Two Americans met by chance one day last summer at a little table in front of the Café de la Paix in Paris. One had arrived only a month before; the other was an old resident in France. After the fashion of their kind they became acquainted and began to talk. Before them passed a picturesque parade, brilliant with the uniforms of half a dozen nations, and streaked with the symbols of mourning that attested to the ravage of war.
"There is something wrong with these Frenchmen," said the first American.
"How is that?" asked his companion.
"It's like this," was the reply. "I have sold goods from the Atlantic to the Pacific, and yet I can get nowhere over here. I give these fellows the swiftest line of selling talk in the world and it makes no impression."
"How well do you speak French?" queried his new-found acquaintance.
"Not at all."
"Have you studied the ways and needs of the Frenchman?"
"Of course not. I've got something they want and they ought to take it."
The man who had long lived in France was silent for a moment. Then he said:
"The fault is not with the Frenchman, my friend. Think it over." He did, and with reflection he changed his method. He put a curb on strenuosity; started to study the French temperament; he began to see why he had not succeeded.
This incident illumines one of the strangest and most inconsistent situations in our foreign trade. By a curious irony we have failed to realise our commercial destiny in the one Allied Nation where real respect and affection for us remain. France—a sister Republic—is bound to us by sentimental ties and the kinship of a common struggle for liberty. Her people are warm-hearted and generous andwantto do business with us.
Yet, as long and costly experience shows, we have almost gone out of our way to clash with their customs and misunderstand their motives. In short, we have neglected a greatopportunity to develop a permanent and worth-while export business with them. It was bad enough before the war. Events since the outbreak of the monster conflict have emphasised it more keenly.
Why have Americans failed so signally in France? There are many reasons. First of all, their whole system of selling has been wrong.
For years many of our manufacturers were represented in Paris and elsewhere in France by German agents, who also represented producers in their own country. The energetic Teuton did not hesitate to install an American machine or a line of American goods. But what happened? When the machine part wore out or the stock of goods was exhausted, there was seldom any American product on hand to meet the swift and sometime impatient demand for replacement or renewal. By a strange "coincidence" there was always an abundant supply of German material available. The German salesman always saw to that. Necessity knows no nationality. The result invariably was that German output supplanted the American. The Frenchman did not want to be caught the second time.
This prompt renewal created an immense goodwill for German goods. Right here is one of the first big lessons for the American exporter to learn, no matter what country he expects to sell in. It lies in keeping goods "on the shelf," and being able to meet emergency demand.
The Frenchman in trade is a sort of Missourian. He must be "shown." He shies at samples; distrusts drawings. He likes to go into a warehouse and look over stocks; it gives him satisfaction to pick and choose. He is the most fastidious buyer in the world and he likes to do things his own way. Any attempt to ram foreign methods—either in buying or selling—down his sensitive throat is bound to react.
Here is a case in point: The General Representative in France of a large American manufacturing concern decided to engage some French salesmen. He was a shark on business system; he fairly oozed with "scientific salesmanship"; he decided to gird his Gallic emissaries with the most improved American selling methods. So he preparedan elaborate "What I did" schedule for them. Into it was to be written every evening the complete record of the business day.
When he handed one of these blanks to his leading French salesman, that gentleman shrugged his shoulders and said:
"It eez imposseeble."
When the American became insistent all the French salesmen resigned in a body. This objection was purely temperamental. If there is one thing above all others that puts a Frenchman into panic it is publicity of his personal affairs. He believes that the greatest crime in the world is to be found out, whether in business or in love. There was nothing perhaps to hide in a biography of his daily work, but it was the wrong tack to take.
In the same way militant and masterful salesmanship also fails. A man may be a crack seller in Kansas City, Denver, and all points West, but he finds to his sorrow that his dynamic process goes straight over the head of a Frenchman. He refuses to be driven; he wants time for mature reflection and an opportunity to talk the thing over with his wife.
This irritating attempt to force uncongenial methods on French buyers is duplicated in a corresponding lack of plain everyday intelligence in meeting the simplest French requirements.
Indeed, the omissions of Americans are wellnigh incredible. Take the matter of postage to France. The head of a great French concern made this statement to me in sober earnestness: "Won't you be good enough to beg American manufacturers to put their office boys through a course of instruction in postal rates between Europe and the United States?"
When I asked him the reason he said: "We sometimes get twenty letters from America in one mail and each comes under a two cent stamp. This has been going on for years despite our repeated protest about it. Some months my firm was required to pay from ten to fifteen dollars in excess postage."
Now the amount of money involved in this transaction is the slightest feature: it is the chronic laxity and carelessness of the American business man that gets on the Frenchman's nerve.
Here is another case in point: A well known French firm has been writing weekly letters for the past eighteen months to a New England factory trying to persuade the Manager to mark his export cases with a stencil plate and in ink rather than with a heavy lead pencil, as the latter marking is almost obliterated by the time the shipment arrives at Havre. In fact, this French firm went to the extent of sending a stencil and brush to New England to be used in marking the firm's cases. But the old pencil habit is too strong and a weekly hunt has to be instituted on the French docks for odd cases containing valuable consignments of machine tools. Vexatious delays result. It is just one more nail that the heedless American manufacturer drives into the coffin of his French business.
These incidents and many more that I could cite, are merely the approach, however, to a succession of mistakes that make you wonder if so-called Yankee enterprise gets stage fright or "cold feet" as soon as it comes in contact with French commercial possibilities. Let me now tell the prize story of neglected trade opportunity.
Last spring the American Commercial Attache in Paris made a speech at a dinner in Philadelphia. He painted such a glowing picture of trade prospects in France that the head of one of the greatest hardware concerns in America, who happened to be present, came to him afterwards with enthusiasm and said: "We want to get some of that foreign business you talked about and we will do everything in our power to land it. Help us if you can."
The Attache promised that he would and returned to his post in Paris. He studied the hardware situation and found a tremendous need for our goods. He was about to make a report to the hardware manufacturer when an alert upstanding young American breezed into his office and said:
"I have been looking into the hardware situation here and I find that there is a big chance for us. In fact, I have already booked some fat orders. Will you put me in touch with the right people in America to handle the business?"
