Harry Perry Robinson

The Commercial Power of the United States—British Workmanship—Tin-tacks and Conservatism—A Prophetic Frenchman—Imperialism in Trade—The Anglo-Saxon Spirit—About Chaperons—"Insist upon Thyself"—English and American Banks—Dealing in Futures—Dog Eat Dog—Two Letters—Commercial Octopods—Trusts in America and England—The Standard Oil Company—And Solicitors—Legal Chaperons—The Sanctity of Stamped Paper—Conclusions—American Courts of Justice—Do "Honest" Traders Exist?

The Englishman, even the Englishman with industrial experience and commercial training, generally, when he makes a short visit to the United States, comes away with a certain distrust of the stability of the American commercial fabric—a distrust which he cannot altogether explain to himself. The rapidity of movement, the vastness of the results, these things are before his eyes; but there insists on obtruding itself a sense of unsubstantiality. Habituated to English surroundings, with their ages-old traditions, the rugged deep-rooted institutions, the deliberate revolutions of all the fly-wheels of a long-constituted society, he cannot believe that the mushroom establishments, thrust up as it were from the soil of a continent which is yet one half but partially broken wilderness, have permanence. He cannot deny the magnitude or the excellence of the work that is being done now, at this moment, under his eyes; but it all has too much the seeming of unreality, as though suspended in midair, unsupported. He misses the foundations of centuries of civilisation below and the lines of shafting running back into the past. Often, it is to be feared, having all his life been accustomed to see power exerted only in cumbersome processes and through old-fashioned channels, he has come to regard the cumbersomeness and the antiquity as necessary conditions of such exertion—nay, even to confuse them with the sources of the power themselves. It will be remembered that the first pig that was roasted in China was roasted by the accidental burning down of a house; and for a long time the Chinese supposed that only by burning down a house was it possible to come at roast pig. Finally arose a great philosopher ("like our Locke") who discovered that it was not necessary to burn houses, but that pigs might be cooked by much less costly and more rapid methods. Unquestionably many of those who had been accustomed to house-burning must have looked at the new and summary culinary processes with profound distrust. It may even be asserted with confidence that many of the older generation died unconverted, though pig-roasting over all sorts of makeshift fires had been going on around them for some years.

After a more or less prolonged residence in the United States, the Englishman finds his distrust lessening. He in turn becomes accustomed to doing without those traditions, those foundations, those lines of shafting, which once he considered so essential to all sound workmanship. When in due time he returns to England he is not seldom amazed to see how many of the things which he was wont to regard as effective links in the machinery are really no more than waste parts which do but retard the motion and cause loss of power. It is not difficult to make machinery so complicated that the power exhausts itself in overcoming the resistance of belts and pulleys and cogs.

I had lived in the United States for many years before I ceased to cling to the notion—which I never hesitated to impart cheerfully to Americans when occasion offered—that though American workmen turned out goods that served their purpose well enough, for really sound and honest workmanship you had, after all, to come to England. It was only after I had been back in England and had experience of the ways of English workmen once more that doubts began to accumulate. English furniture makers told me that England nowadays did not produce such well-made or solid furniture as pieces that I showed them from America, and which are made in America in wholesale quantities. English picture-frame makers marvelled at the costliness of material and the excellence of the work in American frames. A Sackville Street tailor begged me to leave in his hands for a few days longer some clothes which he was pressing for me, made in a far Western State, in order that he might keep them—where they then were—hanging in his work-room as an object-lesson to his men in how work ought to be done. These are but isolated instances out of many which have bred misgiving in one who for many years cherished the conviction that a British-made article was always the best. That English workmen should be slower, less quick-minded, more loth to take up new ideas, or to make things as you wanted them and not as they had always made them—these things I had expected to find, and found less often than I had expected. But that the English workman did ultimately produce a better and more trustworthy article—that I never doubted, till I found it, from the confessions of the workmen and manufacturers themselves, far from necessarily true.

