Before the war we were a debtor nation; today we are rapidly becoming, if we have not already become, a creditor nation. A year ago we were selling abroad only about as much goods as we were buying; now the balance of trade is greatly in our favor, due to the enormous export of foodstuffs and war supplies of all kinds. Monthly our exports are exceeding our imports by many millions of dollars. This indicates that foreign nations are going into debt to us.
At the time of writing this article foreign exchange was quoted as follows: London exchange, sterling, 4.76½; Paris exchange, franc, 5.45¾. By paying down $4.76½ in New York you can get £1 in London, which on a par gold basis is equivalent to $4.86 in London. By paying down 94½ cents in New York you can get the equivalent to 100 cents in Paris.
We now come to another interesting phase of this war supply business, namely, how some persons thought these war orders could be secured and how they are actually being placed. Almost immediately after the declaration of war, most of the belligerent Governments dispatched "commissions" to the United States. Some had orders to buy, and others were authorized to get prices and submit samples. In an incredibly short period of time it became generally known that foreign Governments were shopping and buying in our markets. The knowledge of this fact brought about a condition unique in our business life.
Men in all walks of life, from porters, barbers, clerks in offices, to doctors, lawyers, real estate agents, merchants, Wall Street brokers and bankers, seemed suddenly imbued with the idea of securing or bringing about the placing of a war order. Self-appointed agents, middlemen and brokers sprang up over night like mushrooms, each and every one claiming he had an order or could get an order for war supplies; or, as the case might be, he personally knew some manufacturer, or he knew a friend who had a friend who knew a manufacturer, who in turn wished to secure a contract. An official in one of our large steel companies told me some weeks ago that among others who had called at his company's offices, asking prices on shrapnel, was an undertaker.
In most instances the lack of salesmanship experience, to say nothing of any knowledge of the business and how the particular articles are manufactured, was of no consequence to the self-appointed agent in his mad desire for business.
The lobbies of our New York hotels were filled with horsemen and would-be horsemen, some months ago, almost every State being represented as far west as California; also with manufacturers and manufacturers' agents, all eager to secure a "war contract," be it for horses, shrapnel, rifles, picric acid, guncotton, toluol, cartridges, boots, shoes, sweaters, blankets, machinery and materials, &c. The very atmosphere of Manhattan Island seems impregnated with "war contractitis." We breathe it, we think it, we see it, we talk it, on our way downtown, at our offices and places of business, at our clubs, on our way home at night, in our homes, and I have been told that some have even slept it, the disease taking the shape of a nightmare.
The day of the broker, if indeed he ever had one in this business, is passed. The original commissioners have been withdrawn, or those who have been kept here are now acting as inspectors and have been replaced by purchasing agents. The firm of J.P. Morgan & Co. has been acting as purchasing agent for the English Government for some months past, is now acting in like capacity for the French Government, and has also done considerable buying for the Russian Government.
In order properly to handle this vast volume of business, a separate department was created, known as the Export Department. Connected with this department are experts in all lines—men who are thoroughly familiar with the various Governments' requirements, who know what prices should be paid, who are in close touch with each market, and who understand fully the materials they are buying.
There are a few more concerns, among which are one or two banks, trust companies, and Wall Street houses, which also have formed separate organizations for the purpose of purchasing war supplies for the Allies. As all these concerns are in close touch with the manufacturers and will only deal directly with them, the brokers and middlemen have very little, if any, chance of doing business.
