EXPORT TRADE DIVISION OPERATION OF THE EXPORT TRADE ACT Under the export trade act (Webb-Pomerene law) of April 10, 1918, the commission is given jurisdiction over combines or "associations" organized for the purpose of and solely engaged in the sale of goods, wares, or merchandise exported or in the course of being exported from the United States to foreign countries. Fifty associations filed papers with the commission during the past year: American Corn Products Export Association, 17 Battery Place, New York City. American Locomotive Sales Corporation, 30 Church Street, New York City. American Milk Products Corporation, 71 Hudson Street, New York City. American Paper Exports (Inc.), 136 Liberty Street, New York City. American Pitch Pine Export Co., 522 Audubon Building, New Orleans, La. American Provisions Export Co., 112 West Adams Street, Chicago, Ill. American Soda Pulp Export Association, 200 Fifth Avenue, New York City. American Spring Manufacturers' Export Association, 921 Farmers' Bank Building, Pittsburgh, Pa. American Surface Abrasives Export Corporation, room 1309, 82 Beaver Street, New York City. American Textile Machinery Corporation, 24 Federal Street, Boston, Mass. American Tire Manufacturers' Export Association, No. 7 Dey Street, New York City. American Webbing Manufacturers' Export Corporation, 395 Broadway, New York City. Associated Button Exporters of America (Inc.), 1182 Broadway, New York City. Automatic Pearl Button Export Co. (Inc.), 301 Mulberry Avenue, Muscatine, Iowa. Cement Export Co. (Inc.), care of Charles F. Conn, president, Pennsylvania Building, Philadelphia, Pa. Chalmers (Harvey) & Sons Export Corporation, rear 31 East Main Street, Amsterdam, N. Y. Copper Export Association (Inc.), 25 Broadway, New York City. Davenport Pearl Button Export Co., 1231 West Fifth Street, Davenport, Iowa. Delta Export Lumber Corporation, 908 New Union & Planters Bank Building, Memphis, Tenn. Douglas Fir Exploitation & Export Co., 1125 Henry Building, Seattle, Wash. Export Clothes Pin Association of America (Inc.), 280 Madison Avenue, New York City. Exporters of Wood Products (Inc.), 25 Broad Street, New York City. 1 See Exhibit 10. Florida Hard Rock Phosphate Export Association, Savannah Bank & Trust Building, Savannah, Ga. Florida Pebble Phosphate Export Association, Produce Exchange Building, New York City. Goodyear Tire & Rubber Export Co., The, 1144 East Market Street, Akron, Ohio. Grain Products Export Association, 17 Battery Place, New York City. Grand Rapids Furniture Export Association, 213 Lyon Street NW., Grand Rapids, Mich. Gulf Pitch Pine Export Association, 1212 Whitney Central Building, New Orleans, La. Hawkeye Pearl Button Export Co., 601 East Second Street, Muscatine, Locomotive Export Association, 30 Church Street, New York City. Pipe Fittings & Valve Export Association, Branford, Conn. United States Button Export Co., 701 East Third Street, Muscatine, Iowa. United States Maize Products Export Association, 332 South La Salle Street, Chicago, Ill. Walnut Export Sales Co. (Inc.), 616 South Michigan Avenue, Chicago, Ill. Walworth International Co., 88 Pearl Street, Boston, Mass. Wisconsin Canners Export Association, Manitowoc, Wis. Under the law such a combine may be formed by two or more persons, partnerships, or corporations. It may be incorporated or not, but in most cases incorporation has been found to be preferable. Membership varies from the smallest association with but two members to the largest at present listed, which covers 116 mills. A total of 506 member concerns are represented by the 50 associations listed above. Products exported include both raw materials and manufactured goods, and are shipped to all parts of the world. In a majority of cases, associations report improvement in business. One says that " 1924 business was better than in 1923, although competition was keener and in general prices less satisfactory." Another states that "the volume of business exceeded that of any preceding year, but the average price received was less than in any preceding year." One reports a net increase of 30 per cent in quantity over 1923 sales, another 22 per cent, a third 46 per cent, and still another "a constant increase in volume each year." Lower prices and political disturbances in foreign countries are the chief obstacles reported. Some manufacturers of finished products find it difficult to compete with goods of foreign countries where raw materials and labor are cheaper. One association reports that its European competitors "are able to undersell us 25 per cent." But another states that there is a tendency for prices to become firmer abroad because "both raw materials and labor in European countries are on the rise." Exporters of raw materials report 66 a better demand and an indication that the credit structure of Europe has greatly improved." There was also a substantial increase in exportation of foodstuffs. Exports during 1924 by associations reporting to the commission totaled about $140,000,000. Approximately 470,000 tons of copper, cement, and sulphur, valued at $47,300,000, were exported. Lumber (about 800,000,000 feet of pine, fir, redwood, gumwood, oak, walnut, etc.), naval stores, and wood products to the amount of about $32,700,000 were exported. Phosphate rock, soda pulp, and alkali totaled about 663,000 tons, valued at about $5,000,000. Locomotives, railway springs, textile machinery, steel tires and wheels, pipe fittings and valves totaled $3,630,000. Foodstuffs, including milk, meat, sugar, grain products, and flour were valued at about $35,300,000. Manufactured products such as paper, abrasives, rubber goods, webbing, furniture, paint and varnish, buttons, clothespins, and general merchandise totaled about $16,000,000. Member concerns, mills, mines, and factories are scattered throughout the States, but in most cases headquarters of the export associations are located at seaport, and inland manufacturers are relieved of a multitude of details peculiar to the export business. Advantages obtained by operation under the act are best summarized by the following excerpts from reports recently made by associations filing papers with the commission. An association exporting food products to Europe and other parts of the world states: The advantages gained by the industry in its operations through this association become increasingly evident the