"Certainly," replied the Attache. "I know just the firm you are looking for." He recalled the enthusiastic remarks of the manwho came to him after the Philadelphia speech, so he said: "Write to the Blank Hardware Company in ——, and I am sure you will get quick action."
"No," said the enterprising young American, "I will cable." He immediately got off a long wire telling what orders he had and giving gilt edge banking references.
Quite naturally he expected a cable reply, but he was too optimistic. Day after day passed amid a great silence from America. At the end of two weeks he received aletterfrom the Export Manager of the firm who said, among other things: "We are not prepared to quote any prices for the French trade now. We have decided to wait with any extension of our foreign business until after the war. Meanwhile you might call on our agent in Paris who may be able to do something for you."
The young American dashed up to the agent's warehouse. The agent was an old man becalmed in a sea of empty space. All his young men were off at the front; a few grey beards aided by some women comprised his working staff.
"I have no American hardware in stock,"he said, "but I may be able to get you some English or Swiss goods." This did not appeal to the young American. He is now making a study of Russian finance.
Full brother to this episode is the experience of another American in Paris who found out that there was great need among French women for curling irons. Despite war, sacrifice and sudden death, the French woman is determined to look her best. Besides, she is earning more money than ever before and buying more luxuries. Knowing these facts, the Yankee sent the following cable to a well known concern in the Middle West:
"Rush fifty thousand dollars' worth of curling irons. Cable acceptance." He also cabled his financial references which would have started a bank.
He, too, was doomed to disappointment. After a fortnight came the usual letter from America containing the now familiar phrase: "See Blank Blank, our Paris representative. He may be able to take care of you."
Manfully he went to see Monsieur BlankBlank, who not only had no curling irons but refused to display the slightest interest in them.
Still another American took an order for some kid skins, intended for the manufacture of fine shoe uppers. By the terms of the agreement they were to be three feet in width. The money for them amounting to $30,000 was deposited in a New York bank before shipment.
When the skins reached Paris they were found to be heavy, coarse leather and measuring five feet in width. They were absolutely useless for the desired purpose. The average French buyer, however, is not a welcher. He accepted the undesirable stuff, but with a comment in French that, translated into the frankest American, means, "Never again!"
All this oversight is aided and abetted by a twin evil, a lack of knowledge of the French language. Here you touch one of the chief obstacles in the way of our foreign business expansion everywhere. It has put the American salesman at the mercy of the interpreter, and since most interpreters are crooks, you can readily see the handicap under which the helpless commercial scout labours. A concrete episode will show what it costs:
A certain American firm, desirous of establishing a more or less permanent connection in France, sent over one of its principal officers. This man could not speak a word of French, so he secured the services of a so-called "interpreter guide." It was proposed to select a representative for the company from among a number of firms in a certain large French seaport. The firm chosen was to receive and pay for consignments through a local bank and act generally for the American company.
Friend "interpreter guide" said he knew all the big business houses in the city, so he selected a firm which the American accepted without making the slightest investigation. A bank agreed to take care of the shipments and the whole transaction was quickly concluded. The American grabbed the papers in the case (and I might add without the formality of having them examined by a third party) and left France immensely impressed with the ease and swiftness withwhich business could be transacted with that country.
But there was an unexpected and unfortunate sequel to this performance. A few months later another officer of this American company came post-haste to France to straighten out an ugly tangle. It developed that the French firm chosen by the "interpreter guide" was not of the highest standing: that the interpreter, for reasons and profits best known to himself, had entirely misrepresented the conversation, that instead of paying four per cent for services, the American firm was really paying about ten. The whole transaction had to be called off and a new one instituted at considerable expense of time and money.
Another American came to Paris without knowing the language, used an interpreter every day for nine weeks, and was unable to place a single order. Yet in this time he spent enough money on his language intermediary to pay the rent of a suitable office in Paris for a whole year.
The dependence of Americans with important interests or commissions upon interpreters is well nigh incredible. On thesteamer that took me to France last summer was the new Continental Manager of a large American manufacturing company. I assumed, of course, that he could speak French. A few days after I arrived in Paris I met him in the Boulevard des Italiens in the grip of a five franc a day interpreter. He told me with great enthusiasm that an interpreter was "the greatest institution in the world." In six months he will probably reverse his opinion.
The lesson of this lack of knowledge of French as applied to salesmanship is this: That while the average Frenchman is greatly flattered when you tell him that his English is good, he prefers to talk business in his own vernacular. He thinks and calculates better in French. Frequently when you engage him in conversation in English and the question of business comes up, you find that he instinctively lapses into his mother tongue.
I was talking one day with Monsieur Ribot, the French Minister of Finance, whose English is almost above reproach, and who maintained the integrity of his English through a long conversation. But the moment I asked him a question about the proposed bond issue, he shifted into French and kept that key until every financial rock had been passed.
In short, you find that if you want to do business in France, you must know the French language. It is one of the keys to an understanding of the French temperament.
Even when Americans do become energetic in France, they sometimes fail to fortify themselves with important facts before entering into hard and fast transactions. As usual, they pay dearly for such omissions. This brings us to what might be called The Great American Deluge which overwhelmed not a few Yankee pocketbooks and left their owners sadder and saner.
Fully to understand this series of events, you must know that since the beginning of the war the question of an adequate French coal supply has been acute. Indeed, for a while the country faced a real crisis. Many of her mines are in the hands of the Germans and she was forced to turn to England for help. Not only has the English price risen, but to it must be added the high cost of transportation, the heavy war risk, andall those other details that enter into such negotiations.
France had to have coal and various enterprising Americans got on the job. At least, they thought they were enterprising. Before they got through, they wished that they had not been so headlong as the following tale, now to be unfolded, will indicate.
A group of New York men made a contract to deliver three shiploads of coal at Bordeaux at a certain price.Afterthey had signed the contract, freight rates from Baltimore to the French port almost doubled. This was the first of their troubles. When their vessel finally reached Bordeaux, the dock was so crowded with ships unloading war munitions that they could not get pier space. In France demurrage begins the moment a ship stops outside of port. The net result was that these vessels were held up for nearly two weeks and the high price of transportation coupled with the very large demurrage practically wiped out all the profits.
