Popular Science Monthly/Volume 60/April 1902/Our Foreign Commerce in 1901

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THE commercial reports of diplomatic and consular officers for the-'-calendar year 1901 record continued growth in the sales of many lines of manufactures from the United States in foreign markets and the increase of the general concern in Europe as to the possible results of our industrial competition. Although the figures of our exports compiled by the Treasury Department show a considerable falling off in the total value of manufactured goods sent abroad, there seems to be a steady and uninterrupted spread in the popularity of what may be termed American novelties all over Europe. By the word 'novelties' are meant not only labor-saving implements and machinery to which most Europeans were strangers, but a great variety of articles of merchandise, such as boots and shoes, leather goods, hats and clothing, rubber goods, furniture and household utensils, hardware and cutlery, canned goods, glassware, clocks and watches, scientific apparatus, electrical supplies, and cotton, silk and woolen textiles—all of which possess distinguishing points of excellence and relative cheapness, new to Europe, which commend them to purchasers there in preference to similar articles of home manufacture. In other words, while the aggregate of our exports of manufactured goods has shrunk, the variety of our sales in Europe is being extended and the territory upon which they are encroaching is being steadily enlarged.

Advances in Austria-Hungary.

A striking example of this is seen in the case of Austria-Hungary, the country in which originated the idea of a European combination against American goods and where the hostility of the industrial forces continues to be most pronounced. Notwithstanding this, the imports from the United States, according to Consul-General Hearst, of Vienna, [2] are increasing rapidly, although American exporters have not until recently given general attention to that part of Europe, 'which is considerably removed from ports in closest touch with trans-Atlantic commerce.' So formidable is the growth of American imports, in fact, that 'Austrian manufacturers and agriculturists are making an organized effort to stem the inflow.' At a recent conference in Vienna to take measures against American competition, adds Mr. Hurst, 'it was openly acknowledged that the commercial policy of the present time is dictated and controlled by the United States. . . . Instances of the gigantic strides of our American manufacturing industries are cited to show our capability to forge ahead of all competitors in many fields.'

Still Leading in Germany.

In a report upon the commerce and industries of Germany,[3] Consul-General Mason, of Berlin, says the United States again heads the list of countries selling to that country, with a total of nearly $343,000,000, or 16.9 per cent, of the entire bulk of German imports, although it should be noted that this covers the values of all American products landed on German soil, 'a large percentage of which simply pass through. . . en route to Russia, Austria-Hungary, Switzerland, and Scandinavia.' It may be expected that later returns will show a falling off in German imports, owing to the recent industrial depression which has seriously impaired the purchasing power of the Empire. But in Germany, as in Austria-Hungary, our goods continue to hold their own, and the 'overshadowing competition of the United States' is regarded by German economists as of grave importance to the future of German industry and commerce. "It is recognized by intelligent Germans," adds Mr. Mason, "that in future industrial and trade competitions, that fine composite product of American racial qualities, institutions, and methods, the workingman who thinks, will, in combination with our unequaled resources, turn the scale in favor of the United States"

Supplying Europe with Goods we used to Import.

The same concern is felt in France, in Belgium, in Switzerland, in Great Britain—in other words, in all of the highly developed manufacturing countries of Europe—and it is a most significant fact that even in specialties which were once thought to be exclusively their own, the United States is becoming a more and more formidable competitor. Who would have imagined a few years ago that we would make such rapid progress in the manufacture of silk that we would soon cease buying silks from France, with the exception of highly finished goods, and would actually be exporting silks to that country? Yet this is what has happened. So of tin plate in Wales. At one time it was doubtful whether we could manufacture tin plate profitably, and it was confidently asserted that the Welsh must always control the American trade. But we now manufacture all the tin plate we need, and the Welsh have recently imported tin bars from us.

