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 in 2016 
 
 https://archive.org/details/reconstruction00vand_0 
 
Reconstruction 
 
 F. A. VANDERLIP 
 
 President 
 
 The National City Bank 
 of New York 
 
 AN ADDRESS 
 BEFORE 
 
 The Convention of 
 
 The American Manufacturers’ Export Association 
 October 31st, 1918 
 
Reconstruction 
 
 The dominating fact that is in all our minds is that 
 peace is coming. The last gun may not be fired tomor- 
 row, but some tomorrow, and that at no very distant 
 day, will mark the firing of that last gun. 
 
 When we entered the war, we knew little of what 
 war meant. We did not comprehend the gigantic ef- 
 fort that we were to make. We did not measure the 
 number of men who would be drawn to the colors. We 
 had no conception of the vastly greater army that 
 would be needed to support with supplies and muni- 
 tions the men who were going to the front. And now, 
 perhaps, we do not estimate truly what the coming of 
 peace will mean, and have not measured the gigantic 
 forces that must be diverted from war work to the 
 works of peace. 
 
 It has been estimated by a high authority that there 
 are needed six and one-half persons back of the lines 
 in gathering raw material, in workshops and in trans- 
 portation for every man who wears a uniform. If that 
 estimate is correct, there are eighteen million persons 
 in the United States engaged in work directly relating 
 to the prosecution of the war. With the coming of 
 peace then there is to be the most tremendous transi- 
 tion in industry that has ever been known in the world, 
 and that transition must take place almost as quickly 
 as did the mobilization of industrial forces for the 
 work of the war. 
 
 Some comprehension of all this is getting into the 
 business mind and it is interesting to note the business 
 psychology of the country. We see a vivid interest in 
 
the outlook for foreign trade. Men have noted the 
 great increase in our productive capacity and recogniz- 
 ing the transition which must come and which at prob- 
 ably no distant time may start overnight with great 
 force, they are naturally beginning to give considera- 
 tion to the future. They are wondering if their prob- 
 lem, which now more than anything else is a problem of 
 obtaining labor, may not suddenly turn into a problem 
 of obtaining tasks for labor to perform. 
 
 One of the most significant results of the war to us 
 has been the financial changes that have accompanied 
 it. In the period from its outbreak to the time that we 
 ourselves entered the struggle, this country bought 
 back of our own securities held abroad about two and 
 one-half billion dollars. It purchased the obligations 
 of foreign governments to a total of some $2,400,- 
 000,000., and now since our entry, our Government 
 has loaned our associates over seven and one-half 
 billions. This with the increase of foreign bank credits 
 makes a total change in our situation measured by 
 about twelve and one-half billion dollars. 
 
 The highest estimate of the amount of foreign in- 
 vestment in this country, of which I know, placed the 
 total at five and one-half billions. We have now paid 
 off that debt, and viewing our position internationally, 
 have seven billions more to our credit. 
 
 The first great trade influence that we are likely 
 to see immediately following the declaration of peace 
 is an insistent demand for food, for raw material, and 
 for certain manufactured products. That demand will 
 be so insistent that it must be met. It will not be con- 
 fined to the belligerent countries, for the war has dis- 
 located commerce the world over. If we are to sell to 
 other nations great amounts of our products, raw ma- 
 terials and manufactures, the question must at once 
 
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arise, in view of existing international financial posi- 
 tion, as to how other nations are to pay for what they 
 need. Whatever is bought must be paid for in some 
 way. A foreigner cannot buy a knitting needle without 
 in some way providing means to pay for it. I know of 
 but three methods by which a foreigner can pay for a 
 purchase. It must either be by the sale of goods to 
 us. by the export of gold to us, or by floating with us 
 in .some form, credit obligations. These devastated 
 countries cannot put their industrial organizations into 
 shape to manufacture any great amount of goods for 
 us in the first year or two at least. Whatever other 
 difficulties they may experience, they are first without 
 raw materials. They must have these before the 
 wheels of industry can be started at all. Certainly they 
 have not the gold to ship, and we ought not to demand 
 it. That leaves the inevitable conclusion that we must 
 absorb foreign credit obligations in payment for a 
 large part of our exports. 
 
