The Conditions of Sale 1

credit, foreign, commerce, insurance, trade, chamber, information and courts

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In the United States no commerce courts exist, but a large number of boards of arbitration perform simi lar functions. The best examples are found in the Cincinnati Chamber of Commerce, the Cleveland Chamber of Commerce and above all the Chamber of Commerce of New York. Charles L. Bernheimer, chairman of the latter body's Committee on Arbitra tion, said in a recent address: "In all its endeavors, it strives to establish com mercial equity, a high regard for commercial honor and ethics, and to prevent the disruption of busi ness friendships. I am happy to say that we have never experienced difficulty with the parties to a dispute over the formal award made by our ar bitrators, and we have yet to hear of an instance when in the case of mediation and conciliation, our advice has not commanded confidence and respect.

"Let me make it very clear that our arbitration system rests upon the existing statutory law of the State, under which parties may agree to submit an existing controversy to arbitration and upon the basis of the award may secure the judgment of a court of record." In most countries appeal from the decisions of the commerce courts to civil courts is possible. The ne cessity for such action does not often arise and only then when the commerce court falls short of its aim, which is to act "en qualite d'akniable composi teur," (in the capacity of a friendly conciliator.) A significant step in the direction of establishing international commerce courts has recently been made. The Chamber of Commerce of the United States has made arrangements with the Bolsa de Comercio of Buenos Aires, Argentina, to establish a joint com mittee of arbitration. Disputes arising between American and Argentine firms may be referred to this committee.

14. Accurate information uccessary.—Before clos ing a sales agreement it is necessary to know the cus tomer. In foreign trade the exporter, unless he is represented by his own employes, depends upon in formation secured thru third persons.

Every foreign trade transaction except those in which "cash New York" is demanded before ship ment is made, is a credit transaction. "Documents against cash" is a credit transaction, for the goods travel far from home, spend days, even weeks, in transit, and the "cash" will take time to travel back. Even a "T. T." (telegraphic transfei;) is a credit transaction in this sense. The exporter is, moreover, always at a disadvantage, once the goods are on a foreign shore.

Reliable credit information is, therefore, a very necessary thing. It is the more necessary since credit insurance in foreign trade is not yet generally pos sible.

15. Credit insnrance.—In domestic trade, credit in surance makes it possible for the business man to protect himself against unusual and unexpected credit losses. The German private banks for years insured foreign credits. The banker undertook to discount the bill "without recourse" when presented. Thus, the merchant obtained absolute insurance not only against the credit risk but also against the commercial risk; that is, the risk of the goods being refused. The rate of insurance varied from one tenth of one per cent to four per cent.

16. Recent attempts to establish foreign credit in has shown that only a large in stitution can carry the risks successfully. As Euro pean trade rehabilitation progresses the conditions un der which trade is carried on are becoming more keenly competitive. During 1918 German merchants, bank ers, and steamship lines formed an organization, the aim of which was to establish a kind of guarantee fund for the insuring of foreign credits. Commercial pa per insured by this institution was to be discounted with any bank in Germany.

In Great Britain, the Associated Chambers of Commerce of the United Kingdom passed a formal resolution in 1916, urging that steps be taken to pro vide for credit insurance of exports. The British Trade Corporation has arranged with a well known marine insurance company to be its credit insurance department. In the United States, no developments have taken place along this line.

A strong argument for insuring credit thru a large central organization is the pressure which an institu tion of magnitude can bring to bear on bad risks and their elimination by a process of blacklisting.

17. Credit information.—Next in importance to credit insurance is credit information. R. G. Dun & Company and the Bradstreet Company both main tain a large number of agencies in foreign countries, and also exchange information with the large foreign credit firms. The best known foreign bureaus are: in Paris, Societe generale de Renseignements Com merciaux ; in London, W. R. Perry, and Stubbs Ltd ; and in Germany, W. Schimmelpfeng. The latter was, before the war, the largest European agency.

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