The Twentieth Century American Part 20

I have said elsewhere that in society (except only in certain circles in certain cities of the East) it is the individual character and achievements of the man himself that count; neither his father nor his grandfather matters--nor do his brothers and sisters. And it is the same in business. I am not saying that good credentials and strong friends are not of use to any man; but without friends or credentials, the man who has an idea which is commercially valuable will find a market in which to sell it. If he has the ability to exploit it himself and the power to convince others of his integrity, he will find capital ready to back him. It is difficult to explain in words to those accustomed to the traditions of English business how this principle underlies and permeates American business in all its modes.

One example of it--trivial enough, but it will serve for ill.u.s.tration--which visiting Englishmen are likely to be confronted with, perhaps to their great inconvenience, is in the bank practice in the matter of cheques. There is, as is well known, no "crossing" of cheques in America, but all cheques are "open"; and many an Englishman has gone confidently to the bank on which it was drawn with a cheque, the signature to which he knew to be good, and has expected to have the money paid over the counter to him without a word. All that the English paying teller needs to be satisfied of is that the signature of the drawer is genuine and that there is money enough to the credit of the account to meet the cheque. But the Englishman in the strange American bank finds that the doc.u.ment in his hands is practically useless, no matter how good the signature or how large the account on which it is drawn, unless he himself--the person who presents the cheque--is known to the bank officials. "Can you identify yourself, sir?" The Englishman usually feels inclined to take the question as an impertinence; but he produces cards and envelopes from his pocket--the name on his handkerchief--anything to show that he is the person in whose favour the cheque is drawn. Perhaps in this way he can satisfy the bank official.

Perhaps he will have to go away and bring back somebody who will identify him. It is the _personality of the individual with whom the business is done_ that the American system takes into account.[384:1]

It is, as I have said, a trivial point, but it suffices. Vastly more important is the whole banking practice in America. This is no place to go into the details at the controversy which has raged around the merits and demerits of the American banking system. In the financial panic of 1893 something over 700 banks suspended payment in the United States. At such seasons, especially, but more or less at all times, a great proportion of the best authorities in the United States believe that it would be better for the country if the Scotch--or the Canadian adaptation of the Scotch--system were to take the place of that now in vogue. Possibly they are right. The gain of having the small local banks in out-of-the-way places possess all the stability of branches of a great central house is obvious, both in the increase of security to depositors in time of financial stress and also in the ability of such a house to lend money at lower rates of interest than is possible to the poorer inst.i.tution with its smaller capital which has no connections and no resources beyond what are locally in evidence. It may be questioned, however, whether the country as a whole would not lose much more than it would gain by the less complete identification of the bank with local interests. It would be inevitable that in many cases the local manager would be restrained by the greater conservatism of the authorities of the central house from lending support to local enterprises, which he would extend if acting only by and for himself as an independent member of the local business community. It is difficult to see how the country as a whole could have developed in the measure that it has under any system differing much from that which it has had.

In theory it may be that the functions of a bank are precisely the same in Great Britain and in America. In practice different functions have become dominant in the two. In England a bank's chief business is to furnish a safe depository for the funds of its clients. In America its chief business is to a.s.sist--of course with an eye to its own profit and only within limits to which it can safely go--the local business community in extending and developing its business. The American business man looks upon the bank as his best friend. If his business be sound and he be sensible, he gives the proper bank official an insight into his affairs far more intimate and confidential than the Englishman usually thinks of doing. He invites the bank's confidence and in turn the bank helps him beyond the limits of his established credit line in whatever may be considered a legitimate emergency. In any small town whenever a new enterprise of any public importance is to be started, the bank is expected to take shares and otherwise a.s.sist in promoting a movement which is for the common good. The credits which American banks--especially in the West--give to their customers are astoundingly liberal according to an English banker's standards. Sometimes of course they make mistakes and have to pocket losses. When a storm breaks, moreover (as in the case already quoted of the panic of 1893), they may be unable to call in their loans in time to take care of their liabilities. But that they have been a tremendous--an incalculable--factor in the general advancement of the country cannot be questioned.

