No. 19.
Mr. Lee to Mr. Seward.

No. 56.]

Resuming the topic of my dispatch No. 36, I have to offer some additional facts and observations, which, I hope, may be of use in pointing out methods for advancing our commercial interests in Germany.

[Page 48]

It must be premised in the beginning that depression of business makes frugal purchasers. That such depression has prevailed in Germany for four years past, and still prevails, is the universal testimony. That it may yet continue for some time to come is quite possible. The disastrous outcome of the grape-crop this year will largely diminish one of the great sources of commercial revenue and means of productive interchange. The failure of negotiations for renewal of the commercial treaty with Austria may deprive many producers of their accustomed market, and throw them back upon the surfeited demands of home consumption. Much depends also upon the course of political events in Europe; the enduring apprehension of war, and the necessity of maintaining an immense armament, constitute a dispiriting incubus upon productive industry. At the same time a protective tariff is threatened, and its possible enactment is a contingency that deserves to be at least considered. A large proportion of the manufacturing element is clamorous for it, and the general complaint of tax burdens, which, no doubt, seem more oppressive under the direct than they would under the indirect system, encourages resort to it as a matter of revenue expediency. A small but continuing deficit in the national exchequer re-enforces the arguments in favor of new and indirect sources of revenue. The cries of labor unemployed mingle with those of manufacturers whose mills are idle, or nearly so, and who are realizing more and more the pressure of foreign competition. Against all this stand a strong free-trade sentiment, the fixed policy of the nation, and the apprehension of increasing the cost of raw material to the manufacturer, and of the manufactured product to the consumer.

The American importer must also be prepared to contend against cheap imitations of his wares. Already such imitations are common in the German market, and they have in some instances impelled our people to fight the imitators with their own class of weapons. But this course is not to be commended, either as a matter of expediency or profit. It injures the general reputation of our wares, and at best secures only a temporary benefit.

Another obstacle to be met is the cheapness of labor, which affords a powerful agency for competition with more expensive, albeit more skilled production; it not only reduces the cost of a given product, but sometimes furnishes an incentive for dispensing with that product. Where labor is so inexpensive there will always be a certain reluctance toward buying the appliances that economize it. There will also exist the jealousy of labor itself against such appliances.

It can be scarcely doubtful, as a corollary from these observations, that an improvement of business in Germany would make her a better customer of the United States, and that until such improvement comes, she will have many powerful motives for frugality in her purchases.

Against these adverse circumstances, however, many others of great force are operating, and will operate in favor of our producers. First among these may be mentioned the abundance of money with which Germany has been blessed, if it may be called a blessing. The empire has a large amount of surplus coin which it is anxious to dispose of to the best advantage. If Americans can supply the articles which are in demand in the German market, there is an obvious opportunity for them to obtain this coin in exchange for their goods. A surplus of the purchasing medium naturally predisposes its possessor to be a purchaser rather than a producer. The German Empire has been subject to the influences of such a condition ever since the French indemnity was paid. She is making energetic efforts to escape from them, it is true, and to [Page 49] restore the necessity of creating values by reducing the means of acquiring them, but the process has not yet been completed, and the currents of trade meanwhile are forming, indeed have formed, new and permanent channels.

At the same time, German industry has not progressed, either in the quality or quantity of its productions, and in attestation of this it is easy to cite an abundance of German testimony. In a memorial recently presented to the chancellor of the empire by German merchants of Montevideo, South America, they say:

The official reports of the German commission to the Philadelphia Exposition have confirmed impressions we have long entertained. It is a fact that German manufactured articles are more and more supplanted in the market by those of other countries, and that, under the influence of competition, German importations are continually lessening. In our opinion, the following are some of the causes which have contributed to this result, and which have been observed in all the markets of the world:

The German manufacturer has not followed the example of his competitors in giving to cheaper articles the finish of superior ones.
He has lacked that progress in taste which his competitors have exhibited.
There is dissatisfaction with his delivery of orders, so far as quality and measure are concerned. His ambition seems to be to make cheap goods of inferior quality, and sell them in large quantities.

The Montevideo importers go on to observe:

The present English calicoes appear to the buyer like the original quality, made before the pressure of the crisis, and French wool hats have the appearance of felt hats, while the German hats and calicoes cannot stand comparison with those of English and French manufacture.

About ten years ago we had here only German dress-goods for sale, but of late we cannot import them any more; the English manufacturers monopolize the market. Recently the English have also been making the French novelties in dress-fabrics, but the Germans have not progressed in this way. On the contrary, they have resorted to the production of cheap goods, of poor material, and unsalable patterns. Besides, nearly all the German dress-goods fail to keep measure, while the measure of English goods is correct, and it follows that when the importer opens correspondence with the manufacturer and complains of short measure, it often ends very unsatisfactorily.

