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Memoirs of Robert Dollar
Vol. 1 - Chapter Twenty-two. How to get our Share of the World Commerce


From the New York Times, October, 1915 By Edward Marshall

CAPTAIN DOLLAR TALKS

That days of such prosperity as we never knew before are close ahead of us is the opinion of the most notable expert in ships and shipping, whom I could find to talk to— an expert so notable that by both sides of the controversy over the La Follette Bill he has been recognized as one whose opinion must be reckoned with.

And his optimism stands even in the face of what must be, to him, the most depressing fact that his particular interests have been hit extremely hard, not only by the war, but by our own legislation which preceded it.

Captain Robert Dollar is the largest single ship owner on the Pacific Coast; he is the one important individual figure in our Oriental maritime trade; he is a very careful student of world commerce.

"We are confronted by enormous opportunities." said he. with the strong Scotch burr which survives his ardent Americanism.

"If we do not take advantage of them, world conditions cannot be blamed; our own intelligence will be at fault. We are an intelligent people, and that should not occur.

"I have seen pessimistic predictions in the newspapers; I can see no justification for them there, although I myself have suffered heavily so far. But I have faith in the United States. We have before us unprecedented chance for foreign trade, and foreign trade is the surest guarantee of any nation's prosperity. I don't believe that we shall let it slip I can't believe it.

"Personally, I an; confident that the next Congress will adopt such measures as may be necessary to the development of an American merchant marine, and as soon as that is done our foreign commerce will spring into proportions which could not have been possible if the European war never had been declared.

"Indeed the war has done us a considerable service. It has created an extensive commerce in munitions, which has been more than sufficient to offset the commerce which the conflict has kept off the seas, and when I say 'munitions,' thus, I do not include in this classification any arms or ammunition, any military transport, or indeed any purely military material of whatsoever character. We have exported these things, but we have exported other things in truly mammoth quantities.

"We have been uniquely situated in the past. We have grown with such rapidity that our production never has far exceeded our own demands, so we have not greatly needed foreign trade. Hence we have never studied seriously the art of getting and retaining it.

Competitors for world commerce

"Only a few years before the war began, it, for the first time, became apparent that conditions had begun to change and that our continued national prosperity upon the old scale would necessitate our entrance into competition with the other great producing nations for world commerce.

"But we were in the habit of an insular prosperity, and could not adjust ourselves readily to the fact. We lost because of slowness of adjustment. Long ago our merchants seem to have forgotten both their opportunities and their necessities; our legislators stupidly have failed to revive shipping laws and inspection requirements, which makes it impossible for American vessels to successfully operate in foreign trade. Now has come the La Follette Bill, which caps the climax. It was passed not long after hostilities commenced, in spite of its obvious injustices. Without it we should have borne much better the world-shock of the great conflict.

"Instantly after the war began, there sprang into the public attention various statements of the enormous gains which would accrue to American shipping- as soon as foreign bottoms were scared from all the seas by hostile ships. Those who have made these predictions failed to take this law into there consideration.

"This did not occur, first, because we had no ships worth mentioning with which to take advantage of our chance: second, because those which we had were governed by restrictions making them unprofitable even in the face of the great opportunity; and third, because the ocean war was so uneven that the commerce-carrying vessels of one country only suffered. England's and those of France remained practically free to sail and trade as they never before had sailed and traded. And remember-—we but recently had handicapped ourselves.

"Instead of a period of reconstruction of American shipping came a continuance of its decline. We had no ships, and under existing regulations could not profitably build or buy ships. We could not begin to develop a great foreign commerce without a merchant marine, any more than a man could start a factory without tools. Indeed, we sold some of the ships which we had.

"The war, however, has been a great educator, and the next session of Congress is bound to remedy some of our old mistakes, adjusting our affairs so that certainly we shall be able to take some advantage of the chance before it passes into history. I cannot doubt this.

"There has been a general stimulation of our national interest in those foreign markets which will be open to us as soon as we have carrying facilities wherewith to supply them, and those carrying facilities surely will be possible to us before another year comes to an end.

