America, Through the Spectacles of an Oriental Diplomat

by Tingfang Wu

Chapter 6. American Business Methods

If I should be asked what is most essential for the successful carrying on of business in America I would say advertising. A business man in America who intends to succeed must advertise in the daily, weekly, and monthly papers, and also have big posters in the streets. I do not believe any up-to-date merchant in America fails to do this. Every book and magazine contains many advertisements; sometimes fully half of a big magazine is covered with notices or pictures of articles for sale. Wherever you go the inevitable poster confronts you; and even when you look out of the window of the train you see large sign-boards announcing some article of trade. The newer the brand the bigger the picture. If when you get into a street-car you look around you will see nothing but advertisements of all kinds and sorts, and if you answer an advertisement you will keep on receiving notices of the matter about which you inquired. Even now I receive letters urging me to buy something or other about which I sent a letter of inquiry when I was in America. At night, if you stroll round the town you will be amazed by the ingenious and clever signs which the alert minds of the trades people have invented, such as revolving electric lights forming the name of the advertiser with different colors, or a figure or shape of some sort illustrating his wares. But even this is not thought sufficient. Circulars are often sent to everyone, making special offers, setting forth forceful reasons why the commodity advertised is indispensable. Certain stores make it a point to announce cheap sales once or twice a year, with from 10 to 25 per cent. reduction. It should be noted that no tradesman voluntarily sells his goods at a loss, so that if during a sale he can give as much as 25 per cent. discount we can easily calculate the percentage of profit he generally makes. There are cases where men who started as petty dealers have, after a few years, become millionaires.

To show the importance of advertising I cite the well-known sanitary drink which is a substitute for tea and coffee, and which by extensive advertising in almost every paper published in every country has now become a favorite beverage. The proprietor is now a multi-millionaire and I am told that he spends more than a million dollars a year in advertising.

Another thing inseparable from American business is the telephone. A telephone is a part of every well-appointed house, every partner's desk is provided with a telephone, through which he talks to his clients and transacts business with them. In all official departments in Washington scores of telephones are provided; even the secretary of the department and the chief of the bureau give orders by telephone. It goes without saying that this means of communication is also found in the home of almost every well-to-do family. The invention of a telephone is a great blessing to mankind; it enables friends to talk to each other at a distance without the trouble of calling.[1] Sweethearts can exchange their sweet nothings, and even proposals of marriage have been made and accepted through the telephone. However, one is subjected to frequent annoyances from wrong connections at the Central Office, and sometimes grave errors are made. Once, through a serious blunder, or a mischievous joke, I lost a dinner in my Legation in Washington. My valet received a telephone message from a lady friend inviting me to dine at her house. I gladly accepted the invitation, and at the appointed time drove to her home, only to find that there was no dinner-party on, and that I should have to go hungry.

With some trades, in order to create a new market, commercial travellers or "drummers" give their goods away for nothing. Experience has proved that what they lose at the start they recover in the course of time, receiving in addition triple or tenfold more business than the cost of the original outlay. These commercial agents travel through all sections of the country to solicit business; they call upon those who can give them orders; they look up those who are engaged in similar businesses to their own, and, if they are retailers, they invite their orders, or ask them to become sub-agents. These gentlemen practically live on the trains: they eat, sleep, and do their business while travelling. One of them told me that in one month he had covered 38,000 miles, and that he had not been back to his firm for three months.

There is no doubt that the American people are active, strenuous workers. They will willingly go any distance, and undertake any journey, however arduous, if it promises business; they seem to be always on the go, and they are prepared to start anywhere at a moment's notice. An American who called on me a short time ago in Shanghai told me that when he left his house one morning at New York, he had not the slightest notion he was going to undertake a long journey that day; but that when he got to his office his boss asked him if he would go to China on a certain commission. He accepted the responsibility at once and telephoned to his wife to pack up his things. Two hours later he was on a train bound for San Francisco where he boarded a steamer for China. The same gentleman told me that this trip was his second visit to China within a few months.

American salesmen are clever and capable, and well know how to recommend whatever they have to sell. You walk into a store just to look around; there may be nothing that you want, but the adroit manner in which the salesman talks, and the way in which he explains the good points of every article at which you look, makes it extremely difficult for you to leave the store without making some purchases. Salesmen and commercial travellers in the United States have certainly learned the art of speaking. I once, however, met a remarkable exception to this rule in the person of an American gentleman who was singularly lacking in tact; he was in China with the intention of obtaining a concession, and he had nearly accomplished his object when he spoilt everything by his blunt speech. He said he had not come to China for any philanthropic purposes, but that he was in the country to make money. We all know that the average business man is neither a Peabody nor a Carnegie, but it was quite unnecessary for this gentleman to announce that his sole object was to make money out of the Chinese.

Up to a few years ago business men in America, especially capitalists, had scarcely any idea of transacting business in China. I well remember the difficulty I had in raising a railway loan in America. It was in 1897. I had received positive instructions from my government to obtain a big loan for the purpose of constructing the proposed railway from Hankow to Canton. I endeavored to interest well-known bankers and capitalists in New York City but none of them would consider the proposals. They invariably said that their money could be just as easily, and just as profitably, invested in their own country, and with better security, than was obtainable in China. It was only after nearly twelve months of hard work, of careful explanation and much persuasion, that I succeeded in finding a capitalist who was prepared to discuss the matter and make the loan. Conditions have now changed. American bankers and others have found that investments in China are quite safe. They have sent agents to China to represent them in the matter of a big international loan, and they are now just as ready to lend money in China as in Europe, and on the same terms. In conjunction with the representatives of some large European capitalists they even formed a powerful syndicate in China, for the purpose of arranging loans to responsible Chinese investors. In the spring of 1913, however, they withdrew from the syndicate.

The opportunities to make money in America are great and a young man with only fair ability, but an honest purpose, will always get something to do; and if he is industrious and ready for hard work, if he possess courage and perseverance, he will most surely go forward and probably in time become independent. There are hundreds of millionaires and multi-millionaires in America who, in their younger days, were as poor as sparrows in a snowstorm, but through perseverance, combined with industrious and economical habits they have prospered far beyond their own expectations. The clever methods they adopt in the carrying on of their business cannot but arouse our admiration, and Chinese merchants would do well to send some of their sons to America to study the various systems practised there. But no nation or any class of people is perfect, and there is one money-making device which seems to me not quite sound in principle. To increase the capital of a corporation new shares are sometimes issued, without a corresponding increase in the actual capital. These new shares may represent half, or as much of the actual capital as has been already subscribed. Such a course is usually defended by the claim that as the property and franchises have increased in value since the formation of the corporation the increase of the stock is necessary in order to fairly represent the existing capital. It is said that some railway stock has been "watered" in this way to an alarming extent, so that a great deal of it is fictitious, yet though it exists only on paper it ranks as the equal of the genuine stock when the dividends are paid. Whether or not such an action really is justifiable, or even moral, I leave to the Christian clergy and their followers to decide. The promoters and directors of such concerns have at least hit upon a very clever method for becoming rich, and if the securities of the original shareholders are not injured, and the holders of the genuine and the watered stock can share equally without endangering the interests of all, perhaps such an action may be less blamable, but it is a new kind of proceeding to Orientals.