4 'Cbe Conservative *
The marked in-
OUR KXPOBT .
crease in our ex.
TUADE. , . .
ports of merohan-
dise affords aii interesting subject for
investigation by those interested in
political economy. For the twelve
months ending November 1 , the total
export trade amounted to $2,277,800,048 ,
a sum that seems almost incredible and
far beyond the expectation of the most
sanguine advocate of foreign markets of
a few years ago. In a surprisingly
short time we have become a competitor
in the world's market and not only a
competitor but a very active and re
markably successful one.
Where trade is unrestiicted and people
ple have absolute freedom of choice in
making their purchases
Labor Cost.
chases they buy
where they can buy the cheapest. When
foreigners buy our products they do so
because they can obtain them from us
cheaper than they can from anybody
else. The interesting question is , what
has enabled us to undersell foreign com
petitors ? Is it because the Ameri
can wage scale has been reduced ?
This theory is untenable for the reason
that the report of the United States
commissioner of labor shows that there
has been a slight raise rather than a de
cline in wages during the last five years.
Perhaps changes in methods of pro
duction and distribution have had some-
thing to do with
Managerial Expense. 11
i
cheapen ! u g the
relative cost of putting the American
product upon the market ? The last five
or ten years have witnessed almost rev
olutionary changes in industrial organi
zation. Consolidation has been the
great principle at play in the commer
cial world. Small industries have com
bined their limited capitals and operate
now under a single management. To
secure greater economy in production
and distribution is the principal reason
assigned for the formation of these large
combinations or "trusts , " as they are
commonly known. Oau it be that the
economies resulting from consolidation
have enabled us to successfully 'com- ,
pete in the world's markets ? Do
not the facts in the case tend to show
that this view is the correct one and
that we are meeting foreign competition
not because of cheapened wages
but on account of the saving in expense
of management brought about by com
bination ? If this be true is it not a
fairly strong argument in favor of the
principle of combination ? Under these
conditions is there any need for alarm
because of the further application of the
latter principle ? Do not the results
justify a postponement of judgment
and further experiments with industrial
combinations before denouncing them
all as unmitigated evils , demanding
immediate annihilation ?
Apropos of our increased foreign trade ,
Mr. Ulysses D. Eddy , of Flint , Eddy &
Company , one of
An Exporter's the largest export
Opinion. . . ,
firms in the coun
try , in a recent interview made the fol
lowing sensible explanation :
"What people call trusts , are respon
sible for this phenomenal trade. With
out such combinations of capital and interests -
terests as have taken place in this coun
try within the last few years such
growth in our foreign commerce would
have been impossible. In the first place ,
it takes a great deal of money for a new
dealer to build up a market in a foreign
country , and few manufacturers in this
country could afford to do so until they
pooled their issues. Most of them were
afraid to make the costly effort because
they feared that as soon as they had
cultivated a demand other manufactur
ers in the same line of goods would im
mediately take advantage of the results
of their enterprise and expenditures ,
Few were willing to take the risk.
Then , again , small quantities of mer
chandise cannot be handled with econ
omy. It cost just as much to sell $10,000
worth of goods as $1,000,000 worth , on
which the profits are , of course , so many
times the larger. Therefore the trusts ,
or whatever you may call the amalga
mated companies , are able to do a for
eign business at a greatly reduced cost
with much greater profits than private
firms and corporations.
"It does not pay manufacturers to seller
or ship small quantities. The difference
in freight rates on a cargo and a single
invoice is of itself a good profit. Form
erly orders from foreign buyers were
scattered among a dozen or a hundred
different manufactories in small lots.
Now they are concentrated in large lots ,
which can be handled at the same cost
and the same trouble. This centraliza
tion not only enables us to produce butte
to sell and ship with greater economy.
A few years ago , before what are call
ed trusts were organized , there were two
of conduct-
, , ,
Old methods. . . . ,
ing foreign trade.
One was through commission houses ,
who placed orders with jobbers or man
ufacturers for specified articles. Anoth
er was for manfactnrers who had a sur
plus of goods which they could not sell
at home to consign them to a selling
agent in some foreign country and let
him get rid of them on the best terms
possible. The result was that foreign
merchants came to this country only for
such goods as they could not get else
where , and an irregular and spasmodic
trade was going on between our manu
facturers and merchants in foreign
countries , with very little profit to
either. Now our manufacturers can
afford to establish agencies of their own
to study conditions and work up a trade
for staple articles ; they can give more
liberal credits , because of their larger
capital , and better prices than the indi-
vidual manufacturers could offer , which
enables them to meet successfully the
European competition. Larger ship
ments give them lower transportation
rates. They send goods by trainloads
and fill ships at the lowest possible cost.
The saving in production , transporta
tion and distribution combined is so
great that they are not only enabled to
give lower prices but declare larger
profits.
1 'If yon will notice the export statis
tics , " continued Mr. Eddy , "you will
see that the slowest growth in our for
eign trade is in the dry goods line. That
is because the manfaoturers are not or
ganized. The most rapid growth is in
the various forms of iron and steel , be
cause the manufacturers in those lines
are thoroughly organized and have
made a united and intelligent attack
upon the foreign market. "
The same pee >
, ,
pie and tiie same
newspapers that depict the distress of
farm life and the brisk competition
which farmers give each other in mar
keting their abundant products are also
strenuously advocating governmental ap
propriations , with which to dig ditches
and construct reservoirs on the arid and
rainless plains and so make more farms ,
more products , more competition among
the bucolic producers.
The government is a born pauper.
The United States cannot donate a dollar
lar for irrigation
Taxes.
purposes except
out of money gathered from its citizens
by taxation. It has no other money.
Thus the paradox of bemoaning the
farmer's fate because of the intense
competition with
Paradox. . . , . . ,
which his products
meet in all markets and then proposing
to tax the same farmer and all the rest
of the American people for the purpose
of fertilizing with water a vast area of
arid land which is aow unfertile , and
thus to create more competition.
If it is a duty or function of govern
ment to manure lands with water , why
not equally a duty and function of gov
ernment to furnish solid fertilizers ? If
right to governmentally bring arid plains
in the West into productivity by legisla
tive fertilization and then give them
away to homesteaders ; why is it not
equally right and proper for the govern
ment to restore the old farms of New
England by paying for the commercial
fertilizers necessary to bring them again
into profitable production ?
In a government like this can pater
nalism prevail ? Who are to be given the
_ . . . functions of par-
Putorniillsm. , , , r ,
enthood and who
are to play the children's part ?