The difference between the parts played by the banks in the two countries rests of course on two fundamental differences in the condition of the countries themselves. The first of these is the fact that while England is a country of acc.u.mulated wealth and large fortunes which need safeguarding, America has until recently been a country of small realised wealth but immense natural resources which needed developing. The policy of the banks has been shaped to meet the demands of the situation.

In the second place (and too much stress cannot be laid upon this in any comparison of the business-life of the two peoples) the American is always trading on a rising market. This is true of the individual and true of the nation. Temporary fluctuations there are of course, but after every setback the country has only gone ahead faster than before.

The man with faith in the future, provided only that he looked far enough ahead to be protected against temporary times of depression, has always won. Just as the railway companies push their lines out into the wilderness, confident of the population that will follow, and are never disappointed, so in all other lines the man who is always in advance, who does not wait for the demand to be there before he enlarges his plant to meet it, but who sees it coming and is ready for it when it comes--the man who has always acted in the belief that the future will be bigger than the present,--that man has never failed to reap his reward. Of course the necessary danger in such a condition is that of over-speculation. But nearly every man who ama.s.ses wealth or wins large commercial success in the United States habitually takes risks which would be folly in England. They are not folly in him, because the universal growth of the country, dragging with it and buoying up all industries and all values, as it goes, is on his side. It is inevitable that there should result a national temperament more buoyant, more enterprising, more alert.

What is important, too, is that whereas in England the field is already more or less full and was handed down to the present generation well occupied, so that new industries can, as it were, only be erected on the ruins of old, and a site has to be cleared of one factory before another can be built (all of which is, in a measure, only relative and metaphorical), in the United States there is always room for the newcomers. New population is pouring in to create new markets: new resources are being developed to provide the raw material for new industries; there is abundance of new land, new cities, new sites whereon the new factories can be built. This is why "America" and "opportunity" are interchangeable terms; why young men need never lack friends or backing or the chance to be the architects of their own fortunes. Society can afford to encourage the individual to a.s.sert himself, because there is s.p.a.ce for and need of him.

From this flow certain corollaries from which we may draw direct comparison between the respective spirits in which business in the two countries is carried on. In the first place, in consequence of the more crowded condition of the field and the greater intensity of compet.i.tion, the business community in England is much more ruthless, much less helpful, in the behaviour of its members one towards the other. It is not a mere matter of the more exacting scrutiny of credits, of the more rigid insistence on the exact fulfilment of a bond (provided that bond be stamped), but it colours unconsciously the whole tone of thought and language of the people. There are two principles on which business may be conducted, known in America respectively as the "Live and let live" principle, and the "Dog eat dog" principle. There was until recently in existence in the United States one guild, or a.s.sociation, representing a purely parasitical trade--that of ticket-scalping--which was fortunately practically peculiar to the United States. This concern had deliberately adopted the legend "Dog eat dog" as its motto and two bull-dogs fighting as its crest; but in doing so its purpose was to proclaim that the guild was an Ishmaelite among business men and lived avowedly in defiance of the accepted canons of trade. On the other hand one meets in America with the words "Live and let live" as a trademark, or motto, on every hand and on the lips of the people. Few men in America but could cite cases which they know wherein men have gone out of their way to help their bitterest compet.i.tor when they knew that he needed help. The belief in co-operation, on which follows a certain comradeship, as a business principle is ingrained in the people.

I was once given two letters to read, of which one was a copy and the other an original. The circ.u.mstances which led up to the writing of them were as follows: Two rich men, A. and B., had been engaged in a business duel. It was desperate--_a outrance_,--dealing in large figures; and each man had to call up all his reserves and put out all his strength. At last the end came and A. was beaten--beaten and ruined.

