Xernst in America." During the last few years the reports of scientific discoveries contained in the American scientific journals have contained hardly an American name to act as a land-mark. The names of the chief men in science to-day arc, with almost no exceptions, men of foreign birth or descent." " The difference," said Mr. Magee, " lies in the fact that the Germans are patient, studious, thorough people, and they go to the bottom of things. The Americans, on the other hand, are more or less superficial. They are brilliant, but they haven't time to look at a subject from all sides and probe into it deeply as the Germans do. In science, particularly, there isn't the inducement that is oft'ered to investigators here in this country. In other fields the same conditions hold true. In political economy, for instance, you find the same thing. A man learns a little from his \\'alker and his Adam Smith in college, but he does not, as the Germans do. have pointed out to him the exact places where the requirements are not fulfilled, where the shoe pinches, and then set to work to gather all the data "COMMERCIAL IN\'ASI()N " OK ECROPF. 63 bearing- on that particular part of the prolikiii. in uriUr that he may hnd a sohition of the ilk and cotton must he imported, and in fact she is independent in no single raw "COMMKRC'IAI. INVASION" OF KlROi^K 67 material. Her people must levy upon the whole world for their sustenance and to maintain their intlustries. To such a nation foreign commerce is as the breath of life. If four continents shoulil sink into the sea. the United States would still li\e. But cut ofY Germany from her foreign trade, and she must perish. To sum up the situation, so far as the nations of the Triple Alliance are con- cerned, we see that Italy and the Dual Monarchy are not likely to become for- midable competitors of ours in the world's markets; that Germany is endowed with a spirit and ambition which will probably make her our keenest rival, although we have clear advantages in cheap raw ma- terials. If we turn our attention toward investments in these countries, attractive opportunities will be found in Italy, but hampered by an uncertain currency stand- ard and excessive taxation. Opportunity for the introduction of improved methods is even greater in .\us- tria, but political uncertainties and racial antagonism more than counteract that advantage, and the money standartl is (juitc as uncertain as in Italy. There is much greater investment safety in Germany, and that. I believe is true, in spite of the headlong declines which securities have made on the Genuan exchanires. A j\\.>il.it Cm Ill IT is in Great Britain that \vc lind in its fullest development the eft'ect of the American commercial invasion of the world's markets. It is true that American competition has been making notable inroads into the connnerce of all the countries of Europe. But important as is the effect which has been pro- duced upon commercial conditions in the Continental coun- tries, that result is almost insignificant when compared with the consequence of this competition in Great Britain. From the beginning of our history England has formed our most important market, and for two generations at least we have been the largest customers for English products. In the last half-dozen years a change has taken place in the trade bal- ance between the two nations which is. perhaps, the most notable single commercial event to be recorded in the last decade. We have been steadily reducing our purchases from the mother-country; we have been making astounding increases in our sales to her. Comparing, for instance, the change which has taken place in the trade movement between the two nations in the last half-dozen years we see that our annual purchases from the United Kingdom have dropped $16,000,000. stand- ing last year at $143,000,000. In the same period our sales to Great Britain nearly doubled, going up from $387,000,000 in 1895 to $631,000,000 last year. This change in the annual trade balance, showing for us a more favorable total by $260,- 000,000 than we had six years ago, is a change of such import ''COMMKRL'IAI. IWASION" OF Kl KOPK 69 as can only moan icvohuidnarv transforniatii)n in ihc industrial life of the two nations. Those figures are so sis^iiificant thai thev need to be dwelt on somewhat, to tix in the mind their importance. Six years a.^o we sold to ( iroat Ihitain $jjS,- 000.000 more than we houiiht. 1 .a.^t year we sold to her $488,000,000 more than our innchases. In every business day last vear we sent to her $1.^00.000 more than we bout^ht. h'or Americin-built Eni;ines in a Glassrow Electric Line Power-house. every dollar's worth of goods we bou-ht wo sold her four dollars and forty-one cents' worth of our products. The relative importance of the increase in our trade with Great Britain is shown when we compare it with the incroase which we have made in <.ur sales to all the rest t.f I':uro|)C. Noting that our favorable balance in the trade with Croat Britain last year showed an incroase of S4S8.fX)<).o(M) over the record of 1895, we fmd that that fiiiuro compares with an in- 70 THE AMERICAN An American Electric Travelling Crane, Nijni Novgorod, Russia. This sliDws a sni.ill locomolive hanging in the air, one end being supported by a Irame and the other by a chain sling. Capacity, forty tons. crease in the same ])erio(l of $219,000,000 in our trade with all Continental Europe. Such figures as these make it easy to sec \vhy the indus- tries of Great Britain have more keenly felt our competition than has the rest of Iun-()])c, but even these statistics by no means measure in its full significance the eii'ect upon British commerce of the " American invasion." 