The Washington herald., 1921-04-29

through it the reservoirs Of our
domestic investors can be tapped by
a safe domestic guarantee.
Our investors at large have not
been trained in foreign investment.
We do not today possess that vastly
intricate financial and commercial
machinery, the outgrowth of two
generations in European countries.
that Is necessary to establish and
maintain confidence in business out
side of our borders.
The government has provided
through the Edge act, however,
short cut by which our investor.
can be given home guarantee, and
through which institutions can be
set up to the scale and experience
necessary for. discrimination in for
eign investments. The establish
ment of these institutions is one of
the vital steps in opening the
vicious circle now strangling our
exports.
But the government can do no
more than provide legal facilities:
the initiative of our people must do
the rest. We must have the CO.
operation of cur bankers and our
industry IL our largely expanded
foreign commerce is not to break
at this point. We have need for
immediate action. for some groups
including our farmers, are in great
difficulties.
We are at a disadvantage against
European manufacturers and ex-
porters in our foreign marketing
machinery and our lack of foot
hold in industry abroad. Except in
a few Industries, we do not have
an adequate representation of ma
tive Americans in wholesale busI-
ness, and in general business enter
prise in foreign countries. The sell
ing of (. o. b. goods in boom times
is easy. 1t is ephemeral. 1t leads
to goods badly adapted to foreign
markets; it leads to bad credits: it
leads to our being put in the dis
ard by business houses OF compet-
ing natior alities the moment they
can draw from their home market
Foreign Markets.
Every merchant will agree with
me that the sale of goods abroad is
matter of salesmanship and ma
tional sentiment as well as of quality
and prices. None except our own
citizens can properly represent these
factors. We can liken our present
foreign marketing system to a sup
ply train and q general staff. with
no fighting men on the front. Our
competitors hold the front line, and
naturally we lose the market when
competition arises.
In addition to distribution, one of
the strongest foundations of for
eign trade is our own citizens en-
gagged in foreign industry. Their
enterprises constitute constant
pull of machinery and supplies. 1t
is useless for the government to
say to Americans. Exile yourselves;
get into business. distribution and
industry; protect our foreign trade"
other nations, even under the pres
sure of necessity, have required gen
erations to- build up their market
ing systems and their foreign in
dustries. Our government has tried
to devise a short cut to the estab-
ishment of distribution agencies
through the Webb-Pomerene law,
by which the risks that individuals
would hesitate to take can be spread
over numbers of manufacturers. If
late. protect and give equality to
American citizens who exile them
selves in trade abroad. then we
should legislate further. One thing
is certain. that so long as nonresi-
dent Americans are the only ma
tionality who pay income taxes TO
their home governments on foreign
earnings. they have no equality in
competition.
German Competition.
Some situations among our COM
petitors must concern us. / f1nd
considerable discouragement in
some trades at the apparent in
ability to meet German competition.
At the present moment German
manufacturers are exporting goods
at prices that we can meet with
great difficulty in foreign markets.
and are. indeed, invading our home
markets at such levels that we need
strenuous protection If some of our
industries are not to close. / do
not, however, anticipate that the
present level of prices quoted by our
German commercial and industrial
rivals can continue indefinitely. An
examination of the internal econ.
omy of Germany will show that
the government is SubSidizing food
prices through selling imports at a
loss; IT is subsidizing transportation
through payments of railway losses: ::
i: is paying large losses upon public
utilities generally, thus by indirect
ly subsidizing business, that gov
ernment has created a situation
where their individual manufacturer
can quote prices of extraordinarily
lew order. On the other hand. these