Few Englishmen returning to England after many years of residence in the United States (unless perchance they have lived on a ranch where their contact with the industrial or commercial life of the people has been slight) do not find themselves more or less frequently appealed to for opinions, in giving which they are compelled, however reluctantly, to pose as prophets, warning their countrymen to flee from the wrath to come, telling them that they underestimate the commercial power of the United States. Sometimes it may be that there will be some one in the company who has spent some few weeks, perhaps, in the United States. "Now, I don't agree with you there," this traveller will say. "When I was in the States, I saw .." He saw, in fact, pigs being roasted at a commonplace sort of fire, made for the purpose, of logs and sticks and coal and things, whereas everybody knows that no pig can be duly roasted unless chimney stacks and window-casings and front-door handles be mixed up with the combustibles. And the others present take comfort and are convinced that the Old Country is a long way from going to the dogs as yet. Of course she is, bless her! But it is not many years since an eminently distinguished authority on iron and steel (was he not President of the Iron and Steel Association?), after having made a tour of the United States, assured British manufacturers that they had nothing to fear from American competition in the steel trade. It was some years earlier that Chatham declared that he would not allow the American colonies to manufacture even one hobnail for themselves.

I have no desire now to join the band of those who are urging England so insistently to "wake up." This is not the place for such evangelism, for that is not the gospel which this book is intended to spread. None the less one story I must tell, told to me many years ago in America by one who claimed to have had some part in the transactions; a story that has to do with (let us say, to avoid hurting any susceptibilities) the sale of tin-tacks to Japan. And whether the story is true or not, it is at least well found.

England, then, had had for years a monopoly of the sale of tin-tacks to the Japanese, when a trader in Japan became impressed with the fact that the traffic was badly handled. The tacks came out from England in packages made to suit the needs of the English market. They were labelled, quite truthfully of course, "Best English Tacks," and each package contained an ounce, two ounces, or four ounces in weight, and was priced in plain figures at so much in English money. The trader had continual trouble with those packages. His customers were always wanting them to be split up. They wanted two or three sen worth—not four pennyworth; also they did not care about ounces. So the trader, starting for a visit to England, had some labels written in Japanese characters, and when he arrived in England he went to the manufacturers and explained matters. He showed them the labels that he had had written and said:

"The Japanese trade is worth considering and worth taking some little trouble to retain; but the people dislike your present packages and I have to spend most of my time splitting up packages and counting tacks. If you will make your packages into two thirds of an ounce each and put a label like that on them, you will be giving the people what they want and can understand, and it will save a lot of trouble all around."

But the manufacturers, one after another, shook their heads. They could not read the label. They never had put any such outlandish stuff on anything going out of their works, nor had their fathers before them. The Japanese ought to be satisfied with the fact that they were getting the Best English Tacks and not be unreasonable about it. And the trader exhausted himself with argument and became discouraged.

He returned to Japan via the United States, and stopped to see the nearest tack-manufacturer. He showed him the label and told his story.

"Looks blamed queer!" said the manufacturer, "but you say that's what they want out there? Let's catch a Jap and see if he can read the thing."

So a clerk was sent out to fetch a Japanese, which he did.

"How' do, John?" said the manufacturer to the new arrival. (Chinese and Japanese alike were all "John" to the American until a few years ago.) "You can read that, eh?"

The Japanese smiled, looked at the label and read it aloud.

"All straight goods, eh, John?" asked the manufacturer. The Japanese answered in the affirmative and retired.

Then the manufacturer called for his manager.

"Mr. Smith," he said, as the manager came in, "this is Mr. Brown of Tokio, Japan. He tells me that if we do up tacks in two third of an ounce lots and stick that label on each package, we might do some good business out there. That label—it don't matter which is the top of the thing—calls for a price that figures out to us at about two cents a pound more than our regular export rates. I want this gentleman to have a trial lot shipped out to him and he'll see what he can do. Just go ahead will you and see to it?"

"Yes, sir," said the manager; and when the trader sailed from San Francisco a couple of weeks later the same vessel carried out a trial order of tacks consigned to him at Tokio, made up in two thirds of an ounce packages with mysterious hieroglyphics on the labels. It only took the trader a few days, after his return, to satisfy himself that the sooner he cabled the American manufacturer to duplicate the order the better. There never has been anybody in the American works who has been able to read what is on that label; but when instructions were given for printing new labels after six months of trial the order was for a quarter of a million, and British manufacturers were astonished to discover that by some unexplainable chicanery they had lost the Japanese market for tacks.

I have said that I do not know whether the story is true or not; but fifty similar stories are. And in the aggregate they explain a good deal.

