The Commercial Strength of Great Britain

July 1 1911

The Commercial Strength of Great Britain

July 1 1911

The Commercial Strength of Great Britain


THE British business man from the American standpoint is discussed in a very entertaining article in the Century Magazine by James Davenport Whelpley. We Americans are inclined to be impatient with English business methods, he begins. Our people come to London to close up some affair in which Anglo-American capital is interested, and expect to return within a week—perhaps on the return trip of the same steamer on which they came over. Instead of that days and even weeks go by before people can be seen and things accomplished. When they are concluded, the American goes home with tales to tell of how a “bit” of shooting, a week-end, a motor trip, a. horse-race, a cricket or a golf match, or even a sick horse or dog, delayed his allimportant negotiations indefinitely. When the first outburst of irritation has subsided, however, we learn of certain impressions he brought away with him from London which are worth wdiile. First, he

is even awed at the apparently unlimited amount of real money, actual cash, which is to be had if he has the “open sesame.” Then he will admit, if grudgingly, the sound conservatism, the accurate information, the keen analytical power, and the firmness of conviction possessed by the men he met and with whom he dealt. He will concede to them a knowledge of the far corners of the earth which brings India, South Africa, the Argentine, in fact, every place where English energy or money has been expended, within the familiar ken of the man who may never have been farther from London than the seashore, and to whom a crossing of the English Channel would be the event of a lifetime.

On the other hand, he will have met perhaps some of the army of international tramps who for pleasure or profit travel the highways and byways, observant, matter-of-fact, thorough, and so intensely English always that everything is judged

by English standards and looked at in its possible relations to English profits, political, financial, or commercial. It is these qualities, these characteristics, more highly developed in each succeeding generation, which have begotten that great unorganized volume of individual trading known as English foreign commerce.

In the matter of supplies, the English people are struggling for independence of the United States. The fluctuation of the American cotton markets has caused riots in the manufacturing districts. American trade combinations are held responsible for the high prices of food. It is this feeling which has helped along the spirit of empire in England and has led to heavy investments in the British protectorates in the attempt to develop new supplies of cotton, food-stuffs, and other raw staples. So far these expenditures have had no appreciable effect in diverting the trade from North America, and in view of the enormous supplies required, it will be many years before they become really apparent. If such a time does arrive ii will also be indicative of a change in the character of American industry, for the energies of the people will have turned to other fields, resting content that the home market be supplied with raw materials rather than a surplus be created for export. _ For the seller of staples and raw materials is the least intelligent and least prosperous of the world’s traders.

It is British capital that has developed the British Empire and trade follows capital investment. Roughly speaking, twenty-five per cent, of England’s foreign commerce is with her imperial dominions, though virtually every one of these dependencies has enacted customs laws which demand toll from the trade of the mother country as well as from that of other lands. The only concessions yet made have been those of preferential duties. How frail a tie this may be upon which to found the commercial unity of an empire of which the pivot is a free market is shown in the fact that the imports of British goods into British colonies are now decreasing annually, while imports of foreign goods show a notable increase. It is also even more strikingly brought home to the people of England by the proposed commercial arrangement between the United States and Canada.

Leading English statesmen have designated the event as the "death of preference.” Even those who have made this scheme the basis of their political creeds admit the severity of the blow and the "narrowing of the margin” for the possible establishment of an imperial Zollverein.

That the United States and Canada should in time come closer together in matters of material interest has been inevitable since the settlement of the one country under two flags. It has been the wonder and despair of thoughtful men in the United States that such an arrangement was not accomplished long ago. It has been the wonder and satisfaction of British statesmen that it was so long delayed. The British people have been hugging the delusion for many years that natural laws could be rendered inoperative by sentiment and legislation; and that her lusty colony would remain content under the parent roof-tree and continue to contribute her earnings to the family purse even aftc” the coming of age. This" illusion has been a most attractive toy with which the British politician has interested his audience and with which public attention has been diverted from the real dangers which threatened the peace and welfare of the home itself.

