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Full text of "Investigation of concentration of economic power; monograph no. 1[-43]"

^^3d SeMfon^^l SENATE COMMITTEE PRINT 

INVESTIGATION OF CONCENTRATION 
OF ECONOMIC POWER 



TEMPORARY NATIONAL ECONOMIC 
COMMITTEE 

A STUDY MADE UNDER THE AUSPICES OF THE DEPART- 
MENT OF COMMERCE AND THE FEDERAL TRADE COM- 
MISSION FOR THE TEMPORARY NATIONAL ECONOMIC 
COMMITTEE.SEVENTY-SIXTH CONGRESS, THIRD SESSION, 
PURSUANT TO PUBLIC RESOLUTION NO. 113 (SEVENTY- 
FIFTH CONGRESS), AUTHORIZING AND DIRECTING A 
SELECT COMMITTEE TO MAKE A FULL AND COMPLETE 
STUDY AND INVESTIGATION WITH RESPECT TO THE 
CONCENTRATION OF ECONOMIC POWER IN, AND 
FINANCIAL CONTROL OVER, PRODUCTION. AND 
DISTRIBUTION OF GOODS AND SERVICES 



MONOGRAPH No. 6 

EXPORT PRICES AND EXPORT CARTELS 

(WEBB-POMERENE ASSOCIATIONS) 



Printed for the use of the 
Temporary National Economic Committee 




UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1941 



TEMPORARY NATIONAL ECONOMIC COMMITTEE 
(Created pursuant to Public Res. 113. 75th Cong.) 

.JOSEPH C. O'MAHONEY, Senator from Wyoming, Chairman 

HATTON W. SUMNERS, Representative from Texas, Vice Chairman 

WILLIAM H. KING, Senator from Utah 

WALLACE H. WHITE, Jr., Senator from Maine 

CLYDE WILLIAMS, Representative from Missouri 

B. CARROLL REECE, Representative from Tennessee 

THURMAN W. ARNOLD, Assistant Attorney General 

•WENDELL BERGE, Special Assistant to the Attorney General 

Representing the Department of Justice 

JEROME N. FRANK. Chairman 

•SUMNER T. PIKE, Commissioner 

Representing the Securities and Exchange Commission 

CARLAND S. FERGUSON, Commissioner 

•EWIN L. DAVIS, Chairman 

Representing the Federal Trade Commission 

ISADOR LUBIN, Commissioner of Labor Statistics 

•A. FORD HINRICHS, Chief Economist, Bureau of Labor Statistics 

Representing the Department of Labor 

JOSEPH J. O'CONNELL, Jr., Special Assistant to the General Counsel 

•CHARLES L. KADES, Special Assistant to the General Counsel 

B«presenting the Department of the Treasury 



Representing the Department of Commerce 

LEON HENDERSON, Economic Coordinator 

DEWEY ANDERSON, Executive Secretary 

THEODORE J. KBBPS, Economic Adviser 



^Alternates. 



MONOOKAPH No. 6 

EXPORT PRICES AND EXPORT CARTELS (WEBB-POMERENB 
ASSOCIATIONS) 

JtflLTON GILBESIT AND PATJL D. DICKENS 

DEIPARTMENT OP COMMiaiCE 

AND MEaiBERS OF THE STAFF OF THB 

FEDERAL TBADE COMMIS6TON 

u 



ACKNOWLEDGMENT 



The various parts of this monograph were written by 

MILTON GILBERT 

Bureau of Foreign and Domestic Commerce 
Depa/rtment of Commerce 

PAUL D. DICKENS 

Bureau of Foreign and Domestic Commerce 
Department of Commerce 

and by 
members of the staff of the 

FEDERAL TRADE COMMISSION 

The Temporary National Economic Committee is greatly indebted 
to these authors for this contribution to the literature of the subject 
under review. 

The status of the materials in this volume is precisely the same as 
that of other carefully prepared testimony when given hy individu^ 
witnesses; it is information submitted for Committee deliberation. 
No matter what the official capacity of the witness or author may 6ej 
the publication of his testirrwny.^ report., or rkonograph by the Com- 
mittee in no way signifies nor implies assent to^ or approval of, any of 
the- facts., opinions^ or recom/mendations.^ nor acceptam.ce thereof in 
whole or in part by the members of the Temporary National Economic 
Committee, individually or collectively. Sole and undivided respon- 
sibility for every statement in such testi/mony^ reports, or monographs 
rests entirely upon the respective authors. 

(Signed) Joseph C. OMahonet, 
Chairman, Temporary National Economic Committee. 



TABLE OF CONTENTS 



PSE« 

Letter of transmittal ix 

Foreword — xiii 

PARTI 

A SAMPLE STUDY OF DIFFERENCES BETWEEN DOMESTIC AND 
EXPORT PRICING POLICY OF UNITED STATES CORPORATIONS 

CHAPTER I Page 

Statement of the problem. 3 

The suggestion in the President's monopoly message 3 

Scope and limits of the study 4 

Relation of different export and domestic prices to the monopoly 

problem 4 

CHAPTER II 

Earlier Studies of Export Pricing Policies 7 

CHAPTER III 

Scope of the Field Study 12 

CHAPTER IV 

Problems Involved in Comparing Domestic and Export Prices 16 

CHAPTER V 

Comparison of Export and Domestic Price Policies 29 

Group I. Cases of higher export than domestic prices 31 

Group II. Cases of export prices equal to domestic prices 36 

Group III. Cases of lower export than domestic prices 44 

CHAPTER VI 

The Economic Factors Determining Export Price Policy 63 

Export prices higher than domestic prices 63 

Volume of trade at higher than domestic prices 67 

Export prices equal to domestic prices 68 

Export prices lower than domestic prices 70 

1. Why price concessions are granted 70 

2. Factors in foreign markets which necessitate lower export 

prices 72 

3. Why domestic prices are higher 74 

(a) Monopoly aspects of the problem 74 

(6) The influence of tariffs ^ 81 

(c) The selling problem in the domestic and foreign markets. 82 

4. Other factors influencing export price policy 84 

CHAPTEB VII 

Oonclusions 91 

PART II 
DIRECT FOREIGN INVESTMENTS IN AMERICAN INDUSTRY, 1937 

Page 

Foreword 97 

Introductory. 99 

- T 



VI TABLE OF CONTENTS 

Page 

Foreign Direct Investments in the United States and Tlieir Significance.. 100 

Industrial distribution 101 

Geographic distribution 104 

Foreign control of United States production 105 

Concentration of assets and investment 108 

Conclusion HO 

PART III 

REPORT OF THE FEDERAL TRADE COMMISSION ON THE OPERATION 
OF THE EXPORT TRADE ACT (WEBB-POMERENE LAW) 1918-40 

Page 

Background 113 

Report of the Federal Trade Commission on cooperation in American 

export trade, 1916 113 

Debates in Congress, hearings, and committee reports 118 

The law as passed on April 10,1918 119 

Administration of the Law 123 

1918-27— The Export Trade Division 123 

Foreign Trade Series No. 1, 1919 123 

Proposed amendment to the law, 1921 123 

The Silver letter, 1924 123 

Proposed amendment to permit import combines, introduced in 1924 

(rejected in 1928) .- 123 

1927-40— The Export Trade Section 129 

Foreign Trade Series No. 2, 1935 129 

Pacific Forest Industries, recommendations, 1940 129 

Annual reports of the. Commission, 1916-39 — publicity statements 

issued concerning the law 131 

Procedure under the Act . ■ 132 

Products Exported— Value of Exports, 1920-38 133 

Number of Associations and of Member Companies 135 

Types of Organization ; 136 

Functions of the Groups 138 

Serving as export sales agent for the members 138 

Purchasing the members' products for resale in foreign markets 138 

Employing agents and directing agents of the members — promoting 

conferences and agreements in export trade 139 

Exploitation of members' products abroad 139 

Agreement upon terms and sales policies in export trade 140 

Allocation of the export business 141 

Standardization of products exported — inspection and claims service. 141 
Arranging for insurance, freight rates, cargo space, shipping dates, 

and storage 142 

Collecting and disseminating trade information as to market condi- 
tions abroad, credits, exchange, shipping regulations, foreign laws. 142 

Advantages Derived by Cooperative Effort 143 

Obstacles Met by Export Associations — Reasons for Dissolution of Some 

of the Groups 146 

Future of the Webb-Pomerene Law 146 

Appendix — Exhibits : 

1 . Text of the Export Trade Act (Webb-Pomerene law) 149 

2. List of associations filing papers with the Federal Trade Commis- 

sion, February 1940 152 

3. List of associations formed under the act, 1918-39, with names of 

members and the years in which they held membership — also 
notes on operation of each association, and if dissolved, reasons 

for dissolution 154 

4. First report form 234 

5. Annual report form 237 

6. Foreign Trade Series No. 1, 1919 240 

7. Foreign Trade Series No. 2, 1935 251 

8. Excerpts from annual report of the Commission, 1937 261 

9. Excerpts from annual report of the Commission, 1938 272 

10. Excerpts from annual report of the Commission, 1939 284 

1 1 . Selected list of references on the Export Trade Act 297 

Index _ _ 301 



SCHEDULE OF TABLES 



PART I 

Page 
1. Distribution of 76 cases among 3 groups and 13 types of price policies. 31 

PART II 

1. Estimate of Foreign investments in the United States, end of 1937 99 

2. Foreign direct investments in the United States, by industries, 1937 100 

3. Foreign direct investments in United States, by principal countries and 

industries, 1937 103 

4. Foreign direct investments in the United States, by countries, 1937 105 

5. Study of international affiliations of American industry based on census 

of manufactures, 1937 106 

6. Financial structure of foreign direct investments in the United States, 

by industrial groups and by geographic areas, end of 1937 109 

vn 



LETTER OF TRANSMITTAL 



o 

August 23, 1940. 
The Honorable Senator Joseph C. O'Mahonet, 

Chairman^ Temporary National Economic Committee^ 
Washington^ D. G. 

Mt Dear Senator: I have the honor to transmit herewith a study 
on some phases of Export Prices and Export Cartels ( Webb-Pomerene 
Associations). In this volume there are gathered together three re- 
ports, two by the Department of Commerce and one by the Federal 
Trade Commission, When these were submitted to the Subcommittee 
on Printing and Review of the Temporary National Economic Com- 
mittee, it approved them for printing with the stipulation that they 
be combined into one volume, prefaced by an explanatory introductory 
statement, which I submit herewith. 

The field of foreign trade has traditionally been beset with contro- 
versies and arguments about tariffs, reciprocal trade agreements, in- 
ternational prices, monopolistic exchange controls, exchange dump- 
ing, quotas, barter arrangements, long-term and short-term loans, in- 
ternational combines, and cartels. Businesses on occasion do abroad 
what they would not or could not do at home. Foreign trade is re- 
garded by some as the happy hunting ground of gigantic international 
understandings, political controls, economic imperialism, and ruthless 
■competitive warfare with success a matter of national prestige. These 
studies make intensive probings into but one or two corners of the area 
ordinarily encompassed by foreign trade. But in those corners they 
show interesting action patterns of concentration of economic power 
at work. 

Part I is a study written by Dr. Milton Gilbert of the Department 
of Commerce entitled "A Sample Study of Differences Between Do- 
mestic and Export Pricing Policy of the United States Corporations." 
It explores a most difficult problem for it seeks not only to distinguish 
domestic prices from export prices but to determine whether such 
differences as exist reveal the presence or absence in one form or other 
of economic control. 

This task is the most difficult in most instances because there is no 
single domestic priee. There are hosts of domestic prices. The New 
York price, for example, even of such an article as butter or flour 
■differs considerably from the price in Kansas City or San Francisco. 
There are many reasons for divergences of prices at home and abroad, 
differences in no way related to the presence of monopoly or of con- 
centration of economic power, for all prices are local prices subject to 
local variations in demand, supply, control, taxes, and governmental 
regulation. It is only in the peculiar instance when the domestic price 
is high, completely inflexible and completely under control and the 
foreign price low, highly flexible, and uncontrolled that one can infer 

iz. 



