The record-union., 1892-05-30
FACE TO FACE WITH A TRUTH.

Inc RECORD UNION mas, on several
occasions, pointed out that chief cause
of depression in San Francisco is because
of influences and conditions which
prevent manufacturers from bidding for
home work and supplies against Eastern
competitors. The competition with East
ern houses is direct, and the rates of
transportation are so low that this COM
petition bears heavily against our home
manufacturer.
We have pointed out some of the con-
ditions that tend to this result. The
capital invested at the East is greater and
is satisfied with smaller profits. At the
East there is greater density of popula-
ton and a steadier market for manu-
facturers, because of greater consump-
ton. With less payment of wages,
cheaper material, greater number of
artisans and less profit, because of greater
production, and the difference between
the population served, the Eastern manu-
facturers, with the added advantage OF
low freights, can and do compete with
our own manufacturers, greatly to the
disadvantage of the latter. They, the
Eastern manufacturers, contend ard
prove that with financial, social, indus
trial and commercial advantages enjoyed
by them. they can. with low freights,
beat US in competition.
These conditions have recently received
a significant illustration in San Francisco
in the case Of the South San Francisco
Improvement Company. 1t is engaged
in establishing an abattoir, or slaughter
house, in the southern part of the city
for the purpose of packing meats. It
promises to be very important manu-
featuring industry, giving employment
to very large number of persons and
disbursing large sums of money along
several lines of industry.
The erection of this great packing es-
tablishment necessitated a great deal o.
machinery for its proper equipment
The company thereupon submitted its
needs to the San Francisco foundries fol
bids to supply the machinery, with the
assurance on the part of the company
that it expected to pay a percentage oi
rate for the needed supplies somewhat
higher than for Eastern work because OF
the time it would require to bring the
machinery from the East. At the same
time the Eastern foundries were given
duplicates of the specifications, and bids
were put in by them contemporaneous
with those submitted by the California
foundries.
When the bids were opened it was
found that the Eastern quotations, add.
ing the freight on all the machinery al
the rates now charged-the open, regular
rates, not special rates at all-made the
Eastern rates 10 per cent. lower than the
bids of the San Francisco manufacturers
That is to say, after adding the normal
freight rates on the Eastern work to the
prices bid by the Eastern manufacturers
the bids of the latter were 10 per cent. OF
Sl50 on each $1,000 lower than the Cali.
fornia bids for the like work.
Now this example, which is but one
among many, clearly indicates where the
fault lies. 1t proves conclusively thai
the San Francisco manufacturers rates
were so high that, after adding the nor.
NAL, not special, rate for carriage of like
work from the East TO San Francisco
there was still $3.50 on each 81 900 to be
saved to the Improvement company by
sending the orders to the Eastern found.
ries. No special rates, it must be borne
in mind, were asked by the improvement
company; an open rate was given. The
fault then certainly is not in the freight
rate it is not barrier to home manu-.
facture because of its cost. The rates arc
low. or reasonably low, and no complaint
can be made of them on that score. Bu
the fault was and is in the price at which
San Francisco establishments are willing
or can afford to do the work. They ar,
either insisting upon too large profits O.
are conducting their business at too grea
cost and in too small volume.
So the reason that San Francisco feel
depression is because it is behind tn
Eastern age in the matter OF profits ant