"The opportunity in South America is very great, as we are her logical source of supply. Since the European trade with South America has been shut off. we have built up a large volume of business, and, as soon as we get ships where with to forward it, that trade will grow rapidly.

"A laden vessel sent to foreign countries becomes a drummer there, not only for the sale of the goods carried in her holds, but for cargoes to bring back with her; and if is through such exchange of cargoes that foreign trade is nurtured. As soon as we get ships we shall rind that every one of them will create trade m both directions.

"Take the expedience which my own firm has had with its own ships. It is the rule in our various Far Eastern offices to cable the home office when one of our vessels has discharged in an Oriental port, and there has found herself without a cargo for the homeward voyage. Our representative tells us how many more tons of cargo can be carried than already has been secured, and lets us know what can he bought there on the ground.

The ship a trade missionary

"The ship is a trade missionary. Not finding a cargo ready to bring home she seeks one, even going to the length of buying one, if she can obtain one in no other way.

"We will say that she can buy hemp at Manila at a certain price. We, at the home office, know the price at which hemp can be sold in the United States. If that which she can buy can be sold here, at an advantage great enough to give us profit, possibly only enough for reasonable freight rates, it is wise for us to buy it, is it not?

"We buy it; she brings it; we sell it. Thus we get. at least, freight charges for its handling and its carriage, and a new trade has been established. See how the vessel has acted as a trade missionary?

"Our ships have developed a nice little pig-iron trade between China and this country, having been stimulated to the task by the fact that they had no cargoes to bring home after they had discharged those which they had carried westward.

"They are now bringing on each homeward voyage enough to make that voyage profitable, and when they do this it must be clear that not they alone, but the whole commerce of the country benefits.

"We sent cargoes to the Philippines some years ago, and in order to make the voyages profitable brought copra back with us. Previous to that no trade in copra with the Philippines existed. Now it is a very satisfactory affair, amounting to from 20,cxi0 to 30.000 tons a year.

"On one occasion, finding our ships light in the north of Japan, we began to get out oak timber there for the return cargoes. We bought the standing lumber, put in the men to cut it. and had it stacked and ready for such occasions as might come when we could find no other cargo. There were several such occasions. In San Francisco the timber was cut and made into furniture.

"We are now developing Philippine mahogany along exactly the same lines, bringing 4,000,000 feet a year in our own ships. It does not yield a profit yet, but later on it will. Our ships which bring it are trade missionaries.

"If we did not have the ships we could not do these things, and the whole country would be the loser. If we had more ships we could do more such things, and the whole country would be the gainer. If there were many ship owners doing similar things the national effect would be tremendous. This would be the case with more liberal laws.

Bringers must be takers

"The man on the street who considers ocean commerce is likely to forget that if we bring we must take, and if we take we must bring. Ships must be loaded as they travel or their travel will be profitless. A vessel voyaging in ballast one way must get double freight the other way, or lose money, and double freight is an oppression upon commerce, the consumer and the nation which is forced to pay it.

"There is no good reason under heaven why this nation should not be prosperous at the present time as never before. A vast opportunity has been thrust upon us by this war, which has driven Germany from the seas and preoccupied the other nations, or filled their vessels' holds with war munitions, to the exclusion of the commodities of ordinary life for themselves and non-belligerent nations. Statistics show enormous loss of foreign shipping.

"With this unparalleled decrease of foreign bottoms and the total cessation of commercial shipbuilding at the yards of the belligerent nations which are the greatest in the world, and with the stoppage throughout Europe of ordinary manufacture—the substitution of the manufacture of death-dealing commodities for the manufacture of life and comfort-giving commodities—our mills and shops should rind themselves faced by a constructive task such as never came to them before, and surely such as never will come to them in the future, for it is inconceivable that, m the face of such an argument for international peace, all Europe will involve itself in war again, or at least, in any war which will affect us.