Another group of Americans made a contract to deliver coal to a French railway "subject to call." Without taking the trouble to inquire just what "subject to call" meant in France, they signed and sealed the bargain. Then they discovered that the railroad wanted the coal delivered in irregular instalments. Meanwhile the consignors had to store the coal in French yards where space to-day is almost as valuable as a corner lot on Broadway. They were glad to pay a cash bonus and escape with their skin.
Still another group made a contract with the Paris Gas Company for a large quantity of coal. They discovered later that the company expected the coal to be delivered to their bins in Paris.
"But the American plan is to sell coal f.o.b. Norfolk," said the spokesman.
"We are sorry," replied the Frenchmen, "but the coal must be delivered to us in Paris. The English have been doing it for forty years, and if you expect to do business with us you must do likewise."
When the Americans demurred the company held them to their contract.
This last episode shows one of the great defects in the American system of doing business abroad. We insist upon the f.o.b. arrangement, that is, the price at the American point of shipment. The foreigner, and especially the Frenchman, wants a c.i.f. price which includes cost, insurance and freight and which puts the article down at his door. The German and English shippers, and particularly the former, have made this kind of shipment part of their export creed, and it is one reason why they have succeeded so wonderfully in the foreign field.
The Great American Coal Deluge also precipitated a flood of miserable titled ladies all selling coal for "well known American companies." Most of them were clever American women, married, or thinking they were married, to Italian or French noblemen. Their chief effort was to get a cash advance payment to bind the contract. Such details as price, transportation, credit, and other essentials were unimportant.
Here is a little story which shows how these women did business and undid American good will.
One day last August, the telephone rang in the office of the General Manager of a long established American concern in Paris. A woman was at the other end.
"Is this Mr. Blank?"
"Yes."
"I am Countess A. and I have a letter of introduction for you."
"Yes."
"I represent several large American coal companies and have secured a large order for Italy."
"Yes."
"Can you tell me how I can get the coal to Italy?"
"Yes."
"Splendid! But how?"
"By boats."
"Oh, yes, I know, but have you got the boats and can I get them? I have the order, you see, and that is the main thing."
"But, madam," asked the man, "have you cabled your company in America about the contract?"
"No," answered the woman. "What's the use of doing that. I have no money to spend on cables. Besides, I have full power to act. The price is all right and the buyers are ready to sign but they want to put into the agreement some silly business about delivery and I am asking you to help me get the boats."
"Come and see me," said the Manager.
The woman promised to call the next morning, but she never came. Just what she had in mind the Manager could never quite tell. But one thing was proved in this and similar activities: The "Countess" and most of her sisters who have been trying to put over coal and other contracts in Paris, have little or no real authorisation for their performances, and the principal result has been to prejudice French and Italian buyers against us.
In seeking to make French contracts, some of these adventurers (and they include both sexes) make the most extravagant claims. One group circulated a really startling prospectus. At the top was the imposing name of the corporation with a long list of branches in every part of the world. Then followed a list of names of individuals and firms with their assets supposed to be part and parcel of the corporation. One man whose name I had never heard before and who was set down as a Pittsburgher, was accredited with assets of $250,000,000. Under other individual and firm resources ranged from one to twenty-five million. Thelist included the name of a great American retail merchant, without his consent I might add, but the promoters had cunningly misspelled his name, which kept them within the pale of the law. The total assets of these "concerns personally responsible for all orders entrusted" was precisely $340,000,000. In spite of this dazzling array of misinformation, let it be said to the credit of the French buyer that he failed to fall for the glittering bait.
The more you go into the reasons why so many of our business men have failed in France, the more you find out that plain everyday business organisation seems to be conspicuously absent. Take, for example, the question of credit. The average American doing business in France proceeds in the assumption that every Frenchman is dishonest. This being his theory, he either exacts cash in advance or sells "cash against documents." Such a procedure galls the Frenchman who is accustomed to long credit from English, German, Swiss and Spanish manufacturers and merchants.
Of course, behind all these American errors in judgment and tact is a lack of organised credit information. To illustrate:
When I was in London, the English Managing Director of one of the greatest of Wall Street Banks received an inquiry from his home office for information about the Compagnie Generale Transatlantique (the French Line). The amazing thing was that this bank, that prides itself on its world-wide information, had no data regarding the leading steamship line between England and France. You may be sure that the Credit Lyonnais or any other French banking institution has a complete record of the American Line.
Not long ago, one of the largest banks in Chicago refused to extend credit to a French concern, although the French Government backed up the purchase. This concern had occasionally done business with a New York Trust Company in the Rue de la Paix, whose French Manager was a live, virile, far-seeing young American. The President of the French Company laid his case before him. Quick as a flash he said:
"All right! If they won't guarantee it, I will, and on my own responsibility."
Whereupon he put the deal through. Itwas the kind of swift, dramatic performance that appeals to the Frenchman. The net result was that the service has come back a hundredfold to the Trust Company.
The idea prevailing in America that French firms are not worthy of credit is a matter of great surprise all over Europe. Here is the way an Englishman whose firm has done business in France for fifty years, sized up the situation:
"There are no better contracts in the world than those entered into in France. Americans who have had little experience in such matters may find the negotiations leading up to the signing of a French contract somewhat tedious, but we do not mind this and one is so completely protected by the laws of the country, that losses are almost unknown.
"Not long ago we had a case in point. A purchaser of lathes who had already made an advance payment, received his machines and then by various excuses put off the final payments for the remainder from week to week. We waited four weeks and then made our complaint to the judge at the tribunal. Two days later the judge ordered the delinquentfirm to pay up in full and we received our money the very same day. How long do you think a New York court would have taken to decide a simple question of business of this kind? The fact is that in spite of the war, French credit remains to-day as good as any you can find."
On top of their resentment over our lack of confidence in their credit is the added feeling which has cropped up since the beginning of the war over the way American manufacturers have ignored many of their French contracts. A French manufacturer summed it up in this way:
"There is no doubt that some American manufacturers who had signed contracts for the delivery of machinery in France, deliberately sold these machines at home at higher prices. It has created a very bad impression and I am afraid that henceforth your salesmen will find it much harder to operate in my country.