The German manufactures of iron stand well the competition with English and Belgian. Of German wire for fencing, and strap-iron for packing, large quantities are consumed. Wire tacks are mostly imported from Germany, but not always to the satisfaction of the importer. The tacks are sold by weight, and it often happens that four or five times more wrapping-paper is used than by the manufacturers of Holland, Belgium, and France, and that two numbers are put in one package, when only the thinner was ordered.

We have the same complaint to make of chains manufactured from wire. When a particular number is ordered, it often happens that a thicker number of wire has been used, and since chains are sold by weight, it is a loss and damage to the importer.

It is nearly impossible to sell woolen goods, flannels, shawls, tarlatans, pantaloons-stuff, and hosiery by sample, for there is often a great difference between the samples and the goods delivered. Besides, there is general complaint of want of promptness, both in correspondence and in forwarding goods.

Further home testimony to the same effect is by no means wanting, and, like the foregoing, might be equally useful on our side of the Atlantic, both by way of instruction and admonition. Space will not admit, however, of more than one or two more citations. An experienced German citizen, who deals largely in many kinds of machinery, homemade and imported, frankly states that the German manufactures are not only becoming dearer, but “are lacking in finish, and are impractical;”

As illustrating this point, as well as others to which reference will be made, the same gentleman’s statements may be quoted in this connection, as follows:

Forks for handling hay, straw, and manure, though distrusted at first, now forma respectable item of importation from the United States.

About ten years ago I brought these implements over from England, and found great [Page 50] difficulty in introducing them, because, in the first place, the German farmer sticks to old custom and likes to oppose innovation. Higher prices increased the difficulties. However, the forks came gradually into use. A German house soon imitated them, and its prices being much below the English, I was obliged to buy a large quantity in order to meet competition.

This state of things did not last long. The German house had used German wood for the handles, while the English had employed American wood, and in a few weeks I had so many complaints of breakage of the German handles that I had to give them up altogether. I now applied to the United States, and obtained excellent handles from a very good firm; but even then they became too expensive, in proportion, and, as people began to get used to American forks, I imported them in considerable quantities from an American house. The example was soon followed by other firms of the United States, who overstocked the market with trash at very cheap prices, sent travelers in every direction, and at last created a complete distrust with regard to American forks.

The report of the imperial commission to the Centennial Exposition may be cited in confirmation of these statements, so far as they indicate the condition of German manufacturing industry. That there has been a great decline in the quantity of manufactured products is still more demonstrable. On this subject, especially as relates to the past twelve months, the following expressions are given by twelve leading manufacturers in various parts of Eastern and Southern Germany:

1. Production one-fifth less than in 1876; 2. Production one-third less than last year; 3. Production has increased; 4. Production 20 per cent. less than last year; 5. Production less than last year; 6. Production same as last year. If workmen have been dismissed, those remaining have worked harder. Where time has been reduced production has been diminished; 7. Production 20 per cent. greater than last year; 8. Production one-third less than last year; 9. Manufacturers continually discharging operatives; 10. Production about the same as in 1875; 11. Working hours reduced one-third. Production one-third less than last year; 12. Make 20 per cent. fewer machines than last year.

So large a decline within the past year, as the majority of these statements indicates, preceded, as it must have been, by a corresponding previous decline of much duration, would seem to strongly confirm the view that the period of overproduction has substantially passed. There may, indeed, be still a surplus of cheap, shoddy goods in the market, but that is scarcely so much overproduction as abnormal or diseased production, and cannot be considered a very formidable element of competition with superior articles offered at proportionately equal or lower prices. It is therefore a justifiable hypothesis, to say the least, that a market in which production has so greatly declined in quantity, and has either not progressed, or has deteriorated in quality, is prepared for the reception of new, improved, or superior wares of American manufacture, and may profit by their introduction.

The American producer has in his favor another important consideration, which was briefly suggested in a previous dispatch. The large German-born population of the United States, and the friendly relations which have so long existed between the empire and the republic, naturally predispose the German people to a like friendly feeling with regard to our productions. It may be said, indeed, that as our country is the favorite resort of the German emigrant, and our securities the favorite investment of the German capitalist, so our products are, of all foreign kinds, pre-eminently the favorites in the German market. The articles themselves have mostly created, and have generally well sustained, this favorable opinion; and it is of the highest importance to American interests in Germany that they should sustain it equally well, or even better, in the future.

The great variety and undeveloped extent of American resources also [Page 51] add much to the chances of improving our trade in this part of the continent. Germany is not a country of extraordinary fertility. In minerals, in agriculture, and in the mechanic arts, the United States possess many advantages not known here, or at least not in the same wonderful variety and profuseness. American labor is not distracted, and confused by the same military contingencies, nor hampered by the same poverty of opportunities, and industrial energy being at once more free and more concentrated, is also more progressive. With greater resources, incentives, and possibilities, it would be strange if we were not able both to supply wares not produced here, and to excel, in many respects, those of continental production. This is both reasonable and natural, and it is a fact which is generously appreciated in Germany. It will be much in our favor if we shall not fail in a similar appreciation of the respects in which Germany possesses resources peculiar to herself, and in such it is to our advantage to patronize her artisans.

