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OCR
THE FATHERLAND"
I
AMERICA’S PERILOUS POSITION A ,
By Frank Kocstcr, Consulting Engineer, Author of “Secrets of German Progress,” “The Price of ‘ i
Inefiiciency," etc. 1 .
(Will the United States become bankrupt after the war? Are we to become the prey of the hungry belligerents in Europe? In,
the following article Mr. Koester sounds a warning that every American manufacturer ought to take to heart. He points out
the incredible ignorance on the part of our businessmen regarding foreign trade and international commerce) He proves the - I
folly of free trade as applied to the United States. He marshals up an array of implacable facts which overwhelmingly show
the necessity of an American merchant navy. Here is an article invaluable to those Americans who are preparing for the
future. Will they profit by it?) ‘
THE underlying cause of the war is commercial rivalry. The
enormous progress made by Germany in commerce and manu-
facture, the high degree of efficiency attained and the certainty that
England would be reduced to a minor position, brought home to
English capitalists the necessity of action of some kind if they were
to maintain their supremacy. Being unable to oppose Germany suc-
cessfully in peace, the desperate expedient of attempting to destroy
her by war was adopted. .
In previous generations England had reduced the French, the
Dutch, the Spanish and the Danish maritime commerce by such
methods. During our Civil War she accomplished the same result
for American commerce by privateers. Although America received
3 Dalfry indemnity of $15,000,000, the loss to our commerce has an-
"“3”Y far exceeded this sum.‘ The possibility of ruining German
commerce, however remote, was a. more favorable prospect than
that of continuing the losing game of competition at peace.
However the war may end, it is obvious that the commercial and
. manufacturing struggle after it is over will be far keener than be-
f0l'9. 35. owing to their necessities, all the countries of Europe will
be forced to adopt the most efficient methods and to do business
at the lowest possible margin of profit.
The Tariff After the War
In addition, thcre.will undoubtedly be an entirely new system of
tariff restrictions, and each country will endeavor to obtain by tariff
ba”5“5. reciprocity, preferential duties, export duties and various
50115 of regulations every possible advantage for its own trade.
Commercial rivalries accentuated by the enmities generated by the
war will make the commercial struggle after the treaty of peace 55
slgned one of the utmost bitterness and determination. Every ex-
Pedient and every resource will be adopted to regal“ l05t 8’T0!-“1d-
The struggle'for existence by the individual merchants in each
fmlntry and the poverty and necessities of the workers will result
"1 the. production and sale of goods of all kinds at the lowest
possible prices. ‘
What will be the prospects, under such conditions, hnd the con-
dltions will be certain to exist, of the American manufacturer?
Long basking in the smiles of a. protective tariff and having be-
come highly inefficient, and having through the development of
mlsts strangled invention; being ordinarily five years or more be-
hind the forefront of European progress in all lines of manufacture,
C American manufacturer will be in the position of a fat dog
fimong a pack of wolves. He will have little or no hope of retain-
"ZE any of his foreign trade and he will be lucky if he does not lose
"5 Own domestic trade. ' '
The only thing that can save him will be the imposition of high
lariffs, and at the present time the administration is Democratic,
and if the next election continues the same P371)’ in POW" and the
“fir ends in a reasonable degree of time, there will be no chance for
1m to obtain tariff protection. The cry of the C0nS11mCl' 501' C1163-P
goods will ovex-balance the 'cry of the manufacturer for protection,
"1 which cry he commands but small sympathy with the public’, and
‘More aid can come to him he will be bankrupt and the pub1iC.Wi11
have the oppoftunity of buying the low-priced foreign g00dS. if it
can still find any lucrative employment at which, to earn the wage
necessary for the purchase of even cheap goods. ‘
Will America Be Inundated by Cheap Goods?
F0!‘ a short time after the war, if it continues long, the demand
3‘ Europe for goods will be so acute that the lower prices will not
at Once prevail, and for a time the American manufacturer may
maintain his position, but as soonvas Europe gets caught up with '
v V
production to a certain extent, the days of the American manu-
facturer will be numbered, as far as his exports are concerned.
Even during the war, in Germany, for example, a large stock of I
manufactured goods of certain classes is being accumulated which
will, when peace is declared, be put upon the market at once at what-
ever price they will command. This flood of goods must find a’
market. And this fiood will only be an insignificant splash com-
pared to the exportation of all the countries of Europe when they
return again to the ways of peace.
American manufacturers will not only be confronted with a flood
of goods, but they will be hampered in their own manufacturing by
the scarcity of labor. Already large bodies of Italian laborers have . .
been drawn back, as well as a certain proportion of French and
English workers. After the war is over Germans and German
Americans in large numbers will return to thefatherland. This is .
inevitable since they will be needed to take the places of those who '
have been lost on the firing line, and they will be all the readier to
return on account of the undeserved prejudice and unscrupulous at-'
tacks to which they have been subjected directly and indirectly dur-’ . , '
ing the war.
The Loss of"Skilled Labor 7
Thisexodus of Germans will not only take the skilled laboring
classes but a large body of professional and highly trained technical
men.
German manufacturers and merchants, who willgbe that much better
equipped to meet competition here. They will also take back cer-'
tain American methods, particularly the systems of standardization
by which our manufacturers are enabled to control what foreign
trade they do, and to which German manufacturers have been prej-
udiced in the past. .
The withdrawal thus of large bodies of skilled laborers and pro-
fessional men will have the effect of crippling American manufac- v
turers in many departments and will make the cost of manufac-
turing higher and more diliicult at just the time when European
manufacturers will be bringing their goods upon the market in
greater quantities and at lower prices. '
The tariff walls, which various countries of Europe will erect -
against each other, will have the effect of Iprotecting their own
manufacturers from each other and from American manufacturers,’ ,
and thus fortified they will be in position to compete throughout .
the world with American manufacturers on terms which we can-
not meet. ‘ ‘
Shall We Lose Our South American Trade?
Our position in South America will be particularly precarious.
At the outbreak of the war predictions were lavishly indulged in
that the opportunity was at hand to “conquer the world's trade,"
and in particular to take possession of the trade of South America.
“lhile our neighbors were fighting we were to step into their com-
mercial shocs and occupy the markets of the Latin continent, at‘
, p .
least.
advances toward South America, instead of our merchants rushing
down there to grab the trade, very little activity manifested itself,
and the situation has finally arisen of South America comingto
us and asking for us to enter more actively into relations with her.
The initiative has come from the Southern continent and notthe
Northern. . ' . . ;
Qur Southern neighbors, finding the supply of working capital
The technical men returning will take with them a knowl-.
edge of conditions in America which will prove highly useful to ,
But no such phenomenon has occurred. Instead of our making '