"We must consider the matter of our foreign trade very seriously. It is of importance, to every human being in our territory, and not merely to the residents of seacoast cities and seafaring folk.

"Indeed, analysis of the situation places the man whose interest is in slips last upon the list of those whose interest in foreign traders vital.

"I think those interested should be mentioned in this order: First, the farmer: second, the manufacturer; third, the merchant who has branches or representatives in foreign countries; fourth, the banker who finances and furnishes exchange; fifth, the ship owners who furnish bottoms for the carnage of ocean trade.

Trade cannot develop without drummers

"I have said that ships are the best drummers for a nation's business, and have told you why I think so. We, of all people, have learned the lesson that even local trade cannot be developed without drummers. If we wish American trade to grow, and we do wish that, tor we do not desire to deteriorate nationally, we must have, not only ships to carry our commerce, but they must be American ships. The existence of American ships plying to the world's ports will mean the existence in the world's ports of American branch houses, righting for the world's business.

"Some of our manufacturers employ foreign houses to act as agents for them in the foreign field, but this is a foolish business. Foreign agents will work for our prosperity but half-heartedly if at all. This is a lesson which those of us who are endeavoring to develop foreign trade have learned in sorrow. The German. Austrian. English or French firms

in foreign ports will not develop trade for us, save when such opportunities occur as cannot be met by their compatriots.

"The situation, as it stands, is an absurdity, and would be a tragedy were we not capable of correcting our mistakes with a rapidity and thoroughness exceeding the capabilities of any other nation in the world.

"Already we are waking to the fact that we must do our own banking. An inefficient system has existed in the past. For instance, England has controlled all Oriental business. Our Pacific Coast has done business with Japan and China through London.

"Now this is beginning to change, and, if we choose, we may have the opportunity of seeing to it that the change continues till we take the place which rightfully is ours.

"Years ago I hoped for this, and thought I saw it coming. Now my greatest hope is that I may live to see the day when it shall be a matter of fact. Today, New York is temporarily the financial center of the world. If we are reasonably intelligent it will have so established its advantages and its prestige by the time the war ends that the cessation of hostilities will not alter this condition.

"We already have the farmers and the land, the manufacturers and the raw material with which they can work effectively. Now we must have the American merchant with the foreign house, the American banker to finance exchange in dollars (not pounds, as now) and American ships with which to carry commerce.

We must deliver the goods

"We have been in the position of the merchant who has no delivery service, but is compelled to hire from his competitor across the street, the vehicle with which his wares are taken to his customers.

"Of course, such a merchant would not get the best of service. The growth of his trade would be subordinated to the growth of that of the man who owned the vehicles} his interest would be a secondary matter. He would deliver Sis own goods first, leaving ours to time and opportunity. We must see to it that our trade is primary to those intrusted with promoting it. What would you think of the farmer who left the marketing of his grain until his neighbor's and rival's wagons should be idle?

"Another thing: American ships can carry American cargoes, under reasonably equal conditions, cheaper than anybody else can carry them. I am a shipowner, we will say, living in New York. Could I carry freight to you from another port as cheaply as I could carry it to and from New York?

"Of course not, for if I live in New York I shall be upon the ground there, my ships normally will di>ck there, my orifices will be there, my trusted men will be there: there will be less chance there than elsewhere of mistakes in the conduct of my business.

"Is it not, therefore, obvious that the nation and its cities where the shipowners are located, and the home ports and nations of the ships, will get the trade? It seems so to me.

"I live on the Pacific Coast. Is it likely that I shall try especially to develop New York's trade? Only in a general way. New York's trade indirectly benefits me but the Pacific Coast trade directly benefits me.

"The city and the nation that has the ships will get the cheapest freight rates, for reasons which cannot be gainsaid.

"I have done, something to develop Pacific Coast trade because I have lived on the Pacific Coast. A Boston man, a Philadelphia man, a resident of New York, situated as I have been, would have done what he could to develop Atlantic Coast trade—-particularly trade with his particular home port. The fact that England owns more tonnage than any other nation explains the fact that British commerce leads the world. Men help their own home ports and nation.