As to the measures by and the specific cases in which our countrymen may avail themselves of the foregoing favorable conditions, there is as great diversity of opinion as there is great room for it. Question a German on this subject, and in nineteen cases out of twenty the stereotyped reply will be, “Reduce your high protective tariff and you will improve trade both ways.” As to this suggestion, I have to repeat the remark made on a former occasion, that if our manufacturers can produce articles better, and, on the whole, cheaper than they can be produced here the Germans will buy them without thinking of our tariff. In other words, they will not allow their prejudices against our protective system to stand in the way of their pecuniary interests. Yet there is much ground for the belief that some concessions to the German feeling in this regard may now be profitably made, and with mutual benefit to the two countries. To such raw materials, for instance, as can be more cheaply produced in Germany than in the United States, this remark may be especially applied. It is further applicable to such articles as we cannot make for want of materials. To suggest such articles or materials is, perhaps, unnecessary, as the American manufacturer must have better advantages for forming an intelligent opinion on this subject than any one not directly engaged in manufacturing.

Among all measures that can be suggested for improving American trade in Germany, and in Europe generally, none seems to be of such pressing necessity and great utility as the return to a fixed standard of values by our government and people. Indeed, I should regard this as the one indispensable condition to the proper development of American interests on this continent. By fixed standard is meant, in this connection, one that is placed beyond the reach of artificial fluctuations in coin no less than in paper, whether by virtue of our own legislation or the speculative enterprises of foreign individuals or governments. The advantages of such a standard appear so obvious from this point of view that it seems superfluous to suggest them. A chance observation-of the currents of trade is sufficient to show that in this part of the world one of the chief obstacles to American commerce has been the incessant fluctuation of prices, evidently due to the fluctuation of our currency. The American exporter has been, and still is, obliged to fix his prices at a standard high enough to cover risks of such changes of values between the time of receiving orders and that of filling them, and has therefore been placed at a great disadvantage with the German exporter, by whom the cost of production and the margin of profit could be safely calculated for months beforehand. Many similar considerations might be mentioned, but they are such as every intelligent [Page 52] manufacturer must be already familiar with. Only this further suggestion may be made, that the German importer naturally prefers to deal with a country whose standard of values is fixed, and which does not expose him to loss on large investments by enabling his competitors to avail themselves of sudden currency fluctuations.

Another condition of success in the German market, as in any other, is, that it shall be carefully studied. It has its peculiarities, growing out of the habits of the people, their system of finance, and the physical and political character of their country. American or other foreign dealers who undertake to supply such a market directly from home fall into a multitude of misapprehensions and mistakes, and the profitableness of their ventures is a mere matter of chance. On the other hand, if they commit their business wholly to foreign agencies, they are at the mercy of others over whom they have little control, and who, though perhaps entirely responsible, cannot be expected to take the same interest in selling an article that the owner does. As between these two extremes there is, perhaps, a safer and more advantageous ground. If the American producer could extend a personal or modified supervision over his agents abroad, there is scarcely a doubt that it would inure greatly to his advantage. As to his best means of doing this he may, of course, have his own views, and must be governed largely by his own circumstances. This suggestion may, however, be ventured, that if a profitable trade of any kind is expected in Germany, it is worthy of some special expenditure and effort. Time and patience, as well as money, may be required to build it up, and neither hired nor volunteer agents, who have no direct interest, can be expected always to accomplish the most that might be done in this behalf.

The Germans, in their dealings with foreigners, are not fond of a circle of intermediaries. They prefer to get as near to the original individuals with whom they deal as circumstances will permit. Greatly attached to their own customs, they are not more readily reconciled to foreign innovations by receiving them at third or fourth hand. In any case, they wish to have time and opportunity to thoroughly investigate before they purchase, and to try a new article before discarding an old one. They like also to be sure that the dealer who offers it to them is responsible, and stakes a reputation, at least, upon the good faith of his pledges. It is of great advantage to the seller, on the other hand, that he should know how to avoid offending the prejudices of the people and begetting their mistrust.

There seem to be two feasible plans of accomplishing these objects. One is that of erecting branch establishments on the continent, when the business will justify it, and the other, that of permanent co-operative depots for the exhibition and sale of American goods. The latter plan was suggested in a previous dispatch, and subsequent observation has strongly confirmed the impressions on which the suggestion was based. Depots of this kind, each combining several interests, would certainly cost much less than the erection of separate branch establishments for each interest. Such a depot in Frankfort, for instance, would attract great attention, as, indeed, the bare suggestion of it has, and would place American fabrics before the inspection of both wholesale and retail dealers from all parts of the empire. It would afford the opportunity for examination and trial which is so important. It would be as much as to say, “We covet the inspection of our wares, and only desire that their merits may be understood.” It would bring the American manufacturer into direct, or almost direct, contact with the people here, and be to them a continual assurance of responsibility and [Page 53] good faith. To Americans it would be in the nature of a school for the study of the German market, and to Germans a like agency for instruction in the merits of American production. It would enable the Germans to see what we have to sell, and the Americans to see what they may profitably buy in Germany. Its effects would be in kind the same, but in degree greater than those of a State fair, or an international exposition, because its influence would be more permanent and more directly applied. Considering its duration, its expense would be even less than such an exhibition, and the commissions, not to say the losses, it might save would doubtless more than bear the expense of its maintenance.