There are, indeed, surprisingly few of the articles which used to be obtained exclusively abroad that are not now produced in the United States. The woolen as well as the silk industry of France and the hosiery industry of Germany are said to be suffering severely from our competition, and the Bohemian glass industry is feeling the effect of the increase of glass manufacture in the United States. Our cottons are steadily gaining in taste and finish, and are now sold in England in competition with the Manchester product. Says the Leipziger Tageblatt of April 10, 1901: "Even in fancy articles, in which the European market has set the styles for the entire world, the American manufacturers are beginning to compete with the European. British calico prints are also already receiving competition from America. As we hear, travelers of a well-known American house have offered American cotton stuffs in England with much success, and the London authorities declare them to be tasteful and worth their price." A New York company manufacturing cotton stuffs intends to found a Paris house which shall introduce its fancy woven stuffs for women's dresses, and trimmed women's hats are being exported from the United States to Europe. "The reversible cloths which are made in the United States," said Consul Sawter, of Glauchau, in a report sent in 1900, "are now the style in high-priced goods in the German capital." In agriculture, as in manufactures, we are constantly widening the sphere of our production. The orange and lemon growers of southern Europe are feeling the effect of California's competition. "It is ridiculous," says a Spanish newspaper,[4] "to think that fruits and vegetables raised on the slopes of the distant Pacific should compete at the very doors of Spain with those produced in this country. . . . Shall we live to see American oranges on the Valencia market itself?" We are producing our own raisins, our prunes, our wines, our olive oil, and are sending them abroad. California prunes now compete in Europe with Bosnian prunes, once a staple export to New York.

In the busy manufacturing district of Liege, Belgium, according to the annual report of Consul Winslow, more American goods are consumed than ever before, in spite of business depression. Our sales in general, says Mr. Winslow, have doubled in the past three years, and it is now common to see articles marked 'Americaine' in the shop windows. Spanish journals complain that steel rails are imported from the United States, notwithstanding the production of iron is one of the important industries of Spain. Vice-Consul Wood, of Madrid, says our goods are to be seen everywhere, and include such American specialties as hair-clipping machines, dental supplies, typewriters, electric motors, etc.

Decline in Exports of Manufactures.

The people of Europe, it may be assumed, therefore, are not less but more favorably inclined to goods of American origin, and the falling off in our exports, so far as they are concerned, is to be attributed to temporary causes, such as business depression, reducing their purchasing power, with the natural result of falling prices, or to discrimination against our products. The reduction is also found to be due, in part, to the elimination of the Hawaiian Islands and Porto Rico from the Treasury tables of exports to foreign countries, and to trade conditions in the United States, such as those affecting the exports of copper, which have checked the outflow of manufactured goods.

The Treasury statement of imports and exports of the United States for the calendar year 1901 (subject to revision) shows that the total imports amounted to $880,421,056, an increase of $51,271,3-12 over the year 1900; and that the total exports were $1,465,380,919, a falling oft of $12,565,194 compared with the previous year. The exports of manufactures amounted to $395,144,030, against $441,406,942 during the same period of 1900—a falling off of $46,262,912. The percentage of manufactures in the total of exports declined from 30.38 in 1900 to 27.48 in 1901. On the other hand, the exports of agricultural products rose in value from $904,655,411 in 1900 to $940,246,488 in 1901—a gain of $35,591,077, thus largely offsetting the loss in manufactures. The percentage increased from 62.26 to 65.38. The decline in the exports of copper, not including ore, amounted to $24,007,711; and in manufactures of iron and steel, to $27,093,683.

Has Expansion been checked?