more it is operated. The intelligent distribution of stocks throughout the world, the centralization of the statistical and other information so necessary for the extension of trade, and the ability to standardize the quality of the American products to an increasingly higher level are all amply demonstrated by the encouraging increase in business done during the last year. The competition arising abroad from associations, trade combinations, etc., is and probably always will be a serious factor, although its importance as an obstacle to the expansion of American trade abroad in this industry is dis counted to some extent by the advantages gained through our manufacturers being able to operate export associations. Another association exporting manufactured goods through its agencies in Brazil, Argentina, Uruguay, Chile, Peru, Cuba, Mexico, and the Far East states: Export selling through an association is decidedly advantageous; it pre sents a united front to foreign competition, concentrates and simplifies the problem of sales, eliminates unnecessary competition amongst manufacturers, insures an equitable distribution of export business, stabilizes prices in foreign markets, restrains speculation, and generally builds up the prestige of American manufacturers abroad through the intelligent and constructive creation of a uniform sales policy based on cooperation. An association exporting raw materials to Europe reports that: By operating under the association, members are enabled to maintain ar organization for exploiting foreign markets and gathering data for the general benefit of all which would be too costly for any one member to maintain alone. The data that can be gathered by a single, large, well-directed organization is unquestionably more accurate and reliable than that which could be gathered by a number of smaller organizations working against each other. Similarly, the exploitation of foreign markets can be better handled by a large, single, and well-directed organization than by a number of smaller organizations all working against each other. Concentration of effort, standardization of grades, lower selling costs, are a benefit not only to the American exporter but also to the foreign consumer as well and are important factors in the endeavor to increase export sales. A number of associations report that their members would be unable to export if it were not for their organization under the act. One states that: If each individual were attempting to get his share of the business, the cost would be out of all proportion to the possible profit. An association exporting lumber reports: The export trade act is decidedly advantageous to most manufacturers of lumber, because they individually do not have sufficient volume of export production to justify the expense of personal contact with the foreign buyers or to interest competent sales agencies. One exporting manufactured products states: The volume of business is so small that with the various companies acting independently instead of through an association, it is probable that no business would be obtained. Where competition is as keen as it is in our products, it is doubtful if foreign trade in these commodities could be carried on successfully except through an association. One of the more recently organized associations reports that: The most important advantage during the few months we have been in operation is that the mills have been able to maintain prices which would show a profit. During preceding years, because of intense competition, a large volume of business was done at a decided loss. 66053-25- -8 SECTION 6 (H) OF THE FEDERAL TRADE COMMISSION ACT This portion of the law directs the commission to investigate trade conditions in and with foreign countries where associations, combinations, or practices of manufacturers, merchants, or traders, or other conditions, may affect the foreign trade of the United States. During the past year a report on Cooperation in foreign countries was prepared and submitted to Congress. Chapters I, II, and III cover information concerning consumers', agricultural, and credit cooperative organizations. Chapters IV, V, VI, and VII include cooperative banks, cooperative education, women and the cooperative movement, and international cooperation. Chapter VIII gives a comparative analysis of foreign legislation in support of cooperation. The appendix includes a table of figures covering membership and turnover of the three groups of cooperative organizations in all parts of the world, and copies of by-laws adopted by some of the more important cooperative societies of Europe (translated from the original), which are typical of the organization of types of societies discussed in the report. Attention is called to the following recent legislation in foreign countries concerning government regulation of trade combinations and unfair competition: Under laws passed in Australia in October, 1924, the dairy produce export control board and the dried fruits export control board have been organized under jurisdiction of the department of markets and migration, for the purpose of controlling the handling, exporting, and marketing of dairy produce and fruit, including arrangements for storage, terms of sale and insurance. The boards are given monopolies in contracts for exports to all countries except the Far East, but may also grant special licenses or permission to exporters. A small export duty on butter, cheese, and dried fruits is designed to defray expenses of the boards' operation. The export guarantee act, also passed in October, 1924, provides for guarantee of advances by banks, up to 80 per cent of the market value of produce exported by the boards. The Australian meat council, organized under an act passed in December, 1924, comprises representatives from each of the States interested in meat production, 1 from the Commonwealth, 16 representatives of meat producers, and 7 from packing houses. The purpose of the council is to improve methods of production and marketing, to reduce freight charges, raise the standard of exports, advertise Australian products, and suggest to the Government legislative needs of the industry. The council as such, however, will not buy or sell. Further promotion of exportation is found in the two export bounty acts passed during 1924. Law No. 2, dated May 24, provided for |