Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-06-04
The Discussion Now Going
on in Britain.
AMERICAN METHODS
SECRETARY sHAW'S STATEMENT
ATTRACTING MUCH ATTENTION.
Underselling Abroad Only Affects One
Thirtieth of Our Exports-Ef-
feet of Competition.
Special Correspondence of The Evening Star.

LONDON. May 20, 1904.
The statement made by Secretary Shaw
TO the effect that he was willing to meet
the charge that American manufactures
were sold cheaper abroad than at home
has attracted considerable attention In Eng
land. English manufacturers have COM
planned of what they call ilIegitimate COM
petition from America due to the selling
OF American goods at prices less than
those received In the United States market
Those favoring protection for England have
found in this an argument in favor of dis
elimination against the foreigner and the
English free traders have used 1t as an in
stance illustrating the evils of a protective
tariff
The statement is attributed to Secretary
Shaw that 1t Is true that Americans sell
abroad cheaper than they sell at home, but
only as affecting one-thirtieth of the
American exports AS Secretary Shaw was
talking about manufactured goods when
he made this statement. he evidently did
not mean the total exports of the United
States. which amount to about S15O00O0
900 each year, but the manufactured ex-
ports, which amount to about S525, 900, 900.
Allowing that S1S,00O0O0 in manufactured
American exports are sold abroad at lower
prices than similar goods can be bought at
home, an analysis of this trade will show
that the low prices abroad are due not
much to protective tariff system at home
as they are to the peculiar conditions ex-
listing In foreign markets and the ineNperi-
ence or recklesSness on the part of Ameri-
can exporters.
Competition Of American Exporters.
The American exporters meet the sharpest
kind OF competition in the foreign markets.
This comes principally from Germany, Bel
GUM and England. and these countries
have had the advantage for many years of
a long-continued prestige, direct transporta-
ton lines and financial connections with
the people who buy. The Americans have
appeared on this scene of action as rank
outsiders, bidding for trade either on the
ground of novelty of product or cheapness
of price. The American novelty has made
good Roadway and finds large sale where
ever the market Is progressive and the
people have money to spend In bidding
for trade on the ground of cheapness. the
difference has to be sufficient not only to
attract custom through saving in price.
but a sufficient saving to overcome the
long-established hold other foreigners have
secured upon the market.
American goods have been sold for lower
prices. in some case Intentionally, and in
other cases unintentionaly, and at q dis
tinct loss to the American exporter. In
territorial cheapness is secured through
special effort, and unfortunately in some
cases by the use of inferior material and
hasty workmanship. Unintentional cheap
ness Is the result of what is called In
Europe dumping" The American manu-
facturer or producer finding he has sur
plus of particular line of goods and not
desiring to break the home market. ships
these goods abroad at a venture trusting to
luck to make a satisfactory sale. Having
undergone the expense of manufacture and
shipment, 1t is cheaper to sell these goods
at almost any price than to hold them or
bring them back to the United States. The
result is that they are unloaded In the for
eign markets at an extremely low margin
of profit or oven possibly below cost The
loss on this shipment is direct and appre-
ctable, but there is indirect gain to his
business as a whole, which partially COM
pensates. The home market is sustained.
catalogue prices need no revision and the
works are kept In operation regardless of
oyer-production.
Two Selling Prices.
While this process may not SAVIOR of con-
servative business method, the difference
between the selling price at home and the
selling price abroad is often made good
many times to the American people
through the relief upon the home market
and the continued productiveness of large
manufacturing plants. The manufacturers
margin of profit is exceedingly narrow,
even at the best, and the total difference
between the foreign-sold and the home
sold goods would probably amount to a
very small sum. comparatively. Such a
sum, indeed. would be more than made
up by six months operations of single
large manufacturing plant employing as it
does, thousands of people at skilled-labor
wages and consuming hundreds of thou
SANDS O
The sale of agricultural implements
abroad is the most notable instance of for
eign prices being less than those received
at home. The American implement-maker
can dispose of certain novelties without
much trouble, but the moment he enters
into competition in the matter of standard
machines with Germany Belgium ana
England he finds himself compelled to dis
count his prices to the very limit The
cheap labor of the continent forms an APP
probable factor in the production or heavy
Iar igyhf rQf q
the United States to points of foreign con-
sumption than from the nearby European
points of production are also to be taken
into consideration in a market where prof.
its are figured in fractions rather than in
units.
II is probaly safe to make the statement
that none of the real necessaries of life
produced in America sold cheaper
abroad than at home unless 1t be in excep-
tional cases and In those cases the loss fails
upon the exporter. notable instance or
this occurred during the time OF high prices
for beef which prevailed in the United
States two years ago. American beef was
sold in London cheap or cheaper than
in Chicago. great outcry was made
against the beef trust, as 1t was called, on
this account but II the truth were known
the large packing companies charged up
losses during that season in their export
trade amounting to many thousands of
dollars. The London market can be read
fly supplied for a short time with meat
from a hundred nearby places. and as soon
as the price of beef went up to an attrac-
tive figure shipments were diverted from
elsewhere and dumped into England. The
American packers had millions of dollars
invested in improved facilities for handling
the English trade. their ships were charter
ed under ive-year contracts and their
executive and distributing machinery rep
resented a large pay roll and a heavy
fixed charge. 1t had taken years to build
up their trade and IT was business on their
part to hold this trade and keep their
plant occupied even at a comparatively
small loss rather than to let the entire
system go to pieces for the sake OF better
prices in Chicago.
Wood Manufactures.
Other instances have been shown, es-
pecially in the line OF wood manufacture
where lumber. DOORS window frames and
other products. have been shipped to Eng
land and sold at lower prices than prevailed
in the United States. These are pure cases
OF dumping" for entire shiploads OF doors
and window frames have been sold in I.iv-
erpool to the highest bidder when the Eng
fish market was already overstocked and