But let me say again that the conservatism of British manufacturers is not now my theme. But I do most earnestly believe that Englishmen as a whole—even English traders and manufacturers—unwisely underestimate the commercial power of the United States. What the United States has accomplished in the invasion of the world's markets in the last ten years (since the trade revival of 1896-97) is only a foretaste of what is to come. So far from there being anything unsubstantial—any danger of lack of staying power, any want of reserve force—the power has hardly yet begun to exert itself. Of Europeans who have recently written upon the subject, it seems to me that none has shown a truer appreciation of the situation than M. Gabriel Hanotaux, the former French Minister for Foreign Affairs.[378:1] He sees the shadow of America's commercial domination already falling across Europe; and, so far as France is concerned, he discerns only two directions from which help can come. He pleads with young Frenchmen to travel more, so that the rising generation may be less ignorant of the commercial conditions of the modern world and may see more clearly what it is that they have to fight, and, second, he points to the Colonial Empire of France, with an area not much inferior to that of the United States, and believes that therein may be laid the foundations of a commercial power which will be not unable to cope even with that of America.

It may be only the arrogance and superciliousness of the Anglo-Saxon that prevent one sharing the sanguineness of M. Hanotaux as to any relief coming to the help of France from these two sources, for British hopes can only lie in analogous directions. Englishmen also need to understand better the conditions which have to be met and the power of their competitors; and it is the young men who must learn. Also, if it be impossible that the British Isles should hold their own against the United States, there appears no reason why the British Empire should not be abundantly able to do so.

It is not easy for one who has not lived all his life in England to share the satisfaction with which the English papers commonly welcome the intelligence that some great American manufacturing concern is establishing branch works in Canada. It is well for Canada that such works should be established; but it is pitiable for the Empire that it should be left to the United States to establish them. British capital was the chief instrumentality with which the United States was enabled to build its own railways and conduct the other great enterprises for the development of the resources of its mighty West, and it is, from the point of view of a British Imperialist, deplorable that British capitalists should not now be ready to take those risks for the sake of the Empire which American capital is willing to take with no other incentive than the probable trade profits.

His conservatism, it should be noticed, has a tendency to fall away from the Englishman when he goes out from the environment and atmosphere of the British Isles. The Canadian, or the Englishman who has gone to Canada young enough to imbibe the colonial spirit, is not easily to be distinguished from the citizen of the United States in his ways of doing business. Even the Anglo-Indian refuses to subject himself, in India, to all the cumbersome formalities with which he is compelled to conduct any business transaction when at home. Mr. Kipling in one of his latest stories has given us a delightful picture of the bafflement of the Australasian Minister struggling to bring his Great Idea for the Good of his Colony and the Empire to the attention of the officials in Whitehall.

The encumbering conservatism which now hangs upon the wheels of British commerce is no part of—no legitimate offshoot of—the English genius. It is a fungoid and quite alien growth, which has fastened upon that genius, taking advantage of its frailties. Englishmen, we hear, are slow to change and to move; yet they have always moved more quickly than other European peoples as the Empire stands to prove. And if the people of Great Britain had the remodelling of their society to do over again to-day, they, following their native instincts, would hardly rebuild it on its present lines. With the same "elbow room" they would, it may be suspected, produce something but little dissimilar (except in the monarchical form of government) from that which has been evolved in the United States.

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.

What is important, too, is that whereas in England the field is already more or less full and was handed down to the present generation well occupied, so that new industries can, as it were, only be erected on the ruins of old, and a site has to be cleared of one factory before another can be built (all of which is, in a measure, only relative and metaphorical), in the United States there is always room for the newcomers. New population is pouring in to create new markets: new resources are being developed to provide the raw material for new industries; there is abundance of new land, new cities, new sites whereon the new factories can be built. This is why "America" and "opportunity" are interchangeable terms; why young men need never lack friends or backing or the chance to be the architects of their own fortunes. Society can afford to encourage the individual to assert himself, because there is space for and need of him.

From this flow certain corollaries from which we may draw direct comparison between the respective spirits in which business in the two countries is carried on. In the first place, in consequence of the more crowded condition of the field and the greater intensity of competition, the business community in England is much more ruthless, much less helpful, in the behaviour of its members one towards the other. It is not a mere matter of the more exacting scrutiny of credits, of the more rigid insistence on the exact fulfilment of a bond (provided that bond be stamped), but it colours unconsciously the whole tone of thought and language of the people. There are two principles on which business may be conducted, known in America respectively as the "Live and let live" principle, and the "Dog eat dog" principle. There was until recently in existence in the United States one guild, or association, representing a purely parasitical trade—that of ticket-scalping—which was fortunately practically peculiar to the United States. This concern had deliberately adopted the legend "Dog eat dog" as its motto and two bull-dogs fighting as its crest; but in doing so its purpose was to proclaim that the guild was an Ishmaelite among business men and lived avowedly in defiance of the accepted canons of trade. On the other hand one meets in America with the words "Live and let live" as a trademark, or motto, on every hand and on the lips of the people. Few men in America but could cite cases which they know wherein men have gone out of their way to help their bitterest competitor when they knew that he needed help. The belief in co-operation, on which follows a certain comradeship, as a business principle is ingrained in the people.