Notwithstanding the continued spread of our goods in Europe, and the deductions to be made from the Treasury figures on the score of accidental or natural causes of decline in manufactured exports, it is evident that the 'American invasion' of Europe has ceased, for the time being, to be of the sweeping character that distinguished it at first as an economic phenomenon. Our advantages in industrial competition in the abundance and cheapness of raw material and fuel, in the superior efficiency of our skilled labor, in the unexampled fecundity of our people in the invention of labor-saving machinery, and the advances we are constantly making in economies of production are still the subject of much anxious speculation in the great industrial centers of Europe; but there are some foreign observers who are encouraged by recent developments to hope that conditions may be more nearly equalized by the substitution of new processes and improved machinery modeled on our own and the adoption of legislative measures aimed especially at our goods. It was pointed out in the 'Review of the World's Commerce' a year ago[5] that, in the reports of the consular officers for 1900, there ran 'along with a common note of satisfaction, a warning, here and there, of a more strenuous competition, which, in the end, may counterbalance our superior advantages to a considerable extent and check our progress in the world's markets, unless we equip ourselves in the meantime for the ultimate phases of the struggle.' As yet, it cannot be said that Europe has made any sensible progress, in actual performance, toward more strenuous competition. The measures adopted thus far are almost wholly tentative or preparatory, and it may be that those which involve restrictive legislation will be abandoned if the United States should consent to modify. its tariff policy and permit the importation of a larger volume of European goods in return for similar concessions.

An English View of American Competition.

Upon the other hand, the decline in our exports of manufactures is taken in some quarters to indicate a subsidence in the aggressiveness and force of our competition. The London Times of January 7, 1902, in a careful review of our material progress in 1901, inclines to the view that we may have reached 'the top of the wave of commercial prosperity' and that the danger apprehended from the United States of 'aggressive economic interference with other countries' is not so serious as it was generally thought to be in the earlier stages of our expansion. Great as has been the real commercial and industrial success of the United States during the last two or three years, says the Times, "we are convinced that it is insufficient to warrant the view of its economic results taken either by sanguine Americans or by timid Europeans. The United States are not, as many Americans and some foreigners seem to imagine, exempt from the laws of nature. There are people who are so fascinated by great relative magnitude that they are unable to distinguish between it and infinity. Their judgment becomes, so to speak, polarized by the too intense contemplation of great but variable economic forces, just as a compass needle is disturbed by the proximity of a relatively large mass of iron, and their minds become incapable of receiving impressions from evidence that the really permanent economic forces are not dead or even sleeping. Now, there have been several pieces of evidence during the past year that the economic situation in the United States is not altogether so good as it appears to those who merely look at and discuss the surface, whether from habit or because they have reasons for not wishing the public to look any deeper." In support of its assertions, the Times endeavors to show that the continued expansion of traffic receipts of American railroads loses much of its apparent significance when the fact is considered that it is not a new thing, but 'had been going on for a long time before the end of 1900'; that the sanguine prediction that, in a very few years, New York would be the monetary center of the world, based upon the theory that the United States was becoming a creditor instead of a debtor nation and was lending money to Europe instead of borrowing, is not being realized; that 'America has gone, for the time being, quite as far in the direction of employing her resources and credit as is safe, and possibly a little farther'; and that "the American public has never recovered from the fright it got in May last, in spite of every endeavor on the part of the leaders of the business world to allay the apprehension created by the panic, and to encourage a belief in the strength of the bond which 'community of interest' was supposed to have established among the able and ambitious men who govern the great business corporations of the United States."

Our Industrial Efficiency Undiminished.

Whatever be the force of these conclusions, they do not necessarily detract from the efficiency of the United States as a competitive force in the world's markets, for they do not in any way affect the advantages peculiar to us as an industrial nation, and if they did, they would be offset by drawbacks such as insufficient supplies of raw material and fuel under which the other manufacturing countries must, in the very nature of things, continue to labor. Moreover, it will probably be a long time before the conservative, slow-moving industrial forces of Europe will adapt themselves to the novel requirements which American ingenuity and enterprise have created. Both labor and capital in Europe would seem to have a long and difficult task ahead of them before they shall have approximated to the economics of production which we have mastered.

Alleged Obstruction by British Labor.

