Cooperation for Foreign Trade 1

american, materials, organized, business, selling, price, nations and national

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Individually they cannot fill large contracts, but collec tively they can ; one or two companies could not do it, but 20 companies could take care of it. At present there are only two or three companies large enough to engage in foreign trade.

Mr. Edward Y. Webb, chairman of the Committee on the Judiciary of the House of Representatives, in discussing the measure which bears his name, gave another example: In my State we have a great many small cotton mills ; in my district there are over one hundred, with a capital of from $100,000 to $200,000, that cannot maintain a selling agency in China. The capital is too small, and it would cost them too much in proportion to the output to do so. But if the 64 cotton mills in one county were permitted to have a com mon selling agency in China, they could sell their goods at the low price they are now selling them, and at a decreased cost of distribution, and they could make more money out of it at the same price they get now, and it might have the tendency further of lowering the price in this country.

5. An analysis of the advantages.—It is not only the small concerns which cannot enter the foreign field independently which can profit from combina tion. The large corporations already in the field may for the same reasons derive great benefit from co operative effort.

In the proceedings of the Fourth National Foreign Trade Convention the advantages of cooperation for export are stated as follows: Maintenance of highly organized export service at mini mum cost to participants, employment of American advan tages in advertising, technical demonstration and "follow-up" methods.

Improved credit information and financing of foreign sales, more advantageous traffic contracts thru greater and regu lar tonnage, superior facilities for customs brokerage, ware housing, etc.

Assumption by the cooperative organization of credit ex tension which manufacturers, dependent upon a quick turn over of capital, are unable to provide.

Survival of initial losses, fatal to an individual company, which are sometimes incurred before American goods gain a foothold.

Division of foreign business upon an agreed basis adapted to the mutual interest of all participants from the stand point of sustained labor employment, and ability to produce at a price to meet foreign competition.

6. Foreign competition is along national lines.— American business men need to cooperate, not only because it makes for greater efficiency, but because the business men of other nations are already organized in this way and are reaping the advantages of cooper ation. The war has served to emphasize the need

for an efficient mobilization of all the resources of the nations. The growth in national consciousness has drawn the old organizations closer together and has given rise to many new ones.

Mr. Paul M. Warburg, in a public address made by him at the beginning of our participation in the European War, while he was vice-governor of the Federal Reserve Board, stated this with particular pointedness.

More than ever before will states become solid industrial and financial unions effectively organized for world compe tition, driven by the necessity of perfecting a system of the greatest efficiency, economy and thrift in order to meet the incredible burdens created by the war.

7. The point of attack.—For the calendar year 1919, the United States exported in crude materials, $1,610,142,683; in foodstuffs, crude and manufac tured, $2,641,190,953; and in partly manufactured and manufactured products, $3,486,496,768. Our factories had to buy abroad crude materials and partly manufactured goods amounting to $2,284,578,967.

The European nations depend for their industrial life on raw materials and on markets for their goods. These nations are prepared for the international com petitive struggle by strong cooperative organizations which arc built to accomplish three ends: to depress the market for American raw materials thru coopera tion of buyers; to undersell American manufactured products; and thru cooperation of sellers to force up the prices of raw materials needed by American mills.

8. Recent developments.—Cooperation in buying and selling are firmly established abroad. From every corner of the civilized world evidence accumu lates that the American business man must meet na tionally organized business rather than individual competitors. Sir Richard V. Vassar Smith, Chair man of Lloyd's Bank, before the Institute of Bankers of Great Britain, said: "The day of small industries on individual lines is gone. Manufacturers and traders must' organize for united effort." The British Trade Corporation was organized to accomplish this end. Another development was re cently announced by U. S. Consul Franklin D. Hale: British manufacturers and producers are having their at tention called to a new scheme on national lines relating to the special encouragement and development of export trade. The scheme is to form a corporation under the operation of which the members may be mutually benefited by the increase of over-seas trade, especially in new markets.

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