I was once given two letters to read, of which one was a copy and the other an original. The circumstances which led up to the writing of them were as follows: Two rich men, A. and B., had been engaged in a business duel. It was desperate—À outrance,—dealing in large figures; and each man had to call up all his reserves and put out all his strength. At last the end came and A. was beaten—beaten and ruined. Then the letters passed which I quote from memory:

I need hardly say that it was the second letter of which I saw the original, or that it was A. who showed them to me, when they were already several years old but still treasured, and A. was a wealthy man again as a result of that meeting after dinner. A. told me briefly what passed at that meeting. "He gave me a little more than half a million," he said. "Of course he has had it back long ago; but he did not know that he would get it at the time and he took no note or other security from me. At the time it was practically a gift of five hundred thousand dollars."

And as I write I can almost hear the English reader saying, "Pooh! the same things are done times without number in England." And I can hear the American, still smarting under the recollection of some needlessly cruel and unfair thrust from the hands of a competitor, smile cynically and say that he would like to tell me certain things that he knows. Of course there are exceptions on either side. It takes, as the American is so fond of saying, "all kinds of men to make a world." It is the same old difficulty of generalising about a nation or drawing up an indictment against a whole people. But I do not think that any man who has engaged for any length of time in business in both countries, who has lived in each sufficiently to absorb the spirit of the respective communities, will dissent from what I have said. Many Englishmen, without knowledge of business in England, go to America and find the atmosphere harder and less friendly than they were accustomed to at home, and come to quite another conclusion. But they are comparing American business life with the social club-and-country-house life of home. Let them acquire the same experience of business circles in England, and then compare the tone with that of business circles in America, and they will change their opinions.

Let me recall again what was said above as to the difference in the motives which may impel a man to go into business or trade in the two countries. An Englishman cannot well pretend that he does it with any other purpose than to make money. The American hopes to make money too, but he takes up business as an honourable career and for the sake of winning standing and reputation among his fellows. This being so, business in America has a tendency to become more of a game or a pastime—to be followed with the whole heart certainly—but in a measure for itself, and not alone for the stakes to be won. It is not difficult to see how, in this spirit, it may be easier to forego those stakes—to let the actual money slip—when once you have won the game.

It is necessary to refer briefly again to the subject of trusts. In England a great corporation which was able to demonstrate beyond dispute that it had materially cheapened the cost of any staple article to the public, and further showed that when, in the process of extending its operations, it of necessity wiped out any smaller business concerns, it never failed to provide the owners or partners of those concerns with managerial positions which secured to them a larger income than they could have hoped to earn as individual traders, and moreover took into their service the employees of the disbanded concerns at equal salaries,—such a corporation would generally be regarded by the English people as a public benefactor and as a philanthropically and charitably disposed institution. In America the former consideration has some weight, though not much; the latter none at all.

When a trust takes into its service those men whom it has destroyed as individual traders, the fact remains that their industrial independence has been crushed. The individual can no longer "insist upon himself." He is subordinate and no longer free. One of the first principles of American business life, the encouragement of individual initiative, has been violated, and nothing will atone for it.

The Standard Oil Company can, I believe, prove beyond possibility of contradiction that the result of its operations has been to reduce immensely the cost of oil to the public, as well as to give facilities in the way of distribution of the product which unassociated enterprise could never have furnished. It can also show that in many, and, I imagine, in the majority, of cases, it has endeavoured to repair by offers of employment of various sorts whatever injuries it has done to individuals by ruining their business. But these things constitute no defence in the eyes of the American people.

There is the additional ground of public hostility that the weapons employed to crush competitors have often been illegal weapons. Without the assistance of the railway companies (which was given in violation of the law) the Standard Oil Company might have been unable to win more than one of its battles; but this fact, while it furnishes a handle against the company and exposes a side of it which may prove to be vulnerable, and is therefore kept to the front in any public indictment of the company's methods, is an immaterial factor in the popular feeling. Few Americans (or Englishmen) will not accept a reduced rate from a railway company when they can get it. Whatever actual bitterness may be felt by the average man against the Standard Oil Company because it procured rebates on its freight bills is rather the bitterness of jealousy than of an outraged sense of morality. The real bitterness—and very bitter it is—is caused by the fact that the company has crushed out so many individuals. On similar ground nothing approaching the same intensity of feeling could be engendered in the British public.