"The trouble is that Americans have been spoiled by too many orders. Before the war they were all crying out for business. Now that they have everything their own way, they have become independent and arrogant.With the ending of the war, all this will change, for the French are not likely to forget some of the bitter lessons they have learned. Henceforth they will profit by them."
One reason for our laxity all up and down the French business line is that the American has never taken the French export business any too seriously. On the other hand, stern necessity has been the driving force behind the English and German manufacturer. The American, too, has made the great mistake of assuming that the foreigner, and especially the Frenchman, is not always serious-minded and to be depended upon. If he wants his mind disabused in this matter, let me suggest that he see him at war. He will realise that the superb spirit of aggression and organisation that mark him now is bound to last when peace comes.
You must not get the impression from this long list of American business calamity that all our endeavour has failed in France. Those few great American corporations who have planted the flag of our commercial enterprise wherever the trade winds blow, havelong and successfully held up their end throughout the Republic. So, too, with some individuals. The story of what one New Yorker did is an inspiring and perhaps helpful lesson in the right way to do business in France.
This man is resolute and resourceful: he speaks French fluently and he was familiar with the foreign trade field. With the outbreak of war he did not lose his head and try to get business indiscriminately. Instead, he made a careful survey of the field; he did not listen to the optimist who said it would be a short war: his instinct told him, on the contrary, that it would be a long one. "What will France need more than anything else?" he asked himself.
He realised that most of all France would need machine tools. He got the cables busy assembling goods, and by every known route he brought them to France. When he had a warehouse full of material, he began to sell. He not only had what the French were hungering for, but he had them to deliver overnight. While his colleagues were frantically trying to get their stuff in, he was getting all the business. The French like the man who makes good.
This man met their expectations and to-day he stands at the top of the selling heap.
More than this, he is building a factory on the outskirts of Paris where he will make and assemble his product. Ask him the reason why he is doing this, and he will tell you:
"First, it means good will; second, we will get the benefit of native and cheap labour; third, we will be able to replace parts at once; and, fourth, we will get inside the wall of the Economic Alliance."
No matter how we heed the example of the few progressive Americans who have successfully planted their business interests in France, we will face a new handicap when the war ends. As in England, we will be bang up against an industrial awakening that will mark an epoch. Coupled with this revival will be an efficiency born of the war needs that will act as a tremendous speeder-up.
In France this galvanised industrial life will be stimulated by a brilliant imagination wholly lacking in the English temperament. It will go a long way toward opening up fresh fields of labour and distribution.
Self-sufficiency will be the keynote. The automobile is a striking instance. We had established a very promising motor market (and especially with moderate-and low-priced cars) among the French. When the Government assumed control of the French automobile factories and changed their output to war munitions, the two great automobile syndicates protested that the cutting off of the French motor supply would mean an immense loss of good will. First came a 70 per cent duty on practically all American cars and this was followed up by an almost complete restriction of all American cars.
This prohibition will have the same effect as the English exclusion in that it will stimulate the demand for the native French cars. Here we get to one of the striking phases of the new industrial development of immense concern to us. France has her eye on quantity output. Many signs point to it.
When the war broke out, a certain young French engineer saw great opportunity in shell making. He was immuned from military service, he had a little capital of his own, and with Government aid he set to work. Within four months he had built an enormous plant on the banks of the Seine almost within the shadow of the Eiffel Tower. In six months he had enlarged his capacity so that he was producing 15,000 shells a day. Last summer he sent for the agent of a large American machinery company: "I am going to make automobiles in series after the war." "In series" is theFrench way of expressing quantity output.
"All right," said the American. "What can I do for you?"
"Simply this," said the Frenchman. "I wish to order sufficient automatics to meet the demand when peace comes."
This is the spirit of the awakened French industry. I know of half a dozen automobile and other producing establishments who are making plans to manufacture popular-priced cars when the war is over. This output will not only affect the sale of American cars in France, but will also interfere with the market for our cheap machines in South America. Already France is making every effort to increase her Latin-American trade. She has immense sums of money invested in Brazil and she will follow up this advantage keenly.
It is important for us to remember that France like England will have a well oiled productive machine after the war. It will not only be better but bigger than ever before. The German ill wind that devastated the northern section will blow good in the end. Hundreds of factories operated by hand labour before the war will now beequipped with American labour-saving machinery. The products of these machines operated by cheap labour will be in competition with our own commodities manufactured by more expensive labour in many of the markets of the world.
Formerly the French artisan could produce an article almost from raw material to finished product: now he has learned to stand at an automatic and labour at a single part. In short, he is becoming a specialist which makes him a cog in the machine of quantity output.
What is true of machines and men is also true of money. The old wariness of the French banker in underwriting industry is passing away. He is thinking in terms of large figures and vast projects.
I could cite many examples of the new Gospel of French Self-Supply. Before the war France manufactured lathes that were beautiful examples of art and precision. The firms that made them were old and solid and took infinite pride in their product. Now they realise that output must dominate. A simple type of machine has been chosenas model and will henceforth be made in large quantities.
Then there is the sewing machine. Before the war two groups—Anglo-American and German—controlled the French market. By the ingenious use of export premiums, the Germans had the best of it.
"Why always pay tribute to strangers?" now asks the French housewife. So far as Germany is concerned, this question is already settled. But the American sewing machine will have to struggle for its existence hereafter in France, for plans have been made for at least three huge factories for its production.
Striking evidence of the growing French industrial independence of Germany is her advance in crucible making. For years Sèvres vied with Limoges for ceramic honours. To-day the vast plant which once produced the most exquisite and delicate ware in the world is now producing the less lovely but more serviceable crucibles, condensers and retorts necessary for the distillation of the powerful acid used in modern high explosives. Previous to the war, the Central Empire had a monopoly on this market. Indeed, much of the pottery and glassware used in laboratories and chemical factories was made in Bohemia and marketed by Germany. Now the Sèvres plant is shipping these goods to England and Russia.
So, too, with dye stuffs. A whole new French colouring industry is being created. A Société d'Etude has been formed to make a scientific survey and this will be replaced by a National Company to undertake the manufacture of all coal tar products.
