Chamber of Commerce of the United States

I do not make this statement as a complimentary exaggeration to the delegates of this convention, but as a sober and thoughtful conclusion born of close observation of the many forces at work in our national life.

This development is exhibited in two distinct and radically different types, namely, the organization dealing with a single line of business, either national or in some more restricted geographical division, and the community organization (chamber of commerce) with its later evolution, the State federation.

Nation-Wide Interests.

The crowning achievement of the trade. organization is the creation of a sometimes nation-wide combination of interests, which affords no monopoly except that of good will, and which possesses high potentialities of co-operation without destroying competition or encouraging any of the evils which are so broadly, and sometimes so unjustly attributed to combination.

The community organization achieves in a narrower field of primary interest territorially, but in the fulness of its powers it exerts a beneficial influence upon the whole range of a communnty's business and then proceeds to bring these widely diversified business and professional interests together under the banner of civic patriotism.

These two types of organizations have always been related to each other through the fact that practically every trade organization member is also a member of his home chamber of commerce, but this relationship never reached a point of affiliation between the organizations themselves until the Chamber of Commerce of the United States provided the medium through which their combined influence could be exerted upon those great national questions which so vitally affect business and govern

ment.

Trade Organizations.

Those of you who participated in the organization meeting of this chamber will recall how much of misgiving was expressed with respect to working out a basis for the recognition of both types and for making each equally responsible for the administration of the newly organized body. I have always felt a great debt of gratitude to the national trade organizations for the unselfishness with which they supported the geographical scheme that was there adopted. It did not perfectly fit their case, since they could not with any propriety claim representation in any State group, yet with generous farsightedness they gave the fullest co-operation and have contributed in a very large measure to whatever of success

has been achieved. Now that the permanence of the chamber has been definitely established, I wish to suggest that a review be taken of the representation which this important section of the membership has enjoyed in the executive control of the organization, and if such representation has not been the full measure which should have been accorded, that steps be taken to correct the matter and render full justice during the year 1915.

Perhaps this may be regarded as quite apart from my subject, but it has been on my mind for some time and I cannot conceive a better time or place to raise the question or express my personal feeling.

Benefits of Trade Organization. Prior to the days of modern organization, business was extremely individualistic. Each unit of production or distribution operated without regard to other units in the same field. Misunderstanding and often open antagonism resulted in decreased efficiency and induced competitive methods which brought loss to the competing factors and no permanent good to any interest.

Then came the trade organization, born of necessity, but nevertheless compelled to fight its way against prejudice, selfishness and fear. Its lines of service, however, have become somewhat standardized, and its benefits are capable of being clearly catalogued.

First, it has introduced the personal equation into competition. A very few years ago men engaged in the same line of business had never mingled personally. Insofar as they were competitors they held it impossible to be friends. A competitor possessed no virtues and was not infrequently looked upon as cutthroat, robber and idiot. We all know the innumerable instances of outright enmity which competing factors felt for each other. Competition became open warfare, senseless, wasteful and often destructive. Trade organization introduced competitors to each other; suspicion soon gave way to confidence, enmity to friendship, cutthroat policies to playing the game like good sportsmen; and while competition is as sharp as ever, the bitterness and malignity are lacking, and the fight-to-the-death is a thing of the past.

Second, it has fully established the educational value of co-operation. The birth of a brilliant idea in one brain only reaches its fullest development when vitalized by There contact with other mentalities. never was a trade convention that did not in some particular advance the science of the trade, and the man who to-day denies himself the advantage of discussing his problems in the group loses for his business one of the most profitable products of modern organization.

Third, it has aided in developing the science of cost accounting as a guaranty of

fair and stable prices. The only factor in competition that is now really to be feared is ignorance of productive cost. During the years when our industrial expansion was rioting like an unbroken colt we were subjected:

First-To open warfare competition in which scientific ascertainment of costs did not enter as a controling factor;

Second-To combinations which grew out of the very destructive character of open warfare competition;

Third-To the attempt at monopolistic combinations in which the operating factors were less guilty than the promoting factors for the effort to eliminate competition by strangulation.