'J'he nineteenth century may well be said to have been the century of Cireat Britain's commercial sui)rcmacy. During that hundred vears the industries of the country stood pre-eminent in almost every line of manufacturing. British manufacturers commanded completely their domestic field, but they did much more than that. 1diey were in easy control of the greater part of the world's connnerce in manufactured products. Not only have their work.shops held a commanding position, but pre- eminence has been made more secure l)y control, in large measure, of the commercial fleets of the world. '^ COMMKRClAI. IWASION" OF KIROIM-: 71 \\ licii our own niamitactmcrs Iioi^an sitIdusIv t<» reach out a few years ayo ior foreign trade, then- were fi-w of llnni with the hardihood to attempt t(^ meet British eompetititMi in thr home field. What we (Hd do was .sueeessfnlly to eompete at points so far thstant from the I'.ritish faetories lh;it our ervativeness of em- ployers and the hostihi) of workmen to\\art two, however. I Ijelieve there is pretty unanimous agreement in the minds of trained observers of the conditions of industrial afTairs. The highest development of labor-unions has been in (ireat Britain. Much of the earlier growth of these organizations was along correct economic lines, resulted in distinct benefit to or- ganized labor, and was undoubtedly helpful t<. P.riti.-^h industries generally. A few years ago there came into existence a new unionism, which meant a unionism of force, a unionism which carried its points by strikes, and made strikes efTectivc by forci- ble interference with non-union labor. That new nnioniMU has 82 THE AMERICAN lately been succeeded by a newer unionism, which has a false economic theory for its foundation, and is, I believe, more than any other single cause, the influence to which can be attributed the present unhappy state of British industry. British trades-unions embrace nearly 2,000,000 members. The greater part of this army of organized labor has adopted a false economic theory. They hold that there is a given amount of work to be done in Great Britain, and that, if the day's out- put of the individual worker is decreased, the result will be an in- crease in the aggregate number of days' labor. They might not all of them state the proposition in just that way, but the irre- sistible logic of their position carries them to exactly that point. It is a cardinal principle with the members of most of the labor- unions in England to-day that it is desirable for them to produce with each day's work as small an output per man as it is possible to compel employers to accept. They believe that if a man does only half a given amount of work in a day, two men will have to be employed where one was before, or the job will furnish employ- ment for the one for double the length of time. They have the further uneconomic principle of a minimum wage, which is to be paid to all men employed, without regard to the relative value of their labor. Here is how the situation is viewed by high English authority: \\'ith the principle of the minimum wage is conjoined the principle that there shall be no maximum wage; that is to say, if any workman shall induce his employer to offer him higher wages than his fellows, they at once demand that the same increased wages shall be paid to all of them alike. If the master seeks refuge in improved machinery, the principles of limitation of output and minimum wage arc still enforced. The machine must not be allowed to do all it can. any more than the men: nor mav it have an attendant, however simple his duties, at any lower rate of wages than that fixed for the skilled artisan who did the work before the machine was introduced. The machine, in short, must not increase out- put or displace labor. It is broadly argued that men will "COMMKRe'IAL IWASION" Ol KlRol'K «3 work their Itost if it is nuulc woitli tlu'ir while, ;iiitreiii;th or skill, heeanse he inem^s odimn amoni;' hi^ elass ami eamiot get increased wages in retmn. It hardly seems credihle that the great mass of organi/.eor uses its keen- est ingenuity and best endeavors to devise ways to restrict indi- vidual production. Instances can be produced indehnitely to support the assertion th.at such i^ their l)elief. Such itistauces will show quotations from the rules of the organizations which are devised to restrict labor and discourage energetic workmen. There are nianv e.