The use of a certain number of new war factories has been guaranteed to the company by the Minister of War. Typical of the purpose which will animate the enterprise is one of the articles of the National Company which provides that the Director of the Dye Stuff Industry must be of French birth. An agreement has also been made with England and Italy to protect the colour output of the three countries with a high tariff after the war. Here you find one tangible evidence of the working out of the Paris Economic Pact.
Even while the invader's hand still lies heavy upon the land, France looks ahead to reconstruction. Last summer Paris flockedto a graphic exhibition of how to rebuild a destroyed city. It was called La Cité Réconstitué, and was held in the Tuileries Garden. Here you could see the modern way of making a Phoenix rise quickly out of the ashes. There were model schoolhouses, churches, factories, and cottages, all with standardised parts which could be thrown together in an almost incredibly short time.
With Self-Sufficiency has come a desire for new business knowledge. Not long ago an American business man who has lived in Paris for many years, received a letter from a young French friend in the trenches at Verdun. The soldier wrote:
"I realise that when this war is over we must be better equipped than ever before to meet world business competition. I want to be a better salesman. Please send me some books on American salesmanship and also some of the American trade papers. I have begun the study of Spanish because I believe we are going to have our part in the Latin-American trade." Here was a young Frenchman risking his life every moment in one of the greatest battles the world hasever known: yet in the midst of death he was looking forward to a new business life.
The whole attitude of the Frenchman toward life has undergone a change, first under the stress of ruthless war, and under the spur of his kindling desire for rehabilitation. Formerly, for example, the French loathed to travel. When he knew he was going away on a journey, he spent a month telling his relatives good-bye. Now he packs his bag and is off in an hour to Lyon, Marseilles, Bordeaux, or any other place where business might dictate.
The new and efficient French industrial machine is not the only factor that American business in France must reckon with after the war. The French woman is fast becoming a force, thus setting up an altogether unequal and almost unfair competition, because to shrewd wit and resource is added the power of sex and beauty.
In France, as most people know, the woman exerts an enormous influence, regardless of her social class. In all regulated bourgeois families the wife holds the purse strings; in the small shops she keeps thecash and runs things generally. No average Frenchman would think of embarking on any sort of enterprise without first talking it over with hisfemme, who is also his partner. This team work lies at the root of all French thrift.
The woman of the lower class has met the grim emergency of war with sacrifice and courage. Not only has she faced the loss of those most dear with uncomplaining lips, but she has taken her man's place everywhere. You can see her standing Amazon-like in leather apron pouring molten metal in the shell factory; she drives you in a cab or a taxi; she runs the train and takes the tickets in the Underground: in short, she has become a whole new asset in the human wealth of the nation and as such she will help to make up for the inevitable shortage of men.
Her sister of the upper class, at once the most practical and most feminine of her sex, is also doing her bit. She is the lovely thorn in the path of the American business promoter in France.
Before the war, it was rare to find this type of woman competing with men in outside business affairs, although her influence has always counted immensely in official life where she pulls the strings to get husband or lover Government preferment or concession.
Since the war, however, necessity has sharply developed her latent business qualities. Now it is not unusual to find her in direct competition, using all those delightful charms with which Nature has endowed her. This is especially true of widows and women whose husbands are at the front. They often rely more upon persuasion than upon any technical or practical knowledge. One reason why they succeed is their almost uncanny knowledge of men. And this often enables them to grasp swiftly the clue that business opportunity offers.
One night at dinner a Colonel's widow, a gracious and beguiling lady, heard that the French Government was in the market for 50,000 head of cattle. The next morning she sent half a dozen cables to South America, got options, and in three days her formal bid was at the War Office. Within a week she had the contract.
I know of a case of the wife of a Colonel at the front, who heard one day at lunchthat the War Office needed 50,000 sacks of flour for the army at Saloniki. That same day she put the matter before some American brokers in Paris, who wired to their New York firm and received the usual American reply: "Am not interested in the French trade now. Will wait until after the war."
With the utmost difficulty the woman was able to secure 10,000 sacks by way of Italy and Switzerland. She is not likely to seek American sources of supply soon again.
An American got a tip one day that a certain contract for machine tools was available. He had an appointment for lunch, so he said to himself: "Why hurry? These French people are slow. I'll get busy this afternoon or to-morrow."
When he went to the establishment in question the next day, he found that an exquisitely gowned woman had just preceded him; indeed, the fragrance of the perfume she used still hovered about the outer office. The man cooled his heels for half an hour when the lovely feminine vision flashed by him going out. He started to make his selling talk to the Purchasing Agent, who said, at the first opening:
"I am extremely sorry, Monsieur, but we have just closed the contract with Madam Blank who left a few moments ago."
The New France has brought forth a New Woman!
Through all the organised approach to Self-Sufficiency and Economic Rehabilitation, France has not lost sight of her grudge against the Germans. Indeed, no phase of her business life to-day is more picturesque than the campaign now in full swing not only against Teutonic trade, but against any resumption of commercial relation with the hated enemy across the Rhine. Right here you get a striking difference between English and French methods. While Britain takes out some of her enmity against German trade in eloquent conversation, France has gone about it in a practical way, shot through with all the colour and imagination that only the French could employ upon such procedure.
Preliminary to this campaign was a characteristic episode. Almost with the flareup of war, the French mind turned sentimentally to those fateful early Seventies when Germany in the flush of her great victory seizedthe fruits of that triumph. Some of those fruits were embodied in the famous Treaty of Frankfort in which the Teuton clamped the mailed fist down on every favoured French trade relation.
The war automatically annulled this treaty, and although the nation was in the first throes of a struggle that threatened existence, it celebrated the revocation in characteristic fashion. Millions of copies of the Frankfort Treaty were printed and sold on the streets of Paris and elsewhere. The excited Frenchman rushed up and down brandishing his copy and saying: "Now we will ram this treaty down the throat of the Boche!"