Let us now recur for a moment to the views of the young woman quoted above on the interesting topic of chaperons. We have seen that insistence on the individuality is a conspicuous—perhaps it is the most conspicuous—trait of the American character. Encouraged by the wider horizon and more ample elbow-room and assisted by the something more than tolerant good-will of his business associates, colleagues, or competitors, the individual, once insisted on, has every chance to develop and become prosperous and rich. Everything helps a man in America to strike out for himself, to walk alone, and to dispense with a chaperon. The Englishman is chaperoned at almost every step of his business career; and I am not speaking now of the chaperonage of his colleagues, of his fellows in the community, or of his elders among whom he grows up and, generally, in spite of whom the young man must make his way to the top. There is another much more significant form of chaperonage in English business circles, of which it is difficult to speak without provoking hostility.

The English business world is solicitor-cursed. I mean by this no reflection on solicitors either individually or in the mass. I am making no reference to such cases as there have been of misappropriation by solicitors here and there of funds entrusted to their charge, nor to their methods of making charges, which are preposterous but not of their choosing. Let us grant that, given the necessity of solicitors at all, Great Britain is blessed in that she has so capable and upright and in all ways admirable a set of men to fill the offices and do the work. What I am attacking is solicitordom as an institution.

It is not merely that there are no solicitors, as such, in the United States, for it might well be that the general practising lawyers who fill their places, so far as their places have to be filled, might be just as serious an incubus on business as solicitordom is on the business of London to-day. Names are immaterial. The essential fact is that the spirit and the conditions which make solicitors a necessity in England do not exist in America. I do not propose to go into any comparison in the differences in legal procedure in the two countries; not being a lawyer, I should undoubtedly make blunders if I did. What is important is that a man who is accustomed to walking alone does not think of turning to his legal adviser at every step. Great corporations and large business concerns have of course their counsel, their attorneys, and even their "general solicitors." But the ordinary American engaged in trade or business in a small or moderate way gets along from year's end to year's end, perhaps for his lifetime, without legal services. I am speaking only on conjecture when I say that, taking the country as a whole, outside of the large corporations or among rich men, over ninety per cent. of the legal documents—leases, agreements, contracts, articles of partnership, articles of incorporation, bills of sale, and deeds of transfer—are executed by the individuals concerned without reference to a lawyer. Probably not less than three fourths of the actual transactions in the purchase of land, houses, businesses, or other property are similarly concluded without assistance. "What do we need of a lawyer?" one man will ask the other and the other will immediately agree that they need one not at all.

Of course troubles often arise which would have been prevented had the documents been drawn up by a competent hand. The constitutional reluctance to go to a lawyer is sometimes carried to lengths that are absurd. But I do not believe that the amount of litigation which arises from that cause is in any way comparable to that which is avoided by the mere fact that legal aid is outside the mental horizon. The men who conduct most of the affairs of life directly without legal help are most likely to adjust differences when they arise in the same way. That is a matter of opinion, however, based only on reasonable analogy, which I can advance no figures to support; but what is not matter of opinion, but matter of certainty, is, first, that the general gain in the rapidity of business movement is incalculable, and, second, that business as a whole is relieved of the vast burden of solicitors' charges.

The American, accustomed to the ways of his own people, on becoming engaged in business in London is astounded, first, at the disposition of the Englishman to turn for legal guidance in almost every step he takes, second, at the stupendous sums of money which are paid for services which in his opinion are entirely superfluous, and, finally, at the terrible loss of time incurred in the conclusion of any transaction by the waiting for the drafting and redrafting and amending and engrossing and recording of interminable documents which are a bewilderment and an annoyance to him.

The Englishman often says that American business methods are slip-shod; and possibly that is the right word. But Englishmen should not for a moment deceive themselves into thinking that the American envies the Englishman the superior niceties of his ways or would think himself or his condition likely to be improved by an exchange. An example of difference in the practice of the two countries which has so often been used as to be fairly hackneyed (and therefore perhaps stands the better chance of carrying conviction than a more original, if better, illustration) is drawn from the theory which governs the building of locomotive engines in the two countries.

