The War After the War Part 5

Another American came to Paris without knowing the language, used an interpreter every day for nine weeks, and was unable to place a single order. Yet in this time he spent enough money on his language intermediary to pay the rent of a suitable office in Paris for a whole year.

The dependence of Americans with important interests or commissions upon interpreters is well nigh incredible. On the steamer that took me to France last summer was the new Continental Manager of a large American manufacturing company. I a.s.sumed, of course, that he could speak French.

A few days after I arrived in Paris I met him in the Boulevard des Italiens in the grip of a five franc a day interpreter. He told me with great enthusiasm that an interpreter was "the greatest inst.i.tution in the world." In six months he will probably reverse his opinion.

The lesson of this lack of knowledge of French as applied to salesmanship is this: That while the average Frenchman is greatly flattered when you tell him that his English is good, he prefers to talk business in his own vernacular. He thinks and calculates better in French. Frequently when you engage him in conversation in English and the question of business comes up, you find that he instinctively lapses into his mother tongue.

I was talking one day with Monsieur Ribot, the French Minister of Finance, whose English is almost above reproach, and who maintained the integrity of his English through a long conversation. But the moment I asked him a question about the proposed bond issue, he shifted into French and kept that key until every financial rock had been pa.s.sed.

In short, you find that if you want to do business in France, you must know the French language. It is one of the keys to an understanding of the French temperament.

Even when Americans do become energetic in France, they sometimes fail to fortify themselves with important facts before entering into hard and fast transactions. As usual, they pay dearly for such omissions. This brings us to what might be called The Great American Deluge which overwhelmed not a few Yankee pocketbooks and left their owners sadder and saner.

Fully to understand this series of events, you must know that since the beginning of the war the question of an adequate French coal supply has been acute. Indeed, for a while the country faced a real crisis. Many of her mines are in the hands of the Germans and she was forced to turn to England for help. Not only has the English price risen, but to it must be added the high cost of transportation, the heavy war risk, and all those other details that enter into such negotiations.

France had to have coal and various enterprising Americans got on the job. At least, they thought they were enterprising. Before they got through, they wished that they had not been so headlong as the following tale, now to be unfolded, will indicate.

A group of New York men made a contract to deliver three shiploads of coal at Bordeaux at a certain price. _After_ they had signed the contract, freight rates from Baltimore to the French port almost doubled. This was the first of their troubles. When their vessel finally reached Bordeaux, the dock was so crowded with ships unloading war munitions that they could not get pier s.p.a.ce. In France demurrage begins the moment a ship stops outside of port. The net result was that these vessels were held up for nearly two weeks and the high price of transportation coupled with the very large demurrage practically wiped out all the profits.

Another group of Americans made a contract to deliver coal to a French railway "subject to call." Without taking the trouble to inquire just what "subject to call" meant in France, they signed and sealed the bargain. Then they discovered that the railroad wanted the coal delivered in irregular instalments. Meanwhile the consignors had to store the coal in French yards where s.p.a.ce to-day is almost as valuable as a corner lot on Broadway. They were glad to pay a cash bonus and escape with their skin.

Still another group made a contract with the Paris Gas Company for a large quant.i.ty of coal. They discovered later that the company expected the coal to be delivered to their bins in Paris.

"But the American plan is to sell coal f.o.b. Norfolk," said the spokesman.

"We are sorry," replied the Frenchmen, "but the coal must be delivered to us in Paris. The English have been doing it for forty years, and if you expect to do business with us you must do likewise."

When the Americans demurred the company held them to their contract.

This last episode shows one of the great defects in the American system of doing business abroad. We insist upon the f.o.b. arrangement, that is, the price at the American point of shipment. The foreigner, and especially the Frenchman, wants a c.i.f. price which includes cost, insurance and freight and which puts the article down at his door. The German and English shippers, and particularly the former, have made this kind of shipment part of their export creed, and it is one reason why they have succeeded so wonderfully in the foreign field.

The Great American Coal Deluge also precipitated a flood of miserable t.i.tled ladies all selling coal for "well known American companies." Most of them were clever American women, married, or thinking they were married, to Italian or French n.o.blemen. Their chief effort was to get a cash advance payment to bind the contract. Such details as price, transportation, credit, and other essentials were unimportant.

Here is a little story which shows how these women did business and undid American good will.

One day last August, the telephone rang in the office of the General Manager of a long established American concern in Paris. A woman was at the other end.

"Is this Mr. Blank?"

"Yes."

"I am Countess A. and I have a letter of introduction for you."

"Yes."

"I represent several large American coal companies and have secured a large order for Italy."

"Yes."

"Can you tell me how I can get the coal to Italy?"

"Yes."

"Splendid! But how?"

"By boats."

"Oh, yes, I know, but have you got the boats and can I get them? I have the order, you see, and that is the main thing."

"But, madam," asked the man, "have you cabled your company in America about the contract?"

"No," answered the woman. "What's the use of doing that. I have no money to spend on cables. Besides, I have full power to act. The price is all right and the buyers are ready to sign but they want to put into the agreement some silly business about delivery and I am asking you to help me get the boats."

"Come and see me," said the Manager.

The woman promised to call the next morning, but she never came. Just what she had in mind the Manager could never quite tell. But one thing was proved in this and similar activities: The "Countess" and most of her sisters who have been trying to put over coal and other contracts in Paris, have little or no real authorisation for their performances, and the princ.i.p.al result has been to prejudice French and Italian buyers against us.

In seeking to make French contracts, some of these adventurers (and they include both s.e.xes) make the most extravagant claims. One group circulated a really startling prospectus. At the top was the imposing name of the corporation with a long list of branches in every part of the world. Then followed a list of names of individuals and firms with their a.s.sets supposed to be part and parcel of the corporation. One man whose name I had never heard before and who was set down as a Pittsburgher, was accredited with a.s.sets of $250,000,000. Under other individual and firm resources ranged from one to twenty-five million.

The list included the name of a great American retail merchant, without his consent I might add, but the promoters had cunningly misspelled his name, which kept them within the pale of the law. The total a.s.sets of these "concerns personally responsible for all orders entrusted" was precisely $340,000,000. In spite of this dazzling array of misinformation, let it be said to the credit of the French buyer that he failed to fall for the glittering bait.

The more you go into the reasons why so many of our business men have failed in France, the more you find out that plain everyday business organisation seems to be conspicuously absent. Take, for example, the question of credit. The average American doing business in France proceeds in the a.s.sumption that every Frenchman is dishonest. This being his theory, he either exacts cash in advance or sells "cash against doc.u.ments." Such a procedure galls the Frenchman who is accustomed to long credit from English, German, Swiss and Spanish manufacturers and merchants.

Of course, behind all these American errors in judgment and tact is a lack of organised credit information. To ill.u.s.trate:

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 inst.i.tution 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 a.s.suming 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.