\amj)les of direct official discipline nf members who have sliown a tendency to turn out more work in a day than the minimum which cmi)loyer> can be forced to accept. I have 84 THE AMERICAN heard of many cases where men of ambition and energy who found it difficult to adapt themselves to the easy-going pace which the union prescribes, got very much the worst of it in the contest which always follows a period of acti\-e work. Men who start in to turn out a full day's work are frequently directly disciplined by their unions; but if it does not reach that point, they are at least at once put under a social boy- cott. They are called " sweaters " and " master's men," and nuich ingenuity goes into the devising of ways and means to make their lives miserable and their positions untenable. Some of the notable illustrations of the spirit of curtail- ment of production are found in the building trades. Brick- layers in London, for instance, do not average over 400 bricks a day; those employed by the London County Coun- cil on public work lay materially less. When it is under- stood that an active man can readily lay 1,000 bricks a day, and from that up to 1,600, it will be seen what a disastrous grip this " go-easy " policy has. We have made, with our exportations running into millions of dollars, great inroads on the English boot and shoe industry. Some of that suc- cess can be accounted for by superior machinery and better organization and division of labor, but it is not surprising to find in this, as in a good many other fields where we have made pronounced competitive progress, that there is a clear understanding in the trades-unions controlling the manufacture of boots and shoes that a man's day's work shall be limited to a certain quantity, and that, should he do more, his life will be made intoleral)le. The delusion which the English workman has harbored, that there was a certain amount of work to be done in that industry, and that if everyone tried to do as much as he could there would not be work enough to go around, has led him to the natural re- sult of such a fallacy. Chicago factories, usually paying wages from two to three times as high as are ruling in the English factories, are sending enormous exports into the "COMMERCIAL IWASK )\ - OF KIROPK S5 English ficKl. Tlioso exports iwo _vc'ai> a.i;«> wrn- a Imlc over $500,000; a year a.^o \hv\ pasM'd the million, ami last year they were well on toward .S-'.ooo.ooo. .Both I'lnglish bniUlers and workmen are h;ivini; a most valuable object-lesson in the construction of the great manu- facturing plant of the British W'estinghouse Company. This company is building- a $5,000,000 j)lant at Manchester, in which electrical machines of American model are t(.) be l»uill by American methods. Due of the finest mechanical i)lants in the world is being installed, and the manner in which the building operations have been pushed forward have been the marvel of both luigiish builders and workmen. The plant was started under English supervision. i)ut the work dragged along in such hopeless fashion that the task of comjjleting it was. last April, i)ut into the hands of American buil cm devise to restrict the output of machinery and increase the labor cost is considered by the unions their material ijain. The second serious embarrassment in which liritish industries are involved is the difficulty surroimdin<;- the introduction of modern labor-saving machines and mechanical methods. In the way of that improvement is the double obstacle of the con- servativeness of employers and the opposition of the men. Evervone who has studied the ]Cn,ulish industrial situation will agree unreservedly that labor-saving machinery nnist be exten- sively introduced, that the manufacturing plains nuist l)e put on mechanical equality with those of America and Germany, before the English manufacturers can hope again to produce at as low a unit of labor-cost as is done in the two competing countries. Conservatism is a corner-stone of the English character, and it seems particularly pronounced in some of the families which have hereditarily been in control of manufacturing industries. A machine which did satisfactory service for a man's father and grandfather comes to be regarded with a certain veneration. With us there is no reconmiendation better than that a machine or method is new. To speak to a manufacturer of a new machine or a new process interests him at once. Hi- mmd is open to investigate any improvement that is suggested. antrial development of commanding importance. lUu unless the L'nited States has some more permanent and fundamental ad- \antage, I should lack the absolute faith which 1 now have in our development to a lasting commercial supremacy. Xo small part of our great exports in the last few years has been made up of labor-saving machines, which have at once been turned against us as guns captured from an enemy, h'rom all o\er hurojje deputations of technical experts are journeying to the I'nited States and taking abundant ad\antage of our good-nature and hospitality. They praise our machines and make drawings of them; thev satisfy our pride with aj^prcciations of our methods and thev make coi)ious notes. The residt is beginning to be seen in almost every workshop of luu-ojje. There can be no American mono])oly of ideas. ( i\ili/ation gives no jjatent on technical supremacy, .