New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-08-09
all these growing and prosperous Common
wcalths in the South.
AMERICAN FORKS AND FOREIGN BUYERS.


ANERICAN FORKS AND FOREIGN BUYERS.
What does It mean, this sudden epidemic OF
British desire to buy all sorts of mills and
mines. works and natural deposits, in the
United States? Probably the thought has oc-
Cured to every American that English man.
agement is not necessarily so much wiser and
better than American as to insure profits on
works purchased at admittedly high valuations.
Some wears ago there was a similar though
much less extended disposition on the part or
Enghshmen to own and manage American rail-
ways and some important purchases were
made. 1t has not been found that the lines
controlled and managed by English capitalists
were to noteworthy extent more successful
than others; or that their condition was so
revoutionized as to prove the superiority of
English management. In other departments of
industry, too, there have been English man
ayers of proved skill conducting works here In
competition with Americans, and it cannot be
said that the results have justified general
belief that any concern which barely pays ex-
penses with American management can be
made phenomenally profitable by getting into
English hands.
The bottom fact as to these purchases and
negotiations generally is that prices paid or
proposed to be paid on foreign account are al
most universally higher than American valua-
tons Of the plants in question. This is natural
for two reasons; the rate of interest expected
upon capital invested in industrial works is
higher in this country than in England, and
most American works arc wholly or in part
owned by their American managers who find
salaries and honorable employment in connec-
ton with that use of their capital, but in case
of sale would have to seek other employment
The English capitalist who finds plant pay
ing $50, 900 a year may perhaps consider it
worth 81, 600, 900, whereas an American would
be more apt to pay only $500, 900 for it. The
American owners who get out of the enterprise
$4,000 year, in addition to interest on their
investment, are apt to refuse to sell unless the
price offered is above their valuation of the
property.
If English purchasers as d rule pay more
than an American valuation of works, and are
not marvelOusly superior in their management,
how can the undertakings be expected to prove
profitable? Partly because the average Eng
lishman is apt to think he knows his business
and has exceptional skill in its management,
whether he has or not, and partly because the
resources and conditions Of industry in this
country are better understood by Americans
than by most English purchasers or their agents.
Americans knew, for instance when asked to
buy all the salt works in the country, that vast
deposits, as yet untouched or but partially de-
veloped, in Kansas, Louisiana, or the Colorado
Canon, for instance, must threaten change in
the future of the industry at no distant date.
When an English company put S1,50O,OOO
into iron works in Virginia its agents did not
realize that the available supply of fuel was in
quality not such as could be used by English
processes, and they did not reckon on the cost
Of using American processes. The people who
talk of buying American brewerieS, or Fall
River cotton mills, may or may not understand
all that Americans know Of the extent and pos
sibiliteS of competition in this country.
Most Of the purchases or attempts to purchase
are made in connection with schemes to estab-
lish trust or a monopoly in some other shape.
1t may be doubted whether foreigners yet APP
preciate how hostile American laws are to such
undertakings, how distinctly trusts are already
held unlawful by the courts or how powerful
is public opinion to control both courts and
legislatures. The American who is asked to
take part in any monopoly of production or
trade has guarding instinct that the laws of
his country are decidedly fluid in character, and
liable to be revolutionized on short notice when
ever the public finds itself aggrieved. The
craze for trusts and monopoles has already
given birth in this country to new and stringent
laws in several States, and most Americans
understand that safety against legal prohibition
or judicial interference depends almost wholly
upon ability to avoid increasing the cost of
product or service TO the public If English
men understood this equally we'll there would
probably be fewer of them eager to buy Ameri-
can works at any valuation however high.