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Popular Science Monthly/Volume 86/April 1915/A Message from the Country on Foreign Trade

< Popular Science Monthly‎ | Volume 86‎ | April 1915

A MESSAGE FROM THE COUNTRY ON FOREIGN TRADE[1]
By the Honorable CHARLES H. SHERRILL

LATE AMERICAN MINISTER TO ARGENTINA

LISTEN to a message from the country: "Give new freedom to our railroads and our dying merchant marine so that they can aid our crusade for foreign trade, and permit American labor employers to combine abroad so as successfully to compete there against foreign combinations paying much lower wages." So audible is this message in all parts of our land that if there be legislators who have not already heard at least some of its wave sounds, then there must be something wrong with their political wireless telegraph apparatus, or, to drop into archaic phrase, "they haven't got their ears to the ground!" This message comes from an aroused country which has recently become aware of certain entanglements that it wants removed. Rip Van Winkle has awakened from his long repose in the Catskills of home trade, but the first few attempts to stretch himself have revealed that clinging creepers have grown about his limbs. Those creepers will have to go, and if the sharpness of existing legislative wits are not sharp enough to cut them, others will be found to do it.

The country from which this message comes is no longer a country where the farmer sees no further than his boundary fence, or the banker his local customers, or the merchant the home market alone. Not only have farmer, banker and merchant alike become students of foreign trade, but advanced students they know both what they want and also the handicaps that hamper them, and they want those handicaps removed. And this message of theirs was learned by the writer from nearly two hundred chambers of commerce all over the country. It is surprising how much there is for a man to learn when once he gets away from the localism of Manhattan Island and comes into touch with that marvelous campaign for community-bettering now so vigorously carried on by the commercial bodies of our land. My message to them was of South America, the value of its friendship and of its trade opportunities, but the message they send back is of far wider import, deserving the attention of us all and especially of those to whom we have delegated the making of our laws and the conduct of our government. These chambers of commerce have now gone far beyond their old discussions of the need for foreign markets as a field for the expansion of our manufacturing, or as a balance to offset any temporary contraction in home markets. No, they are away beyond that. The study of the railroad rebate evil and its correction led them to learn that those domestic rebates were but trifles in comparison with the rebates given foreigners by the foreign shipping conference combine in ocean freights, which annually transfer from our pockets to foreigners six hundred million dollars for freight, insurance, etc., not only bleeding us financially, but also leaving the foreigners with the possession of the ships, and with their factories protected against our competition. Ten years ago if this statement had been made to a western grain grower or a southern cotton planter he would have replied: "I don't care, foreign ships are cheap ships, and I want my product carried cheaply." But now he knows better, he knows that when as a result of secret rebates to foreigners, and of its so-called "fighting fleet" the foreign shipping conference combine drove independent vessels off the seas, carrying rates for grain and cotton, which in 1910, were, respectively, .03 and .12 were "readjusted" by 1913 to .10 and .45, respectively. He knows that the tribute he paid out of his profits to the foreign ships was trebled in three years, and that hurts! Therefore, and therefrom, he insists that our merchant marine be enabled to protect him from further extortion of that sort.

Nor have the leading men of the various communities who make up these chambers of commerce confined their study to American conditions, but have looked abroad and inquired into what other governments were doing to obtain more foreign trade for their nationals, and what did they find? They soon came to learn that many useful things done across the water by governments for the governed are here forbidden by our laws. Chief among those governmental aids to enterprising exporters abroad is reduced railroad rates to the seaboard given for exports, and the encouragement for firms which are competitors in the home market to band together for foreign trade. Their competition at home keeps down the home prices, but once across their national frontier they fight only foreigners and combine to do so. Now, with us a lower preferential rate on railroads for export articles is forbidden by the Interstate Commerce Act and the rulings of its Commission, while the Sherman Act interferes with combinations for foreign trade. All the foregoing is known to the organized activity of business men constituting these great commercial organizations. They have done everything possible to help themselves, but now they realize that governmental action is necessary to liberate our merchant marine from its present trammels, to release the over-regulated railroads from those regulations which prevent their assisting our exporters and to free our producers to make such combinations in foreign fields as they like. Give us this new freedom for our foreign trade, and American brains and energy will soon get for American labor and capital what has been so long going to foreign labor and capital.