This emotional prelude was now followed by a definite crusade for the elimination of German goods. Anti-German societies were formed all over the country. Backing these up are dozens of other formidable organisations, such as Chambers of Commerce and Business Clubs. Typical of the campaign is the formation of a Buyers' League which is intended to assemble all persons who will take a resolution never to buy a German product and be satisfied for the remainderof their lives with the French manufactured article.
Wherever you go in France, you find some concrete and striking evidence of the Anti-German wave. When you get a bundle from a Paris shop, you are likely to find stuck on it a brilliantly coloured stamp showing a pair of bloody hands holding a number of packages, the largest one labeled "made in Germany." Under it is the sentence in French reading: "Frenchmen, do not buy German products. The hands that made are reddened with the blood of our soldiers."
There is great variety in these stamps, which are used on letters and packages. One of the most popular shows a helmeted German with a brutal face holding a smiling mask before his visage. In one hand he holds a bundle marked "Made in Germany." On this stamp is the inscription: "Mistrust their smiles—in every German there is a spy."
Still another and equally popular stamp pictures a soldier with bandaged head standing by a prostrate comrade and pointing to a fleeing German. The inscription reads: "We chase the Germans during the war.You, civilians, will you allow them to return after peace?"
One stamp used much throughout the Provincial French cities shows a woman in deep mourning weeping over a grave marked with a cross surmounted by a red soldier cap. The woman is supposed to be saying these words: "French people, buy no more German products. Remember this grave."
A companion stamp shows a figure representing the French Republic and holding the tri-colour. The flag is attached to a spear with which she is piercing the breast of a German eagle on the ground. At her side is the national bird of France, the Cock, crowing triumphantly. Underneath are the words: "Refuse all German products."
Similar in idea is another dramatic conception showing a white robed female figure holding a battle axe in one hand and pointing with the other to a burning cathedral. Her words are: "Frenchmen, do not consume any German products. Remember 1914."
Most of the large French cities have their own Anti-German stamps which are enlarged and used on billboards as posters. Atypical city stamp is that of Lyon, which shows a Cock in brilliant colours standing proudly in the red and blue rays of a white sun. Attached is the legend: "National League of Defence of French Interests—The Anti-German League: Buy French Products."
The City of Marseilles has a stamp showing the French Cock standing on a German helmet surrounded by the words "Anti-German League." Elsewhere on the stamp is the inscription: "No more of the people—No more German products."
Whether the Frenchman buys or sells, he has poked under his nose or flaunted before his eyes every hour of the business day some concrete evidence that his country has put the German people and their products under the ban.
In connection with this campaign are some facts of utmost significance to the American business man who has studied the intent and purpose of the Paris Economic Pact which is described in a previous chapter, and which declared for an Allied war of economic reprisal against Germany and the other Central Powers. In that chapter, as you may recall, the point was made that since individuals and not nations do business, the Pact was likely to fail.
With their usual intelligence, the French understand this, and their whole educational campaign at home is to make the individual Frenchman immune against the lure of the cheap German products. The French know that it is the sum of individual French resistance to German buying that will keep the German product forever outside the realm of the Republic.
Indeed, the clearest-minded men in France to-day believe that more commercial advantage will accrue to France by the intensive development of her resources, the perfection of old industries and the creation of new ones than in the formation of committees devoted to plans for commercial alliances dedicated to reprisal. In other words, this helps to bear out the theory held in many quarters that the economic pact is after all merely a campaign document and utterly impracticable.
In France there are other signs that point to a rift in the Pact. While I was in Paris, a well known Senator pointed out that assoon as the war ended France would need coal and would look to Italy for it as she had done in the past. To obtain her coal more cheaply than she is now doing from the United States or England, Italy would very likely make concessions to Germany in order to obtain German fuel. The result would be an interchange of merchandise between the two countries regardless of the decree of the Paris Pact. The question arises: Could France place restrictions upon the Italian frontier to the annoyance of her Allies?
Meanwhile France is seeking immunity from any future coal crisis by developing a system of hydraulic power which will not only be economical, but will also help to cut down her imports. It is just one more phase of the ever-widening programme of Self-Sufficiency.
Despite our past blunders, our present lack of organised initiative, and the efforts toward Self-Supply, the future holds a large business opportunity for America in France. As a matter of fact, half of the selling work is already registered because the French are eager and anxious to do business with theirgreat sister democracy across the sea. It is, therefore, up to the American exporter to capitalise the needs of the nation and the good will that it bears toward us. But it must be done now.
For one thing, it cannot be achieved without constructive co-operative work. Groups of exporters must organise and establish offices in Paris and elsewhere in France. The reason for this is that the Frenchman abhors the fly-by-night salesman: he likes to feel that the man with whom he is trading has taken some sort of root in his midst.
With organisation must come knowledge. Why did the Germans succeed so amazingly in France? Geographical proximity and the Frankfort Treaty helped some, but the principal selling power he wielded was that he lived with his clients, found out what they wanted, and gave it to them. If a French farmer, for example, wanted a purple plough share fastened to a yellow body, the German assumed that he knew what he wanted and made it for him. The average American exporter, on the other hand, has always assumed that the foreign customer had to take what was given to him. For this reason we have failed in South America and for this reason we will fail in France unless we change our methods. Knowledge is selling power.
We must be prepared to give the French long credits, and if necessary, finance French enterprises. Despite her immense gold hoardings, she may feel an economic pinch after the war. We must also have sound and organised French credit information.
Our salesmen must know the French language and sympathise with the French temperament. Give the French buyer a ghost of a chance and he will meet you more than half way. Unlike the stolid Englishman he is plastic, adaptable and imaginative. Understanding is a large part of the trade battle.
We must accumulate large stocks of American goods in France to indulge the purchaser in his favourite occupation of long and elaborate choosing and to meet demands for renewal. To ship these goods we must have our own bottoms. Here, as elsewhere in the whole export outlook, is the old need of a merchant marine.
But we will never realise our trade destiny in France without reciprocity. We cannot sell without buying. France looks to us to take part of the huge flood of goods that once went to Germany. We take some of her wine: we must take more. We buy her silks and frocks: the American market for them must now be widened. We depended upon Germany for many of our toys: France expects the Anglo-Saxon nursery henceforth to rattle with the mechanical devices which will provide meat and drink for her maimed soldiers. And so on down a long list of commodities.