As these successive steps have been taken we have learned many useful lessons and to apply many correctives. No need to concern ourselves over the bigness of business. Whatever closely touches the life of a large section of the people, whether it be transportation, finance or industrial enterprise, will be the subject of regulation, and whatever bulks big enough in the public eye to command attention will be the subject of inquiry. Economic law and actual experience will teach us how far regulated combination is sound, and regulated combination will of necessity offer only intelligent and equitable competition. The problem in industrial life to-day is to avoid the unintelligent competition from the small factors not subject to regulation, and trade organization, through its educational campaign on the subject of costs, is performing a valuable national service among this class.

If time permitted I should like to speak of the improvement which trade organization is bringing about in the matter of credit terms and method of credit expansion; in watchfulness of market influences; in creating better standards of treatment of labor; in distribution of statistical information upon the state of trade, raw material supply, visible supply of finished products and probable demand-all of which, as standardized operations, enter into the successful administration of these organizations and assure them an enduring place in the economic life of the nation.

The community organization (chamber of commerce) occupies a wholly different field of action, having not to do with the needs of any single line of business, but relating itself intimately to the entire commercial and civic life of the city.

Now communities, like individuals, exhibit a great variety of characteristic qualities. No two possess the same virtues or the same faults. That which constitutes a remedy for the ills of one may prove disastrous to another. Population, geographical location, chief business interests, predominating nationality or citizenship, temperament and atmosphere, must be taken into

consideration in laying out the work of the chamber of commerce and make standardization particularly difficult, but while complete standardization may be impractical, there are certain ascertained and tested operating plans which, with modifications, can be successfully applied to every organization.

Complete Representation. First-There shall exist as a fundamental requisite to success an absolute democracy with respect to membership qualifications, such as will assure numerical strength and a representation of every phase of the city's life. Two common faults are apparent in a study of some of our community organizations-one, in which the control is held by a limited coterie of the prominent men of the community; and, two, where the organization is made up entirely of men who have not yet achieved place or success, but who are on the way. The first robs the organization of that real power which arises from complete representation, and the second robs it of the power which arises from the co-operation and counsel of successful men. Both types are wrong. Share the control and responsibility equitably between them and immeasurable good will result.

Ample Revenue.

Second-Unless the annual dues charged yield an amount which will guarantee ample revenue for efficient operation, a fatal blunder is made. No organization ever charged too much; most of them charge too little. No member will ever be asked to pay what an efficient organization is actually worth. Annual dues should constitute a secondary tax upon one's real and personal property, and should be paid as promptly as though required by law, though rather more cheerfully. It is probably true that no standard of dues can be fixed that will be generally applicable, even to cities of like population, but there should be no hesitancy in fixing the dues at a figure which will assure efficiency.

These are fundamental administrative measures and if time permitted I should like to discuss two others, namely, the success which has followed a policy of rotation in elective offices, permitting every member who has rendered valuable service to aspire to and attain the highest office in the gift of the organization, and the necessity through appropriate committees of giving a large part of the membership some definite task as the surest way to retain interest and enthusiasm.

Practical Functions.

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I wish to pass now to what may be called the practical daily functions of a munity organization. These functions group themselves into three classes-the commercial, the civic and the philanthropic. Especial emphasis should always be laid upon the commercial activities. These were the sole motives for organization in the early days and must constitute the basic motive of the modern organization if it is to hold its influence and avoid becoming simply a reform movement. I do not advocate the dominance of the commercial solely because of the material results achieved, but because all civic and philanthropic effort must draw its financial support from the wealth created through

successful commercial development, and furthermore, practical, hard-headed sense must underlie this activity as opposed to theory and sentiment which is so apt to become the controling motive in any purely reform effort.

Buying at Home.