Of these three great and immediate reliefs now so widely and so earnestly desired by organized business men the two mentioned last are the more easily obtained. Laws could speedily be enacted, one modifying the Interstate Commerce Act so as to permit railroads to grant preferential rates on goods to the seaboard intended for export, and the other amending the Sherman Act so that it shall be lawful to make combinations for trade outside our borders. As to the third point, the assistance of our merchant marine—it has been so much discussed that it has come to seem a difficult problem, but is it? Let us see. We carry only 8 per cent. of our foreign trade in American ships and we have to pay any rates for the rest of it that the foreign shipping combine decide upon. We all want to get back to some such laws as were put on our statute books in 1789 by Washington, Madison and Jefferson, at a time when our ships carried but 23 per cent. of our exports and imports, and which laws by 1800 had already raised that percentage to 89 per cent., and by 1810 to 91½ per cent., at the same time giving us a merchant marine that won for us the war of 1812. In 1828, when we were carrying 89 per cent. of our trade, the agricultural south and west combined against the shipping interests of New England and passed the Reciprocity Act of 1828, opening our trade to foreign competition, whereupon there at once began a loss which has now shrunk our total down to a paltry and shameful 8 per cent. A democratic southern President, Polk, seeing the success of English subsidies in the then new steamship trade, followed their example and soon our success in steamships was rivaling our earlier success in clipper-built ships, but the bitter sectional quarrel between south and north in 1856 caused the southerners in Congress, led by Jefferson Davis, to strike a blow at the shipbuilding north by repealing the mail subsidies. It succeeded. Thank God that quarrel and its cause no longer exist.

To-day the cotton-growing south and the grain-growing west are as alive as the northeastern seaboard to the need for freeing our merchant marine from the meshes of the net that is strangling it.

Everybody wants our merchant marine assisted—it was promised by all parties in the campaign of 1912. What happened after the election? The democratic party in control of both branches of the Congress and of the executive enacted the tariff law of October 3, 1913, and in it put a section granting 5 per cent. reduction in duties to goods carried in American bottoms. Sundry foreign governments promptly filed protests with the State Department. These foreign governments had long been planning to prevent any return by us to the laws which succeeded so brilliantly in the early days of our republic. Thanks to certain secretaries of state more eager to perpetuate their names on treaties than to learn the history and policy of their department, those foreigners succeeded in weaving a web of treaties which in the opinion of the Attorney General of the United States (rendered October 31, 1913, to the Secretary of the Treasury), nullified all that part of the act which attempted to assist our merchant marine. And that was the end of it? No, it was only the end of that chapter, for the people of the United States waked up for the first time to the fact that constant vigilance must henceforth be given to what contracts our State Department makes with foreign powers. We now insist on knowing if good bargains are being made for us, so flagrantly have many of our diplomatists been outwitted in the past, as witness this mesh of treaties that seem to leave us powerless to do what Washington, Madison and Jefferson did in 1789.

But are we helpless, and are we outwitted? Let us look at these treaties, and see if anything could be added to the said opinion of our Attorney General. We shall find that almost without exception each of them contains a clause permitting either party at his pleasure, upon a specified notice generally of one year, to terminate it. No breach of treaty or of contract is necessary to terminate the treaties recited in the Attorney General's opinion. To serve general notice that unless these treaties are so modified as to give us back the freedom of 1789 we intend availing ourselves of their abrogating clauses would gain us respect from those very foreign chancelleries which to-day laugh openly over their success in catching our merchant marine in their net of treaties. It would be both interesting and useful for us to learn which, if any, of those chancelleries would decline to make such modifications, and thus force us to serve the required notice upon them! The Democratic party loves to quote Jefferson, and all parties to quote Washington—very good, let them, once freed from our present plight, join in re-enacting the laws which those two early statesmen put on our statute books. Fortunately we are not here confronted with a question like that involved in the Panama Canal Treaty—in that treaty there was no abrogating clause, and we will live up to that bargain in which England got so much the better of us, cost what it may. England will live to regret that treaty, or else she will wisely consent to its modification. Parenthetically, is it not the duty of our government, the very next time England asks a favor to exact, as a condition to granting it, that the Hay-Pauncefote be so modified that we can do what we like with the canal built by our brains and our millions!

This message comes from no youthful debating societies, nor is it prefaced by the word "please"—it comes from thousands of men, full grown in their heads as in their bodies, business men who have organized to protect their rights and to get what they deserve, and who have come to know of certain impediments thereto which they properly expect to have removed by the government which they themselves elected. No untried remedies are being sought—two of them have been successfully tested by the German Government and the third by our own dear country under the guidance of Washington and Jefferson. Here is the message—but what will our government do about it?

 

  1. Address delivered before the annual meeting of the American Association for the Advancement of Science, Philadelphia, Dec. 29, 1914.