Then the letters pa.s.sed which I quote from memory:

"DEAR MR. B.:

"I know when I'm beaten and if I was quite sure you wouldn't kick a man when he's down, I would come round to see you and grovel. As perhaps you can guess, I am in a bad way.

"Yours truly, A."

"DEAR A.:

"There's no need to grovel. Come around to my house after supper to-morrow night and let us see what we can do together to put you straight.

"Yours truly, B."

I need hardly say that it was the second letter of which I saw the original, or that it was A. who showed them to me, when they were already several years old but still treasured, and A. was a wealthy man again as a result of that meeting after dinner. A. told me briefly what pa.s.sed at that meeting. "He gave me a little more than half a million,"

he said. "Of course he has had it back long ago; but he did not know that he would get it at the time and he took no note or other security from me. At the time it was practically a gift of five hundred thousand dollars."

And as I write I can almost hear the English reader saying, "Pooh! the same things are done times without number in England." And I can hear the American, still smarting under the recollection of some needlessly cruel and unfair thrust from the hands of a compet.i.tor, smile cynically and say that he would like to tell me certain things that he knows. Of course there are exceptions on either side. It takes, as the American is so fond of saying, "all kinds of men to make a world." It is the same old difficulty of generalising about a nation or drawing up an indictment against a whole people. But I do not think that any man who has engaged for any length of time in business in both countries, who has lived in each sufficiently to absorb the spirit of the respective communities, will dissent from what I have said. Many Englishmen, without knowledge of business in England, go to America and find the atmosphere harder and less friendly than they were accustomed to at home, and come to quite another conclusion. But they are comparing American business life with the social club-and-country-house life of home. Let them acquire the same experience of business circles in England, and then compare the tone with that of business circles in America, and they will change their opinions.

Let me recall again what was said above as to the difference in the motives which may impel a man to go into business or trade in the two countries. An Englishman cannot well pretend that he does it with any other purpose than to make money. The American hopes to make money too, but he takes up business as an honourable career and for the sake of winning standing and reputation among his fellows. This being so, business in America has a tendency to become more of a game or a pastime--to be followed with the whole heart certainly--but in a measure for itself, and not alone for the stakes to be won. It is not difficult to see how, in this spirit, it may be easier to forego those stakes--to let the actual money slip--when once you have won the game.

It is necessary to refer briefly again to the subject of trusts. In England a great corporation which was able to demonstrate beyond dispute that it had materially cheapened the cost of any staple article to the public, and further showed that when, in the process of extending its operations, it of necessity wiped out any smaller business concerns, it never failed to provide the owners or partners of those concerns with managerial positions which secured to them a larger income than they could have hoped to earn as individual traders, and moreover took into their service the employees of the disbanded concerns at equal salaries,--such a corporation would generally be regarded by the English people as a public benefactor and as a philanthropically and charitably disposed inst.i.tution. In America the former consideration has some weight, though not much; the latter none at all.

When a trust takes into its service those men whom it has destroyed as individual traders, the fact remains that their industrial independence has been crushed. The individual can no longer "insist upon himself." He is subordinate and no longer free. One of the first principles of American business life, the encouragement of individual initiative, has been violated, and nothing will atone for it.

The Standard Oil Company can, I believe, prove beyond possibility of contradiction that the result of its operations has been to reduce immensely the cost of oil to the public, as well as to give facilities in the way of distribution of the product which una.s.sociated enterprise could never have furnished. It can also show that in many, and, I imagine, in the majority, of cases, it has endeavoured to repair by offers of employment of various sorts whatever injuries it has done to individuals by ruining their business. But these things const.i.tute no defence in the eyes of the American people.