X LETTER OF TRANSMITTAL 

the presence of monopoly solely from a study of differences in price 

honfl-Vior 

When, however, there is incompletely monopolistic control in some 
markets' at home with a great deal of competition in others coupled' 
with partial control in foreign markets, some being exclusively dom- 
inated while in others a considerable amount of competition exists, the 
relationship between any given domestic price and the price in those 
few foreign markets to which a corporation may have obtained access, 
is likely not to show any substantial regularity.^ 

Tlie converse of the proposition stated above is likevvnse true. One 
cannot infer, for example, that competition is present when the price 
in a foreign market is as high or even higher than in the domestic mar- 
ket. In certain small countries a domestic corporation may readily 
liave a monopoly while suffering competition in the particular domes- 
tic market selected by the sample study for price comparison. In 
short, to come to any conclusion merely on the basis of differences in 
price is unwarranted. Most of the ready inferences that monopolistic 
control does not exist because of variability in price pattern are 
unjustified. 

The last two studies constituting parts II and III of this volume deal 
with the groups that carry on foreign trade, and in particular the form 
of their organization. Part II, entitled "Direct Foreign Investments 
in American Industry, 1937," represents a study made by Mr. Paul D. 
Dickens, of the Department of Commerce, analyzing the extent to 
which foreign-owned corporations control production in the United 
States. Part III, entitled "Operation of Export Trade Act (Webb- 
Pomerene law), 1918-1940," is a study of the Federal Trade Commis- 
sion indicating how American corporations have united to penetrate 
the foreign market. Both studies give a limited insight into the op- 
eration of combines and cartels in our export and import trade. 

The vicissitudes of Webb-Pomerene associations, particularly as 
illustrated in the copper industry, Avere studied in detail by the Tem- 
I^orary National Economic Committee in its hearings on Cartels at 
Home and Abroad. Organized originally as The Copper Export 
Association, later called Copper Exporters, Inc., these associations, 
according to Dr. Rudolph Callman, well-known expert on cartels and 
author of a volume on German cartel law - represent types of cartels 
well known in national and international industry. The Copper Ex- 
port Association was simply a joint selling agency. It would be called 
a syndikat in the German cartel law. The same is true of Copper 
Exporters, Inc., although the situation is not quite so clear as in the 
Copper Export Association, particularly insofar as its purpose, instead 
of being that of mitigating or eliminating competition among its 
members, seemed to be that of common defense against speculators, 
who, while neither producing nor consuming copper, were believed to 
be responsible for artificial and harmful fluctuations in copper prices, 
particularly in the London metal exchange. But the evidence showing 
that the major effect was the mitigation of competition among each 
other was so convincing that I feel no hesitancy in calling Copper 
Exporters, Inc., a cartel. And may I add that it was thus regarded 

^/J^Pf.**'^ theoretical difficulties of Interpreting differences between export prices and 
R??lnt loo^foQn^ ^\^°*l?'"^ I ?''^PS' "I^xport. Import, Domestic Prices in the United 
5i^ • \?^ . ^u^'^^ /,^^ Quarterly Journal of Economics, Vol. 46, p. 195 ff. 
Das Deutsche Kartellrecht, Philo Verlag, Berlin, 1934 720 pp 



LETTER OF TRANSMITTAL XI 

by all of the writers on cartel problems in Europe. Dr. Robert Lief- 
mann, the famous German expert, in his book entitled "Cartels, Com- 
bines, and Trusts" (London, 1928) goes so far as to say (p. 60) that 
Copper Exporters, Inc., was ''a ckar case of export cartels deliberately 
fostered by the Government of the U. S. A. to the detriment of the 
European consumer," 

The American public may be surprised, if not annoyed, by such a 
statement. But in European opinion and experience cartels that 
engage in international trade are generally assumed to be fostered by 
their governments because cartels are frequently merely another means 
of international trade policy. 

Moreover, Copper Exporters Inc., is an association authorized by 
the Government under the Webb-Pomerene Act, which according to 
the evidence presented in these hearings, was strongly urged upon 
Congress and the Wilson administration by influential members of 
the copper industry. 

I hasten to add that in European cartel literature and discussions 
all associations formed under the Webb-Pomerene Act are regarded 
as export cartels.^ 

As is brought out in part III of this volume such association^ often 
control 100 percent of the export of their members. Many of them 
no longer rely on agents abroad, but have substituted well-qualified 
association agents. Sales in many instances are no longer made on a 
c. i. f. basis plus letters of credit set up at home, but are made from 
warehouse stocks carried abroad, thus enabling export sales to be 
allocated quarterl}-. 

Moreover, such associations often amount to price cartels, the estab- 
lishment of prices being regarded as a distinct function of the associ- 
ation, prices depending upon economic conditions in each market 
compared with maximum consuming power of that market under 
normal conditions. In other words, purchasing power or "what the 
traffic will bear" is an important factor to be considered with respect 
to maximum sales. Another factor is competition. Still another 
is quality and the study of the needs of important consumers in 
accordance with their processes of manufacturing. Thus prices neces- 
sarily fluctuate in different parts of the world, being controlled by 
innumerable conditions both political and economic. In some in- 
stance's the return exceeds domestic levels. In others it is about the- 
same and in others it will occasionally be lower. Consequently, many 
associations work on a final aA^erage annual price on behalf of the 
industry which return is distributed equitably in proportion to each 
factory shipment. 

To some extent such associations become sales and market 
cartels. Business in many of them is divided among the members on 
a quarterly basis which is adjusted yearly as provided for in member- 
ship agreements. Individual brands may be shipped in the same size 
packages. Individual trade-marks and names are utilized in con- 
junction with the standardized association trade-mark. Consolidation 
of different brands in a single shipment is a common occurrence and 
is utilized by the association in accordance with its own discretion 

• Investigation of Concentration of Economic Power, hearings before the Temporary Na- 
tional Economic Committee, Congress of the United States, 76th Cong.. 1st sess., Cartels 
at Home and Abroad. 



3^11 LETTER OF TRANSMITTAL 

either from shipments arriving from different plants or from seaboard 
stocks. In some instances in the chemical industry^ export associations 
have agreements with international cartels comprising British, conti- 
nental, and other foreign manufacturers. Certain territorial divisions 
are required as exclusive one to the other and a certain division of 
total available business is likewise required, the latter involving per- 
centages in some joint market in contrast to no division in exclusive 

One of the main problems that arise in the effective operation of 
Webb-Pomerene associations is at the same time one of the major 
problems of a sales cartel ; that is, the diversion of merchandise through 
channels of export outside of the centralized company or association. 
Independent dealers and brokers and sometimes large-scale consumers 
cause considerable disturbances in prices and sales by covert activity. 
Another disturbing factor is export speculation by producers, which 
may not only be detrimental to sustained effort of the cartel, but may 
at times cost much in the way of annoyance and reduction of prices 
in certain areas abroad. Fundamental misrepresentation, under-cover 
buying, and disregard of the obligation accepted in purchasing also 
bring about diversion unknown to the association members of domes- 
tic tonnage into export channels. There has consequently been some 
clamor to make it unlawful for any firm or individual to export or to 
sell for export any commodities of a Webb-Pomerene corporation 
through channels other than those controlled and maintained by such 
corporations. This would make if impossible, for example, for pur- 
chasers allegedly buying for export to attempt to move the material 
by steamship here by truck and resell in the domestic market. 

An effective cartel or efScient conglomerate of economic power 
naturally always attempts to get as profitable a rate of return as pos- 
sible on all business done, whether in the domestic or in the foreign 
market. Through vigorous organization and through cooperation 
with foreign cartels, an industry may have an essentially monopolistic 
hold on both the domestic market and the foreign market. Under 
such conditions with prices set in the respective markets in accordance 
with "conditions" and "what the traffic will bear," differences in price 
have little meaning. Certainly they do not show competition or the 
absence of monopoly. That can only be determined by studying mar- 
ket organization and market conditions, commodity by commodity, a 
study which has not been made in this volume. 

Respectfully submitted. 

Theodore J. Keeps, EconoTnic Adviser. 



FOREWORD 



The last 10 years have revolutionized thinking about prices. Both 
in theory and research, the simple "10 cents for an orange" concept 
of price has given way to a recognition that price is a complicated 
formula, and that "the law of single price" is limited to very small 
areas. 

For many years, it has been recognized that export prices may suf- 
fer from domestic prices. Many countries have antidumping laws to 
prevent foreigners f i*om selling in their markets too cheaply. In some 
cases legislation has also been directed against sale abroad at levels 
below those at which the products are made available to domestic 
consumers. Both sets of laws recognize that price differences may 
and do exist. 

The present study is directed to the current practices of American 
enterprises selling both in the domestic and the foreign market. In 
total, 76 cases were carefully studied. Under an assurance of confi- 
dential treatment, the business executives involved were most cooper- 
ative in presenting the picture of their actual price practices. While 
the sample provides a sufficient cross section to illustrate the various 
policies which are to be found, it does not permit an exact statistical 
measurement of the importance of each attitude toward the foreign 
market. 

Probably the most important conclusion is that the foreign and 
domestic markets are frequently not sufficiently unified to require 
identity of price. And, particularly in his foreign-trade efforts, the 
businessman appears to have wide scope for exercising his business 
judgment. It is of further interest to note the case where the busi- 
nessman cannot clearly declare that his foreign business is as profit- 
able as his domestic. But it is evidently extremely difficult to with- 
draw from a market as long as the future permits any hope. In 
many cases, the export business is not regularly tested against any 
tough profit-or-loss measure, and when it is, does not show satis- 
factory current results. 

Above all, the study indicates the skill required for effective opera- 
tion in foreign trade. All the problems of domestic selling are pres- 
ent, with certain added complications. It should perhaps be noted 
that in the face of these complications, our Government has given 
much less aid than that afforded by our competitot-s in foreign mar- 
kets. If we wish to keep our export trade, new policies may be 
necessary. 

WiLLARD L, Thorp. 

XIII 



PART I 

A SAMPLE STUDY OF DIFFERENCES BETWEEN 

DOMESTIC AND EXPORT PRICING POLICY 

OF UNITED STATES CORPORATIONS 

Prepared by 
MILTON GILBERT 

in the 

Bureau of Foreign and Domestic Commerce 
DEPARTMENT OF COMMERCE 



CHAPTER I 
STATEMENT OF THE PROBLEM 

THE SUGGESTION IN THE PKESIDENT's MONOPOLY MESSAGE 

In his message to Congress which resulted in the establishment of 
the Temporary National Economic Committee, President Roosevelt 
reviewed some of the problems facing American industry and offered 
for consideration some recommendations relative to the strengthening^ 
and enforcement of antitrust laws. Under the suggestions for im- 
provement of antitrust procedure the President said : 

A revision of the existing antitrust laws should make them susceptible of pi-ac- 
tical enforcement by casting upon those charged with violations the burden of 
proving facts peculiarly within their knowledge. Proof by the Government of 
identical bids, uniform price increases, price leadership, higher domestic • than 
export prices, or other specified price rigidities might be accepted as prima facie 
evidence of unlawful actions.^ 

The purpose of this study is to explore the possibilities of one of 
these suggestions — that concerning higher domestic than export prices. 
It was felt that the ramifications of the problem would only be re- 
vealed by a broad study which would offer a cross-section picture of the 
export pricing policies of many industries. For without such a study^ 
the perspective required for the formulation of practicable and con- 
vincing recommendations to the Congress, if the evidence reveals a 
need for such action, would be lacking. 

For this reason the Department of Commerce has undertaken a 
study of business practices with regard to pricing for export. It was 
considered desirable to enlarge the scope of the study beyond what was 
specified in the monopoly message. It seemed inadequate merely to 
uncover instances of firms in industries charged with monopolistic 
practices selling at lower prices to export customers than to domestic 
customers. For that procedure would assume the basic point at issue ; 
that is, that the ability to practice price discrimination among national 
markets is necessarily an attribute of monopoly power. Therefore, a 
comparative study of domestic and export pricing policies of a repre- 
sentative sample of American industry has been attempted. The 
study embraces firms in industries with many independent business 
units and firms in industries with few business units ; large firms and 
small ; some firms which export a large proportion of their production 
and otliers which export only a small percentage of their output ; firms 
with branch plants abroad and firms with only American factories. 
The emphasis of the study is upon a comparison of domestic and ex- 
port prices and price policy and the reasons or explanations for any 
differences which may come to light. It was also expected that some of 
the characteristics of the price system under which American business 
operates would be revealed by the investigation. 



IS. Doc- '73, T.oth Cong., 3d sess., Strengthening and Enforcement of Antitrust Laws, 
p. 7. 

:i5776'.t— 41— No. 6 2 3 



4 OONCEXNTRATION OF ECONOMIC POWER 

THE SCOPE AND LIMITS OF THE STUDY 

The precise nature of the problem to which this study is devoted may 
be more clearly understood by noting the following limitations upon 
its scope. 

