Part 11

When I was in London, the English Managing Director of one of the greatest of Wall Street Banks received an inquiry from his home office for information about the Compagnie Generale Transatlantique (the French Line). The amazing thing was that this bank, that prides itself on its world-wide information, had no data regarding the leading steamship line between England and France. You may be sure that the Credit Lyonnais or any other French banking institution has a complete record of the American Line.

Not long ago, one of the largest banks in Chicago refused to extend credit to a French concern, although the French Government backed up the purchase. This concern had occasionally done business with a New York Trust Company in the Rue de la Paix, whose French Manager was a live, virile, far-seeing young American. The President of the French Company laid his case before him. Quick as a flash he said:

"All right! If they won't guarantee it, I will, and on my own responsibility."

Whereupon he put the deal through. It was the kind of swift, dramatic performance that appeals to the Frenchman. The net result was that the service has come back a hundredfold to the Trust Company.

The idea prevailing in America that French firms are not worthy of credit is a matter of great surprise all over Europe. Here is the way an Englishman whose firm has done business in France for fifty years, sized up the situation:

"There are no better contracts in the world than those entered into in France. Americans who have had little experience in such matters may find the negotiations leading up to the signing of a French contract somewhat tedious, but we do not mind this and one is so completely protected by the laws of the country, that losses are almost unknown.

"Not long ago we had a case in point. A purchaser of lathes who had already made an advance payment, received his machines and then by various excuses put off the final payments for the remainder from week to week. We waited four weeks and then made our complaint to the judge at the tribunal. Two days later the judge ordered the delinquent firm to pay up in full and we received our money the very same day. How long do you think a New York court would have taken to decide a simple question of business of this kind? The fact is that in spite of the war, French credit remains to-day as good as any you can find."

On top of their resentment over our lack of confidence in their credit is the added feeling which has cropped up since the beginning of the war over the way American manufacturers have ignored many of their French contracts. A French manufacturer summed it up in this way:

"There is no doubt that some American manufacturers who had signed contracts for the delivery of machinery in France, deliberately sold these machines at home at higher prices. It has created a very bad impression and I am afraid that henceforth your salesmen will find it much harder to operate in my country.

"The trouble is that Americans have been spoiled by too many orders. Before the war they were all crying out for business. Now that they have everything their own way, they have become independent and arrogant. With the ending of the war, all this will change, for the French are not likely to forget some of the bitter lessons they have learned. Henceforth they will profit by them."

One reason for our laxity all up and down the French business line is that the American has never taken the French export business any too seriously. On the other hand, stern necessity has been the driving force behind the English and German manufacturer. The American, too, has made the great mistake of assuming that the foreigner, and especially the Frenchman, is not always serious-minded and to be depended upon. If he wants his mind disabused in this matter, let me suggest that he see him at war. He will realise that the superb spirit of aggression and organisation that mark him now is bound to last when peace comes.

You must not get the impression from this long list of American business calamity that all our endeavour has failed in France. Those few great American corporations who have planted the flag of our commercial enterprise wherever the trade winds blow, have long and successfully held up their end throughout the Republic. So, too, with some individuals. The story of what one New Yorker did is an inspiring and perhaps helpful lesson in the right way to do business in France.

This man is resolute and resourceful: he speaks French fluently and he was familiar with the foreign trade field. With the outbreak of war he did not lose his head and try to get business indiscriminately. Instead, he made a careful survey of the field; he did not listen to the optimist who said it would be a short war: his instinct told him, on the contrary, that it would be a long one. "What will France need more than anything else?" he asked himself.

He realised that most of all France would need machine tools. He got the cables busy assembling goods, and by every known route he brought them to France. When he had a warehouse full of material, he began to sell. He not only had what the French were hungering for, but he had them to deliver overnight. While his colleagues were frantically trying to get their stuff in, he was getting all the business. The French like the man who makes good.

This man met their expectations and to-day he stands at the top of the selling heap.

More than this, he is building a factory on the outskirts of Paris where he will make and assemble his product. Ask him the reason why he is doing this, and he will tell you:

"First, it means good will; second, we will get the benefit of native and cheap labour; third, we will be able to replace parts at once; and, fourth, we will get inside the wall of the Economic Alliance."

IV--The New France

No matter how we heed the example of the few progressive Americans who have successfully planted their business interests in France, we will face a new handicap when the war ends. As in England, we will be bang up against an industrial awakening that will mark an epoch. Coupled with this revival will be an efficiency born of the war needs that will act as a tremendous speeder-up.

In France this galvanised industrial life will be stimulated by a brilliant imagination wholly lacking in the English temperament. It will go a long way toward opening up fresh fields of labour and distribution.

Self-sufficiency will be the keynote. The automobile is a striking instance. We had established a very promising motor market (and especially with moderate-and low-priced cars) among the French. When the Government assumed control of the French automobile factories and changed their output to war munitions, the two great automobile syndicates protested that the cutting off of the French motor supply would mean an immense loss of good will. First came a 70 per cent duty on practically all American cars and this was followed up by an almost complete restriction of all American cars.

This prohibition will have the same effect as the English exclusion in that it will stimulate the demand for the native French cars. Here we get to one of the striking phases of the new industrial development of immense concern to us. France has her eye on quantity output. Many signs point to it.

When the war broke out, a certain young French engineer saw great opportunity in shell making. He was immuned from military service, he had a little capital of his own, and with Government aid he set to work. Within four months he had built an enormous plant on the banks of the Seine almost within the shadow of the Eiffel Tower. In six months he had enlarged his capacity so that he was producing 15,000 shells a day. Last summer he sent for the agent of a large American machinery company: "I am going to make automobiles in series after the war." "In series" is the French way of expressing quantity output.

"All right," said the American. "What can I do for you?"

"Simply this," said the Frenchman. "I wish to order sufficient automatics to meet the demand when peace comes."

This is the spirit of the awakened French industry. I know of half a dozen automobile and other producing establishments who are making plans to manufacture popular-priced cars when the war is over. This output will not only affect the sale of American cars in France, but will also interfere with the market for our cheap machines in South America. Already France is making every effort to increase her Latin-American trade. She has immense sums of money invested in Brazil and she will follow up this advantage keenly.

It is important for us to remember that France like England will have a well oiled productive machine after the war. It will not only be better but bigger than ever before. The German ill wind that devastated the northern section will blow good in the end. Hundreds of factories operated by hand labour before the war will now be equipped with American labour-saving machinery. The products of these machines operated by cheap labour will be in competition with our own commodities manufactured by more expensive labour in many of the markets of the world.

Formerly the French artisan could produce an article almost from raw material to finished product: now he has learned to stand at an automatic and labour at a single part. In short, he is becoming a specialist which makes him a cog in the machine of quantity output.