The American usually builds his engine to do a certain specified service and to last a reasonable length of time. During that time he proposes to get all the work out of it that he can—to wear it out in fact—feeling well assured that, when that time expires, either the character of the service to be performed will have altered or such improvements will have been introduced into the science of locomotive construction as will make it cheaper to replace the old engine with one of later build. The Englishman commonly builds his engines as if they were to last for all time. There are many engines working on English railways now, the American contemporaries of which were scrapped twenty years ago. The Englishman takes pride in their antiquity, as showing the excellence of the workmanship which was put into them. The American thinks it would have been incomparably better to have thrown the old things away long ago and replaced them with others of recent building which would be more efficient.

The same principle runs through most things in American life, where they rarely build for posterity, preferring to adapt the article to the work it has to perform, expecting to supersede it when the time comes with something better. If a thing suffices, it suffices; whether it be a locomotive or a contract. "What is the use," the American asks, "when you can come to an agreement with a fellow in ten minutes and draw up your contract with him that afternoon,—what is the use of calling in your solicitors to negotiate and then paying them heavily to keep you waiting for weeks while they draft documents? We shall have had the contract running a month and be making money out of it before the lawyers would get through talking."

Out of this divergence in point of view and practice have of course grown other differences. One thing is that the American courts have necessarily come to adopt more liberal views in the interpretation of contracts than the English; they are to a greater extent inclined to look more to the intent than to the letter and to attach more weight to verbal evidence in eliciting what the intent was. No stamping of documents being necessary in America, the documents calling themselves contracts, and which are upheld as such, which appear in American courts are frequently of a remarkable description; but I have a suspicion that on the whole the American, in this particular, comes as near to getting justice on the average as does the Englishman.

And the point is that I believe it to be inevitable that the habit of doing without lawyers in the daily conduct of business, the habit of relying on oneself and dealing with another man direct, must in the long run breed a higher standard of individual business integrity. Englishmen, relying always on their solicitors' advice, are too tempted to consider that so long as they are on the right side of the law they are honest. It is a shifting of the responsibility to the chaperon; whereas, if alone, you would be compelled to act on your honour.

What I think and hope is the last word that I have to say on this rather difficult subject has to do with the matter already mentioned, namely the absence of the necessity of stamping documents in America. Englishmen will remember that the Americans always have evinced a dislike of stamps and stamp duties and acts relating thereto. Of late years the necessity of meeting the expenses of the Spanish war did for a while compel the raising of additional internal revenue by means of documentary and other stamps. The people submitted to it, but they hated it; and hated it afresh as often as they drew or saw a cheque with the two-cent stamp upon it. The act was repealed as speedily as possible and the stamping of papers has for six years now been unknown.

I think—and I am not now stating any acknowledged fact, but only appealing to the reader's common-sense—that it is again inevitable that where a superior sanctity attaches to stamped paper a people must in the long run come to think too lightly of that which is unstamped. I do not say that the individual Englishman has as yet come to think too lightly of his word or bond because it is informal, but I do think there is danger of it. The words "Can we hold him?" or (what is infinitely worse) "Can he hold us?" spring somewhat readily to the lips of the business man of this generation in England.

Continual dependence on the law and the man of law, and an extra respect for paper because it is legal, have—they surely cannot fail to have—a tendency to breed in the mind a disregard for what is not of a strictly legal or actionable character. It is Utopian to dream of a state of society where no law will be needed but every man's written and spoken word will be a law to him; but it is not difficult to imagine a state of society in which there is such universal dependence on the law in all emergencies that the individual conscience will become weakened—pauperised—atrophied—and unable to stand alone.

That is, as I have said, the last point that I wish to make on this subject; and the reader will please notice that I have nowhere said that I consider American commercial morality at the present day to be higher than English. Nor do I think that it is. Incontestably it is but a little while since the English standard was appreciably the higher of the two. I have cited from my own memory instances of conditions which existed in America only twenty years ago in support of the fact—though no proof is needed—that this is so. I by no means underestimate the fineness of the traditions of British commerce or the number of men still living who hold to those traditions. On the other hand, better judges than I believe that the standard of morality in English business circles is declining. In America it is certainly and rapidly improving.

Present English ideas about American commercial ethics are founded on a knowledge of facts, correct enough at the time, which existed before the improvement had made anything like the headway that it has, which facts no longer exist. I have roughly compared in outline some of the essential qualities of the atmosphere in which, and some of the conditions under which, the business men in the two countries live and do their business, showing that in the United States there is a much more marked tendency to insist on the character of the individual and a much larger opportunity for the individuality to develop itself; and that in certain particulars there are in England inherited social conditions and institutions which it would appear cannot fail to hamper the spirit of self-reliance, on which self-respect is ultimately dependent.