The details of organizing such an establishment could be safely left to the business tact and judgment of those who might choose to undertake it. There seems to be no objection to combining within the scope of its operations any number of interests not antagonistic to each other. It might be organized as a joint-stock concern, or on the co operative principle. Two things are indispensable, first, that it shall be undertaken in no spirit of speculative adventure, but as a legitimate business transaction; and second, that all shoddy wares shall be inexorably excluded from the scope of its operations. It may be simply a warehouse for exhibition, or also an agency for taking orders, as may prove best. It need not deal directly with retailers, and does not imply that all agencies and middle men are to be dispensed with. On the contrary it may make such agencies and middle men more useful than ever by bringing them under more direct supervision of their employers.

Since this matter was first suggested in my dispatch No. 36, many notices of the suggestion have appeared in the German press, evidently derived from American newspapers, and doubtless emanating from information given out by the Department. Many letters have consequently been written to this office in regard to it, and many personal inquiries have been made. But in no instance has objection been made to the project, except on the part of agents who feared that it meant the loss of their occupation. A sample expression of this latter kind is herewith forwarded.

In harmony with these suggestions, and as a further means of advancing American trade in Germany, and in Europe generally, may be represented the importance of a creditable exhibit of American products at the approaching French International Exposition. The gravity of this matter can scarcely be overestimated. Through the reports of European visitors to the Centennial Exposition, our people have established a reputation on this side the Atlantic as skilled producers, which it is of the hightest importance for them to maintain. There are indications that great efforts will be made by Germany to redeem herself at Paris from the unfavorable impressions that have grown out of her Philadelphia showing. Should our country make a feeble exhibition of her products beside the good one which Germany is likely to make of hers, our producers must be greatly injured, and the good things that have been said of them will be largely discredited. Any stint of expenditure, therefore, whether public or private, which prevents a first-class American showing at Paris, will be short-sighted in the extreme.

Spurred by outside competition and formidable rivalries, Germany will probably herself hold an international exhibition within the next five years. Already suggestions are made to that effect, which show that the necessity of doing the utmost to maintain and improve the reputation of German manufactures is being realized.

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As to the particular branches of production in which American trade may be improved, many suggestions given; but all are more or less hypothetical in the absence of experiment. No doubt actual effort to increase trade would show the increase to be practicable where it is little dreamed of now, and impracticable, perhaps, where it is most expected. The exhibition plan, which has been suggested, would afford the best and cheapest opportunities for bringing this matter to the test. The Germans would no doubt largely develop their own wants and demands after having a better chance to see what we have to sell. Meanwhile, as a basis of opinion, some information may here be given as to the condition of particular branches of industry and of American trade in this part of Germany.


Large quantities of this commodity are manufactured within the district of Frankfort and Mayence, and the exports to the United States were formerly very large. But the enterprise of American tanners has reversed this state of things, so far as the heavier leathers are concerned. Copies of two letters, marked respectively C and D, are hereto appended, the first being written by a prominent leather-dealer of this city, and the second by a leading leather manufacturing firm of Mayence. These letters are significant of the prevailing views of the classes of persons which the writers represent as to the present condition of the German leather trade and production, and as to the relations of American competition thereto. The loss of our market for the heavier leathers, aggravated by the strong competition of our manufactures with those of Germany, on their own ground, has naturally caused much chagrin. But this can be no longer helped. The reverses in the currents of our leather trade are permanent, and the German manufacturer, recognizing this, would be content now if our duties were lowered on the finer leathers, in which he claims to be able to surpass us as to cost and quality. He argues, as usual, that the reduction of duties would be a mutual advantage to both countries, and the course by which he reaches this conclusion is sufficiently indicated by the letters already cited.

The production of leather does not seem to have been prosperous in Germany during the past year. One firm attributes this to “overproduction,” another to the fact that “raw hides cost so much,” and another to “American competition.” Perhaps all these causes have operated together. Producers of lac-varnished calf-leather, it is said, have lost money, while the small tanneries have had most profit. When exports to the United States fell off, a market was sought and found in England. Imports of oak and hemlock leather from America, for saddlers’ purposes, have steadily increased since 1872. The German tanners have, in consequence, petitioned their government for an increase of duties on leather of all sorts, but no increase has yet taken place.

agricultural implements.

