W

ITH something like 25,000,000 tons of merchant shipping to be employed inside of two years, the United States Shipping Board feels that it is none too early to look around for cargoes, both in this country and abroad. With the task of building the ships in charge of the Emergency Fleet Corporation, under the leadership of Charles M. Schwab, this function of the United States Shipping Board begins to attain prominence—and that is what the shipping board originally created for by Congress.

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Twenty-five million tons is a lot of shipping. In one voyage these ships would carry all the live stock, dressed meats, packing-house products, poultry, game, fish, wool, hides and leather carried on our railroads in one year. In less than five trips they would carry our whole yearly railroad haul of grain, flour, cotton, hay, fruit, vegetables, and other farm products; in three and one-half trips all our lumber; in seven trips all our manufactured goods; in sixteen trips all our coal and coke. The total tonnage hauled on our railroads is about 1,200,000,000 tons.

So, amid all his splendid effort in producing equipment to win the war, the American manufacturer must be asked to take thought for to-morrow and think in terms of shipping and foreign trade. This might appear like a distraction now- something which will take the attention from the supreme duty of winning the war. But far from being a distraction, it fits in with war production and war psychology. While our factories and factory employees are building war material to-day, they are also building foreign trade, if we can only see things whole and make one factor work with another.

When the business man turns his attention to export trade he looks abroad and thinks of foreign customers. But foreign trade actually begins in his own factory. He looks

abroad and studies such factors as ocean freights, foreign exchange, export packing, and international salesmanship. If he would look into his own factory first, and study factors close at hand, such as labor turnover, wages, manufacturing costs and efficiency, he would be laying solid foundations for export trade.

In a recent study of factors that make successful, lasting foreign trade, Prof. Taussig places first of all the element of manufacturing "effectiveness," as he calls it, which he defines as a combination of capital, labor, invention, salesmanship, and transportation, all working together under first-rate business leadership, to make goods capable of holding markets in competition with the products of other nations. These elements of effectiveness are largely right at hand in our factories-it is not necessary to send anybody abroad to find them. And as an illustration of how nations make mistakes in trying to build foreign trade at the other end, Prof. Taussig shows that real effectiveness in manufacturing almost invariably holds its own against artificial devices for building foreign trade, such as export bounties, special railroad rates on export shipments, cut prices, discriminatory tariffs, etc.

With the bugaboo of cheap foreign labor haunting us in former years, we got into the way of thinking that export trade necessitated some lowering of wages and American living standards. Probably that was crooked thinking before the war. Certainly it is crooked thinking now, for the war is bringing other nations closer to our American standards of wages and living.

True development of foreign trade in our factories means better and better American standards.

In most of the countries of the world there will be a decided shortage of labor after the war. That country will best succeed which pro

tects its workmen by improving their living conditions, guaranteeing a fair return for labor, protecting workmen and their families against accidents and idleness, and making workers better citizens. The country taking those measures will be the country that develops and makes products most economically, and will perform a world service by making goods at the prices fair to other nations.

Nobody has yet suggested sending cheap American soldiers over to France to win the war. Our men at arms are the pick of the country, physically and mentally. We take plenty of time to train them, make them specialists in every branch of fighting. We study them individually to find which are best suited for flying, or signalling, or bombing, or bayonet fighting. We recognize that modern war is a swift game, constantly changing, and that our soldiers must be prepared to learn new trades and new tricks from month to month, and we get ready to teach them these new trades, and also put them in a receptive attitude toward improvements in the fighting game. We feed them like fighting cocks, and spare no expense in clothing them or providing the latest fighting tools.

In the Army and the Navy we have a visible mobilization of man power for results in a foreign country. If we could have the same visible mobilization of man power in our factories for foreign trade it would be a splendid object lesson for those who manage the factories and make the export goods.

To think of cheapness in connection with foreign trade is just as wrong as trying to pin bargain tags on soldiers. Foreign markets

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not going to be won or held by cheap ened American workers, or bargain methods in American life. As manufacturers, we have got to lay the foundations for foreign trade by going out into our factories and studying labor and costs together. We can sell our export products at reasonable prices by increasing wages along with output, and decreasing the losses caused by labor turnover, untrained workers, spoiled materials and other inefficiency.

Our experience along these lines in the Emergency Fleet Corporation has been most encouraging. With the task of creating new ship-yards in a few months, and manning them with several hundred thousand workmen, most of whom came from other trades, we ran into about every difficulty, and problem, and tangle, that could conceivably arise in management. On a large scale we effected an adjustment of man power such as is called for now in preparing the average American factory for the export trade which we will need to keep our ships employed.

To get production at unheard of speed and in record-breaking quantity, we did something simple and fundamental-and thorougnly human. This was nothing more nor less than arranging wages so that, while our workers produced more for us, they were also able to produce more for themselves. We established the rule that a piecework wage rate set by any shipbuilder must stay in force during the period of the war. Any manufacturer who sets a piecework rate, and then reduces that rate if he finds that he has made a mistake against himself, is doing a great injustice to his employees. Profiting by our experience in the shipyards, I should like to see Congress pass a Federal law making it compulsory to keep every piece rate in effect one year. That would protect workers and furnish a real basis for increased production.

We found ourselves confronted with enormous losses and dangerous delays through lack of skill in special trades needed by workers in the shipyards, and also through the cost of labor turnover. To find 100 capable shipbuilders who would stick on the job it was necessary to hire and try, discharge or lose 1,000. Every manufacturer will recognize in these difficulties exactly the difficulties that he himself faces from day to day, and which put excessive burdens of cost upon his products. In the shipyards we got around those difficulties by establishing training centers for the various trades we needed, and by appealing to the splendid spirit which lies in the average worker.