And the conclusion? For the most part my readers must draw it for themselves. My own opinion is that, whatever the relative standing of the two countries may be to-day, it is hardly conceivable that, by the course on which each is travelling, in another generation American commercial integrity will not stand the higher of the two. The conditions in America are making for the shaping of a sterner type of man.

Postscript.—The opinion has been expressed in the foregoing pages that in one particular the American on the average comes as near to getting justice in his courts as does the Englishman. I have also given expression to my great respect, which I think is shared by everyone who knows anything of it, for the United States Supreme Court. Also I have spoken disparagingly of the English institution of solicitordom. But these isolated expressions of opinion on particular points must not be interpreted as a statement that American laws and procedure are on the whole comparable to the English. I do not believe that they are. None the less Englishmen have as a rule such vague notions upon this subject that some explanatory comment seems to be desirable.

Especially do few Englishmen (not lawyers or students of the subject) recognise that the abuses in the administration of justice in America, of which they hear so much, do not occur in the United States courts, but in the local courts of the several States. So far as the United States (i. e., the Federal) Courts are concerned I believe that the character and capacity of the judges (all of whom are appointed and not elected) compare favourably with those of English judges. It is in the State courts, the judges of which are generally elected, that the shortcomings appear; and while it might be reasonable to expect that a great State like New York or Massachusetts should have a code of laws and an administration of justice not inferior to those of Great Britain, it is perhaps scarcely fair to expect as much of each of the 46 States, many of which are as yet young and thinly populated.

The chief vice of the State courts arises, of course, from the fact that the judges are elected by a partisan vote; from which it follows almost of necessity that there will be among them not a few who in their official actions will be amenable to the influence of party pressure. It is perhaps also inevitable that under such a system there will not seldom find their way to the bench men of such inferior character that they will be directly reachable by private bribes; though this, I believe, seldom occurs. The State courts, however, labour under other disadvantages.

We have seen how Congressmen are hampered in the execution of their duties by the constant calls upon their time made by the leaders of their party, or other influential interests, in their constituencies. The same is true on a smaller scale of members of the State legislatures. Congress and the legislatures of the several States alike are moreover limited by the restrictions of written constitutions. The British Parliament is paramount; but the United States legislatures are always operating under fear of conflict with the Constitution. Their spheres are limited, so that they can only legislate on certain subjects and within certain lines; while finally the country has grown so fast, the conditions of society have changed with such rapidity, that it has been inherently difficult for lawmaking bodies to keep pace with the increasing complexity of the social and industrial fabric.

If the limitations of space did not forbid, it would be interesting to show how this fact, more than any other (and not any willingness to leave loopholes for dishonesty) makes possible such offences as those which, committed by certain financial institutions in New York, were the immediate precipitating cause of the recent panic. Growth has been so rapid that, with the best will in the world to erect safeguards against malfeasance, weak spots in the barricades are, as it were, only discovered after they have been taken advantage of. With the preoccupation of the legislators stable doors are only found to be open by the fact that the horses are already in the street.

But, after all has been said in extenuation, there remain many things in American State laws for which one may find explanation but not much excuse.

Reference has already been made to the entirely immoral attitude of many of the State legislatures towards corporations, especially towards railway companies; and in some of the Western States prejudice against accumulated wealth is so strong that it is practically impossible for a rich man or corporation to get a verdict against a poor man. It would be easy to cite cases from one's personal experience wherein jurors have frankly explained their rendering of a verdict in obvious contradiction of the weight of evidence, by the mere statement that the losing party "could stand it" while the other could not. Of a piece with this is a class of legislation which has been abundant in Western States, where the legislators as well as most of the residents of the States have been poor, giving extraordinary advantages to debtors and making the collection of debts practically impossible. In some cases such legislation has defeated itself by compelling capitalists to refuse to invest, and wholesale traders to refuse to give credit, inside the State.

Yet another source of corruption in legislation is to be found in the mere numerousness of the States themselves. It may obviously inure to the advantage of the revenues of a particular State to be especially lenient in matters which involve the payment of fees. It is evidently desirable that a check should be put on the reckless incorporation of companies with unlimited share capital, the usual form of such a check being, of course, the graduation of the fee for incorporation in proportion to such capital. One State which has laws more generous than any of its neighbours in this particular is likely to attract to it the incorporation of all the companies of any magnitude from those States, the formal compliance with the requirements of having a statutory office, and of holding an annual meeting, in that State being a matter of small moment. Similar considerations may govern one State in enacting laws facilitating the obtaining of divorce.

