If I should be asked what is most essential for the successful carrying
on of business in America I would say advertising. A business man in
America who intends to succeed must advertise in the daily, weekly, and
monthly papers, and also have big posters in the streets. I do not
believe any up-to-date merchant in America fails to do this. Every
book and magazine contains many advertisements; sometimes fully half of
a big magazine is covered with notices or pictures of articles for
sale. Wherever you go the inevitable poster confronts you; and even
when you look out of the window of the train you see large sign-boards
announcing some article of trade. The newer the brand the bigger the
picture. If when you get into a street-car you look around you will
see nothing but advertisements of all kinds and sorts, and if you
answer an advertisement you will keep on receiving notices of the
matter about which you inquired. Even now I receive letters urging me
to buy something or other about which I sent a letter of inquiry when I
was in America. At night, if you stroll round the town you will be
amazed by the ingenious and clever signs which the alert minds of the
trades people have invented, such as revolving electric lights forming
the name of the advertiser with different colors, or a figure or shape
of some sort illustrating his wares. But even this is not thought
sufficient. Circulars are often sent to everyone, making special
offers, setting forth forceful reasons why the commodity advertised is
indispensable. Certain stores make it a point to announce cheap sales
once or twice a year, with from 10 to 25 per cent. reduction. It
should be noted that no tradesman voluntarily sells his goods at a
loss, so that if during a sale he can give as much as 25 per cent.
discount we can easily calculate the percentage of profit he generally
makes. There are cases where men who started as petty dealers have,
after a few years, become millionaires.
To show the importance of advertising I cite the well-known sanitary
drink which is a substitute for tea and coffee, and which by extensive
advertising in almost every paper published in every country has now
become a favorite beverage. The proprietor is now a multi-millionaire
and I am told that he spends more than a million dollars a year in
advertising.
Another thing inseparable from American business is the telephone. A
telephone is a part of every well-appointed house, every partner's desk
is provided with a telephone, through which he talks to his clients and
transacts business with them. In all official departments in
Washington scores of telephones are provided; even the secretary of the
department and the chief of the bureau give orders by telephone. It
goes without saying that this means of communication is also found in
the home of almost every well-to-do family. The invention of a
telephone is a great blessing to mankind; it enables friends to talk to
each other at a distance without the trouble of calling.[1]
Sweethearts can exchange their sweet nothings, and even proposals of
marriage have been made and accepted through the telephone. However,
one is subjected to frequent annoyances from wrong connections at the
Central Office, and sometimes grave errors are made. Once, through a
serious blunder, or a mischievous joke, I lost a dinner in my Legation
in Washington. My valet received a telephone message from a lady
friend inviting me to dine at her house. I gladly accepted the
invitation, and at the appointed time drove to her home, only to find
that there was no dinner-party on, and that I should have to go hungry.
With some trades, in order to create a new market, commercial
travellers or "drummers" give their goods away for nothing. Experience
has proved that what they lose at the start they recover in the course
of time, receiving in addition triple or tenfold more business than the
cost of the original outlay. These commercial agents travel through
all sections of the country to solicit business; they call upon those
who can give them orders; they look up those who are engaged in similar
businesses to their own, and, if they are retailers, they invite their
orders, or ask them to become sub-agents. These gentlemen practically
live on the trains: they eat, sleep, and do their business while
travelling. One of them told me that in one month he had covered
38,000 miles, and that he had not been back to his firm for three
months.
There is no doubt that the American people are active, strenuous
workers. They will willingly go any distance, and undertake any
journey, however arduous, if it promises business; they seem to be
always on the go, and they are prepared to start anywhere at a moment's
notice. An American who called on me a short time ago in Shanghai told
me that when he left his house one morning at New York, he had not the
slightest notion he was going to undertake a long journey that day; but
that when he got to his office his boss asked him if he would go to
China on a certain commission. He accepted the responsibility at once
and telephoned to his wife to pack up his things. Two hours later he
was on a train bound for San Francisco where he boarded a steamer for
China. The same gentleman told me that this trip was his second visit
to China within a few months.
American salesmen are clever and capable, and well know how to
recommend whatever they have to sell. You walk into a store just to
look around; there may be nothing that you want, but the adroit manner
in which the salesman talks, and the way in which he explains the good
points of every article at which you look, makes it extremely difficult
for you to leave the store without making some purchases. Salesmen and
commercial travellers in the United States have certainly learned the
art of speaking. I once, however, met a remarkable exception to this
rule in the person of an American gentleman who was singularly lacking
in tact; he was in China with the intention of obtaining a concession,
and he had nearly accomplished his object when he spoilt everything by
his blunt speech. He said he had not come to China for any
philanthropic purposes, but that he was in the country to make money.