"Merchants will tell you that in business they forget the flag under which ships sail. That is absolutely true. But they do not forget the operating expenses of those ships, for they fix the freight rates.

"Our government has done something to develop its foreign trade. It has had wonderful consular reports, and has done fine missionary work abroad. But it has done little or no missionary work at home, and that is what we need.

Some things we might do

"If our Government would select one merchant or manufacturer in each of the lines promising- the best foreign trade development, and see to it that his interest was aroused, he would straightway become a home missionary.

"It takes the product of many factories to make the cargo of a ship. The bigger the cargo the cheaper the rate. So, it is to the interest of every business man who wants foreign trade, to see that his neighbor also wants it, and to assist his neighbor in obtaining his share, of it.

"I, personally, have had some interesting experiences with regard to foreign trade. I arrived in China just after the revolution started, a few years ago. I told my son that there would be no Chinese business, and he replied, that he had been thinking of the Philippines. I went to Manila and was met with a note from Governor Forbes, who said lie had been laying for me.' He put a steamer at my disposal and assigned a man to take me around the islands, stating, that the longer I kept them the better he would like it. for lie knew that my journey would mean an increase of American trade.

"I kept the steamer and the man sixteen or eighteen days, and they did mean American trade. From Zatnhoanga I cabled home for a big steamer to come out and load with copra and mahogany. It did so, and an absolutely new American trade was thereby established.

"Was Governor Forbes the missionary? No. Was I? No. Was the ship? Yes! Governor Forbes' effort, and my own, would have been futile if there had not been an American ship waiting at the. other end of the Pacific cable.

"Governor Forbes was delighted. I went on to Shanghai, and before I left there I cabled him that I had sent for another ship. Many ships have gone since then, and many more will go.

"There was a case in which our Government co-operated with a private individual in working for the public good. There should be more of this.

"Our tendency toward antagonism between Government and individual is too great. Of late in the United States the successful man, or the enterprising man, is likely to be looked upon at once as one to be suppressed and handicapped. We must get over that. It is a foolish tendency.

Every citizen interested in shipping

"I have said the farmer has an interest in ocean shipping and the passage of right laws regarding it. Was not this startlingly illustrated when the cotton crisis came? Is it not strikingly illustrated now, when we have bumper crops of grain.

"Crops must be moved to market, else the farmer cannot raise them profitably. If we raise more than the domestic market can absorb the surplus must be moved to foreign markets. This can be carried to foreign markets only in ships. If we have not the ships it cannot go. If there is no movement, of what value are crops to the men who have produced them?

"Not long ago, a friend told me of the necessity of sending a ship to South America to bring back cargo, but said that he could find no cargo for the outward trip. He sent cards to friends asking them to help him find a cargo.

"They did so. He sent her laden with potatoes and the potatoes sold in South America, although North American potatoes had never been offered there before. The ship brought back South American goods which were badly needed here.

"That was constructive work which could not have been done if the ship had not been available. If we pass laws allowing ships to be profitable we shall have more ships. The fellow that has the transportation comes near to being master of the situation. Have not we on land learned that, in dealing with the railroads?

"That man must be comfortable. If we bother him too much we all shall lose by it. Give him a fair chance, and he'll make good. Don't let him take advantage of you. That will hurt you both. We have learned that, too, in connection with the railroads, but don't unduly oppress him."

New trade after the war

"What new trade, ought we to get after the war is over?" I asked Captain Dollar,

"We ought not to wait until the war <s over," he replied. "The markets of the world are open to us now, if we do enough missionary work among our business men, arousing them not only to their opportunity for getting it, but to the means for keeping it.

"It is of paramount importance that we should put our men in the foreign fields. The first chance now exists for us to put them there. We need foreign trade. We never really have needed it before. We can get it. We never before have had so favorable an opportunity.