There are, then, obviously many causes which make the attainment of either an uniform or a satisfactory code of jurisprudence in all States alike extremely difficult of attainment. It will only be arrived at by, on the one hand, the extension of the Federal authority and, on the other the increase in population and wealth (and, consequently, a sense of responsibility) in those States which at present are less forward than their neighbours. But, again, it is worth insisting on the fact that the faults are faults of the several States and not of the United States. They do not imply either a lack of a sense of justice in the people as a whole or any willingness to make wrong-doing easy. But it is extremely difficult for the public opinion of the rest of the country to bring any pressure to bear on the legislature of one recalcitrant State. The desire to insist on its own independence is indeed so strong in every State that any attempt at outside interference must almost inevitably result only in developing resistance.

And again I find myself regretfully in direct conflict with Mr. Wells. But it is not easy to take his meditations on American commercial morality in entire seriousness.

"In the highly imaginative theory that underlies the reality of an individualistic society," he says (The Future in America, p. 168), "there is such a thing as honest trading. In practice I don't believe there is. Exchangeable things are supposed to have a fixed quality called their value, and honest trading is I am told the exchange of things of equal value. Nobody gains or loses by honest trading and therefore nobody can grow rich by it." And more to the same effect.

A trader buys one thousand of a given article per month from the manufacturer at ninepence an article and sells them to his customers at tenpence. The extra penny is his payment for acting as purveyor, and the customers recognise that it is an equitable charge which they pay contentedly. That is honest trading; and the trader makes a profit of a trifle over four pounds a month, or fifty pounds a year.

Another trader purveys the same article, buying it from the same manufacturer, but owing to the possession of larger capital, better talent for organisation, and more enterprise, he sells, not one thousand, but one million per month. Instead of selling them at tenpence, however, he sells them at ninepence half-penny; thereby making his customers a present of one half-penny, taking to himself only one half of the sum to which they have already consented as a just charge for the services which he renders. Supposing that he pays the same price as the other trader for his goods (which, buying by the million, he would not do), he makes a profit of some £2083 a month, or £25,000 a year. Evidently he grows rich.

This is the rudimentary principle of modern business; but because one man becomes rich, though he gives the public the same service for less charge than honest men, Mr. Wells says that he cannot be honest.

If two men discover simultaneously gold mines of equal value, and one, being timid and conservative, puts twenty men to work while the other puts a thousand, and each makes a profit of one shilling a day on each man's labour, it is evident that while one enjoys an income of a pound a day for himself the other makes fifty times as much. It is not only obvious that the latter is just as honest as the former, but he can well afford to pay his men a shilling or two a week more in wages. He can afford to build them model homes and give them reading-rooms and recreation grounds, which the other cannot.

Others, besides Mr. Wells, lose their heads when they contemplate large fortunes made in business; but the elementary lesson to be learned is not merely that such large fortunes are likely to be as "honestly" acquired as the smaller ones, but also that the man who trades on the larger scale is—or has the potentiality of being—the greater benefactor to the community, not merely by being able to furnish the people with goods at a lower price but also by his ability to employ more labour and to surround his workmen with better material conditions.

The tendency of modern business industry to agglutinate into large units is, as has been said, inevitable; but, what is better worth noting, like all natural developments from healthy conditions, it is a thing inherently beneficent. That the larger power is capable of greater abuse than the smaller is also evident; and against that abuse it is that the American people is now struggling to safeguard itself. But to assail all trading on a scale which produces great wealth as "dishonest" is both impertinent (it is Mr. Wells's own word, applied to himself) and absurd.

The aggregate effect of the great consolidations in America and in England alike (of the "trusts" in fact) has so far been to cheapen immensely the price of most of the staples of life to the people; and that will always be the tendency of all consolidations which stop at any point short of monopoly. And that an artificial monopoly (not based on a natural monopoly) can ever be made effective in any staple for more than the briefest space of time has yet to be demonstrated.

The other consideration, of the destruction of the independence of the individual, remains; but that lies outside Mr. Wells' range.

FOOTNOTES:

[378:1] Preface to the EncyclopÆdia of Trade between the United States and France, prepared by the SociÉtÉ du Repertoire GÉnÉral du Commerce.