In this branch of manufacture the Americans indisputably lead Many reaping and mowing-machines, horse-rakes, and a large variety of harvest hardwares are sold in this city, all of American manufacture. The testimony of dealers is that the American machines and tools easily out-sell the German of the same kind, though there is some objection to our reapers on account of their apparently greater weakness of construction. [Page 55] Cologne, also, is a good market for our implements of agriculture. In Frankfort, of late, the demand for steam-engines and iron machines has somewhat lessened, but there has been a good call for milling and grain-cleaning apparatus, of which there has been a considerable export to Russia and Rournania. Reapers and mowers are but little used in this immediate neighborhood, owing in part to the division of the land into small tracts.

As pertaining to the sale of agricultural implements, and illustrating the mistakes liable to be made through misapprehension of this market, reference may be made here to an advertising circular, to which my attention has been called, sent out by an American firm. The circular is intended to advertise a new horse-rake, of which the advertisers are proprietors, and undertakes to commend the article to the German mind by representing it as drawn by a magnificent tiger, driven by a gaily dressed young woman, the whole pictured in brilliant colors. The circular is a well-meant pleasantry, which would be readily understood at home, but here its effect is to stamp the machine as a humbug, rather than to commend it.


The principal American sewing-machine companies have extensive agencies in Frankfort, and seem to be doing a satisfactory business. In and near this city are also manufactured from 16,000 to 18,000 German machines every year, the establishments employing several hundreds of of workmen. The production of these establishments last year was about 20 per cent. less than in 1875, and the prices of their machines about 15 per cent. less.

boot and shoe machines.

The New England inventors and manufacturers of these machines are represented by a branch establishment in Frankfort, from which large numbers of their contrivances are being sold in all parts of the empire. This enterprise illustrates, indeed, what may be accomplished by Americans in Germany by a careful study of the people, and by a patient and intelligent effort to build up a business among them. The establishment is managed by native Americans, who have learned the German language while prosecuting their business.

wooden ware.

Americans have a great advantage in this line of manufactures on account of the abundance and superior quality of their woods. Our bent work, so largely and successfully made in the West, would scarcely have a rival here. The toughest and best kinds of wood used for articles of that class do not grow in Germany, and even the commoner varieties are by no means so plentiful as with us. No doubt the sale of our general articles of wooden ware could be largely increased by proper effort.

stoves and pumps.

In this line there is some demand for American products, but the styles of articles now in use have become so imbedded in the habits of the people that any change, even in the way of improvement, is very difficult. There is no telling, however, what continued perseverance in the offer of superior wares may accomplish.

[Page 56]

furniture and kitchen-ware.

Generally the American styles are not suited to the German market because of the different modes of cooking and living. There are, however, some exceptional conveniences of the American kitchen and household which the people here seem to like, and which might no doubt find a profitable sale.

rubber goods.

These and kindred articles of American make have been favorably received in Germany, and doubtless the trade might be considerably increased.


The principal continental supply of these fabrics is obtained from Alsace. American shirtings have been profitably sold in Frankfort for two years past, and are found to be cheaper than the English. They well hold their place in this market, and, as there is much demand for them, their sale will probably increase. American shirtings are being extensively introduced also in other parts of Germany.


The sale of American silks has been tried here, but complaint is made that they are dearer than those of Lyons, Crefeld, and Switzerland.


In this line there would seem to be a chance of successful competition with the English article. The very low cost at which the best prints are now made in the United States encourages this idea, and the chances of its success are certainly worthy of a fair test.

dairy products.

It would seem that the cheap and enormous pasturages of our Western States ought to enable us to export the products of the dairy profitably at the prices they usually bring here. In this part of Germany the supplies of cheese are drawn chiefly from Switzerland, Bavaria, and Würtemberg. The article is also imported from Austria, France, Belgium, Holland, and Italy. In Saxony and Holstein are extensive manufactories of cheese, but their product is not consumed in this neighborhood. A large amount of Swiss cheese is exported to America, but the American article does not appear to be familiar to the continental market. The coin prices of butter and cheese in Frankfort and Mayence during the past year have been as follows:

Swiss cheese, per 100 pounds, $22.32 to $23,50; per pound, retail, 28 cents.

Bavarian cheese, per 100 pounds, $18.80 to $19.95; per pound, retail, 22½ to. 23½ cents.

Limburger cheese, per 100 pounds, $10.81 to $12.92; per pound, retail, 13 to 16½ cents.

Butter per pound, wholesale, 24 cents; retail, 28 to 30 cents.

Butter is said to be 25 per cent. cheaper than last year, on account of its reduced consumption on the part of working people deprived of employment. There is no trade in American butter or cheese, but it is the opinion of intelligent dealers here that these articles might be successfully introduced.

[Page 57]

indian corn.

This alone of American cereals is unfamiliar to Germany. The effort to make it better known seems quite worthy of trial, and might prove a profitable experiment.

dead meat.

The American dead-meat trade in England has attracted attention all over Europe, and its success there justifies the expectation that it may yet be extended to this continent. Delivery of the meat at Rotterdam, its transfer there to refrigerating Rhine-steamers, and its conveyance to the markets of Cologne, Coblentz, Mayence, Frankfort, and Mannheim, does not, in the light of experience, seem to be beyond the range of possibility.

canned goods.