Acting under the almost incomprehensible theory that the home country was being strengthened in the building up of countries which, although under the same flag, treated her only as a favored nation. Great Britain has been drained of much of her expert labor and the fittest of the unemployed. These men, with their women and children, have been urged, even assisted to leave, while the lands of the British Island cried aloud for intelligent and economical tillage, the sweat-shops of East London grew apace through unrestrained immigration of the more or less undesirable, and the wage scales of industry remained at low ebb because of the cost of production through ancient methods and inefficiency. Like unto the mother of seven sons lost in battle, she gives of her children to the universal development and progress of the world, but the home is desolated.

To say that in this now fading illusion of empire there lies a tremendous and magnificent pathos is to seem almost irreverent, for it is to the British nation, it5

world-wide and broadcast sowing of rightthinking men and women that the world owes its progress in the last two centuries. It is only because of the grasping of politicians for marionettes with which to amuse the crowd that the real meanings of the forces at work are lost sight of. The people are scanning far horizons for rainbows of promise when they have the materials beneath their feet with which to stop the now ominous gaps in the wall of home defense; and there are no better materials more quickly to be molded to desired ends than those which lie close to hand. Anything which will leaven the toiling mass of humanity, quicken the pulse and the intelligence, bring hope to the children of the hopeless, will do more to prolong England’s hold upon the trade of the world than a hundred imperial conferences. To devise means to keep her money and her men at home and to give each an equal chance is now the problem which lies on the doorstep of the home citadel of this fecund mother of nations, who still abounds in incredible resources, strength and power, notwithstanding the demands already made upon her and to which she has responded with a lust for adventure without parallel.

No greater source of England’s strength exists than that which lies in her dominance of the seas. It is not the armored vessels of which her people are so proud that contribute to her vitality, but the unarmed liner following its regular route, or the blunt-nosed, slow-speeded “tramp,” seen perhaps first at the London docks, then again a few weeks later at anchor in some far tropic port.

The tonnage of ships flying the British flag is nearly twenty million. The United States comes next with less than eight million and then Germany with less than four and a half million. A great percentage of the American tonnage is in the coasting trade, while that of England is overseas. There are no signs of decrease in this greatest of all the British industries, for in 1910 over 500 vessels were launched from British yards — figures which included 331 sea-going steamers, ranging from small yachts to the 45,000ton new passenger steamer Olympic. In the United States 195 vessels were launched; and in Germany 117. Nearly 50 per cent of all the world’s new shipping of

1910 carries the British flag. The very nature of England’s trade demands this great merchant fleet, for her highways are those of the sea. Her greatest port of tonnage is London, the second is Hong-Kong, and the third is Liverpool.

To say that this great English industry stands on its own feet, that it is just as free from government aid or organized directing is as true as to say the same of the commerce it stands for. Many careless and intentionally or unintentionally misleading statements havq been made concerning the aid given +o steamship lines by the British government. With the exception of a favorable loan and a subvention conditional upon high speed arranged by the English government to secure the building of the Mauretania and the Lusitania, virtually no subsidies are now paid by England to further the interests of sea transportation. Statements are not uncommon in which all the amounts paid by the British government for carrying the mails and other services are lumped together and characterized as shipping subsidies. This is not really a fair statement, for the British Post Office pays for the carrying of the mails at the lowest ton rate which can be secured under the circumstances. In former years some subsidies have been paid ; one notable instance was that designed to encourage the development, of a line to the West Indies, but even this subsidy has been discontinued, owing to the refusal of Jamaica to continue payment of her half share of $200,000 a year. That the payment for the mail services is based upon actual work done is shown by the fact that with each succeeding year less and less money is paid to the Penninsular and Oriental Line owing to the decrease in the amount of mail matter sent by that route. On the whole it may truly be said that English commerce, including the great shipping industry, is entirely dependent for success upon the intelligence and persistence of designed effort and activity.