\merica may lead the world now in her ingenious api)lication of lahor-.saving machin- erv. but there can be no assurance of the permanent continuance of that advantage. Xor can assurance be given that .American industrial society will always remain as mobile and as energetic as it is at i)resent. We have already secM-i trades-union> attempt Dmu'H i-y Otto H. Backer from a photografk. The Opening of an American-equipped Electric Line in Glasgow. "COMMKRCMAI. INVASION" ()\ l.lRoPK ')S ing to force cmploxcrs to make wcrk rather than to i)r(Mlueo wealth. We have seen strikes that have had tor their ha^i> only a desire for an increased i)o\ver of interference, and from that it is not a long- step to a position where imion labor may he fonnd struggling to restrict individual production. Strikes of that character have so far been successfully combatetl. but whatever there is left of the spirit that animated them remain> a menace to American prosperity. In our national conception of the dignity of work we have an enormous advantage, but that also may be in danger. Thus far industrial rewards have l)een made pretty strictly on a merit basis. There have been few sons and nephews of rich families to be taken care of. The future generation can hardly be so free from nepotism in industrial promotion. With the increase of wealth we ha\e already the beginning of a leisure class, and it is not certain that industrial and commercial life can continue to command the full service of the best brain and energy that we have. Our military burdens may increase if we measure up to the full extent of our responsibilities as a woidd-p.ower. Tariff walls may be built against us. On all these points of present superiority we can have but small assurance of a lasting industrial supremacy, but I feel that a more fundamental reason for l)elief in such supremacy can be advanced, one which will warrant the conclusion that .\merica must inevitably lead the world in the twentieth-century com- mercial struggle. Of all nations the United States has the ni(.st unbounded wealth of natural resources. We have hardly comprehended the inevitable advantages which those resoiu-ces arc to give us. Man's labor the world over is steadily decreasing in impor- tance. It is the age of machinery. The forces of nature are to do man's w(jrk. All the world over the cost of production has fallen. The relative imp(jrtance of labor in the cost of pro- duction is lessening; the sway of machinery is increasing. 'Ihc twentieth centurv will be the century of machinery. P.eforc 96 THE AMERICAN it is half completed we may expect to see that sort of human labor that is the painful and laborious exercise of muscle almost supplanted by automatic machinery directed by trained intelli- gence. Such development of machine production steadily in- creases the importance of raw material in the productive process. As the proportion of labor cost decreases, the cost of the raw material forms a larger part of the value of the finished product. The hand-weaver took a pound of cotton and spent a week in its manipulation. The cloth had to reimburse not only the cost of the pound of cotton, but six days of toil. Machinery was introduced into the industry, a week became an hour, and a hundred yards took the place of one. The price of each yard then had to pay the merest fraction of the cost of the labor which watched the looms. The proportion which the cost of the raw material bore to the cost of the finished product enor- mously increased. So under these modern conditions of manu- facturing industry, where machinery enters more and more into the manipulation, and the cost of labor forms a constantlv decreasing relation to the whole, raw material comes to play a more and more important part. When machinerv has fully entered into production, the cost of the crude products makes up the major part of the cost of the finished article. We can in a measure reduce the cost of raw material by improved methods in production and in transportation. The steam hoist and electric drill in the mine, the steam harvester and the steam plough on the farm, the mogul engine and the hfty-ton car, fast steamships of huge tonnage, have all greatly reduced the price of raw material. liut no matter how strong the appeal. Mother Nature fields a slow and grudging consent to the efforts of her children to relax her grip. Alan's success in chcajiening raw material must always fall short of achievements in the realm of manufacture. Since the cost of material is an increasing jiart of the price of the product, those producers who can draw upon practically inexhaustible and rich supplies near at hand, who are not obliged "COMMERCIAL INXASION " OK KlRoi'K 97 to work poor ores ami poor lands, or t.. iran^pori iiialcrials great distances — ^the produccMs and tlic nation with iIk.sc- blessings are at tremendous advantage when compared with others whose supplies of material are less rich and less atlvanlageously Iocater .^r^S#: THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW AN INITIAL FINE OF 25 CENTS WILL BE ASSESSED FOR FAILURE TO RETURN THIS BOOK ON THE DATE DUE. THE PENALTY WILL INCREASE TO SO CENTS ON THE FOURTH DAY AND TO $1.00 ON THE SEVENTH DAY OVERDUE. :m '^tKM ( Ny - u_ ^ ^**^, \ SJa* 6Nov'61jW '■f._C O Ui. ) ^tti2 6'64-6r ^ Due end of FALL Quart subject t« rprali ifter '' OCT 1 R '«) 1 g IN STACKS OCT 170 ftami?i ,iAN^ ,- 71-5PM 2^ 1 *- ^: ■■ ■'^- l. ; :.-. 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