When Englishmen, looking at the progress of the United States, doubt its permanence—when they distrust the substantiality or the honesty in the workmanship in the American commercial fabric—it might be well if they would say to themselves that the men who are doing these things are only Englishmen with other larger opportunities. Behind all this that meets the eye is the same old Anglo-Saxon spirit of pluck and energy which made Great Britain great when she was younger and had in turn her larger opportunities. Above all, that pluck and energy are unhampered by tradition and precedent in exerting themselves in whatever direction may be most advantageous; and to be unhampered does not necessarily mean freedom only to go wrong.
An American girl once explained why it was much pleasanter to have a chaperon than to be without one:
"If I am allowed about alone," she explained, "I feel that I am on my honour and can never do a thing that I would not like mama to see; but when a chaperon is with me, the responsibility for my behaviour is shifted to her. It is her duty to keep me straight. I have a right to be just as bad as I can without her catching me."
The tendency of American business life is first to develop the individuality and initiative of a man and, second, to put him, as it were, on his honour. It is, of course, of the essence of a democracy that each man should be encouraged to develop whatever good may be in him and to receive recognition therefor; but there have been other factors at work in the shaping of the American character besides the form of government. Chief among these factors have been the work which Americans have had to do in subduing their own continent and that they have had to do it unaided and in isolation. Washington Irving has a delightful sentence somewhere (in Astoria I think) about the frontiersman hewing his way through the back woods and developing his character by "bickering with bears." "The frontiersmen, by their conquest of nature, had come to despise the strength of all enemies," says Dr. Sparks in his History of the United States. It was only to be expected, it was indeed inevitable, that the first of American thinkers—the man whose philosophy caught the national fancy and has done more towards the moulding of a national temperament than, perhaps, any man who ever wrote, should have been before all things the Apostle of the Individual. "Insist upon Thyself!" Emerson says—not once, but it runs as a refrain through everything he wrote or thought. "Always do what you are afraid to do!" "The Lord will not make his works manifest by a coward." "God hates a coward." "America is only another name for Opportunity." My quotations come from random memory, but the spirit is right. It is the spirit which Americans have been obliged to have since the days when the Fathers walked to meeting in fear of Indian arrows. And they need it yet. It has become an inheritance with them and it, more than anything else, shapes the form and method of their politics and above all of their business conduct.
I have said elsewhere that in society (except only in certain circles in certain cities of the East) it is the individual character and achievements of the man himself that count; neither his father nor his grandfather matters—nor do his brothers and sisters. And it is the same in business. I am not saying that good credentials and strong friends are not of use to any man; but without friends or credentials, the man who has an idea which is commercially valuable will find a market in which to sell it. If he has the ability to exploit it himself and the power to convince others of his integrity, he will find capital ready to back him. It is difficult to explain in words to those accustomed to the traditions of English business how this principle underlies and permeates American business in all its modes.
One example of it—trivial enough, but it will serve for illustration—which visiting Englishmen are likely to be confronted with, perhaps to their great inconvenience, is in the bank practice in the matter of cheques. There is, as is well known, no "crossing" of cheques in America, but all cheques are "open"; and many an Englishman has gone confidently to the bank on which it was drawn with a cheque, the signature to which he knew to be good, and has expected to have the money paid over the counter to him without a word. All that the English paying teller needs to be satisfied of is that the signature of the drawer is genuine and that there is money enough to the credit of the account to meet the cheque. But the Englishman in the strange American bank finds that the document in his hands is practically useless, no matter how good the signature or how large the account on which it is drawn, unless he himself—the person who presents the cheque—is known to the bank officials. "Can you identify yourself, sir?" The Englishman usually feels inclined to take the question as an impertinence; but he produces cards and envelopes from his pocket—the name on his handkerchief—anything to show that he is the person in whose favour the cheque is drawn. Perhaps in this way he can satisfy the bank official. Perhaps he will have to go away and bring back somebody who will identify him. It is the personality of the individual with whom the business is done that the American system takes into account.[384:1]
It is, as I have said, a trivial point, but it suffices. Vastly more important is the whole banking practice in America. This is no place to go into the details at the controversy which has raged around the merits and demerits of the American banking system. In the financial panic of 1893 something over 700 banks suspended payment in the United States. At such seasons, especially, but more or less at all times, a great proportion of the best authorities in the United States believe that it would be better for the country if the Scotch—or the Canadian adaptation of the Scotch—system were to take the place of that now in vogue. Possibly they are right. The gain of having the small local banks in out-of-the-way places possess all the stability of branches of a great central house is obvious, both in the increase of security to depositors in time of financial stress and also in the ability of such a house to lend money at lower rates of interest than is possible to the poorer institution with its smaller capital which has no connections and no resources beyond what are locally in evidence. It may be questioned, however, whether the country as a whole would not lose much more than it would gain by the less complete identification of the bank with local interests. It would be inevitable that in many cases the local manager would be restrained by the greater conservatism of the authorities of the central house from lending support to local enterprises, which he would extend if acting only by and for himself as an independent member of the local business community. It is difficult to see how the country as a whole could have developed in the measure that it has under any system differing much from that which it has had.
In theory it may be that the functions of a bank are precisely the same in Great Britain and in America. In practice different functions have become dominant in the two. In England a bank's chief business is to furnish a safe depository for the funds of its clients. In America its chief business is to assist—of course with an eye to its own profit and only within limits to which it can safely go—the local business community in extending and developing its business. The American business man looks upon the bank as his best friend. If his business be sound and he be sensible, he gives the proper bank official an insight into his affairs far more intimate and confidential than the Englishman usually thinks of doing. He invites the bank's confidence and in turn the bank helps him beyond the limits of his established credit line in whatever may be considered a legitimate emergency. In any small town whenever a new enterprise of any public importance is to be started, the bank is expected to take shares and otherwise assist in promoting a movement which is for the common good. The credits which American banks—especially in the West—give to their customers are astoundingly liberal according to an English banker's standards. Sometimes of course they make mistakes and have to pocket losses. When a storm breaks, moreover (as in the case already quoted of the panic of 1893), they may be unable to call in their loans in time to take care of their liabilities. But that they have been a tremendous—an incalculable—factor in the general advancement of the country cannot be questioned.
The difference between the parts played by the banks in the two countries rests of course on two fundamental differences in the condition of the countries themselves. The first of these is the fact that while England is a country of accumulated wealth and large fortunes which need safeguarding, America has until recently been a country of small realised wealth but immense natural resources which needed developing. The policy of the banks has been shaped to meet the demands of the situation.
In the second place (and too much stress cannot be laid upon this in any comparison of the business-life of the two peoples) the American is always trading on a rising market. This is true of the individual and true of the nation. Temporary fluctuations there are of course, but after every setback the country has only gone ahead faster than before. The man with faith in the future, provided only that he looked far enough ahead to be protected against temporary times of depression, has always won. Just as the railway companies push their lines out into the wilderness, confident of the population that will follow, and are never disappointed, so in all other lines the man who is always in advance, who does not wait for the demand to be there before he enlarges his plant to meet it, but who sees it coming and is ready for it when it comes—the man who has always acted in the belief that the future will be bigger than the present,—that man has never failed to reap his reward. Of course the necessary danger in such a condition is that of over-speculation. But nearly every man who amasses wealth or wins large commercial success in the United States habitually takes risks which would be folly in England. They are not folly in him, because the universal growth of the country, dragging with it and buoying up all industries and all values, as it goes, is on his side. It is inevitable that there should result a national temperament more buoyant, more enterprising, more alert.