The canned meats of Chicago are familiar to this market, and may be seen in the windows of every grocery. American fruits and jellies are extensively sold. There is evidently a large and lucrative field in this business for those who know how to improve it.


In a national convention of watch manufacturers held at Wiesbaden recently, the following declarations were made: “The International Exposition, at Philadelphia, has shown that the Americans have, within a few years, established-watch manufactories in their country, which, with their energy and use of machines, have superseded the Swiss watch industry for cheap watches. There is every reason to believe that the Swiss manufacturers cannot any longer compete with the Americans, and that they are almost forced to adopt the American system of fabrication.”

petroleum lamps and pendants.

These articles of American manufacture are now having a fair sale in this city. The same is true of some varieties of gas-fixtures, and nickel-plated ware.

cider and wine presses.

It is quite worth while to try the market with these wares. There is certainly great use for them.

carpenters’ tools.

In the improved styles of American make there ought to be a large sale, and doubtless would be if the mechanics could be persuaded to discard their own inferior appliances.


These articles, brought from the United States, are extensively sold here, in spite of the formidable competition and the admirable varieties made in Germany.

dental instruments.

The American inventions and patterns are unequaled. They ought to monopolize this market.

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Scores of other articles might be added to this list which are either now sold in Germany, or might be, or the sale of which might be greatly increased were their merits properly made known.

Appended to this dispatch are copies of five letters, culled from an extensive correspondence, and which are marked, respectively, A, B, G, D, and E. The first two are written by gentlemen of rare intelligence and large business experience, and contain valuable suggestions, to which the attention of the Department is respectfully invited. Those marked C and D are given as illustrating the views of well-informed manufacturers and dealers in leather with regard to their interests, and that marked E is appended as the single unfavorable expression that has come to my knowledge with reference to some of the suggestions herein presented.

I am, &c.,


[Inclosure 1 in No. 56.]


We never have strikes, for our district is not, properly speaking, a manufacturing one. Dismissed workmen nearly always look for employment in small shops, or become laborers at buildings, &c. They seldom look for work in the country, where there is a great want of workmen. The country people dislike the town and city workmen, and the latter dislike life in the country, which is frugal and wretched.

The law and the custom require that employer and employed shall reciprocally give fourteen days’ notice before terminating a labor contract. [This is the all but universal method of engaging laborers and artisans in Germany. Written contracts are very seldom made.—A. E. L.] Workmen have a given time for breakfast and other meals. There is very seldom any stipulation as to obligations of the master to the workmen.

Meat is higher in price this year than it was last. Bread is cheaper. Potatoes and vegetables are 10 to 20 per cent. lower; while clothing and rents are the same as last year. Clothing cannot be made cheaper, because the merchants lose too much by giving credit, and have to make it up on those who pay. Well-organized consumption-societies, with honest management, would be the only manner of releasing a large part of the workmen from their miserable lot.

* * * On the whole, production is about equal to that of last year. Where workmen were dismissed, those remaining have worked harder. In some branches there has been a reduction of time for labor, and in such cases production may have been less. Its amount, however, is not always proportionate to the time occupied by the laborer. Two men, for example, who work twelve hours will not accomplish as much as three men who work eight hours. Only at the rate of eight, or, at most, ten, hours’ employment per day can the workmen accomplish the best results.

The perpetual apprehensions of war, on the part of the people, and of social troubles on the part of the government, depress trade. Since nobody expects much from the future, nobody allows himself a luxury. This is instantly felt in the workshops, where even workmen drink poorer coffee and use poorer cigars than ever before. People lessen their wants in all directions, and therefore manufacturers try to make cheaper wares, and make them poorer. Consequently all manufactured articles have depreciated in every respect during the last four years. With exception of those who gamble on ’change, nobody gains anything. If the continual rattle of arms would cease, and the social question were earnestly considered, confidence would soon resume its old place, and trade would flourish.

The government, too, may accomplish much by exerting itself against all kinds of dishonest business, and aiding those who try to elevate trade by honest means.

* * * As to American trade we would suggest—

If the United States would resume payments in gold coin, this would be the best means of increasing trade between that country and Germany.
The United States Government should reduce the enormous customs duties which it has placed on so many articles. No article except brandy, opium, and similar commodities, which do only harm, should be subjected to a higher duty than 20 per cent. [Page 59] Any article which needs more protection than that is a hot-house plant, not worthy the care of the great and rich republic.
The use of bills of lading, such as have been introduced in the English colonies. Under this system the orderer does not receive the goods before he has paid the bill of exchange, and of course it is made impossible, in this way, to give credit across the ocean. It is plainly not the duty of a German manufacturer to give the use of his capital to an American customer to help the progress of the latter’s business. If the American customer needs credit, he should be able to get it from bankers at home. In this manner business can be done directly by an agent without capital, between producer and consumer, and there is not half as much risk for the manufacturer as under the present method. It is also from this manner of payment that all German articles can be had for nearly the same price in the wholesale stores of Calcutta, Melbourne, &c., as in Berlin, Breslau, or Munich. A great many English and colonial banks live entirely upon the discount of such bills of lading, and to the honor of English merchants it must be said that there has never been a fraud committed by giving an order on a fictitious person.
To introduce more American articles into Germany, it would be well to have American warehouses in Berlin, Leipzic, Breslau, Cologne, Frankfort, Stuttgart, and Munich. From these points all parts of the empire could be easily reached. By this arrangement the American producer could, with greater security, have a larger profit, for the present losses by discounts, agents, shipmen, &c., would be saved.