“What England needs,” said an Englishman to me, “is a tariff for revenue with a carefully adjusted degree of protection for home industry and the power such protection will give us to favor the products of the colonies.” It was in the course of a smoking-room chat on a steamer northbound from South America

that this was said. Mv friend is the kind of man who would succeed anywhere— quiet, wasting no words, and commanding respectful attention when he does speak; practical to the last degree, and with a fortune, the profits of many years of successful trailing, which speaks for the value of his opinion. “I am going home,” he continued, “to stand for Parliament on the Tariff Reform platform. The constituency in which I shall ask for votes is one of laboring men. I shall tell them what I think and take the consequences.” He did, and was defeated; but he will be in the field at the next general election in England, when he believes the tide will turn toward what he terms “a plain, common-sense view of the situation.”

When his attention was called to the fact that the year 1910 witnessed an enormous increase over previous years in the figures of England’s foreign commerce, he said, “Yes, it did; but a large part of the gain is accounted for by increased prices paid for raw materials imported and the corresponding increase in the prices received for goods sold abroad. The actual gain in bulk is not so satisfactory. An ominous feature of the so-called boom of last year is that according to the returns made by the labor organizations a much smaller percentage of unemployed labor was absorbed than during any trade boom of recent years. We are seriously wrong at the bottom and must put our house in order.”

And now for a contrary view. A few weeks later I was traveling from Paris to London. Sitting in the so-called Pullman buffet car on the English end of the journey, I found myself opposite the kind of Englishman who is always promising of interest,—-tall, strong, keen-eyed, rather good-looking, fairly young, and manifestly full of nervous energy and interest in life; hence entirely lacking the air of boredom which is cultivated by some as evidence of “good form,” that exacting god worshiped by the well-born Briton at the expense of his enjoyment in life, and often of his progress. Presuming upon my American nationality, a possession which brings forgiveness in the minds of many Europeans for certain so-called eccentricities, one of which is speaking to strangers, I began a conversation. My fellow voyager was quite ready, in fact, eager

to discuss fhe questions which every intelligent Englishman is now debating.

“Tariff reform, protection—no, sir, that is not what England wants. We don’t need it. Our trade has grown to what it is because it has been free. England has been and is the market-place of the world. In quality we manufacture as well as any people in the world, if not better, and if we keep pace with the modernization of industry we can continue to compete in price. Let me illustrate. I am an engineer, a manager of steel mills. The history of our property is that of nearly every other mill in Great Britain. The business was founded by a practical hard-working man, who by sheer industry, actual strength of arm, and personal knowledge of the abilities and character of the men whom he gathered about him, built it up to a creditable size. This business then passed to the sons, men who were better educated, better off socially, but still hard workers with an intimate knowledge of practical affairs and of the men in their employ. They sent their sons to the universities. When the time came these young men with university education, good social position, and much knowledge of many things unknown to their fathers, came into the ownership of the mills. In theory they knew what was going on, but not in practice, and they had no firsthand knowledge of the men whom they must place in immediate charge of the works. They now fail to see the necessity for capital expenditure, they do not realize that year by year the cost of production is being reduced, not by economy but by liberal expenditure, and by heroic discarding of plant still apparently useful. The articles they manufacture are still the best in the world as to quality, but they find the Germans, for instance, excelling them in beauty cf finish and design, and what is more serious, they find the manufacturers of several other nations, underbidding them in price in, to them, an inexplicable way. These are the men seeking from without some relief from foreign competition, who are crying for protection.

“Some of the most ardent advocates of Tariff Reform among the iron and steel manufacturers are men who are still using the obsolete and expensively operated ‘bee-hive’ furnaces. Give our mills modern processes, well managed, and England

can compete successfully with the world. In brief, what we want at home is not protection, but ihe money now being sent out of the country for foreign investment. Delegations from our industrial people go to Germany and they see fine mills, clean, well-fed, well-housed workmen with wives contented with their lot; and they return convinced that all these advantages result from protection. They are wrong. Our competitors are merely taking advantage of the inventive genius of the age in the conduct of their business, and look upon the proper care of their work-people as part and parcel of an intelligent conservation of force and a tremendous factor in the cheapness of the ultimate cost of production.”