All this means that before the mood cools we must conclude new commercial treaties with France and assure for ourselves a really favoured nation relation that carries the guarantee of a permanent foreign trade now so necessary to our permanent prosperity.
In the last analysis you will find that it is France and not England to whom we must look for the larger commercial kinship after the war. The spirit of the awakened Britain, so far as we are concerned, is the spirit of militant trade conquest: the dominant desire of the speeded-up France is benevolent Self-Sufficiency.
Whether England realises her vast dream remains to be seen. But one thing is certain: No man can watch France in the supreme Test of War without catching the thrill of her heroic endeavour, or feeling the influence of that immense and unconquerable serenity with which she has faced Triumph and Disaster. They proclaim the deathlessness of her democracy, the hope of a new world leadership in art and craft.
She will be a worthy trade ally.
By making patriotism profitable, England has enlisted an Army of Savers and launched the greatest of all Campaigns of Conservation. No contrast in the greatest of all conflicts is so marked as this flowering of thrift amid the ruins of a mighty extravagance. The story of Britain's "Economy First" campaign is a chapter of regeneration through destruction that is full of interest and significance for every man, woman, and child in the United States. Through self-denial a complete revolution in national habits has begun. Out of colossal evil has come some good.
It has taken a desperate disease to invoke a desperate remedy. The average American, firm in his belief that he holds a monopoly on world waste, has had, almost without his knowledge, a formidable rival in England these past years. Whether the visiting Yankee tourist helped to set the pace or not, the fact remains that when the warbroke over England she was as extravagant as she was unprepared.
The Englishman, like his American brother, though unlike the Scotch, is not thrifty by instinct. He regards thrift as a vice. He prefers to let the tax gatherer do his saving for him. He believes with his great compatriot Gladstone that "it is more difficult to save a shilling than to spend a million."
Contrasting the Englishman and the Frenchman in the matter of economy, you find this interesting parallel: With the Frenchman the first question that attends income is "How much can Isave?" Saving is the supreme thing. With the Briton, however, it becomes a matter of "How much can Ispend?" Saving is incidental.
To associate thrift with the British workingman is to conceive a miracle. To be sure, he seldom had anything to save before the war. But with the speeding-up of industry to meet the insatiate hunger for munitions and the corresponding increase of from thirty to fifty per cent, even more, in wages, he suddenly began to revel in a wealth that he never dreamed was possible. The morehe made the more he spent. He squandered his financial substance on fine cigars, expensive clothes, and excessive drinks, while his wife bedecked herself in gaudy finery and installed pianos or phonographs in her house. No one thought of To-morrow.
Just as it took the shock of a long succession of military reverses to rouse the English mind to the consciousness that the war would be long and bitter, so did the abuse of all this temporary and inflated war time prosperity bring to far-seeing men throughout England the realisation that the British people, and more especially those who worked with their hands, were booked for serious social and economic trouble when peace came, unless they saw the error of their wasteful ways.
"What can we do to stem this tide of extravagance and at the same time plant the seed of permanent thrift," asked these men who ranged from Premier to Prelate. No one knew better than they the difficulties of the task before them. In England, as in America, thrift is more regarded as a vice than a virtue. Like the taste for olives itis an acquired thing. To spend, not to save, is the instinct of the race.
But there were other and equally serious reasons why all England should buck up financially and make every penny do more than its duty. First and foremost was the terrific cost of the war that every day took its toll of $25,000,000; second was the enormous increase in imports and the diminished flow of exports, a reversal of pre-war conditions that meant that England each day was buying $5,000,000 worth of goods more than other countries were purchasing from her; third was the human shrinkage due to the incessant demand of battlefield and factory. Everywhere was colossal expenditure of men and money: nowhere existed check or restraint. Something had to be done.
It was generally admitted that the first thing for everybody to do was to spend less on themselves than in times of peace. When, where and how to save became the great question. To save money at the cost of efficiency for essential and urgent work was not true economy. "But," said the thrift promoters, "waste is possible even in the process of attaining efficiency. For example, people may eat too much as well as too little, they may buy more clothes than they actually need, ride when they could walk, employ a servant when they could do their own work, use their motors when they could travel in a tram."
Thus every class came within the range of the lightning that was about to strike at the root of an ancient evil.
The start was interesting. Before the war was a year old definite order emerged of what was at the beginning a scattered protest against reckless spending. But long before the first organised message of saving went to the home and purse of the worker, the rich began to economise. Here is where you encounter the first of the many ironies and contrasts that mark this whole campaign. The people who could most afford to be extravagant were the first to draw in their horns. This, of course, was not particularly surprising because the rich are naturally thrifty. It is one reason why they get and stay rich.
Among the pioneer organisations was the Women's War Economy League founded and developed by a group of titled womenwho got hundreds of their sisters to pledge themselves to give up unnecessary entertaining, not to employ men servants unless ineligible for military service, to buy no new motor cars and use their old ones for public or charitable work, to buy as few expensive articles of clothing as possible, to reduce in every way their expenditures on imported goods, and to limit the buying of everything that came under the category of luxuries. Champagne was banned from the dinner table, décolleté gowns disappeared: men substituted black for white waistcoats in the evening.
The rich really needed no organised stimulus to retrench. The great target for attack was the mass of the population who did not know what it meant to save and who required just the sort of constructive lesson that an organised thrift movement could teach.
Much of the increase in wages among the workers was going for food and drink. Hence the opening assault was made on the market bill. Fortunately, an agency was already in operation. At the outbreak of the war a National Food Fund was started tofeed the hungry Belgians. That work had become more or less automatic (the Belgians' appetite is a pretty regular clock), so its machinery was now trained to the twin conservation of British stomachs and savings.
"Save the Food of the Nation," was the appeal that went forth on every side. "No One is too Rich or Poor to Help. Every man, woman and child in the country who wants to serve the state and help win the war can do so by giving thought to the question of conserving food. Since the great bulk of our food comes from abroad, it takes toll in men, ships and money. Every scrap of food wasted means a dead loss to the Nation in men, ships and money. If all the food that is now being wasted could be saved and properly used it would spare more money, more ships, more men for the National defence."
