The National Paper and Type Company has been the cooperative selling • agency for non-competing firms in the paper and printing industry. The com pany has been operating for nearly thirty years, and in 1916 had seven foreign branches. It is capitalized at $1,200,000 and its yearly expenses amount to $400,000.
1.5. The attitude of a misconcep tion as to its purpose and effect, the passage of the Webb-Pomerene Act aroused suspicion at first in the South American markets. La Epoca, the gov ernment newspaper in Argentina, said "South American markets will be left to fight as best they can against the same commercial practices which are prohibited between the States. It is not likely we shall find tolerable that which the States have pro hibited because it was noxious to them." The fact that American manufacturers are now permitted to do what their foreign competitors have been allowed and even urged to do by their gov ernments for decades, cannot have such dire ef . fects as to the South American or other markets as are anticipated. That goods will be sold in foreign mar kets from time to time for less than in the domestic market is undoubtedly true. This can hardly be claimed to be a new development. The German car tels have done this very thing for years and the Amer ican copper dealers have been forced to do so right along. Many American firms have been in the habit of doing it. Sewing machines, shoes and many other products sell for less abroad than at home. Goods are sold abroad for what they will bring. Combina tion need not aggravate this situation. The new law has undoubtedly brought aid to the small manufac turer. Big firms, like the United States Steel Cor poration or the Standard Oil Company, do not need it.
16. The forms of the new combinations.—The sell ing organizations formed under the Webb law fall into three main types. In the first type a group of corn . peting manufacturers will organize an export associa tion by contributing funds to the purchase of stock. This working capital is then employed to establish offices, warehouses and showrooms, to pay the salaries of foreign salesmen, to carry on the work of advertis ing and for general development purposes.
In the second type of association each one of a number of manufacturers creates a subsidiary for ex port business only. These subsidiaries form a trade association and register under the Act without having a central selling agency or stock company of any kind. The executive staff of the association makes trade and credit investigations and supplies this information to the association. The expenses are paid from dues or proportional annual assessments based on yearly sales of members. The subsidiaries may have "gentlemen's agreements" as to price, credit, allocation of territory. If they agree on a free, field they may determine prices, credits, warehouse facilities, etc.
Those manufacturers who believe a demand for an American product may be created abroad often form a tentative association for an advance investigation. For the purpose they assess themselves on a sales or a mercantile rating basis. With the funds thus cre ated well trained men are sent abroad to secure definite information about the possibilities of foreign markets in which the manufacturers hope to compete against foreign merchants and manufacturers.