(a) It is concerned only with goods produced in the United States 
and with the prices in the American market at which those goods are 
sold to domestic and foreign customers. The prices of similar goods 
produced by foreign branches of the firm, or by independent foreign 
factories, or the price in the foreign market are entirely irrelevant. 
The study is not concerned with the price the foreign consumer pays 
for similar goods which were not produced in the United States, or 
with the prices at which American products are finally offered to the 
foreign -consumer after ocean shipment, payment of duty^ retailer's 
mark-up, etc., have been added to the manufacturer's price. It is 
concerned only with the producer's prices to similar types of cus- 
tomers under similar conditions of sale. Of course, there are many 
difficulties involved in obtaining truly comparative prices, the discus- 
sion of which is postponed to a later section. 

(b) The field survey was limited to manufactured products; non- 
processed agricultural or mineral products are not considered in the 
report. 

(c) The differences between domestic and export prices which are 
herein considered are only those differences which are the result of 
decisions of the manufacturers. Price differences which arise from 
domestic governmental policy or from differences in distribution serv- 
ice costs not controlled by the manufacturer are evidently irrelevant 
to the problem. For example, a Government subsidy on exports, an 
excise tax that is levied on production for domestic consumption but 
not on exports, drawbacks of duty paid on imported raw materials 
which are exported aftesr processing, a lower inland freight rate from 
factory to seaboard on export shipments than on domestic business, 
niiglit all make the price to an export customer lower than the price 
to a domestic customer. But as these factors would not make any 
difference in the net price received by the manufacturer, they are not 
part of the problem under consideration. In brief, it is the manufac- 
turer's net prices from domestic and export customers which are to be 
compared. 

THE RELATION OF DIFFERENT EXPORT AND DOMESTIC PRICES TO THE 
MONOPOLY PROBLEM 

A brief discussion of the theory of dumping has been injected at 
this time to show why a study of the practice is relevant to the 
problems confronting the Temporary National Economic Committee. 
The most careful writers on the subject have concluded that monopoly 
IS a prerequisite for dumping and it is, therefore, pertinent to inquire 
whether "higher domestic than export prices might be accepted as 
prima facie evidence of unlawful actions." The many important 
questions revolving around the meaning of monopoly and competition 
must be deferred until the differences between domestic and export 
pricing policies have been surveyed. 

It will be recognized that the practice referred to in the President's 
mo^snnre, quoting lower prices for export than for domestic customers, 



CONCENTRATION OF ECONOMIC POWER 5 

is what is generally called "dumping." The use of that term has been 
avoided as far as possible because, both in its legal definition and gen- 
eral connotation, it includes much more than will be discussed in this 
study. But it can correctly be said that we are here dealing with one 
type of dumping — that which rests upon the sole decision of the pro- 
ducer or seller. This type of dumping may be defined as international 
price discrimination and includes differences between domestic and 
export prices in either direction, i. e., higher as well as lower export 
prices. 

Familiarity with economic writing on this type of dumping would 
reveal the relation between dumping and the monopoly problem and 
make it clear why evidence of the practice might establish a presump- 
tion that a monopolistic situation exists. Prof. F. W. Taussig has 
stated the relationship as follows : 

Sales at lower prices are made to foreigners not only sporadically, but for 
long periods and systematically. This phenomenon would seem to be ex- 
plicable only on the ground of monopoly. Where there are competing 
producers, no one of them will steadily accept lower prices than the other. 
Each will be desirous of selling in the most advantageous market. There 
will be dumping of the sporadic sort only, by one of the competitors or by 
several of them, at times when the total output is not easily carried off at 
remunerative prices. The more effective is competition, the more standard- 
ized the article, the less likely is even sporadic dumping. On the other hand, 
the more removed the conditions are from those of smooth-working competi- 
tion — to the degree that there is influence from brands, specialities, quasi- 
monopoly, complete monopoly — the more is there likely to be departure from 
a uniform market price, and the more likely is it that discrimination and 
dumping appear.^ 

Another explanation of this line of reasoning is given in the widely 
known monograph on dumping by Prof. Jacob Viner. 

In the ♦ * * summary of export dumping, it was made apparent that 
dumping on other than a sporadic basis was typically, if not invariably, 
confined to monopolistic producers' combinations. This conforms with theo- 
retical expectations. First, dumping is most likely to appear to be profitable 
in the case of industries using large plant and expensive, machinery, so 
that the fixed charges are an important part of the total costs of production. 
For such industries maintenance of output at near maximum capacity is 
most urgent on financial, and sometimes on technological, grounds. It pays 
such industries to accept additional orders at any price which more than 
covers the direct costs, if these orders are not othewise obtainable, and if 
full production cannot be maintained without them. But it is in industries 
having these characteristics that, apart from natural and legal monopolies, 
monopolistic organization is most likely to be attempted, mainly In order to 
escape the danger of destructive competition. 

Once monopoly control has been achieved in the domestic market, it may 
pay, if domestic orders do not fully occupy the productive facilities, to bid for 
orders in other markets at prices lower than those exacted at home. If 
cutthroat competition results from this policy, it will at least be confined 
to markets in which the dumping organization is not vitally interested. 
The mere fact of monopoly control in the domestic market will make it 
probable that the prices exacted In that market will be above the competi- 
tive level in outside markets, and that foreign orders will be obtainable 
only If the prices quoted to prospective foreign purchasers are lower than 
the domestic prices. Monopoly in the domestic market would appear for 
another reason to be essential if continued dumping is to be profitable. If 
there is competition in the domestic market, the concern which dumps a 
portion of its output in foreign markets in order tp reduce the supply and 
maintain or raise the prices in the domestic market must bear by itself all 
the sacrifice involved In the export at reduced prices and must share with 



*P. W. Taussig, Some Aspects of the Tariff Question, Cambridge, 1915, p. 208. 



g CONCENTRATION OF ECONOMIC POWER 

all its domestic competitors the advantage accruing from the reduction in the- 
domestic supply. Under these circumstances a concern will have as much — 
or nearly as much — to gain from price cutting in the domestic market as 
from export dumping. It is only to a monopoly that export dumping has 
attractions greater than those of moderate domestic price cutting. 

It is on grounds such a^ these that it has been held by many economists 
that dumping as a systematic and continued practice must normally be con- 
fined to monopolies.' 

The essence of this argument is that unless there is some type of 
monopolistic restraint in the domestic market, some restriction upon 
the normally competitive pricing mechanism, it will not be to the 
economic advantage of any single producer to accept the loss or lower 
profit involved in selling to foreign customers at less than the domestic 
market price. For if the producer must make a price concession to- 
sell his total output, an offer of a lower price in the domestic market 
would be just as effective in clearing his stocks as would the offering 
of lower prices for export shipments. But when some monopolistic 
element of whatever character is injected into the domestic market — 
some factor which prevents price from performing its usual function 
in a competitive market — then excess stocks may be accumulated or 
productive capacity remain idle. Under such circumstances the ex- 
port price may be reduced in order to clear excess stocks or to employ 
unused capacity. This could occur whether the export markets were 
competitive or monopolistic. 

Thus, the existence of a two-price system would be indicative of 
some impediment to competition in the domestic market. A situation 
that would conform to this picture is that of a group of producers 
having a tacit or explicit agreement with regard to price in the domes- 
tic market but no such agreement with foreign producers as to export 
prices. The monopoly price so established yields an abnormal return 
in the sense that some of the producers would accept additional busi- 
ness at lower prices if it could be obtained without upsetting the ex- 
isting price situation in the domestic market. As there is no restric- 
tion on competition in foreign markets, a competitive export price is 
established which is lower than the monopoly price in the domestic 
market. Such is the basic type of situation that is generally conceived 
to lead to the practice of dumping. The primary purpose of this 
study is to see if the facts in the business world conform to this 
theoretical picture. 

From this picture it can be seen why economists have insisted that 
another fundamental factor, in addition to an element of monopoly 
in the home market, is required to make dumping possible. This 
factor is protection of the home market, for in order for the domestic 
monopoly to be effective, the competitively priced products in the 
foreign markets, originating either at home or abroad, must be pre- 
vented from breaking the domestic monopoly price. It is generally 
conceived that high protective tariffs are the commonest and most 
effective means of excluding competitively priced goods from the 
home market. But freight costs, if they are large in proportion to 
the value of the product, may be equally restrictive. Besides, the 
manufacturer may have agreements with distributors, even with 
those ni the foreign market restricting them from reshipping the 
goods to the United States.^ 

! W°rJJ?r^i^'^^^V"P'?r^L'^, ^^^^l^*" *° International Trade. Chicago, 1923. pp. 94-95. 
p. 301 ^^^^'^'^'^'^ ^0° Haberler, The Theory of International Trade, New York, 1936, 



CHAPTER II 
EARLIER STUDIES OF EXPORT PRICING POLICIES 

There is considerable evidence that for many years American indus- 
try has sold its products abroad at other than domestic prices. That 
evidence, however, is not very satisfactory in revealing the extent of 
the practice, the magnitude of price differentials, or the economics 
of the problem. While a few official inquiries were made, the informa- 
tion disclosed is not sufficient to answer the questions of major inter- 
est. But as to the mere existence of price differentials for some 
products there can be no doubt.^ 

One of the earliest notices of exporting at lQ^^er than domestic prices 
in official publications was made in regard/'to the steel industry and 
its effect upon shipbuilding in a monthly statistical bulletin formerly 
issued by the Treasury Department. 

The progress of work on shipbuilding in the United States has likewise 
been retarded, because makers of steel materials required a higher price from 
the American consumers than they did from the foreign consumers for sub- 
stantially similar products. Of course, American exporters have to get for- 
eign contracts in competition with foreign plate makers, who are excluded 
from our domestic market. In addition to this, American export plate 
makers are interested in preventing the establishment of plate manufac- 
turing in their customer nations abroad, and to that end bid low enough to 
discourage foreign nations from entering the field for producing their own 
plate at home. The progress of domestic maufacturers of iron and steel 
goods may likewise be handicapped by the sale of iron and steel in their 
unmanufactured state at so much lower a price to foreigners than to domes- 
tic consumers as to keep the American competitor out of foreign markets 
generally. The natural limit to such a policy of maintaining a higher level 
of prices for these materials at home than abroad is found in the restriction 
of domestic consumption and in the import duty. If restriction of consump- 
tion at home does not operate to prevent the short-sighted policy of dis- 
crimination against domestic development of manufacturing industries, the 
other contingency is more or less sure to arise, namely, the demand for a 
reduction of the tariff on unfinished iron and steel, in order to equalize the 
opportunity of makers of finished products in foreign markets. To this policy 
the domestic consumer is usually ready to lend himself, thus making a 
powerful combination of interests to set limits to the rise of domestic prices 
of Iron and steel materials.^ 

The first attempt at a systematic study of the problem was made by 
the staff of the Industrial Commission and presented in its report 
"Foreign and Domestic Prices of American Products."^ 

The report stated that, "In view of the frequent assertion that ex- 
porters of American-made goods often sell them in foreign countries 
at lower prices than are obtained for similar goods at home, the Indus- 
trial Commission has endeavored to secure from the business interests 
of the United States a full and frank statement covering the efforts 



^ Jacob Viner, TDumping : A Problem in International Trade, Chicago, 1923, pp. 80-90. 
' "Monthly Summary of Commerce and Finance," August 1900, p. 250, Bureau of Sta- 
tistics, Treasury Department. 

*:Report of the Industrial Commission, 1901, vol. XIII, pp. 725-760. 

7 



Q CONCENTRATION OF ECONOMIC POWER 

made to extend consumption of products in foreign markets." The in- 
formation was obtained directly from industrial firms by question- 
naire on a voluntary basi^ and under a pledge by the Commission that 
answers would be treated as confidential. 

The Commission sent its questionnaire to 2,000 firms, of which about 
715 replied; 416 answers were from firms engaged in exporting and 
approximately 300 from firms which stated that they had no export 
business. 