In the promotion of commerce and industry the encouragement of intra-market trading offers to my mind a first principle of industrial success. A city whose people have learned to prefer the products made and sold at home to like products made and sold elsewhere has provided itself with the surest guaranty of industrial growth. The responsibility for lack of market loyalty rests first with the producers themselves, and second with the buying public. The distributing medium (the storekeeper) is to my mind least of all a primary factor. The producers are inclined to view the trade that is far afield as more worthy of cultivation than that which lies about their own plants. If they were ready to conduct a consistent campaign having for its purpose the demonstration of a city's own products to its own people, and proving their value in comparison with like products from other places, they would be tak ing the first step toward a high percentage of market loyalty. The second factor in intra-market trading is the education of the people to demand home products, and this is singularly the task of the community organization; nor is this task confined to loyalty to home productions, but rather to that broader field of patronizing home distributors as against the unfortunate tendency to assume that the things purchased in other places are better than those we find in the shops of our own community. Almost without exception where a buy-at-home campaign is started, the burden of carrying it on is laid at the door of the local merchant. This is unjust and should be reversed. His co-operation is essential; his interest lies naturally in preferring the products of local factories, since their development means an increase of labor, retaining the profits of the production entirely at home, and furnishing a greater local money circulation which finds its way largely into the retail shops, but it should be borne in mind that it is his business to supply what his customers demand rather than to dictate what they shall demand.

Industrial Departments. Industrial departments have been commonly organized in successful community organizations over the entire country. The best advertisement for a city will be found in prosperous factories; the poorest advertisement in those dismantled. A city which is found proudly to exhibit its own products and show loyalty to its own factories is assured of industrial success, and new industries will inevitably search out such a city, making the work of the industrial department extremely easy.

Through the organization of trade extension work and through convention bureaus, the community and its products become known over an ever-increasing territory, and thus the commercial advantage of a community becomes cumulative.

Uniting town and surrounding country by bonds of interest and friendship recog

nizes the interdependence which properly exists and adds to the common prosperity by the exchange which must result from such a union.

Civic and Political Types.

Under the head of civic functions we have gradually reached a point where there are two distinct organized administrations in every city-the political, which must always be partisan and which will shift from one party to another as public favor is withdrawn for some good or fancied cause, while the civic administration, which is coming to be represented rather completely by the community organization, owns to no partisanship and remains steadfastly interested only in the general progress and development of the city so that it becomes the one stable and permanent factor offsetting the shift in the tide of political life.

The community organization, because of the relationship which it has singularly. come to hold to municipal government, is the steadying factor in keeping political administrations sound and efficient, and has the advantage of permanency as opposed to the constant change in political administration.

Experiment in Michigan.

In some quarters there is a disposition to combine the civic and political administrations into one. The first experiment of that kind has recently been made in the city of Jackson, Mich., where the president of the Chamber of Commerce is Mayor of the city, and in all probability all five of the city's commissioners are actively identified with that organization. The result of this experiment will be watched with great interest, but I rather deplore a tendency that might lead organizations to seek this sort of responsibility. The highest power, after all, is that which directs rather than performs. If a community organization is to be charged with the responsibility of city government, it thereby loses its power to criticise wisely the faults of administration and some other critical power must rise to take its place. Immeasurable good can come from the maintenance of these two administrations along broad, sane, cooperative lines-first co-operative, lastly critical-willing to condemn if condemnation is necessary, but desiring rather to commend and to assist than to frown upon the projects of the administration in power. When James Bryce uttered his now famous criticism of Our American institutions. "America's most conspicuous failure is its city government," there was just enough justification to make it a plausible catchphrase, but to-day it is much less justified because of the efficient watchfulness of the community organization, and in another decade there will be no ground for such a statement if these organizations continue to perform the advisory function and refuse to be drawn into the actual operation of municipal government.

Philanthropic Activity.

To the community organization the field of philanthropic activity is both prolific of opportunity and of danger. The subjects of interest are limitless-every one appealing, every one worthy-but herein lies the danger lest in the zeal to occupy this fruitful field the underlying principles of com