American manufacturers should also send representatives to the fairs of Frankfort and Leipzic with samples. At the Leipzic fair collect wholesale merchants, not from Germany only, but from Austria, Russia, Roumania, Servia, Scandinavia, Holland, and Switzerland. Frankfort-on-the-Oder has three fairs, not only for all Germany, but for Poland and Russia.

[Inclosure 2 in No. 56.]


The import of American articles of industry into Germany has been slowly but steadily increasing, and it seems as though the two countries might, in future, reverse the trade relations that have heretofore existed between them. Ten years ago North America was the best market for German goods, but now such articles mainly find their way across the Atlantic as are not yet manufactured in the United States. The Americans are already sending to Germany many articles of their skill and invention. American machinery and tools, particularly, are much in demand here, and have been brought over in large quantities.

The superiority of the American people, as a manufacturing nation, over all nations of the Old World, particularly in the mode of working, has been clearly proved by the Centennial Exposition in Philadelphia. The comprehension of this fact can be found in almost all the reports of the European commissioners to their respective governments. The consequence has been that the German authorities, and all classes concerned, are discussing the measures to be taken to protect the industry of this courrtry against a new and powerful competitor.

It has been further understood that one of the main reasons for the decline of German industry has been the want of a useful and practical patent-law. This omittance has now been recovered. The new German patent-law, which has now been in existence since last July, is mainly formed after the patent institutions of the United States, and gives full protection to the inventor and patent owner. Others have proposed the introduction of a protective tariff, but this scheme has not found the support of the people.

It cannot be doubted that the exertions now everywhere made to elevate German skill and industry will have good effects, and will assure to this country an important position among the manufacturing nations of the globe.

As far as the products of agriculture are concerned, the question of importing from America is settled by the price at which such products can be brought to the European market. American grain, flour, meat, and raw materials of various kinds are brought over here in large quantities, but I think the import of farming products could be still further increased if the American railways would reduce their freight-tariffs from the Western States to the Atlantic seaboard. In recent years American preserved meats, fruits, and other delicacies have been introduced in this country with good success. The more such articles become known, the more the consumption of them must increase, if sold at prices proportionate to those paid here for similar articles.

American shirtings have also been brought over here lately, and their quality has proved satisfactory.

[Page 60]

The trade in American machinery and tools has been increasing yearly; but, owing to their high prices, they have been imitated by German manufacturers, and this German make is now preferred here at low prices. American manufacturers should therefore not fail to have their inventions and improvements patented in this country, and should also endeavor to introduce their goods at the lowest possible prices.

Some of the American manufacturers of agricultural machinery and of sewing-machines have established themselves in Hamburg, Berlin, arid other German cities, and are doing an extensive trade, dealing directly with consumers. This plan is to be commended where it is necessary to introduce an entirely new article, as agents and commission-houses seldom undergo the trouble and expense which are unavoidable in such cases. I, myself, have brought over from the Centennial Exhibition a large variety of improved American articles, household implements, improved cooking-stoves, machinery, &c., but have found the introduction of those articles to incur great trouble and expense. The people here are prejudiced against novelties and improved implements which differ too much from their own, and the introduction of such articles will always prove to be a failure where the task is left to agents an d’com mission-merchants. Time and constant explanation are necessary to convince the people of the worth of a new and improved article. Every province of this country has its own style of implements and tools.

The prospects of American exports to this country depend mainly upon the price at which American goods can be sold here, upon the manner in which American inventions and implements are introduced, and, lastly, upon the position which German industry will occupy with relation to American in future years.

[Inclosure 3 in No. 56.]


The export from Germany to the United States in upper-leather, such as calf, kid, and goat skins, was very large up to 1867, and ten years ago had reached an enormous amount. From that time, however, it decreased, and became less year by year, so that to-day the export is limited to a small portion of the above.

Asking what may be the cause of this rapid and astonishing change, I find that the principal cause lies in the great progress of the American leather industry within recent years.

The American manufacturers worked with gigantic energy and progress to raise the leather industry to the greatest possible perfection, and they have now advanced so much that the former supplies in imported stock are now covered by home production, which not only seems to give perfect satisfaction as to quality, but can be sold cheaper-than the foreign leathers.

The manufacturers of the United States are completely protected by a high tariff, which even to-day taxes German leather 20 to 35 per cent. If the Americans would reduce this duty, it would yet be possible for Germany to take up again the export of some of her very fine and light leathers, and such goods as this country has natural advantages for making in her line raw material and cheap labor, and in the manufacture of which machinery is but little used.

