The people of a nation have it within their power to advance the interests of their foreign commerce in two ways: one by intelligent legislation at home, and the other by intelligent diplomacy abroad. The shipment of merchandise from one country to another means to the selling nation a foreign market for the raw material, the employment of labor to the extent of from thirty to ninety per cent. of the selling value of the goods, and the payment for this material and labor by foreigners in money or its equivalent. It is a clear gain in every phase of the transaction. There is an old frontier adage, which originated in the early days of the Western boom, to the effect that “outside money makes the camp.” It is a homely expression that summarizes the advantages of an export of two billion dollars’ worth of goods with a comprehensiveness equal to its original application. It is not too much to say that anything in the shape of legislation or of increased facilities which assists the outward flow of the products of labor is of unquestioned advantage to the producing nation. An unnatural, though perhaps comprehensible, attitude of suspicion toward successful export has come about in the United States. This has led to hostility toward special rail and water-rates for export, lower prices for bulk foreign business, niggardliness of national expenditures for diplomatic representation and for the work of the Department of Commerce and its foreign-trade bureau. It might almost be said that the great and growing figures of foreign trade, issued triumphantly every year by the government statisticians, have been achieved despite the obstructions placed in the path of their progress.
The growth of those figures in their largest aspect is due to organized private effort, the methods and operations of which are a sealed book to the government official or the general public, and which unfortunately have shared in the recent and sweeping condemnation of the business methods of all big corporations. There has been no sifting of the wheat from the chaff, the good from the evil, with most deplorable results, for which both public and corporations are to blame. The natural result has been that in attempting to regulate the home activities of “big business” their foreign activities have been hindered and even checked. Lost ground in foreign directions is more difficult to regain than at home, for certain artificial and natural barriers always exist, which favor home markets, while foreign trade meets well-equipped rivals at least on equal terms, and often with a handicap.
In the year 1913 the people of the United States are entering upon a radical change in the national attitude toward domestic and foreign commerce. There is a partial reversal of policy toward home industry; there is also an important experiment afoot in diplomacy. It is too early to say just how radical these changes will be in the final reckoning, or what may be the outcome. It is quite possible that increased freedom of trade may bring good results at home; and if Congress recognizes the need of a commercial diplomacy auxiliary to that of the litterateur, the reformer, the peace-advocate, the missionary, and the general uplifter of mankind, and the administration provides competent, permanent, and resident commercial diplomats or attachés to all important American missions, a threatened disadvantage may be turned into a victory. At present, however, American foreign trade is the foot-ball of national politics.
Private enterprise, with its able American representatives abroad, is the only real guard against serious damage possessed by this great asset of the nation. The advance of American foreign commerce may be likened to a more or less friendly conflict with an allied army of foreign competitors. This is specially true of American trade, for it is generally a new-comer, and is regarded with dislike and antagonism to such an extent as to induce combinations of rivals to resist its advance.
The strongest efforts of American diplomacy should be directed to Russia and China to bring about a commercial entente between the United States and these two countries. The future of China as a market for foreign enterprise and merchandise will develop slowly, it is true, but the results will in time prove stupendous. In view of this, firm foundations should be laid for the structure of international trade, which will inevitably develop in the course of years. In the case of Russia there is no time to be lost. Here is a great area of wonderfully productive territory inhabited by scores of millions of people. Education is spreading among these people, and their wants are multiplying. Such foreign trade as has found a lodgment there is of the kind America wants, and will need more and more as her productiveness increases and the oversupply of home markets becomes more noticeable. England, Germany, France, the Low Countries, and those of Scandinavia are losing no time. Political, financial, commercial, and industrial bonds are being forged with all possible rapidity to this awakening nation of industrious people. American interests in Russia are already large, but their existence is due to private and not national initiative. As a nation we have not only done much to discourage the betterment of intercourse with Russia, but have even actually threatened the existence of American interests therein by inviting antagonism instead of friendly coöperation. It is not too late to remedy this unfortunate attitude, but the situation needs prompt, wise, and fearless handling by those responsible for the foreign policy of the United States.
American foreign commerce rests on a basis of international friendship. Once established, the needs of the respective countries determine the extent of international trading, modified as it must be, however, by conditions of transportation and such fiscal restrictions as may be imposed. Leaving the matter of price and quality to be dealt with by the industrial exporter, as must be the case, the influence of the Government remains as the most important outside factor in determining the prosperity of this trade. Under the control of the Government come the treaty-making power, with its bid for favorable reception of American products; the official attitude toward facilities for the manufacturing of exports and toward transportation; and assistance in gathering information for exporters. The important, but more technical, details of foreign commerce can safely be left to private enterprise in its effort toward profitable trading. There is no doubt as to the good intention of government officials and of those who vote the money for their work: it is, of course, that American consumers shall benefit.
There are two points of view, however, well illustrated in the attitude of the British and the United States Government, respectively, as to the direction in which governmental efforts may be extended in the furtherance of foreign trade. The British Government pays great attention to the diplomatic end of the business, and lets private enterprise follow up any advantage gained. The United States Government spends vastly more money and effort upon the details of trade, but in many cases unfortunately attempts to build upon a shifting and insecure foundation, in that the relations of the two countries may be weak diplomatically, or there may be lack of knowledge or understanding as to the general conditions to be met. For some American consul to inform American manufacturers through the State Department of great openings for the sale of goods does not mean necessarily that these goods can be sold; for in some cases American competition would find itself hopelessly handicapped by the superior trade diplomacy and knowledge of its adversary, thus nullifying any possible superiority in goods or prices.
From a practical point of view, to analyze American foreign trade in detail would be an endless and useless task. It has grown to be what it is through exports of food-stuffs and raw materials, followed naturally by the surplus products of manufacturing. Of imports the same may be said, reversing the order of the progression. The land furnished the material, and labor came at its call from all parts of the world. The logical result of plenty of material, a constantly increasing supply of labor, combined with national ingenuity and a climate conducive to the development of nervous energy, is the production of more or less finished merchandise in such quantities as to keep half the ships of the world in daily use carrying it to and fro. Whether governmental intervention has helped or hindered has been the subject of controversy since this commerce began, and will continue until commerce ends; but out of it all must come a certain amount of wisdom, gained through experience, which should be of practical benefit to those on whom rests the responsibility of official coöperation with private adventure in foreign lands.
The three great foreign trading nations of the world are England, Germany, and the United States, in the order named. In 1912 the foreign commerce of England amounted to a little less than $6,000,000,000, that of Germany to more than $4,600,000,000, and that of the United States to nearly $4,200,000,000. The total foreign trade of these three countries is proportioned approximately between imports and exports as follows:
England | Germany | United | |||||||
Imports | 60 | per | cent. | 54 | per | cent. | 43 | per | cent. |
Exports | 40 | “ | “ | 46 | “ | “ | 57 | “ | “ |