The labor conditions in Great Britain especially appear to be such as to seriously embarrass progress there and to give us a broader margin of opportunity in more quickly and more economically meeting the demands of foreign consumers. In a series of articles entitled 'The Crisis in British Industry,' a writer in the London Times asserts that the English trades-unions have so hedged about the productive forces of the Kingdom as to greatly diminish output and delay the execution of work. "Thirty years ago, our correspondent states, and we believe accurately," says the Times editorially, "a bricklayer would lay 1,000 or 1,200 bricks in a day. In America, we are given to understand, the figure is even higher. Now, by an unwritten but mercilessly enforced trades-union law, a man must not lay more than 400, and if he works for the London County Council—that is to say, for the ratepayers—he must not lay more than 330. Our correspondent quotes a case of a building put up for the school board in which the average output of the bricklayers was 70 bricks a day. Yet these are men receiving the highest current rate of wages, a rate very greatly in excess of what was paid when 1,000 bricks were laid per day. This is typical of what goes on in every trade, though it may not always be so easy to give exact figures."

The United States consul at Liverpool, Mr. Boyle, in his annual report for 1901,[6] gives a most interesting description of the lengths to which this restrictive policy is carried. "The charge is made," he says, "that there is a general disposition on the part of British workingmen to obstruct as much as possible the use of labor-saving machinery, and to limit its output whenever the employers add machinery to their plant; and also that, in certain trades, the rule is 'one man, one machine,' whereas in America one man will attend to two or three machines. It is furthermore charged that there is an increasing disposition on the part of British workingmen to shirk work, and to use all expedients to perform as little labor as possible during the hours for which they are paid. These charges are made with great particularity against trades-unionists. There is, it is to be noted, a growing tendency throughout the country to shorten the hours of labor, while at the same time there is an upward movement in wages. As a rule, trades-unionists deny the charge of obstructing the use of labor-saving machinery and limiting the output; and they retort that employers are lacking in enterprise in not fitting up their factories with up-todate plants. It is undoubtedly true, however, that, speaking generally and quite apart from the question of trades-unionism, English manufacturers find it almost impossible to get the same amount of product from machines as is obtained in America. There are two reasons that account for this, independent of any agreement, expressed or implied, on the part of trades-unionists to limit the output. The first reason is that, as a rule, the British workman is not as adaptable as the American workman—he does not so readily get command of new appliances as the American workman; and the second is that it is not the custom of the country for an Englishman, whether mechanic, clerk or laborer, to work as hard as an American." In Consul Boyle's opinion, 'trades-unionism has an influence in England far beyond what it has in the United States'; but he adds: 'It is but just to say that there is greater need of trades-unions in this country than in America. Undoubtedly, English trades-unions have brought about great reforms in the condition of factories, as to the hours of labor, in regard to the employment of children, etc.; and there are indications that the alleged restrictive policy of trades-unions, express or implied, is gradually being modified."

American Workingmen promoting Expansion.

Whatever be the merits of the points at issue between employers and organized labor, it is evident that the existing conditions are not only unfavorable to the increase of Great Britain's competitive energy, but actually handicap her in the effort to adapt herself to the industrial exigencies which we have created. The advantage we enjoy in this particular is rendered all the more formidable from what seems to be a growing tendency in the United States toward a more harmonious cooperation between labor and capital, as was strikingly shown in the recent conference of employers and labor leaders in New York which resulted in the creation of a permanent board of conciliation. American workingmen generally, instead of seeking to limit output, strive to increase it, and they find their reward in the cheapening of production, which enables the manufacturer to compete in foreign markets and thus get rid of the surplus beyond the demands of home consumption, with the result of keeping his factory going and giving steady employment to the operatives throughout the year.

Competitive Energy but partly developed.

It may be assumed that, whatever the symptoms of a falling off in our sales abroad, the causes are not to be found in any decline of our industrial efficiency or in a more strenuous competition on the part of Europe. It is evident, however, that, if we would again attain the rate of progress of a year ago and keep it against all comers, we must avail ourselves of something more than the indigenous resources that have been described. As yet, we can not be said to have made full use of our powers. It must not be forgotten that, as has frequently been pointed out, our sudden and surprising success in invading Europe with manufactured goods was due, not to concerted and systematic effort on our part, but to the need of finding outlets for surplus product and the unlocked for recognition by European purchasers of the superiority of many articles of American manufacture. To a very great extent, our goods have sold themselves in the European markets, and that, too, in the face of high tariffs, of the hostility of industrial interests, and of a very general indisposition on the part of our manufacturers to adapt their styles, patterns, etc., to the tastes or prejudices of foreign consumers.