There is the additional ground of public hostility that the weapons employed to crush compet.i.tors have often been illegal weapons. Without the a.s.sistance of the railway companies (which was given in violation of the law) the Standard Oil Company might have been unable to win more than one of its battles; but this fact, while it furnishes a handle against the company and exposes a side of it which may prove to be vulnerable, and is therefore kept to the front in any public indictment of the company's methods, is an immaterial factor in the popular feeling. Few Americans (or Englishmen) will not accept a reduced rate from a railway company when they can get it. Whatever actual bitterness may be felt by the average man against the Standard Oil Company because it procured rebates on its freight bills is rather the bitterness of jealousy than of an outraged sense of morality. The real bitterness--and very bitter it is--is caused by the fact that the company has crushed out so many individuals. On similar ground nothing approaching the same intensity of feeling could be engendered in the British public.

Let us now recur for a moment to the views of the young woman quoted above on the interesting topic of chaperons. We have seen that insistence on the individuality is a conspicuous--perhaps it is the most conspicuous--trait of the American character. Encouraged by the wider horizon and more ample elbow-room and a.s.sisted by the something more than tolerant good-will of his business a.s.sociates, colleagues, or compet.i.tors, the individual, once insisted on, has every chance to develop and become prosperous and rich. Everything helps a man in America to strike out for himself, to walk alone, and to dispense with a chaperon. The Englishman is chaperoned at almost every step of his business career; and I am not speaking now of the chaperonage of his colleagues, of his fellows in the community, or of his elders among whom he grows up and, generally, in spite of whom the young man must make his way to the top. There is another much more significant form of chaperonage in English business circles, of which it is difficult to speak without provoking hostility.

The English business world is solicitor-cursed. I mean by this no reflection on solicitors either individually or in the ma.s.s. I am making no reference to such cases as there have been of misappropriation by solicitors here and there of funds entrusted to their charge, nor to their methods of making charges, which are preposterous but not of their choosing. Let us grant that, given the necessity of solicitors at all, Great Britain is blessed in that she has so capable and upright and in all ways admirable a set of men to fill the offices and do the work.

What I am attacking is solicitordom as an inst.i.tution.

It is not merely that there are no solicitors, as such, in the United States, for it might well be that the general practising lawyers who fill their places, so far as their places have to be filled, might be just as serious an incubus on business as solicitordom is on the business of London to-day. Names are immaterial. The essential fact is that the spirit and the conditions which make solicitors a necessity in England do not exist in America. I do not propose to go into any comparison in the differences in legal procedure in the two countries; not being a lawyer, I should undoubtedly make blunders if I did. What is important is that a man who is accustomed to walking alone does not think of turning to his legal adviser at every step. Great corporations and large business concerns have of course their counsel, their attorneys, and even their "general solicitors." But the ordinary American engaged in trade or business in a small or moderate way gets along from year's end to year's end, perhaps for his lifetime, without legal services. I am speaking only on conjecture when I say that, taking the country as a whole, outside of the large corporations or among rich men, over ninety per cent. of the legal doc.u.ments--leases, agreements, contracts, articles of partnership, articles of incorporation, bills of sale, and deeds of transfer--are executed by the individuals concerned without reference to a lawyer. Probably not less than three fourths of the actual transactions in the purchase of land, houses, businesses, or other property are similarly concluded without a.s.sistance. "What do we need of a lawyer?" one man will ask the other and the other will immediately agree that they need one not at all.

Of course troubles often arise which would have been prevented had the doc.u.ments been drawn up by a competent hand. The const.i.tutional reluctance to go to a lawyer is sometimes carried to lengths that are absurd. But I do not believe that the amount of litigation which arises from that cause is in any way comparable to that which is avoided by the mere fact that legal aid is outside the mental horizon. The men who conduct most of the affairs of life directly without legal help are most likely to adjust differences when they arise in the same way. That is a matter of opinion, however, based only on reasonable a.n.a.logy, which I can advance no figures to support; but what is not matter of opinion, but matter of certainty, is, first, that the general gain in the rapidity of business movement is incalculable, and, second, that business as a whole is relieved of the vast burden of solicitors'

charges.