 The tap-root of this whole question of foreign 
 trade, in the light of our position as a creditor nation, 
 seems to me to run right down through the capacity 
 of our workshops to manufacture and the efficiency of 
 our labor to produce, and extend on into our ability 
 as a nation to finance the purchases. Unless we will 
 finance them, in many cases the purchases cannot be 
 made, and so your ability to develop a great foreign 
 trade will be circumscribed by the willingness of the 
 country to absorb more foreign securities. 
 
 One thing that the war has shown us has been that 
 we greatly underestimated the strength of our financial 
 position. Our savings, our ability to make new invest- 
 ments, jumped from say six and one-half billion dollars 
 a year to a total this year of fifteen billions. We have 
 seen the greatness of little things in business. More 
 
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than nine hundred millions has been collected in small 
 sums by the sale of War Savings Stamps. Our capac- 
 ity to save is so great that it seems clear that we can 
 probably devote a very large amount of our savings 
 to investment in foreign securities. I believe that the 
 total is not less than three billions a year. The banks 
 and the investment houses have a great role to play in 
 wisely selecting foreign investments and intelligently 
 popularizing them with our investors. 
 
 We are facing a time when there is going to be 
 the greatest need for the wisest governmental attitude 
 toward business and toward this whole subject of re- 
 construction. Are we to continue price control, or 
 shall we have freedom of competition? If foreign 
 buyers are given credit and are permitted free access 
 to our markets, will they rob us of our raw material 
 and leave the workshops bare and the workmen empty- 
 handed? Should the new League of Nations take 
 stock of the whole world’s store of raw material and 
 for a time ration each nation according to its needs? 
 These are all questions of tremendous import and you 
 should have well-considered opinions, for we cannot 
 expect to have the government have sounder judgment 
 than the sum-total of public opinion. 
 
 The problem of demobilization is going to be one 
 of great importance. We have found the operation of 
 the iselective draft to be on the whole satisfactory. 
 Should we now have selective demobilization? De- 
 mobilization may extend over a year and possibly take 
 two years. Should the selective principle, which would 
 bring back into commerce and industrv first those men 
 best fitted and most needed, be applied to the demobili- 
 zation process? 
 
 We have our duty towards reconstruction as clearly 
 as we had our duty towards the war. Let us continue 
 
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to be altruistic. If we render to the world a great 
 service we can rest easy about our reward. We have 
 a great opportunity. Let us see what we can make of 
 this opportunity, not what we can make out of it. 
 
 I wonder if you manufacturers appreciate the great 
 obligation that lies on you? What is the one thing 
 above all else that might prevent present conditions 
 from blossoming into wonderful prosperity? The 
 answer is labor troubles. You may say that labor is 
 too highly paid; that labor must be liquidated. In some 
 instances labor certainly is too highly paid. When 
 riveters and caulkers make $200 a week, as some do, 
 they are out of line with the rewards that others re- 
 ceive. But it seems to me that the thing we must try 
 to do is so to organize industry that labor will produce 
 enough so that it will earn what it is getting. The 
 economic service that you are rendering your country is 
 incalculably great, but you can render a service to 
 society that is on a level with the sacrificing service 
 of great doctors, or of men of learning and of science. 
 We have learned that there are things greater than 
 money making. The solving of this problem that has 
 always been with us, this antagonism between capital 
 and labor, would be one of the greatest contributions 
 that could be made to this country. And you have the 
 solution largely in your hands. 
 
 I want to venture to voice a solemn warning against 
 the danger in this time of crisis of political controversy. 
 I believe the voice of the people should be heard in these 
 days when the questions are of such vast concern. I 
 believe, too, that public servants who have done great 
 tasks well should be trusted. A great task has been 
 well done. Two million men are in France and have 
 turned the tide of battle. Some mistakes may have 
 
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been made, but so far as they were honest they can be 
 forgiven. 
 
 But the problems of peace are, in their way, going 
 to be as great as have been the problems of war. I 
 am not sure but that they will be more difficult. We 
 shall need the wisdom of the whole people to solve 
 them. It is no time for heated partisanship. We 
 should have the deepest consideration and the calmest 
 judgment applied to these problems. On that wisdom 
 and on that judgment will depend the welfare of count- 
 less millions, both inside and outside of this country. 
 
 B4153 
 
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