Now began a notable campaign of education which was carried straight into the kitchen. Food demonstrators whose work ranged from showing the economy of cooking potatoes in their skins to making fire-less cookers out of a soap box and a bundleof straw, went up and down the Kingdom holding classes. In town halls, schools, village centres and drawing-rooms, mistress and maid sat side by side. "Waste nothing," was the new watchword.
Backing up the uttered word was a perfect deluge of literature that included "Hand Books for House Wives," "Notes on Cooking," "Hints for Saving Fuel," "Economy in Food," in fact, dozens of pamphlets all showing how to make one scrap of food or a single stick of wood do the work of two.
The people behind this movement knew that with waste of food was the kindred waste of money. They realised, too, that even the most effective preachment for food economy must inevitably be met by the cry, "Everybody must eat." With money, on the other hand, there seemed a better opportunity to drive home a permanent thrift lesson. So the forces that had built the bulwark around the English stomach now set to work to rear a rampart about the English pocketbook.
Circumstances played into their hand. The Great War Loan of $3,000,000,000 had just been authorised. "Why not make this loan the text of a great National thrift lesson and give every working man and woman a chance to become a financial partner of the Empire," said the saving mentors. It was decided to put part of this loan within the range of everybody, that is, to issue it in denominations from five shilling scrip pieces up, to sell it through the post office and thus bring the new savings bank to the very doors of the people.
Again a machine was needed, and once more as in the case of the food campaign one was well oiled and accessible. It was the organisation that had raised, by eloquent word and equally stimulating poster and pamphlet, the great volunteer army of 3,000,000 men. Just as it had drawn soldiers to the fighting colours, so did it now seek to lure the savings of the people to the financial standard of the nation.
The Parliamentary Recruiting Committee became the Parliamentary War Savings Committee and it loosed a campaign of exploitation such as England had never seen before. From newspapers, bill boards and rostrums was hurled the injunction to buy the War Loan and help mould the Silver Bullet that would crush the Germans. It wasliterally a "popular loan" in that the five shilling short-term vouchers, bought at the post office, and which paid 5 per cent, could be exchanged when they had grown to five pounds for a share of long-term War Stock paying 4½ per cent. The higher rate of interest was the inducement to begin saving and it worked like a charm.
Tribute to the efficacy of this programme is the fact that more than 1,000,000 English workers purchased the War Loan. Through this procedure they learned, what most of them did not know before, that when you put money out to work it earns more money. It meant that they had become investors and were starting on the road to independence.
But this campaign, admirable as it was in scope and execution, failed in its larger purpose of reaching the great mass of the people. While more than 1,000,000 workers participated in the loan their holdings really comprised but a small percentage of the immense total. The bulk of the buying was by banks, corporations, trustees, and wealthy individuals. The message, therefore, of permanent thrift combined with a more or lesscontinuous investment opportunity for every man still had to be delivered. All the while the Empire hungered for money as well as for men.
Such was the state of affairs when the Chancellor of the Exchequer appointed the Committee on War Loans for the Small Investor. It had two definite functions: to raise funds for the national defence and to provide through the medium selected some simple and accessible means for the employment of the average man's money.
This Committee recommended that an issue be made of Five Per Cent Exchequer Bonds in denominations of five, twenty and fifty pounds to be sold at all post offices. It was an excellent idea and was immediately authorised by the Treasury. The Exchequer Bond became part of the swelling flood of British war securities and might have had a distinction all its own but for the enterprise and sagacity of one man who happened to be a member of this Committee.
That man was Sir Hedley Le Bas. You must know his story before you can go into the part that he played in the great drama of British investment that is now to be unfolded. A generation ago he was the lustiest lad in Jersey, his birthplace. His feats as swimmer were the talk of a race inured to the hardships of the sea. After seven years in the Army he came to London to make his fortune. From an humble clerical position he rose to be head of one of the great book publishing houses in Great Britain, employing over 400 salesmen, spending over a quarter of a million dollars a year in advertising alone.
Sir Hedley is big of bone, dynamic of personality, more like the alert, wideawake American business man than almost any other individual I have ever met in England. One day he gave the British publishing business the jolt of its long and dignified life by taking a whole page in theDaily Mailto advertise a single book. His colleagues said it was "unprofessional," that it violated all precedent. Sir Hedley thought to the contrary and in vindication of his judgment the book developed into a "best seller." That pioneer page in theMailwas the first of many.
Prior to the outbreak of the present war, Sir Hedley had been consulted by the thenMinister of War as to the most advisable means of getting recruits.
"Why don't you advertise?" he asked.
"It's never been done before," replied the Minister.
"Then it's high time to begin," said the hard-headed Jerseyman.
His plan scarcely had time to be considered when the Great War broke. Sir Hedley was made a member of the Parliamentary Recruiting Committee and with Kitchener helped to face England's huge problem of raising a volunteer army. How was it to be done?
Hardly had the new War Chief warmed the chair in his office down in Whitehall, than Le Bas came to him with this suggestion: "The quickest way to raise the new army is to advertise for men."
Kitchener's huge bulk straightened: he looked surprised: the idea seemed unsoldierly, almost unpatriotic. But he knew Le Bas. After a moment's hesitancy:
"All right. Go ahead."
Under Le Bas was launched the publicity campaign which no man who visited England during its progress will ever forget.This galvanic publisher geared all the Forces of Print up to the idea of selling Military Service. Instead of books the Merchandise was Men.
The most lureful, colourful and effective posters that artist brain could possibly conceive flashed from every bill board in the Kingdom. No one could escape them.
It was Le Bas who created the phrase "Your King and Country Need You" that went echoing throughout the Kingdom and drew more men to the colours perhaps than any other plea of the war.
When the Parliamentary Recruiting Committee became the Parliamentary War Savings Committee, Le Bas went with it. Its first job was to sell the Great War Loan. The Treasury officials wanted it done in the usual dignified British way.
At the first meeting of the Committee, Le Bas objected to this procedure. Early the next morning he went around to the house of Reginald McKenna, Chancellor of the Exchequer.
"The Chancellor is in his bath," said the footman who opened the door.