The method used to obtain information, the failure of the Commis- 
sion adequately to define price and to specify the difference in the type 
of customer in domestic and export markets, leave the conclusions that 
can be drawn from this study open to doubt. It was concluded that 
"The great majority of the answers indicated that prices are no lower 
abroad than they are for domestic customers, and a considerable num- 
ber indicate that foreign prices are higher." As to just what is meant 
by "foreign prices" there is no great clarity. For example, in dis- 
cussing the replies received from textile firms, it was stated that "Of 
the 18 establishments answering the schedules, 13 report that foreign 
prices, or the prices in foreign markets, are not lower than those in do- 
mestic markets." Because of the confusion that must have existed as 
to exactly what prices were being compared, a statement of this char- 
acter has little meaning except that it does show that there were five 
establishments reporting that "foreign prices, or the prices in foreign 
markets" were lower than those in domestic markets. The writer can 
state from actual experience that when the question, "Do you sell in 
foreign markets for a price less than that charged for exactly similar 
articles in the United States?" is put baldly to business executives, 
the answers received are seldom based on a comparison of f . o. b. factory 
prices to similar classes of customers. 

Further evidence of the confusion that arose from the wording of 
the questionnaire is apparent from the answers given to a question on 
the reasons for differences in prices. Of the reasons of a permanent 
nature "to Avhich are ascribed the greatest importance are those of 
cash payment and large purchases in foreign trade, whereas the domes-, 
tic trade is based on credits and small purchases." And next in im- 
portance would seem to be "the drawback or rebate of the tariff on im- 
ported raw material of goods manufactured for export and "where an 
allowance is made from the internal revenue duties in case of exported 
goods." Of course, as ordinarily conceived these cost differences are 
not differences in prices at all. 

The inadeauacy of the study led to different opinions of the im- 
portance of the practice, both as to its extent and its significance. In 
Its final report the Commission stated that "In about 20 percent of 
the cases covered by the Commission's returns, the export prices have 
ruled lower than those charged to home customers." The Commission 
did not think the practice was confined to the trusts but that it was 
quite common "on the part of the separate establishments as well as of 
combmations." And it concluded that "It is probable * * * that 
when the export prices have been at cost the result has been by keeping 
the plants fully employed, to hold the prices to American consumers 
lower than would have been possible otherwise."" This conclusion 

♦ Final report of the Industrial Commission, 1902, vol. XIX. pp. 626-627. 



CONCENTRATION OF ECONOMIC POWER 9 

"was based on testimony of interested witnesses rather than on an im- 
partial economic analysis of the problem. 

It is not surprising that in a supplementary statement by Thomas 
W. Phillips entirely different conclusions were reached : 

There are a large number of industries iiL which it is in evidence that 
the domestic price is much higher than the export price. I do not agree 
that the answers to inquiries addressed by the Commission to exporters 
indicate that the trusts are not chargeable with this practice to any serious 
extent. Out of 2,000 schedules of inquiries sent out, there were received 
only 416 replies, and only a very few of these replies came from corporations 
known popularly as trusts (vol. XIII, p. 726). The fact that about 75 
answers indicated lower prices abroad than at home is significant, when 
it is noted that more than four-fifths of those addressed failed to answer, 
and that naturally those who are chargeable with such discriminations 
would be the ones who would decline to reply. 

Several witnesses before the Commission on behalf of the trusts admitted 
that their export prices were lower than their domestic prices, but they 
contended that this was necessary in order to work off their surplus and 
to keep their establishments running full time, and that all manufacturers 
in all countries do the same. This argument overlooks the fact that 
their surplus products could also be worked off by lower prices at home, 
and that it is the tariff which encourages them to cause a domestic 
surplus by restricting domestic consumption through high prices." 

Among the Commission's recommendations is included the following 
statement relevant to this problem : 

That, in view of the extent and perfection of our manufactures, of our 
growrig export trade and the sharp competition it encounters in foreign 
markets, of the practice by some exporters of making lower prices abroad 
than at home, and of the desirability of protecting the consumer as well 
as the producer, without awaiting other legislation, the Congress provide 
for a commission to investigate and study the subject, and to report as soon 
as possible what concessions in duties may be made without endangering 
wages or employment at home, what advantages abroad may be obtained 
therefor, and also to suggest measures best suited to gain the ends desired.* 

A more extensive report on comparative domestic and export prices 
was prepared for the New York Tariff Reform Club and reprinted 
in the Congressional Record of June 7, 1906.'^ The report stated that 
the great bulk of our exports of manufactured goods, which amounted 
to ^52,000,000 for the year ended June 30, 1904, were sold to for- 
eigners at prices much lower than those prevailing in this country. It 
was estimated that 85 or 90 percent of our exports at that time were 
sold at an average of 20 percent less than domestic prices. 

After summarizing the available evidence in official sources to sup- 
port this charge, an extensive table of comparative prices was pre- 
sented which showed export prices to be substantially below domestic 
prices for a large variety of manufactured goods. The price compari- 
son suffers from two defects. First, the report does not name the firms 
to which the prices refer or give any other evidence of their authen- 
ticity. In an unofficial report, some proof of the accuracy of the data 
would be desirable. Second, no effort was made to adjust prices for 
any difference in terms and conditions of sale or for differences in 
costs that might have existed. The domestic prices seem to be whole- 
sale prices, but it is not clear to what class of customer the export 
prices refer. The bulk of them are presumably prices to export com- 
mission houses, which handled a much larger volume of our export 

» Vol. XIX, p. 663. 

' Congressional Record, vol. 40, pt. 8, 59th Cong., Ist sess., pp. 8024-8033 



2Q OONCENTRATION OF ECONOMIC POWER 

business in those days than at the present time. In that case the 
manufacturer would have had no selling burden on his export busi- 
ness and some differential between the domestic and export prices was 
to be expected. The report is therefore, not conclusive as to the size 
of the differential beween domestic and export prices, and no doubt 
overestimates the percentage of exports sold at dumping prices. 

The Secretary of Commerce and Labor was directed by a Senate res- 
olution of December 16, 1908, to supply as much information as he 
could regarding American manufactures which were sold for lower 
prices in foreign markets than at home. Two reports were submitted 
to the Senate.^ 

The difficulties of the task were apparently realized. 

To secure the information contemplated by the resolution of the Senate, 
and arrange it in form that would present the facts in a satisfactory manner, 
would require the services of a person who has had experience in active busi- 
ness and who has practical acquaintance with industrial and mercantile 
affairs, including knowledge of methods employed in the preparation of 
goods for shipment, charges and expenses that are incidental to transporta- 
tion, entrance, clearance, discounts, credits, and the like. Thorough 
equipment of this character is deemed essential to proper and impartial in- 
vestigation. Ascertainment of prices at which articles are sold is simple, 
requiring no special knowledge ; but to ascertain causes for prevalent prices 
or conditions that may be abnormal and to weigh these causes impartially 
would require the services of a man competent for such work.' 

Prices of United States g( jds in several foreign markets were sub- 
mitted in the reports but no comparative prices for the domestic mar- 
ket were offered. The prices were reported by special agents with 
general comments to the effect that prices in the foreign markets were 
not lower than prices for similar goods in the American market. No- 
where in the reports are comparisons made of the manufacturers' prices 
f .o.b. mill for foreign and domestic trade. 

On May 27, 1926, the Federal Trade Commission submitted a report 
on "Alleged Violation of Anti-Trust Laws by Combinations Being 
Formed Abroad by American Firms and Alleged Dumping of Ameri- 
can Goods in Foreign Markets." " The study was made in response 
to a request dated March 24, 1925, by a group of Senators who asked 
"whether in any cases American goods are sold cheaper to foreign cus- 
tomers as a means of maintaining the prices of such goods manufac- 
tured in the United States, than to American consumers." 

The report states that "a general survey has been made of the 
principal commodities exported from the United States * * *. 
Personal inquiries were made of concerns engaged in interstate and 
foreign commerce." A summary of the replies received in response to 
the inquiry is presented which consists of a detailing of the various 
types of policies found. There is no indication of the prevalence of 
various policies and little mention of the industries which use the 
policies. 

In a concluding statement the Commission states : 

No evidence has been found of an intention to export at lower prices as 
a means of maintaining high prices in this country. On the contrary, ex- 
porters contend that when the export price is lower, exportation is of great 
advantage to the industry and to the public, because it serves to stabilize 



»n*P;«?,'^*^' ^'<>- 6- Manufactured Products Sold In Foreign Markets at Lower Rates Than 
m American, pts. 1 and 2, 6lst Cong., 1st sess 

•Ibid, pt. 1, p. 2. 

" Mimeographed. 



CONCENTRATION OF ECONOMIC POWER IX 

production, providing an outlet for surplus, preventing the closing down of 
mills and mines when the domestic demand is temporarily slackened, and 
resulting in lower production costs and, consequently, lower prices to domes- 
tic purchasers. * ♦ * From the standpoint of the American producer or 
manufacturer, two arguments against dumping are suggested by concerns 
to which this inquiry was presented. It is insisted that goods are not 
dumped (1) because it would be an Injury to the company's domestic trade 
through loss of gocd will of the American consumer, and (2) because it 
would be an injury to the company's foreign trade which can only prosper 
in the long run by establishing permanent foreign markets * * *. It Is 
also claimed that "regular" exporters, those selling in large quantities and 
expecting to stay in the business, are selling at regular intervals and gen- 
erally at higher prices to foreign customers than to domestic ; that the prac- 
tice of dumping surplus into foreign markets at irregular intervals and at 
low prices is used less and less frequently and will continue to diminish as 
our foreign trade develops. 

The best study and the only recent one of a comparison of domestic 
and export prices was that of the agricultural implement industry 
made by the Federal Trade Commission. Considerable care was exer- 
cised to obtain comparable prices — that is, prices which refer to the 
same commodity under similar terms and conditions of sale. 

The Commission found several instances of sporadic dumping. 
Goods were shipped abroad and because of some change in business 
conditions could not be sold at the anticipated price. Prices were, 
therefore, cut in order to move the stocks as reshipment to the United 
States would have been unprofitable. The bulk of the exported goods, 
however, was found to be sold at the same prices as similar goods in 
domestic sales. 

Other bits of information on dumping from the United States in 
earlie.' years are available, but enough has been given to indicate its 
general character. A good portion of it is inconclusive as the prices 
compared are not really on a comparable basis. It is furthermore of 
little value for the present study because the bulk of the information 
refers to conditions of 20 years or more ago. The only study of 
recent years is that of the Trade Commission on agricultural imple- 
ments. Thus, it was necessary in the present study to obtain from 
business firms the primary data for the comparisons of domestic and 
export prices. 



CHAPTER III 
SCOPE OF THE FIELD STUDY 

It is evident from this brief summary of previous studies of the 
problem that available knowledge of the subject would be inadequate 
for the Committee's needs. In addition to inaccuracy and inconclu- 
siveness, the data from previous studies do not cover current business 
practices. Nor are they addressed precisely to the problem in a way 
that makes them adequate for present purposes. It was, therefore, 
necessary to make a field survey of the current price policies of busi- 
ness that would contrast domestic and export prices. 

For two reasons it was considered essential that the information 
industry could furnish be obtained by personal interview with the 
appropriate business executives rather than by relying upon a mailed 
questionnaire. The probability is that returns to a questionnaire 
would come primarily from firms which did not have lower export 
prices and thus bias the sample. Furthermore, the character of the 
information required is such as to make it unlikely that accuracy 
could be obtained except by interview. This is due to the difficulty 
of framing a set of questions which would leave no doubt of the precise 
information desired with resulting indefiniteness in the answers. 

The data were obtained through conversations with the executives 
of each business concern rather than by sifting the evidence out of 
the business records. The reasons for this are that an executive can 
answer in a short time questions which the records could reveal only 
after weeks and even months of work and, furthermore, certain in- 
formation was desired which would not appear in the records. As the 
study was designed to be qualitative in character, rather than an. actual 
statistical measurement of differences in prices, the desired data could 
more quickly be obtained by this method. 

In order that business executives might feel free to speak frankly 
about the policies of their firms and be under no apprehension of 
unfavorable reactions upon their particular business, it was guaran- 
teed that all information provided the investigator would be confi- 
dential as to the source, and that nothing would be published to reveal 
the identity of any firm. It was relatively easy for the investigator 
to arrange the order of his questions so as to assure himself that they 
were being answered to the best ability of the business executive. It 
must be emphasized, however, that the analysis of the cases presented 
in the study and the conclusions reached by the investigator were made 
independently and are not the undigested opinions of business execu- 
tives. In some cases the persons interviewed might not agree with the 
conclusions of the investigator. 