We all know that the average business man is neither a Peabody nor a
Carnegie, but it was quite unnecessary for this gentleman to announce
that his sole object was to make money out of the Chinese.
Up to a few years ago business men in America, especially capitalists,
had scarcely any idea of transacting business in China. I well
remember the difficulty I had in raising a railway loan in America. It
was in 1897. I had received positive instructions from my government
to obtain a big loan for the purpose of constructing the proposed
railway from Hankow to Canton. I endeavored to interest well-known
bankers and capitalists in New York City but none of them would
consider the proposals. They invariably said that their money could be
just as easily, and just as profitably, invested in their own country,
and with better security, than was obtainable in China. It was only
after nearly twelve months of hard work, of careful explanation and
much persuasion, that I succeeded in finding a capitalist who was
prepared to discuss the matter and make the loan. Conditions have now
changed. American bankers and others have found that investments in
China are quite safe. They have sent agents to China to represent them
in the matter of a big international loan, and they are now just as
ready to lend money in China as in Europe, and on the same terms. In
conjunction with the representatives of some large European capitalists
they even formed a powerful syndicate in China, for the purpose of
arranging loans to responsible Chinese investors. In the spring of
1913, however, they withdrew from the syndicate.
The opportunities to make money in America are great and a young man
with only fair ability, but an honest purpose, will always get
something to do; and if he is industrious and ready for hard work, if
he possess courage and perseverance, he will most surely go forward and
probably in time become independent. There are hundreds of
millionaires and multi-millionaires in America who, in their younger
days, were as poor as sparrows in a snowstorm, but through
perseverance, combined with industrious and economical habits they have
prospered far beyond their own expectations. The clever methods they
adopt in the carrying on of their business cannot but arouse our
admiration, and Chinese merchants would do well to send some of their
sons to America to study the various systems practised there. But no
nation or any class of people is perfect, and there is one money-making
device which seems to me not quite sound in principle. To increase the
capital of a corporation new shares are sometimes issued, without a
corresponding increase in the actual capital. These new shares may
represent half, or as much of the actual capital as has been already
subscribed. Such a course is usually defended by the claim that as the
property and franchises have increased in value since the formation of
the corporation the increase of the stock is necessary in order to
fairly represent the existing capital. It is said that some railway
stock has been "watered" in this way to an alarming extent, so that a
great deal of it is fictitious, yet though it exists only on paper it
ranks as the equal of the genuine stock when the dividends are paid.
Whether or not such an action really is justifiable, or even moral, I
leave to the Christian clergy and their followers to decide. The
promoters and directors of such concerns have at least hit upon a very
clever method for becoming rich, and if the securities of the original
shareholders are not injured, and the holders of the genuine and the
watered stock can share equally without endangering the interests of
all, perhaps such an action may be less blamable, but it is a new kind
of proceeding to Orientals.
I must not omit to mention, however, the confidence which is placed in
the honesty of the people in general; for example, you enter an
omnibus, you will find the driver, but no conductor to collect the
fare. "It is up to you" to put the fare into a box, and if you do not
pay no one will ask for it. Yet every fare is paid. I have never seen
a dishonest man who omitted to pay. This is a remarkable fact which I
have noticed nowhere but in America. I suppose it is because the
people are not poor, and as they are always able to pay the fare they
do so. They are too honest to cheat. It is certainly a good way to
encourage people to be honest, to put them on their honor and then rely
on their own sense of uprightness.
The most curious sight I have ever seen was the Stock Exchange in New
York. It is used as a market for the purchase and sale of various
articles, but there were no goods exposed for sale. I saw a good many
people running about talking, yelling and howling, and had I not been
informed beforehand what to expect I should have thought that the men
were getting ready, in their excitement, for a general all round fight.
However, I did not see any exchange of blows, and I did not hear that
any blood was shed.
Another remarkable feature of the scene was that I did not see a single
woman there; she was conspicuous by her absence. Whether or not the
rules of the Exchange allow her to become a member I do not know; that
is a question for the woman suffragists to investigate, but I learned
that it is a wealthy association consisting of 1,100 members, and that
to become a member one must be a citizen of the United States of 21
years of age or more. The number of members is limited. Persons
obtain membership by election, or by the transfer of the membership of
a member who has resigned or died. A new member who is admitted by
transfer pays an initiation fee of 2,000 gold dollars, in addition to a
large fee to the transferrer, for his "seat in the House". A member
may transfer his seat to his son, if the Committee of the Exchange
approve, without charging for it; but in all cases the transferree pays
the above-mentioned initiation fee of 2,000 gold dollars.