There exists a bad feeling among our leather manufacturers on account of the high American tariff, and although the export of heavy upper leather is lost to us, yet it might be that with a reduction of the United States duty we might be able to regain some of our export in lighter stock. For this reason it is desirable that America should reduce her tariff to the level of that of this country, the more so as the States are flooding us with their hemlock, oak, sole, and all sorts of heavy upper-leather for shoe, carriage, and harness manufactures, all of which enter under a tariff of 3 to 5 per cent., while America, as stated, keeps hers at 20 to 35 per cent.

The statistics of exports from the United States show an immense quantity of leather shipped regularly to this country, and it is my opinion that nothing can prevent the increase of this trade so long as Germany does not raise her tariff. It seems to me, therefore, that it would be to the interest of the United States to reduce the present tariff to a level with that of this country.

[Inclosure 4 in No. 56.]


In the United States there is hardly one branch of industry that is more favored by natural advantages than the fabrication of leather. The country produces the largest [Page 61] quantity of hides’ and skins, and of the best quality. The production of bullock-skins, for instance, is so considerable that the country needs but one-third of the product for its own use.

The second important factor in the fabrication of leather is the tanning material. There is no country in the world that is as rich in such material as the United States. The quality of the different kinds of barks, and of the plants that contain tannin, is so excellent that, in spite of the high freights for so cheap an article, it competes effectually with its rivals in the European market. We ourselves have imported American sumac via Bremen, and oak-bark by way of Hamburg, although the freight was more than a third of its value.

Hides and tanning-materials constitute the most that is wanted for the fabrication of leather. The wages paid for making sole-leather and upper-leather are of small importance compared with the value of the article, and even if the cost of labor were 25 per cent. higher in America than in Europe, this element would make a difference of only 1 per cent. in the value of the leather.

These facts show, we think, that no country has advantages superior to America for this branch of industry. Why is it, then, that the American tanners want so much time to take advantage of their favorable situation? Why has American leather been exported to England, France, and Germany only within recent years? The answer is, because the tariffs are too high. The fabrication of sole-leather, and of common upper-leather, is so simple that not much intelligence or attention is necessary to produce a good quality. But the American tanners have had no inducement to try to reach higher scopes. They always found purchasers enough for an inferior article. If the tariff were reduced, American leather would soon grow better in quality and cheaper.

Finer leathers, especially such as are wanted for the fabrication of pocket-books, are, in spite of the high duties imported into the United States. This industry has greatly increased within a few years. Women and children find an easy and compensating occupation in making such wares. But the high duties make the material too dear, and impede the industry. The American manufacturers want fine leather for fine articles, but cannot get it in their own country. They therefore get it from Europe, good and cheap; but before it comes into their hands the duties have made it so costly that the articles made from it cannot compete with those of other countries.

Varnished calf-leathers, for boot-makers, are only used in small pieces for borders of elegant ladies’ shoes, and although the high tariff of 35 per cent. does not prevent their use, it makes the manufactured article so dear as to lame the shoe industry and export trade.

The European shoe manufacturers are behind the Americans in the use of machines, and there is no doubt that the Americans would surpass the Europeans in cheapness of the manufactured article if they could get their material cheaply, and without duty, as the Europeans do. The revenue derived from the tariff is no equivalent for the damage inflicted upon this great branch of industry.

The cheap sole and upper leathers enable American shoemakers to furnish half the world with their excellent article, but as long as the finer articles are not as cheap as the European, Europe will not take its supply of shoes from America.

[Inclosure 5 in No. 56.]


I am sorry to see that the consul (at Frankfort-on-the-Main) thinks of bringing the manufacturer into contact with the retail buyer. I am sure it will not benefit American industry to import here by samples. I hope the plan does not contemplate consignments. I know from experience that no first-rate manufacturer will consign goods. Consignation of goods is always the first step one takes when he intends to run away.

What I have seen of American manufacturers has given me these impressions, and they are more their ideas than mine. The better class of them hate all retail business and let the business of selling their goods go to the dealer. These conditions enable first-rate responsible houses to take up the American import trade.

How are the accounts to be settled which are brought about by an exhibition? No firm, not even a German one, can, according to the rule of commerce, pay for goods unless they are in its house. Must the American manufacturer sell on credit? Where will his stability remain when his accounts are scattered all over the country? I think England has occasion to repent that she went into the retail business-and so lost her hold on the wholesale trade. Through retail selling, the English trade has lost its predominance. Every one takes what he can get, and they cannot sell as cheap as formerly, because the manufacturer must now keep up the appearance of a merchant, [Page 62] which costs money. His time is so absorbed in mercantile transactions that he cannot pay proper attention to his manufactures.

I think American industry will not be profited by this plan. I acknowledge that the United States consuls do more for their countrymen than the German consuls in the way of giving them useful hints. But experience is required to find out what is wanted and what is not.