^" this basis a study was made of the practices of what might best 
be called 76 cases. They are called cases rather than companies or 
corporations because the study often cuts across the complications of 
corporate structure. The purpose of this classification was to in- 
12 



CONCENTRATION OF ECONOMIC POWER 13 

elude as a unit for discussion the relevant domestic and export price 
policies for a particular pi;oduct, or related group of products, regard- 
less of whether this involved more than one corporation or only part of 
a corporation. For example, a company may have its export depart- 
ment incorporated separately, but both corporations are considered as 
one case for this study. An export house may handle the export busi- 
ness of as many as 40 independent producing companies on an agency 
basis or otherwise, but the combined pricing policies are counted as one 
case in this report. Several of the cases are Webb-Pomerene export 
corporations formed by a group of domestic concerns. Each of these 
corporations and its group of producing members was counted as one 
case. On the other hand, one corporation may have two or three pro- 
ducing departments, each making a different line of products, each hav- 
ing its own export division, and each determining its selling and pric- 
mg policies in accordance with the conditions of the industry of which 
it is a part. The ideas of the central management may have little 
effect upon the price policies of each department. In such circum- 
stances each department may be a separate case for the purpose of this 
study. 

An attempt was made to select a sample which would illustrate as 
many type situations as possible. The only characteristic which all the 
eases have in common is that in each an active effort is being made to 
secure export business. The volume of export business obtained and 
the proportion it bears to domestic business varies considerably. Many 
types of industries are represented and many types of marketing pro- 
cedures. Some are giant corporations and some are moderate-sized 
businesses. Some are known td" be operating under a noncompetitive 
price system in the domestic market, while others are generally con- 
sidered to be operating in highly competitive industries. Some are 
parts of world-wide organizations with plants in many parts of the 
world, while others obtain their export business through agents in 
foreign countries without the aid of traveling representatives. The 
manufacturing plants are widely distributed throughout the United 
States with the executive or export offices located in New York, Phila- 
delphia, Pittsburgh, Wheeling, Chicago, Buffalo, Niagara Falls, and 
Rochester. The diversity of the product sample may be appreciated 
from the following list of the principal products of the concerns 
studied : 

Foods 

Flour. Branded food products. 

Packing-house products. Canned fruits and vegetables. 

Evaporated and condensed milk. 

Testiles and Theie Products 

Cotton yarn. Girdles. 

Mercerized cotton yarn. Women's gloves. 

Silk knitting yarn. Pajamas. 

Rayon yarn. Textile finishers. 

Cotton and rayon piece goods. Men's collars. 

Cotton staples. Men's shirts. 

Cotton, turkish. and buck towels. Neckties. 

Silk hosiery. Felt hats. 

Men's cotton hosiery. Caps. 

Bed sheets and pillowcases. Straw hats. 

Cotton and wool blankets. Handkerchiefs. 

Women's underwear. Sanitary napkins. 



14 



(X)NCENTRATION OF ECONOMIC POWER 



Machinery and Transportation Equipment 



Automobiles. 

Trucks. 

Adding machines. 

Calculating machines. 

Listing machines. 

TjT)ewriters. 

Accounting machines. 

Radios. 

Phonographs. 

Radio tubes. 

Commercial radio equipment. 

Theatrical recording equipment. 

Theatrical reproducing equipment. 

Dyeing machinery. 

Compressors. 

Pumps. 

Elevating machinery. 



Conveying machinery. 

Household electrical equipment. 

Household electrical appliances. 

Wood building machinery. 

Tractors. 

Sewage-disposal machinery. 

Machine tools. 

Air-conditioning equipment. 

Heating and ventilating fans. 

Sewing machines. 

Diesel engi-nes. 

Scales. 

Electrical machinery. 

Electrical refrigerators. 

Industrial motors and generators- 

Electrical supplies. 

Electrical light lamps. 



Chemical and Allied Products 



Pharmaceutical specialties. 

Chemicals for the drug trade. 

Pharmaceuticals. 

Biological products. 

Home necessities. 

Vitamin products. 

Bulk drugs. 

Automotive chemicals. 

Insecticides. 

Industrial lubricating oils and greases. 

Textile assistants. 

Chemical specialtist for heat treat- 
ment, processing and finishing of 
metal products. 

Paints. 

Glass, Stone, 

Glass bottles and jars. 
Glass tableware. 
Tumblers. 
Safety glass. 
Plate glass. 



Lacquers. 

Enamels. 

Industrial explosives^ 

Sporting powders. 

Chemical products 

Heavy chemicals. 

Carbon products. 

Ink ribbons. 

Automotive lubricants. 

Reagents. 

Abrasive grains. 

Photographic chemicals. 

Cosmetics. 

Writing inks. 

AND Clay Products 

Plaster wallboard. 
Acoustical tiles. 
Structural insulating board. 
Lime. 
Plaster. 



Me^-al Produots 



Pipe fittings. 

Flush valves. 

Plumbing fixtures. 

Valves. 

Heating equipment. 



Hand saws. 

Band and circular saww 

Tools. 

Metal lath. 



Paper and Aixied Products 



Paper towels. 

Paper and stationery specialties. 

Craft board. 

Writing paper. 

Printing trades paper. 



Cleaning tissues. 
Toilet tissues. 
Insulation board. 
Reinforcing building paper. 



MlSCEIXANLDUS 



Men's shoes. 
Phonograph records. 
Cork products. 
Leather belting and packing. 
Cigarettes. 

Mining and industrial safety ap- 
pliances. 
Industrial instruments. 



Commercial measuring instruments- 
Ophthalmic instruments. 
Film projectors. 
Cameras. 

Photographic supplies. 
Abrasive equipment and supplies.. 
Refractory products. 
Laboratory apparatus. 



CONCENTRATION OF ECONOMIC POWER 15 

The reader will note that while this list covers many of the items 
Tvhich are important in our exports of manufactured products, there 
are many omissions. There were three ^easons why the list is not 
more comprehensive. The omissions which appear most conspicuous 
are due to the fact that these industries are being studied intensively 
at the present time by other executive agencies represented on the 
Temporary National Economic Committee. Either these studies will 
include a comparative analysis of domestic and export prices or else 
it appeared undesirable to impose too great a burden on a small group 
of concerns by requesting data for two studies at once. Any other 
omissions are the result as much of chance as of any other factor. 
The purpose was to get sufficient coverage to reveal the basic problems 
which create price differences. Diversity of industry in the sample 
was desirable in order to give assurance that no important problems 
were omitted. But when it was felt that the types of situations exist- 
ing in industry were rather thoroughly covered, the sample was con- 
sidered sufficiently large. It is, therefore, to a large extent, accidental 
ihat some products rather than some others are in the list. 

It must be stressed that the emphasis in this report is not upon the 
price policies relating to particular products but upon the types of 
policy that businessmen use and find effective. A sample of 76 cases 
cannot possibly be decisive as to what products have lower export 
prices or higher export prices, although it might be revealing as to 
w^hat proportion of our export trade is sold at other than domestic 
prices. Before long it will be apparent to the reader that in many 
cases a product sold in a particular way by one manufacturer may be 
sold under an entirely different policy by another manufacturer. All 
that one can expect to do with the limited sample under review is to 
illustrate the various types of situations and, insofar as is possible, 
to find the basic conditions determining those situations. 



CHAPTER IV 

THE PROBLEMS INVOLVED IN COMPARING DOMESTIC 
AND EXPORT PRICES 

Anyone examining the invoices of most manufacturing establish- 
ments covering the sales of a particular product for even as short a 
period as a month will find a bewildering array of prices which might 
appear incapable of comparison. The complexity of the compara- 
bility problem will be evident in the existence of different prices to 
retailers, wholesalers, distributors, and other manufacturers, f. o, b. 
prices and delivered prices, quantity discounts, advertising allowances, 
varying credit terms, combination offers, f. a, s. prices, c. i. f. prices, 
agents' commissions, packing enlarges, or the nominal prices used to 
record transfers of the products to subsidiary companies at home or 
abroad. This confusing assortment of invoice prices attests to the 
fact that a price usually includes some service or group of services as 
well as the product itself and makes it clear that a very careful defi- 
nition of price must be formulated before meaningful comparisons 
between domestic and export prices can be made. 

One might expect tliat precise definition would be found in the vast 
body of antidumping legislation that exists throughout the world. 
But the standards of price equality which are elaborated in anti- 
dumping legislation are generally inadequate for our purpose. They 
cover a variety of practices or types of dumping which have no rela- 
tion to this study and, furthermore, the definitions are in such general 
terms as to have little meaning unless implemented by many adminis- 
trative regulations. The general character of antidumping legislation 
can be seen from the following summary from a report of the Federal 
Trade Commission of usual provisions for which dumping duties will 
be imposed : 

(1) Goods imported at prices less than the "domestic value," "market 
prices," or the "fair market value" in the country of manufacture or export 
plus expenses incident to packing and transportation. 

(2) Goods imported at prices less than the cost of production in the 
country of origin, or less than the cost of production of similar goods in the 
country of importation. 

(3) Importation of goods sold at "less than a reasonable price," or at "an 
unfair price." 

(4) Importation on consignment, of goods which may be sold at less than a 
reasonable price. 

(5) Importation of goods freight free, or at ballast rates of freight, or in 
subsidized ships at rates of freight lower than the freight rates prevailing 
at the date of shipment. 

(6) Importation from a country in which the exchange value or currency 
has depreciated, resulting in prices detrimental to industries in the country 
of importation. 

(7) Importation of goods upon which a bounty, bonus, rebate, or subsidy 
has or will be granted in the country of production and/or exportation.* 



• Federal Trade Commission, "Alleged Dumping of American Goods In Foreign Markets," 
1926, pp. 16-17. (Mimeographed report.) 

16 



CONCENTRATION OF ECONOMIC POWER 17 

JNIore pertinent definitions can be derived from the economic mono- 
graphs on dumping which have classified the various kinds of dumping 
and discussed in specific terms dumping by the producer. Professor 
Viner, for example, defines dumping as "price discrimination between 
national markets."^ In explaining the meaning of this definition he 
makes the following comments : 

In the definition of dumping presented above the term "price discrimina- 
tion" was intentionally used in preference to the milder phrase, "sales at 
different prices." In the growing literature on unfair competition there are 
traces of a tendency to apply the term "price discrimination" only to such 
instances of sales at different prices to different purchasers as are not readily 
to be explained by differences in the conditions and terms of sale governing 
the different transactions. Given this interpretation, "price discrimination" 
may, in fact, result from the quotation of identical prices without adjustment 
for differences in the terms and conditions of sale. In international com- 
merce the sale at different pri. to purchasers in different national markets 
is to be regarded as price discrimination, and therefore as dumping only if the 
different prices are quoted simultaneously for identical or substantially iden- 
tical commodities offered for sale under similar conditions and terms, or, 
where these last are not similar, only if the price differentials embodies what 
is either more or less than a reasonable allowance for the differences in 
conditions and terms.' 

Thus it is obvious that quoted prices may be different, and yet that 
tliis difference be due to mere differences in the conditions and terms of 
sale. On the other hand, similar prices may be quoted which conceal 
an actual price difference because the conditions and terms of sale are 
different. 

Hence it is essential in comparing domestic and export prices that 
the terms and conditions of sale in both cases be identical or else that 
appro]:)riate adjustments in quoted prices be made for any differences 
that might exist. The reason for tliis is that differences in terms and 
conditions of sale often arise out of differences in costs to the business 
organization, and it is an establislied principle that differences in 
invoice prices are not discrimijiatory when they reflect differences in 
costs. Thus, in order to put domestic and export prices on a com- 
parable basis, adjustment sliould be made for all differences in costs as 
between the two spheres of operations. Furthermore, to be consistent 
the adjustment of invoice prices for differences in costs should be made 
even if the invoice prices are identical. For example, if an export 
shipment required an extra packing cost of $10, then $10 should be 
deducted from the export price Avhen comparing it with the domestic 
price. If the invoice prices were identical before the adjustment, then 
there is a price discrimination of $10 in faA^or of the export customer. 
But if the export customer had been billed for the packing cost, domes- 
tic and export prices would be equal for the purposes of this comparison. 

The differences in the conditions and terms of sale Avhich usually 
involve differences in costs and which should be allowed for in price 
comparisons, are primarily freight costs, duty or tax refunds on 
exports, the length of credit terms, extent of credit risks, the s'ze of 
orders, packing costs, difference in the selling costs required to get the 
business, and difference in the service facilities offered in diffi rent 
markets. Therefore, in order to assure that domestic and export prices 

' Viner. op. cit., p. 3. 
» Ibid., pp. 8-9. 



1§ CONCENTRATION OF EOONOMIG POWER 

are comparable, the following conditions should be fulfilled, or appro- 
priate adjustments in the quoted prices should be made. 