The American, accustomed to the ways of his own people, on becoming engaged in business in London is astounded, first, at the disposition of the Englishman to turn for legal guidance in almost every step he takes, second, at the stupendous sums of money which are paid for services which in his opinion are entirely superfluous, and, finally, at the terrible loss of time incurred in the conclusion of any transaction by the waiting for the drafting and redrafting and amending and engrossing and recording of interminable doc.u.ments which are a bewilderment and an annoyance to him.

The Englishman often says that American business methods are slip-shod; and possibly that is the right word. But Englishmen should not for a moment deceive themselves into thinking that the American envies the Englishman the superior niceties of his ways or would think himself or his condition likely to be improved by an exchange. An example of difference in the practice of the two countries which has so often been used as to be fairly hackneyed (and therefore perhaps stands the better chance of carrying conviction than a more original, if better, ill.u.s.tration) is drawn from the theory which governs the building of locomotive engines in the two countries.

The American usually builds his engine to do a certain specified service and to last a reasonable length of time. During that time he proposes to get all the work out of it that he can--to wear it out in fact--feeling well a.s.sured that, when that time expires, either the character of the service to be performed will have altered or such improvements will have been introduced into the science of locomotive construction as will make it cheaper to replace the old engine with one of later build. The Englishman commonly builds his engines as if they were to last for all time. There are many engines working on English railways now, the American contemporaries of which were sc.r.a.pped twenty years ago. The Englishman takes pride in their antiquity, as showing the excellence of the workmanship which was put into them. The American thinks it would have been incomparably better to have thrown the old things away long ago and replaced them with others of recent building which would be more efficient.

The same principle runs through most things in American life, where they rarely build for posterity, preferring to adapt the article to the work it has to perform, expecting to supersede it when the time comes with something better. If a thing suffices, it suffices; whether it be a locomotive or a contract. "What is the use," the American asks, "when you can come to an agreement with a fellow in ten minutes and draw up your contract with him that afternoon,--what is the use of calling in your solicitors to negotiate and then paying them heavily to keep you waiting for weeks while they draft doc.u.ments? We shall have had the contract running a month and be making money out of it before the lawyers would get through talking."

Out of this divergence in point of view and practice have of course grown other differences. One thing is that the American courts have necessarily come to adopt more liberal views in the interpretation of contracts than the English; they are to a greater extent inclined to look more to the intent than to the letter and to attach more weight to verbal evidence in eliciting what the intent was. No stamping of doc.u.ments being necessary in America, the doc.u.ments calling themselves contracts, and which are upheld as such, which appear in American courts are frequently of a remarkable description; but I have a suspicion that on the whole the American, in this particular, comes as near to getting justice on the average as does the Englishman.

And the point is that I believe it to be inevitable that the habit of doing without lawyers in the daily conduct of business, the habit of relying on oneself and dealing with another man direct, must in the long run breed a higher standard of individual business integrity.

Englishmen, relying always on their solicitors' advice, are too tempted to consider that so long as they are on the right side of the law they are honest. It is a shifting of the responsibility to the chaperon; whereas, if alone, you would be compelled to act on your honour.

What I think and hope is the last word that I have to say on this rather difficult subject has to do with the matter already mentioned, namely the absence of the necessity of stamping doc.u.ments in America.

Englishmen will remember that the Americans always have evinced a dislike of stamps and stamp duties and acts relating thereto. Of late years the necessity of meeting the expenses of the Spanish war did for a while compel the raising of additional internal revenue by means of doc.u.mentary and other stamps. The people submitted to it, but they hated it; and hated it afresh as often as they drew or saw a cheque with the two-cent stamp upon it. The act was repealed as speedily as possible and the stamping of papers has for six years now been unknown.

I think--and I am not now stating any acknowledged fact, but only appealing to the reader's common-sense--that it is again inevitable that where a superior sanct.i.ty attaches to stamped paper a people must in the long run come to think too lightly of that which is unstamped. I do not say that the individual Englishman has as yet come to think too lightly of his word or bond because it is informal, but I do think there is danger of it. The words "Can we hold him?" or (what is infinitely worse) "Can he hold us?" spring somewhat readily to the lips of the business man of this generation in England.