Necessary Aids to Future Growth.

It may be said, indeed, that we have hardly more than entered upon a novitiate in fitting ourselves for international competition. The establishment of sample warehouses and agencies at important trade centers, the employment of commercial travelers conversant with the language, customs, trade usages of particular countries; the development of adequate banking and transportation facilities; the adoption of proper methods of packing; the offering of more liberal credits—these are some of the conditions of the full utilization of our opportunities in foreign markets. If to these is added provision for a larger volume of exchange with countries which, to a greater or less extent, are now excluded from our markets, the real strength of our competitive powers will be developed.

Increasing Popular Interest in Foreign Trade.

It is encouraging to note that the people of the United States are becoming more and more sensible of the value of foreign trade and the importance of intelligent and well-directed efforts for its expansion. The growth of popular comprehension and approval is illustrated not only by the establishment of commercial museums, the organization of export associations, the demand for the creation of a separate department of the Federal Government having special charge of industry and commerce, and for the improvement of the consular service as an agency of commercial expansion, but also by the fact that our educational institutions, one after another, are rapidly adopting commercial instruction as an important feature of their work. Even the ordinary high schools are engrafting commercial geography upon their courses, and during the past year, the Bureau of Foreign Commerce has received applications from teachers and scholars in many parts of the country for copies of monthly and other consular reports as aids in this branch of study. The requests for information as to trade conditions in foreign countries from manufacturers and exporters have multiplied rapidly, and it may now be said that there is hardly an important business concern in the United States having a present or prospective interest in foreign trade which does not avail itself of the data furnished by the consular service.

Conditions in Undeveloped Markets.

The relation of the economic forces of the United States to those of Europe may be taken as the surest index to the probable future of our trade with the rest of the world; for it must be evident that, if we can continue to compete with European industries in their home markets, we shall have but little to fear from their rivalry in the neutral or undeveloped markets, where we would meet them on an equal footing. Even in Canada, notwithstanding a preferential tariff of 3313% per cent. in favor of British imports, we continue, says Consul-General Bittinger, of Montreal, to enjoy 'more of Canadian customs than the rest of the world put together,' and many classes of goods which some years ago were bought in Great Britain are now more cheaply and more conveniently purchased in the United States. Last year, our sales to Canada amounted to more than $110,000,000, while those of Great Britain were only about $43,000,000. In Mexico, Consul General Barlow reports, the purchases from the United States show a large increase—over $4,000,000, or 11.8 per cent—while those from every other country exporting largely to Mexico, except Germany, show a large decrease. The German gain was only about $411,000, or 5.8 per cent. In the reports from Central America and South America, there are gratifying indications of substantial growth in the sales of our goods, and we are steadily widening the variety of our exports to Africa, Asia, Australasia—in other words, to every part of the world.

Commercial Work of Consular Officers.

In the 'Review of the World's Commerce' introductory to the annual reports for 1901[7] the effort has been made to summarize the detailed reports of the consular officers in such a way as to bring out the points of chief interest as to the trade and industries of the various countries and the obstacles to, as well as the opportunities for, the sale of American goods. It is but due to the consular officers to add that the quality of their work shows continued improvement, and that, thanks to their industry and promptitude, the Department is again enabled to transmit the annual reports to Congress within a month after the close of the calendar year.

  1. Extract from the 'Review of the World's Commerce,' introductory to 'Commercial Relations of the United States, 1901' (in press).
  2. See 'Advance Sheets of Consular Reports,' No. 1193 (November 19, 1901).
  3. Printed in 'Advance Sheets of Consular Reports,' No. 1185 (November 9, 1901).
  4. 'Advance Sheets,' No. 1043.
  5. 'Review of the World's Commerce for 1900.'
  6. See 'Advance Sheets of Consular Reports,' No. 1222 (December 24, 1901).
  7. 'Commercial Relations of the United States' (in press),