(1) The price comparison should be made for products which are identi- 
cal. If there is any special manufacture required for exports, the cost must 
be added to the price. 

(2) The comparison should be of prices quoted on the same date or dur- 
ing a period in which neither the domestic nor the export price changed. 
Using the date of shipment can be misleading, for there may have been a 
price change since the sale was made. 

(3) Any rebates to the producer from duties or excise taxes paid must be 
deducted from the export price ; or if exports are exempt from such taxes, 
their price should be lower by the amount of tax. 

(4) The comparison should be made on an f. o. b. factory basis with all 
freight allowances deducted. 

(5) The cost of extra packing required for export should be allowed for 
in the export price. 

(6) The comparison should be made between prices quoted to similar 
types of customers in the domestic and foreign markets ; i. e., both prices 
should be prices to wholesalers, to distributors, to retailers, or to other 
manufacturers. It would obviously be incorrect to compare a price to 
retailers in the domestic market with the price to wholesalers in the export 
market. 

(7) The price comparison must be made for orders of similar size. 

(8) If the credit risk is greater in either market, it should be allowed for 
in the price. 

(9) If engineering or other services are supplied without charge in the 
domestic market and not abroad, the cost of such services should be 
deducted from the export price. 

(10) Differences in advertising and selling costs should be allowed for in 
the price. 

(11) Differences in quantity discounts or credit terms offered to customers 
in both markets should be considered to be differences in prices. 

If commodity prices, adjusted for all of the foregoing factors which 
were applicable, could be obtained, they would provide an accurate 
basis for comparing domestic and export prices and determining in 
which cases export prices were higher, lower, or identical with domes- 
tic prices. In other words, it is the factory net, or mill net, on 
domestic and export sales that should be compared. Such adjusted 
prices represent what might be called the ideal basis of comparability. 

This conception of ideal comparability obviously derives from the 
conditions which prevail under highly competitive conditions. In an 
industry which approximates a condition of pure competition one 
finds that virtually every productive operation and every distributive 
service required to produce the commodity and get it into the hands 
of the consumer is performed by a different group of individuals or 
business concerns, insofar as a division of functions is technically 
feasible. Each functional group of individuals or firms adds only 
one link to the productive process and, therefore, each function is 
individually priced. A buyer paj^s only for that combination of 
functions which he requires. In some cases where one individual 
performs several functions there are competing groups who are will- 
ing to render each of the several services so that the buyer has a 
standard of comparison that enables him to evaluate the worth of the 
combined services offered him. Each service in the entire chain has 
its price and it is quite simple to compare the prices which various 
buyers, such as domestic and foreign, pay for each service and to see 
if they are equal. 

It is, of course, in the standardized, or accurately graded, commodi- 
ties wliich are produced by a large number of unorganized producers 



CONCENTRATION OF ECONOMIC POWER JQ 

and sold to a large number of unorganized buyers that one finds the 
nearest approach to the concept of pure competition. The organization 
of the productive and distributive process of wheat, cotton, apples, and 
truck crops are typical examples of a high degree of competition in 
the contemporary economic system. The farmer concentrates his at- 
tention almost exclusively on one function — growing the crop. If he 
also delivers the product to the railroad station, local grain elevator, or 
nearby city market, he performs this service for his entire product — 
all customers get the benefit of it. The selling function is undertaken 
by independent commission men, and the price of this service is deter- 
mined independently of the farm price of. the product. The major 
transportation function is performed by another group of individuals 
and is priced independently of the previous services. And so on 
through the entire process each function — storage, grading, milling, 
financing, and so forth — has a distinct group of individuals offering 
only one of the services which the final user pays for when he buys the 
product delivered to his place of business. The price of each service all 
along the line is independently determined and is well known. The 
user has the privilege of entering tlie productive process at any stage 
and of paying only for those functions that have actually been exe- 
cuted. The price of wheat is lower in Chicago than it is in New York 
because the New York price must include the cost of transportation 
from Chicago to New York, which is fixed and paid for independently 
of the price of the wheat without transportation. A buyer in Buffalo 
will not pay the New York price because he has the alternative of 
buying in Chicago and shipping to Buffalo at a total cost which will be 
less than the New York price. Similarly, the price of flour is higher 
]n 1-pound ])ags than it is in barrels because there are millers who 
l-orform only the one function while others perform both, and the 
consumer has the opportunity of buying from either. Thus, putting 
the flour into 1-pound bags is an independently priced function. The 
differentiation of function which arises from a multij^licity of pro- 
ducers and a multiplicity of buyers acts to establish an independent 
price for each service in the productive process, and thus makes possi- 
ble a comparison of prices between markets for exactly the same group 
of services. 

Not all agricultural products exhibit this minute separation of 
functions, because tliere is a high degree of concentration either of 
selling or btiying at some point in the distributive system. And, of 
course, in most manufacturing industries the productive process is 
highly integrated, even in what is usually thought of as nonintegrated 
industries, so that the buyer at any stage in the production-distribu- 
tion process is offered a variety of services with little choice of s]:>ecify- 
ing precisely those which he Avants, Generally speaking, the nearer the 
product gets to the ultimate constimer, the more fuuctions are tied up 
in the price and the less choice the buyei' has of sorting out and paying 
for the exact functions tiiat will meet his needs. 

For example, a department store will generally offer the buyer a 
commodity at a price Avhich includes a charge-account privilege, gift 
))acka<>i7tg, free delivery, and exchange services if those are desired, but 
does not give a .pecial price to the customer who takes none of these 
services. Similarly, many manufactured products are priced to include 
a variety of services and often no allowance is made if the buyer- does 

2."iT769— 11- 



20 OONCENTRATION OF ECONOMIC POWER 

not avail liimself of the services. The export price may be set to in- 
clude a somewhat different group of services and it may be impossible 
or impracticable for even the manufacturer to compare the two prices 
by trying to make the two groups of services equal. There is no inde- 
pendent price for each service, and it is often impossible and mean- 
ingless to assess a monetary value for it. 

It might seem that, although the combined services included in the 
selling price are not priced independently, they must have separate 
and cleterminate costs, and that a comparison on the basis of costs 
would be feasible. But the costing problem is highly complex. In 
some cases it is impossible to allocate costs, except by arbitrary meth- 
ods which have no reality but in the accountant's mind, while in other 
cases the expense of doing so would be gi^eater than any benefit the 
businessman could derive from the expenditure. These two difficul- 
ties, joint cost allocation and the expensiveness of costing minor items 
of expense, interpose serious obstacles in the way of a statistical appli- 
cation of the conditions pi-eviously listed as requirements of price 
comparability. A brief discussion of the difficulties encountered in 
applying some of these conditions will illustrate the nature of the 
problem. 
Differences in the Domestic and Export Products. 

In many cases a manufacturer must adapt his product to meet the 
needs of various export markets. The right-hand drive on automo- 
biles, keyboard adjustments on typewriters, foreign-language labels 
on pharmaceutical products, and different-colored bands on hats are 
interesting examples. Any -of these changes must involve some addi- 
tion to costs, but just when the charge is substantial enough to warrant 
an addition to the price is something that even the manufacturer 
cannot always answer. The automobile companies regularly charge 
extra for right drive ; the typewriter companies do not charge for key- 
board adjustments; the hat manufacturer does not charge for 
style adaptations; one pharmaceutical house computes the cost of 
manufacture of foreign-language containers, while another pastes a 
label in the appropriate language over the English printing and does 
not cluirge for this service. In some cases the adaptation of the prod- 
uct involves a cost large enough to be allocated and added to the price, 
but in other eases the added cost is too small to botlier with. Even 
where the manufacturer knoA\s that the cost is substantial, it is r.ot 
always computed separately, for in some instances the foreign market 
price will not allow the extra cost to be added to the domestic price. 

The rule adopted in this study has been to accept the manufacturer's 
estimate of the cost of special manufacture. If he considei-ed the cost 
substantial, then it was assumed that he should make a price adjust- 
ment for it, and that if he did not adjust the export price he was then 
offering a lower price for export. Costs that were too r.egligible for 
the manufacturer to conceive as warranting a price adjustment were 
ignored for the purpose of the price comparison. 

In some eases the firms make an entirely special product foi- the 
export market. The short-wave radios maiuifactured for the Latin 
American market are a conspicuous example. It was found that the 
manufacturer usually knows whether the profit margin included in the 
price of such products is larger or smaller than the customary margin 
in his domestic product. Tlie export price was counted as higlier if 



CONCENTRATION OF ECONOMIC POWER 2l 

the profit margin (in percentage terms) was larger, and lower if the 
profit margin was smaller. 

Some situations, however, present difficulties which defy solution in 
such simple terms. The problem of a manufacturer of black anrl ^_^q1- 
vanized pipe fittings, among other things, is an interesting one. Pipe 
fittings are made in a very large assortment of styles, shapes, and sizes 
and the entire assortment is made in two thread styles, American and 
British. In the domestic market only the American thread is used, 
while both American and British threads are exported. A domestic 
and export price comparison for the American thread fittings presents 
no peculiar difficulties. But how is one to compare the export prices 
of the British style fittings with the domestic prices of the American ?' 
While both types include the same range of shapes and sizes, the pric& 
structures are entirely different. The British thread price structure 
originated with European manufacturers and an American producer 
must meet those prices if he is to get any business. The two price 
structures differ in that the price range of any particular product 
(as an L or union) from the smallest to the largest size is much 
greater for the British than for the American thread. The smaller 
sizes are cheaper and the larger sizes dearer for the British than for 
the American thread. The smaller sizes are produced and used in- 
much larger quantities than the larger sizes — this larger production 
undoubtedly being the reason for their low prices in the British thread 
price structure. But the American producer believes that if he sold 
only small sizes at the Brititsh thread prices he would lose money, 
and if he sold only large sizes the profit would be substantial. Of 
course, a manufacturer must offer the whole range of sizes in order to 
meet the needs of his customers. It would obviously be very difficult 
to compare the two price structures even if one made the simplifying 
assumption that factory costs for the same size of a product were 
identical (which' is not at all likely because they are produced in 
different quantities). The weighted average price in relation to 
weighted average costs would have to be the basis of comparison, but 
these averages would change from day to day or month to month as 
different quantities were produced and sold. And with the tremen- 
dous variety of shapes and sizes involved the expense of detailed record 
keeping would be prohibitive. An additional difficulty is the fact 
that the price changes in the two sj^stems do not occur at the same 
time and are not always in the same direction as one arises from 
European conditions while the other arises from American conditions. 
All things considered, one must agree with the manufacturer that 
the British and American thread prices are not comparable. 

Compai-h'^iov of Pr'toeft Quoted on the Same Date. 

There is ordinarily no problem in obtaining domestic and export 
prices as of the same date. In some cases, hoAvever, frequent price 
changes are usual in the domestic market; new price lists are sent out 
once a month. Such frequency may not be possible in the case of 
exports where customers are spread out to all the corners of the earth 
so that new export price lists are sent out only once a year or when- 
ever major price changes occur. At any time, therefore, export 
prices may be somewhat above or below domestic prices, or some above 
and some below. These cases were not considered as differences 
between domestic and export prices unless the one was consistently 
above or beloAY the other. 



22 CONCENTRATION OF ECONOMIC POWER. 

Rebates on Duties and Excise Taxes Paid. 

There is little difficulty in applying this condition. Of course, the 
drawbacks are sometimes so small in relation to the value of the prod- 
uct that they are ignored in the determination of the export price. 
The excise tax on cigarettes and automobiles makes a sizable difference 
in the price of those products, and the omission of the tax on exports 
must be taken into account in comparing prices. But a manufacturer 
of a pharmaceutical product, which wholesales at about $8.50 per 
dozen, mig^t or might not pass on to his export customers the draw- 
backs on sugar and alcohol taxes which amount to only 21 cents a 
dozen. We did not count an item which was only a negligible per- 
centage of the value of the product if the manufacturer did not deduct 
it from the export price as a difference in price for the purpose of the 
price comparison presented in the following chapter. 

Price ComparisoTis on an F. 0. B. Factory Basis. 

In more than two-thirds of the cases that were examined prices were 
quoted some other way than strictly f. o. b. factory. A few manufac- 
turers who sell f. o. b. factory to the domestic trade quote the same 
prices f. a. s. New York to export customers. Such a practice clearly 
involves a price concession for export business when the factory is 
Tiot located on the seaboard. Other cases in which export prices are 
quoted f. a. s. or c. i. f. according to the custom of the trade, but in 
which the exact amount of the inland freight is added to the f. o. b. 
factory domestic price, are clearly cases of no difference in prices. 
But all other cases present more or less difficulty. 