Continual dependence on the law and the man of law, and an extra respect for paper because it is legal, have--they surely cannot fail to have--a tendency to breed in the mind a disregard for what is not of a strictly legal or actionable character. It is Utopian to dream of a state of society where no law will be needed but every man's written and spoken word will be a law to him; but it is not difficult to imagine a state of society in which there is such universal dependence on the law in all emergencies that the individual conscience will become weakened--pauperised--atrophied--and unable to stand alone.

That is, as I have said, the last point that I wish to make on this subject; and the reader will please notice that I have nowhere said that I consider American commercial morality at the present day to be higher than English. Nor do I think that it is. Incontestably it is but a little while since the English standard was appreciably the higher of the two. I have cited from my own memory instances of conditions which existed in America only twenty years ago in support of the fact--though no proof is needed--that this is so. I by no means underestimate the fineness of the traditions of British commerce or the number of men still living who hold to those traditions. On the other hand, better judges than I believe that the standard of morality in English business circles is declining. In America it is certainly and rapidly improving.

Present English ideas about American commercial ethics are founded on a knowledge of facts, correct enough at the time, which existed before the improvement had made anything like the headway that it has, which facts no longer exist. I have roughly compared in outline some of the essential qualities of the atmosphere in which, and some of the conditions under which, the business men in the two countries live and do their business, showing that in the United States there is a much more marked tendency to insist on the character of the individual and a much larger opportunity for the individuality to develop itself; and that in certain particulars there are in England inherited social conditions and inst.i.tutions which it would appear cannot fail to hamper the spirit of self-reliance, on which self-respect is ultimately dependent.

And the conclusion? For the most part my readers must draw it for themselves. My own opinion is that, whatever the relative standing of the two countries may be to-day, it is hardly conceivable that, by the course on which each is travelling, in another generation American commercial integrity will not stand the higher of the two. The conditions in America are making for the shaping of a sterner type of man.

_Postscript._--The opinion has been expressed in the foregoing pages that in one particular the American on the average comes as near to getting justice in his courts as does the Englishman. I have also given expression to my great respect, which I think is shared by everyone who knows anything of it, for the United States Supreme Court. Also I have spoken disparagingly of the English inst.i.tution of solicitordom. But these isolated expressions of opinion on particular points must not be interpreted as a statement that American laws and procedure are on the whole comparable to the English. I do not believe that they are. None the less Englishmen have as a rule such vague notions upon this subject that some explanatory comment seems to be desirable.

Especially do few Englishmen (not lawyers or students of the subject) recognise that the abuses in the administration of justice in America, of which they hear so much, do not occur in the United States courts, but in the local courts of the several States. So far as the United States (_i. e._, the Federal) Courts are concerned I believe that the character and capacity of the judges (all of whom are appointed and not elected) compare favourably with those of English judges. It is in the State courts, the judges of which are generally elected, that the shortcomings appear; and while it might be reasonable to expect that a great State like New York or Ma.s.sachusetts should have a code of laws and an administration of justice not inferior to those of Great Britain, it is perhaps scarcely fair to expect as much of each of the 46 States, many of which are as yet young and thinly populated.

The chief vice of the State courts arises, of course, from the fact that the judges are elected by a partisan vote; from which it follows almost of necessity that there will be among them not a few who in their official actions will be amenable to the influence of party pressure. It is perhaps also inevitable that under such a system there will not seldom find their way to the bench men of such inferior character that they will be directly reachable by private bribes; though this, I believe, seldom occurs. The State courts, however, labour under other disadvantages.

We have seen how Congressmen are hampered in the execution of their duties by the constant calls upon their time made by the leaders of their party, or other influential interests, in their const.i.tuencies.