The prices for these seats vary, the fluctuations being due to the
upward or downward trend of the stock market. Within recent years the
price has risen considerably, and as much as 95,000 gold dollars has
been paid to the transferrer. This is much higher than the price
usually paid by new members in Stock Exchanges in Europe, yet when a
seat becomes vacant there is no lack of purchasers. It is clear that a
seat in the "House" is very valuable to the holder. In the building
each member has a stall allotted to him where he has a telephone for
his exclusive use; this enables him to communicate every transaction
done in the Exchange to his business house, and to keep up connections
with his constituents in other cities. When one of his constituents,
say in Washington, D.C., desires to buy a certain security the order is
conveyed to him direct, and executed without delay. I have seen a
transaction of this kind executed in ten minutes, though there was a
distance of several hundred miles between client and broker. The
amount of business transacted in the "House" every day is enormous,
aggregating many millions of dollars. New York also has other
Exchanges, where different articles of merchandise are purchased and
sold, such as corn, coffee, cotton, etc., and the volume of business
transacted daily in that "Empire City" must be immense, and almost
beyond calculation.
Of course there are Exchanges in Chicago, Boston, Cincinnati, St.
Louis, Philadelphia, Baltimore, Washington and other cities, all
conducted on similar lines, but the prices are always governed by the
quotations from New York. This skilful and systematic way of doing
business is remarkable, and I am inclined to believe that New York is
ahead of many cities in South America and in Europe. No wonder that
the services of Americans are required by other countries in industrial
and technical concerns. Some years ago, when I was in Madrid, I
noticed that the street tram-car was running according to the American
system, and upon inquiry I was told it was controlled by an American
syndicate.
The pursuit of wealth in America is intense; it is apparent everywhere
and seems to be the chief aim of the American people. Because of their
eagerness to become rich as soon as possible they are all in a constant
hurry. You may see people in the streets almost running to their
offices, at luncheon they do not masticate their food, they bolt it,
and in less than ten minutes are on their way back to their office
again. Everyone is urged on by this spirit of haste, and you
frequently hear of sudden deaths which doctors attribute to heart
failure, or some other malady, but which I suspect are caused by the
continual restless hurry and worry. People who are so unnaturally
eager to get rich naturally suffer for it.
It is the general belief that Americans do not live as long as
Europeans. They make money easily and their expectations are high. I
have known many Americans who, in my opinion, were wealthy people, but
they themselves did not think so; in fact, they said they were poor.
Once I asked a gentleman, who was known to be worth half a million of
gold dollars, whether it was not time for him to retire. He
pooh-poohed the idea and said that he could not afford to give up his
work. In reply to my inquiries he informed me that he would not call a
man wealthy unless he should be possessed of one or two millions of
dollars. With such extravagant ideas, it is no wonder that Americans
work so hard. I grant that a man's mission in this world is to attain
happiness. According to Webster, happiness is "that state of being
which is attended with enjoyment," but it is curious to observe what
different notions people have as to what happiness is. I know an
Englishman in China who by his skilful business management, combined
with good luck, has amassed immense wealth; in fact, he is considered
the richest man in the port where he resides. He is a bachelor, over
seventy years old, and leads a very simple life. But he still goes to
his office every day, and toils as if he had to work for a living.
Being told that he should discontinue his drudgery, as at his death he
would have to leave his large fortune to relatives who would probably
squander it, he gave an answer which is characteristic of the man. "I
love," he said, "accumulating dollars and bank notes, and my enjoyment
is in counting them; if my relatives who will inherit my fortune, take
as much pleasure in spending it as I have had in making it, they will
be quite welcome to their joy." Not many people, I fancy, will agree
with the old bachelor's view of life. I once suggested to a
multi-millionaire of New York that it was time for him to retire from
active work, leaving his sons to carry on his business. He told me
that he would be unhappy without work and that he enjoyed the demands
his business made on him each day.
Many a man's life has been shortened by his retiring from business. It
is the mind rather than the body that lives, and apart from their
business these men have no thoughts and therefore no life. A man's
idea of happiness is greatly governed by his personal tastes, and is
influenced by his environment, his education and the climate. The form
which it is to assume may vary with persons of different tastes and
positions, but it should not be carried out for his own benefit solely
and it should not be injurious to his health or to his intellectual and
spiritual improvement, nor should it be detrimental to the interests of
other people.
[1] "To call" in the sense of "to visit".--A. R. L., 1996.