The difficulty arises because of the variety of freight allowances 
that may be included in the price, because the freight costs may differ 
for almost every customer the firm has, and because there is so much 
difference in the relation of freight allowed to value of product. In 
a few cases freight costs are so high that the manufacturer must keep 
accurate account of his costs to customers in various locations and 
adjust prices for differences in freight costs. For example, a producer 
in New Orleans selling at one price delivered in the United States has 
a total freight bill of 20 percent of receipts from domestic sales. In 
order to get export business, his f. a. s. New Orleans export price is 
20 percent less than the domestic price. Since we are here concerned 
onlv with differences between domestic and export prices and not 
with discriminations in the domestic prices themselves, we counted 
domestic and export prices as identical in that case. 

But where freight costs are not so large a proportion of selling price 
and the difference between export and domestic freight costs not so 
conspicuous, a neat adjustment of prices is usually impossible. A 
few examples will show the complications involved. Some firms lo- 
cated on or close to the Atlantic seaboard have zone prices for the 
domestic market; the price for each zone includes freight to any 
point within the zone. The zone 1 price is offered to export customers 
f. a. s. New York. Now the precise costs of freight to all customers 
in zone 1 may be more or less than freight costs from factory to 
steamer side in New York, and it may vary continually according to 
the floAv of sales in the domestic market. Furthermore, the differences 
between the domestic zone prices may not be exactly equal to the 
difference in average freight costs between the zones. 



CONCENTRATION OF ECONOMIC POWER 23 

A firm located in New York State sells f. o. b. its regional sales 
branches to its domestic customers for all items that are regularly 
carried in stock, but f. o. b, factory for made-to-order items. In 
export it sells all orders f . a. s. New York City for freight f . o. b. 
New York for parcel post, but it gets very little made-to-order business 
from export customers. In any event the freight cost from factory to 
New York City is very small in relation to the value of the product. 
Now the average freight paid by the company on export businesses less 
than the average paid on other business in New York City (because 
the domestic customer pays the freight on a larger proportion of the 
total business) but it is less than the average for all United States 
sales. But as all freight is a relatively minor item of expense, the 
company does not keep separate accounts for freight paid by domestic 
and export sales. And as a good part of the export shipments come 
out of stocks of the New York City sales branch, it would be no easy 
matter to allocate freight costs. 

Another firm located near the eastern seaboard sells at one de- 
livered price throughout the United States. Total freight costs on 
domestic sales is a rather significant item — about 12 percent of 
domestic sales. The company believes it is offering export cus- 
tomers the same conditions by quoting identical prices for export 
f. o. b. any port in the United States. Consequently, export ship- 
ments move out of New York, Philadelphia, Baltimore, Gulfport, 
Mobile, Key West, New Orleans, San Francisco, and Seattle, accord- 
ing to the locations of the export customer, available shipping facili- 
ties, and ocean freight rates. But because of the geographical con- 
centration of the world's population and buying power, a larger 
proportion of the company's exports leave from the port of New 
York than the proportion of domestic sales which are concentrated 
around the area from the factory to New York. Consequently, while 
the company is offering the domestic and export customers the same 
inland freight facilities, its average freight bill per unit of sales is 
lower for export business than for domestic business. 

Another firm located in the vicinity of New York sells to all cus- 
tomers, domestic and export, at the same price f. o. b. New York, but 
it allows freight on domestic orders of over $100. The purpose of' 
this practice is to induce the customer to plan his buying so as to 
avoid the expense involved in many small shipments. In export 
there is no inland freight, and besides the customers plan their buy- 
ing as well as they can without special inducement, because the dis- 
tances in most cases prevent rapid delivery and they must be pre- 
pared to meet their needs out of stock. 

These examples will make it clear that some more flexible formula, 
is needed than an attempt to adjust prices for differences in the cost 
of freight included in the price. For once goods are sold on other 
than strictly f. o. b. factory terms, a multiplicity of complications arc 
introduced. All kinds of stipulations are made to suit the peculiari- 
tips of the product, the domestic market, and the export market. 

For the purpose of our price com])arison, the following procedure 
was adopted. F. o. b. prices were used wherever they are the basis 
of varying price quotations. Where exports are sold c. i. f. the ocean 
freight and insurance costs were deducted from the export price to 
provide a basis of comparison with domestic prices. In all cases 



24, OONCENTIIATION OF ECONOMIC POWER 

where the producer offered the same conditions with regard to in- 
land freight to export customers as to domestic, no price adjustment 
was made even though actual freight costs were not, as tliey could 
hardly ever be, identical. Furthermore, no price adjustment was 
made where the freight conditions were dissimilar if the purpose of 
the difference was to expedite business procedure. But a price ad- 
justment was considered necessary where the special conditions 
offered to export or domestic customers was in lieu of a price con- 
cession. 

Adjustment for Cost of Special Packing. 

Ordinarily it is not difficult to make a price adjustment for the 
cost of packing. Where this cost is a sizable item, the manufacturer 
is well aware of the cost and knows whether the export price is 
sufficiently higher to cover the cost. In some cases the cost is so smalJ 
in relation to tlie vaUie of the product that the manufacturer prefers 
to ignore it, and we have accepted his judgment. For example, in 
shipping adding machines packed three in a case, one firm slips the 
regular package into another case for export shipment. The value 
of the three machines is well over $100 and the extra case costs less 
than 25 cents. It hardly seems reasonable to consider this a price 
discrimination. In fact, the manufacturer said that he did not add 
the cost to the export jjrice because it never occurred to him to charg>? 
for the extra container. 

Some cases present complexities. A lightweight product is sold 
in the domestic market and in many export markets in a paper-board 
container that weighs ahnost as much as tlie })roduct itself. The man- 
ufacturer's price covers the product and container. In some ex])ort 
markets duty is assessed by gross weight, and the product of this com- 
pany plus container would have to pay almost twice as much duty as 
the products of competing manufacturers which are sold without con- 
tainers. Hence, the price in those export markets would be too high 
to attract consumers. The company, therefore, ships to dealers in those 
countries without containers and gives them an allowance which ap- 
proximately covers the cost of })ackaging in the dealer's country. As 
the dealer in each country only ])ackages a small volume in comparison 
to the output of the firm itself in the United States, his cost per pack- 
age is larger than the cost in the United States so that the net to the 
company is lower on sales of this product to those countries. We did 
not, however, count this as a reduction in the export price. Anothei" 
firm sells its product unpackaged for export and gives a large allow- 
ance for the purpose of meeting foreign competition. The allowance 
is much larger than the cost of packaging, here or abroad. In this case 
we did count the export price as lower than the domestic price. 

Comparing Prices Quoted to Similar Types of Buyers. 

This provision is very difficult to apply in some cases and impossible 
to apply in a few instances. When the firm has some customers of the 
same type in the domestic and export market, the prices to identical 
types of customers can be compared. But when there is no equivalent 
of the domestic type of customer in export markets and vice versa, the 
comparison of prices is not a simple matter. 

In the first place the division of the distributive function among re- 
tailers, wholesalers, and distributors that is a characteristic of the 



CXDNCENTRATION OF ECONOMIC POWER 25 

United States, simply does not exist in many parts of the world as, for 
example, in many Latin American countries. The distribittive func- 
tion may be divided between importers and merchants, but the im- 
porter may sell direct to the consumer as well as to nonimporting mer- 
chants, or he may sell only to the consumer. The American producer, 
Avho does not have extensive field representation, may not even know 
what functions these foreign customers perform, and he is apt to clas- 
sify them as wliolesalers without much investigation. We did not chal- 
lenge the classification of customer which the firm found it necessary 
to make. 

But real difficulties arise in the following types of cases. A domestic 
maiuifacturer maintains his own retail branches in the United States. 
All his domestic sales are direct to consumer, but export sales are to 
wholesalers and retailers. The expense of maintaining the retail 
branches varies from about 33 to 47 percent of the branches' sales and, 
of course, the total varies from year to year according to the total 
volume of business and the sales of each branch. If the discount 
offered to export customers was an approximation of the average cost 
u» tlie company of the selling function we counted the prices as identi- 
cal, but if it was consistently larger Ave counted the export price as 
lower than the domestic. 

Another firm sells in all the heavily populated areas of the United 
States through retail branches but appoints exclusive dealers for a 
few thinly populated areas. The discount which the firm nnist give 
these dealers to induce them to stock and sell the product is, of course, 
based upon a realization of the costs of doing business in thinly popu- 
lated areas and is larger than the actual costs of the company's retail 
branches located in heavily populated areas. The company also sells 
abroad through exclusive dealers and grants them the same discount 
as is given the exclusive dealers in the domestic market. Now ob- 
viously the net return on exports is lower than on domestic business 
since the costs of the company's retail branches are less than the 
dealers' discount. We did not, however, consider that this procedure 
involved a price concession to the export customer. 

Equal Credit Terms to Domestic and Export CustOTners. 

In a large majority of the cases covered in the field survey, it was 
found that longer terms are extended to export customers than to 
domestic customers. In general, the longer extension of credit is 
designed to cover the longer time required for shipment of goods 
and transmission of documents. The time that the export customer 
has possession of the goods without payment is generally no longer 
than the time a domestic customer would have them. In almost all 
cases the cost involved in this longer extension of credit is absorbed 
by the shipper. If the absorption of this cost were to be considered a 
price concession on exports, then almost all cases which would other- 
wise have identical domestic and export prices would have higher 
domestic than export prices. As this would not be a useful distinction 
for the purposes of this study, such differences in credit terms were 
ignored in making the price comparisons. In a few cases, however, 
very long credit terms of 6 to 9 months are extended to export cus- 
tomers where domestic customers are limited to 30 days, and the pur- 
pose is to give an added inducement to the export customer. As this 
extension of credit is in lieu of a price concession, we did consider that 



26 CONCENTRATION OF ECONOMIC POWER 

an adjustment of the export price in these cases was necessary. It 
so happened that in the cases covered all those which extended un- 
usually long credit terms also made actual price concessions in export 
and, therefore, would have been classified as having lower export than 
domestic prices regardless of credit terms. 

These illustrations are sufficient to indicate that there are many 
difficulties in the way of a strict adjustment of prices for all differ- 
ences in cost, although they do not preclude the drawing of reasonable 
conclusions. Even if one considered that that principle should be 
rigidly applied, it would be necessary to adopt certain simplifying 
statistical procedures as indi<;ated above. But as a comparison of 
prices must be made in accordance with actual business practices, 
situations occur which leave some doubt as to the applicability of the 
principle itself. It is not that costs in these cases are indeterminate, 
but that the relevancy of adjusting prices for differences in cost is 
itself doubtful. 

In many cases, the distinction between domestic and export sales 
is an artificial one from a business standpoint. One might find that 
the relative costs of many items of expense were different for export 
than for domestic business, due entirely to accidental factors. In 
fact, the same type of cost differences would be found between different 
areas of a company's operations within the United States. For 
example, a sales branch in one of the densely populated eastern States 
might have relatively lowf * costs than that in a western territory. 
Similarly, it might be rela ively more or less expensive tlian a Latir 
American branch. And yec, if all the branches of the company were 
charged at the same price by the factory, it would seem only common 
sense to consider domestic and export prices equal. 

It is generally with regard to selling costs that it seems mapplicable 
to adjust prices for all cost differences as between domestic and ex- 
port operations. A typical example is that of a firm which advertises 
in the domestic market where the bulk of its sales are concentrated 
but does not advertise in its far-flung export markets, each of which 
absorbs only a small share of its total sales. This company sells its 
product for the same price f. o. b. factory to all customers, foreign 
or domestic. If one were to adjust the domestic price for the dif- 
ference in advertising cost, the net result would be that the export 
Erice would be higher than the domestic price, which would seem to 
e an unreasonable conclusion. The procedure followed in this study 
was to ignore differences in cost of this type. Another firm, however, 
does its own advertising in the domestic market but grants an adver- 
tising discount to its exclusive distributors in foreign markets. The 
invoice price to its export customers is, therefore, lower than the 
domestic price by approximately its advertising cost in the domestic 
market. In cases of this type we also considered domestic and export 
prices to be equal. 