Between these two extremes of belief, each held by many well-educated, intelligent, practical, and thoughtful men, stands the Liberal in theory, but who is for protection as a matter of expediency. He thinks that England is all right at the top, but that the laboring classes must be lifted out of the helpless rut into which he believes they have fallen. A wide distribution of education—paternalistic legislation for their benefit, old-age pensions, compulsory insurance, anything, in fact which will lighten the burden of the poor —enlighten their minds and give them hope. This man says the rich must rest content with even heavier taxation that the future may yield some promise of relief. This man would have protection, not because he thinks British industry needs it, but because he believes it might assist in his general scheme of raising the mental and physical standards of the people as a whole, thus aiding in the desperate struggle to keep the nation abreast of the times and to retain her present premier hold upon the trade of the world. He says it has been done in Germany all within twenty years, and could be done in England within a generation.

Politics in England means fiscal policies, economics. The party organizations are so incomplete and ineffectual that they have built up no considerable following which votes as it is told. Political beliefs in England to-day are marked by an individualism bewildering not only to the foreigner but to the citizen as well. The questions to be disposed of by future elections, which promise under the British

system to be of frequent occurence, are those which deeply concern the integrity of the British Empire and the welfare of England and her people at home. The complexities of the problem are such that no man can say unhesitatingly that this or that policy is unquestionably the best, and few attempt to do so. And further, no man dares to predict confidently the immediate triumph of one or the other of the many remedies suggested by those who believe the situation needs remedy, or of the policies suggested by those satisfied with present conditions, but who view with apprehension the decreasing margin of distance between the England of to-day —the greatest trading nation of the world —and her active pushing rivals, hopefully following on apace.

There is no sign of decadence in England. By contrast with the rapid development of Germany and of the United States, she seems, however, to be progressing but slowly. It needs but a glance at her vast figures of foreign trade, encompassing as they do the world-wide field of human endeavor and industry, to gain some understanding of what has yet to be accomplished to retire her to second place, To British ports come vessels of every nation and to every seaport in the world are sent British-owned vessels on trading missions. Millions of tons of staples are bought by England in the country of their origin, loaded on British ships, and delivered to her customers elsewhere without touching British ports. In the warehouses along the Thames and elsewhere are concentrated the supplies of the world in many notable articles of commerce. The ivory of India and Africa are first brought here. The furs of the world are sold by auction in the London fur market. Mahogany logs lie on the London docks awaiting transshipment +o countries much nearer to ■‘heir native growth than England. In brief, this little island is the commercial heart of the world, and the slowing or quickening of its pulses is reflected on the bourses of the nations of the earth. With all the internationalizing of finance which has come about in recent years, England still keeps tight hold upon the purse-strings. The London bank rate is a governing factor from New York to Peking. England has been for generations and still is the great creditor nation

More than £200.000,000 is scattered abroad annually. It is her money which builds the pioneer railroads, opens mines, dams the waters, and finances the lesser nations. From all these enterprises her people take their toll and seek new outlets for this increment. That too much money and too many men have been sent abroad attracted by promise of greater returns is probably true. She has bled herself too freely, and the heart now shows some signs of weakness. The rivalry of younger and more daring and strenuous peoples for the trade of the world is a severe test of her seasoned strength.

That she will yield in time may be true, and probably is, for history repeats itself. If the empire shall fall to pieces, it will be not in decay, but rather as the proud mother of many children reluctantly witnesses the departure of her sons and daughters into the battle of life, their inheritance one of courage, strength, selfconfidnce, and capacity for self-government; each with a notable share of the gold which has come to the parent purse from all quarters of the globe, and upon the investment of which is founded the prosperity and credit of these new nations, once upon a time England’s dependent colonies.