"We must be farsighted if we wish really to be prosperous. We had not studied carefully the South American-situation. We had been buying but not selling there. We had allowed the money which we spent, there to be respent in Europe.

"That was an exceedingly poor business method. When we go there now, in the tremendous effort which I hope we shall put forth, we must tell the South Americans that we will buy of them, but that, if we do they, in turn, must buy of us.

"We shall be in a position to dictate if we are wise. Commerce, really, should be merely barter, consisting of an exchange of commodities, rather than an exchange of money from one side for the commodities from the other. We took commodities and gave money. England. Germany and Europe generally were wiser.

"But when the war began Europe's position altered immensely. She had to buy of us more than she sold to us. Had she been in a position to sell to us as much as she had to buy of us, I do not believe that she would have sent, as she did not long ago, the allied commissioners for the negotiation of a great war loan.

"Among truly prosperous nations the balance of trade must be about equal. We must try to equalize our balance of trade with every nation on earth, and we never can do that until we are ship owners.

"We have at hand the best potential salesmen ability that the world has ever known. Years ago Americans abroad were no credit to their home country, hut those days have passed. Our Consuls at one time were a miserable lot; but, happily, that has been remedied.

Choosing American representatives

"But we still must be careful of our representatives. When I go to a foreign country those with whom I do business do not call me 'Mr. Dollar'; they say, 'that American,' If I do wrong my nation suffers.

"When a foreigner treats us badly here we speak of him as 'that Japanese,' 'that Austrian,' or by his nationality

"We must remember these things when we select our agents to do business for us in foreign fields.

"We must impress on all those whom we urge into new-trade that, the honor of the nation, to a considerable extent, is in their hands; and we must encourage for the work only the best men of the highest ability and ideals. Not only must we have good salesmen, but good citizens abroad. This cannot be too strongly emphasized. The days when the whole world distrusted Yankee shrewdness, now are past. I know we stand as well abroad as Englishmen or Germans do. If we do not we should see to it that we rise promptly in the world's estimation.

"So, assuming that for honesty and integrity we compare favorably with our competitors in foreign countries, it is high time that we began to compare favorably with them in enterprise and trade intelligence, and I know that we do not do that, at present.

"Foreigners, now, have no doubt of the quality of the goods which we sell them, but they have some doubt that we will send them exactly what they order. We have been strangely prone to assume that we know better what a foreign market needs than that market knows itself.

"When a market orders a certain sort of carpet we do not always send that kind to it, but, instead, sh.p to it the sort of carpet which we think it ought to want. And thus, sometimes, with other things.

Must take no liberties with trade

"Very likely we are right, but we must not take such liberties until we have proved that to be the case We must abate that foolish arrogance.

"When I began in the China trade there was a demand there for long American timber. It was inconvenient stuff to handle, and short timber would have served the purpose just as well, so I started a campaign of education to prove this, and at length succeeded. But until I had done this I gave my Chinese customers long timber, shifting to the short only when they, themselves, as the result of that which they had learned, asked me for it.

"Before we end this talk I want to say a few more words about the farmer's interest in the export trade, and the strong link which binds every human being in this country to the great problem of ocean shipping, even though they may live in the interior, far distant from the seacoast.

"It is to the interest of everyone that our shipping laws should be such as to make shipping and ship-owning possible. They are not so at present. The La Follette law is an attempt to equalize wages on all ships in the world. When I was asked by the Congressional committee if an increase in wages on the ships would not necessitate an increase in rates, I answered in the affirmative, of course. Then I was asked who would pay, and, of course, the only answer was, 'The consumer.'

"As a matter of fact, it will cost us 2 or 3 cents a bushel more to carry grain under this law than it did under the old laws.

"Will the consumer pay it always? No! Sometimes the producer must pay it—he must if he meets competition not similarly burdened—and he does exactly that when he sells his grain for export.

"When we are forced to charge increased freights the farmer must sell at a less price or not sell at all. And so, also, with the manufacturer. This shipping problem is a great one, touching all of us."


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