BANQUET. 367 



But the present Shipping Board, confronted by this condition, far from being discour- 

 aged, feels encouraged, because it realizes that we are now dragging bottom. It feels that now 

 we are going through the lowest period that American shipping will go through. The pres- 

 ent Shipping Board feels that, with the physical assets we have, with the inspiration that will 

 undoubtedly be given to American shipping by President Harding in his administration, 

 American ship operators, bankers and manufacturers will work at one with the Shipping 

 Board in a constructive policy to make solidly for our carrying our full share of our world's 

 trade. Rather than being dismayed by the picture, we feel that we know the worst and are 

 experiencing the worst; we feel that courage and vision must and will solve our problem, 

 since what we are going through is the worst. 



Modern nations must pass through certain well-defined stages in their development : first, 

 the grazing or live-stock stage; second, the agricultural stage; and third, the manufacturing 

 stage. In our vast country, certain parts are today represented in each of these stages of 

 development. We have expanded industry to a geometric ratio ; our manufacturing industry 

 has been increased to meet the demand of an increasing population, not alone by continuous 

 output, but by the additions to manufacturing plants. 



The lack of adequate export markets was beginning to rest heavy on us at the outbreak 

 of the war. With this same war, however, came the truly abnormal demand on our facili- 

 ties, which resulted in a badly ordered, but enormous, expansion of our already top-heavy 

 manufacturing structure ; still further augmented by the period of inflation that followed the 

 short period of depression of the early months of 1919. 



Then the bubble burst, and today we are left with enormous manufacturing capacity in 

 many lines far beyond any possible domestic need, and with such a surplus of food products 

 that the Secretary of Agriculture talks of the possibility of burning com in place of coal in 

 certain parts of the country as an economically defensive proceeding. 



Through the war period cost played little part in foreign trade. Goods could be mar- 

 keted as manufactured ; foreign markets became available because of the fortunes of war far 

 more than through individual effort and energy. Too little attempt was made to hold them 

 by good-will, with the natural consequence that in many directions we have lost ground, until 

 today, except for the export of foodstuffs, we are nearly back on a 1913 basis. 



Now these same exports of foodstuffs are, for us, a temporary stage. Canada, Aus- 

 tralia, Argentine will, in the not distant future, absorb this business, while the nations that 

 fought shoulder to shoulder with us in the war owe us some ten billions of dollars, interest 

 upon which can only be paid in goods or through the extension to them of further credit ; 

 and practically all of these debtor countries are in the manufacturing stage of their develop- 

 ment. It follows that their very attempts to pay their debt to us must make them the keenest 

 of competitors, both in our home and in our foreign markets. In order to pay for our imports 

 of raw materials and of foodstuffs and for the increasing number of valuable articles, many 

 mere luxuries, and to reduce the overhead of our enormous manufacturing establishments, it 

 will be of the utmost importance that we produce industrially to capacity. 



This means strenuous work to develop new and permanent foreign markets for our own 

 surplus of these exports must go to a very considerable extent to undeveloped countries with 

 whom, heretofore, we have not enjoyed a large export trade. 



Even to balance our imports of raw materials, a bulk low-grade outbound commodity 

 cargo must be available. This is our export coal. Its normal market is South and Central 

 America, which not only has no adequate supply of coal, but which must furnish us with the 

 raw materials, nitrates, or linseed and hides necessary for our manufacturers. 