Situations such as these indicate that prices should not be adjusted 
for all differences in costs. With strict adherence to the principle of 
cost equality it is improbable that any cases of equal domestic and 
export prices could be found. Thus, in order to yield more reason- 
able conclusions the comparison of prices in this study was made on 
the basis of an approximation of the factory net back on domestic 
and export sales — approximations such as are used by business itself. 
The problems mentioned above are of a conceptual character, but 



CONCENTRATION OF ECONOMIC POWER 27 

there are others more statistical in nature. These examples were con- 
cerned with the question of when an adjustment of invoice prices was 
necessary to insure comparability. For each of them had only one 
factor which had to be taken into account ; that is, the terms and con- 
ditions of sale were substantially identical except for one sij^nificant 
difference for which an adjustment could be made on the basis of the 
difference in costs. But most cases present many differences in the 
terms and conditions of sale and many differences in the cost to the 
company of supplying identical services for domestic and export 
business with the cost differences being larger for export on some items 
and larger for domestic on other items. For example, a firm sells in 
the domestic market f. o. b. factory at 2/10 net 30, at three different 
prices to consumers, retailers, and wholesalers, gives quantity dis- 
counts on some items, has salesmen working on salary and commission, 
maintains branch sales offices in some localities, does considerable ad- 
vertising, and gives its customers technical advice and engineering 
service when necessary. For export it sells at domestic prices f. a. s. 
New York, boxes for export without charge, gives credit terms up to 
90-day-date draft, has a few traveling representatives to stimulate tha 
foreign dealer by showing him how to market the product, has a few 
special discounts to exclusive representatives in certain export markets, 
does no advertising abroad, has certain special expenses such as cables, 
freight forwarder's fees, consular fees, pays commissions to foreign 
agents, but offers no technical or engineering services in export mar- 
kets and no quantity discounts. It can be seen that the task of adjust- 
ing domestic and export prices for all these differences would be 
enormous, especially when the cost of any one item is not substantial 
enough for the manufacturer to consider a price difference warranted 
on the basis of it. The problem is further complicated when, as in 
many cases, the manufacturer does not sell at uniform prices for export 
but has different prices in different markets depending upon costs 
or local competitive conditions. 

As a practical matter, therefore, the procedure of comparing prices 
must be simplified to statistically manageable rules. The following 
method was used in this study : 

Where invoice prices were the same for the same types of customers, 
domestic and foreign, and there was no individual difference in terms 
and conditions of sale or costs of doing business substantial enough by 
itself to make the net return different, we counted prices as identical. 
Where invoice prices were different and the differences were due to 
specific adjustments for differences in the cost of doing business, we 
counted the prices as identical. Where invoice prices were different 
but the difference was due to market conditions, the export price was 
counted as lower or higher as the case may be. Where prices were the 
same but there was a substantial difference in the costs of doing business 
or the services included in the price, export prices were counted as 
higher or lower as the facts indicated. 

An actual computation of the degree of difference in prices for even a 
small sample would have involved a heavy cost and considerable time, 
which seemed inappropriate to the purpose of the report. All that 
was done, therefore, was to determine if export prices were higher or 
lower than domestic prices. 

Another complication arises in the fact that many firms sell a variety 
of products to many foreign markets, and their price policy is not the 



28 CONCENTRATION OF ECONOMIC POWER 

same for all products and all markets. Some products are sold at 
higher than domestic prices, some are sold at the same as domestic 
prices, and some lowei'. There is a similar variation from market to 
market. In other words, it is often impossible to give a simple de- 
scription to a firm's price policy by saying that it exports at lower or 
higher prices or at prices identical with domestic quotations. For it 
may be doing all three things at the same time. A comparison of 
average prices in export and domestic trade would often, therefore, 
conceal the details which are of primary interest in this study. For 
this reason an attempt at two comparisons between domestic and ex- 
port business was made — one concerns prices, the other profits. 

The cases examined in the field survey have been divided into three 
groups, on the basis of price policy. The prices compared in all cases 
were adjusted prices — not invoice prices. Group I includes those for 
Avhich all or some export prices are higher than domestic prices, but no 
export prices are lower than domestic prices. Some export prices may 
be equal to domestic prices, either for certain products or to certain 
countries, but none are lower. Group II includes all cases for which 
export prices are equal to domestic prices ; none are higher and none 
lower. Group III includes those cases for which some export prices, 
adjusted as indicated above, are lower than domestic prices. In these 
cases export prices may be in part equal or higher than domestic but 
some prices are lower. The details of price policy are given accord- 
ing to the various types classified under each group. 

The comparison of the profitability on export and domestic sales was 
made in order to indicate the overall or average relation of export and 
domestic prices. It is clear that if adjusted export prices on a par- 
ticular product to a particular country are lower than domestic prices 
then the profit margin on those export sales is lower than on domestic 
sales. The process of adjusting prices is a process of allowing for 
significant differences in costs. Hence, a net difference in price is a 
difference in the margin of profit on that portion of exports.* 

The comparison of profit margins on United States sales with all 
export sales measures the difference between the avei-age of all domes- 
tic prices (adjusted) and all export prices (adjusted). It indicates, 
however, two things which are neglected by the price comparison. 
First, it may show that there are some small differences in costs which 
could not be considered large enough to wan-ant a price adjustment. 
For this reason a case in grou]) II of export and domestic prices equal 
may have a higher or lower margin of profit on exj)ort sales. All the 
cases in group I, how^ever, have a higher margin of profit on exports. 
Second, it can show that lower export prices for a portion of a firm's 
exports may be offset by higher prices for other portions. Thus, som& 
of the cases in group III which have some lower export prices also 
have higher profits on export sales. 

In the comparison of profits, all direct costs of doing domestic or 
export business were to be cliarged against those sales to which they 
applied and overhead or joint costs strictly allocated on tlie basis of 
sales. Each sales department, domestic and exjiort, was to be charged 
with its full costs including overhead. 



* The margin of profit refers to nverase profit, of course, not mar>;itinl profit. 



CHAPTER V 

COMPARISON OF EXPORT AND DOMESTIC PRICE 

POLICIES 

In this chapter will be presented a summary of the price policies 
and comparative profitability of domestic and export sales for the 76 
business enterprises covered by the field study. This summarization 
is necessarily an oversimplification of the facts since there are peculi- 
arities in the selling practices of every business organization which in 
one way or another make it an individual case. The cases are classi- 
fied into three main groups and subclassified into various types, 
according to the predominant characteristic of the export price pol- 
icy. In this way, the pledge not to disclose the identity of any busi- 
ness organization which supplied this information is not violated as it 
would be if complete descriptions of products and practices were 
given case by case. Such a classification of the cases based upon the 
dominant characteristic of the price policy, which, so to speak, stressed 
the rationale of the price policy, reduces the data to manageable form 
and more clearly reveals the essential facts. 

The primary classification of the 76 cases has been made on the 
basis of the comparison of domestic and export prices as defined in 
chapter IV. Thus, the cases fall into three groups — those with ex- 
port prices higher than domestic prices, export prices equal to domes- 
tic prices, and export prices lower than domestic prices. The cases 
are further subdivided into 13 types, according to the dominant fea- 
ture of the price policy. This essential feature of the export price 
policy may be either the guiding principle behind the price policy, or 
an expression of the conditions or results achieved by the price pol- 
icy or both. One or more examples of each type will be given in 
order to show the details of price policy. 

If export prices are higher than domestic prices after the adjust- 
ment, then export sales are presumably more profitable than domestic 
sales and vice versa. However, the following distinction must be 
made between the comparison of prices and the comparative profit- 
ability of domestic and export sales as a whole. Where a business 
organization makes some of its export sales at net prices identical to 
domestic prices and some of its export sales at net prices higher than 
domestic it has been put into group I — export prices higher than do- 
mestic prices. Where the business organization consummates any sig- 
nificant portion of its export business at net prices lower than domes- 
tic prices so that its net profit on that portion of its sales is lower 
Ihan the net profit on its domestic sales it has been classified into 
group III — export prices lower than domestic prices. In some of these 

29 



30 OONCENTRATION OF ECONOMIC POWER 

cases the profitability of export business as a whole may be just as 
great as the profitability of domestic business and in some cases the 
export business as a whole may be more profitable. Moreover, as the 
price comparison is based upon an approximation of the factory net 
on domestic and export sales while the profit comparison is based 
upon a precise computation of factory net including all selling and 
incidental costs, the results of these two comparisons are sometimes 
different. The number of cases which have these various profit expe- 
riences will be indicated in the discussion to follow. 

The reader will remember that in the comparison of the net profit 
on domestic and export business all costs must be allocated with no 
special preference given to either the domestic or export sales. That 
is, per unit factory costs for identical products must be the same and 
where the products are not identical the exact factory costs must be 
determined on a rational basis. For example, all factory overhead 
cannot be charged against domestic sales. The direct costs of selling 
and distribution in the domestic market must be charged against 
domestic sales and the same procedure followed for export selling 
costs. Furthermore, ' general administration overhead must be di- 
vided on a reasonable basis. 

In the case histories, it will be indicated whether the business or- 
ganizations have actual profit and loss statements prepared separately 
for domestic and export sales. Where the profitability of export and 
domestic sales are not computed separately the comparison that will 
be offered represents the best judgment of the management. It 
should also be added that when a case is noted as not preparing sepa- 
rate profit statements for domestic and export sales, it only means 
that the profitability is not measured in the manner indicated above. 
The company may keep its records in some other form not suited to 
the needs of this study. 

The distribution of the 76 cases among the three groups and 13 
types of price policies is shown in Table 1. The explanation of the 
various types of price policies is given in the text of this chapter. 



CONCENTRATION OF ECONOMIC POWER 
Table 1 



31 



Name of case 


"5 

S 

s 

1 


is 

n 


i"T3 

is <a 

SB'S 

^ i 

2 o « 


o » 
£^ 

is 

til 

X rt w 


H 

V o 
.2 ft 

|9 
s§ 
c a 


o 

a 

t 

X 


.3 

Ms 

ill 

S 3 S 

1"" 


Group I. Export prices higher than domestic prices 


9 


5 


8 



















Type 1. Export monopoly ^ 


2 

3 
4 

21 


2 

3 





2 

1 
4 


2 

3 
4 








Type .2. No standard export price; accept export business 
only when price is equal to or above domestic price 








Type 3. List prices for export higher than domestic prices 
















Group II. Export prices equal to domestic prices 


10 


2 


13 


2 


4 






Type 4. Market price plus distribution costs for all customers- 


4 

1 

16 








4 

1 

5 


..._.. 


4 

1 
8 






Type 5. Factory price plus distribution costs for all types of 
customers .. . . 






Type 6. One price policy for all customers 


2 


4 






Group III. Export prices lower than domestic prices 


46 


45 


32 


6 


4 


31 


6 






Type 7. Standard export price same as domestic, but conces- 
sion given in some markets - . 


8 
7 
6 

15 

1 
6 
3 


8 
7 
5 

15 

1 
6 
3 


3 
6 
4 

15 

1 
3 


3 

r 
1 

1 


1 
1 

2 


1 
4 
4 

12 

1 
6 
3 


4 


Type 8. Export business with different type of customers 
than domestic, but concession given in some markets 

Type 9. Standard export prices lower than domestic prices for 
some commodities _ 


I 


Type 10. Domestic and export sales departments establish 
prices independently on basis of factory costs plus distri- 
bution costs; some concessions in export 




Type 11. All foreign sales made by company affiliates; con- 




Type 12. All foreign sales made at lower than domestic prices. 








Type 13. Export agents and commission houses 
















Total number of cases 


76 


50 


50 


17 


17 


33 


9 







GROUP I. CASES OF HIGHER EXPORT THAN" DOMESTIC PRICES 

Out of the total of 76 cases, 9 were found to have higher export 
than domestic prices for either a significant part or for all export sales 
and to have no class of export business on which prices were lower than 
domestic prices for a similar class of customer. That is, in these 
9 cases, after invoice prices are adjusted for differences in terms and 
conditions of sale or for significant differences in selling costs, export 
prices are higher than domestic for at least a part of export sales 
and no less than equal to domestic prices for the remainder of export 
sales. Of necessity, export business as a whole is more profitable than 
domestic in all these cases. 

Type 1. Export Monopoly. 

The distinguishing characteristic of export price policy in cases 
of group I, type 1 is that export prices are admittedly monopoly prices 
regardless of the competitive or noncompetitive nature of domestic 
prices. The United States producers account for a dominant share 
of world production. In the cases of this type which fell in our 
sample, they (or most of them) have organized an export corporation 
under the Webb-Pomerene Act which enables them to agree upon and 
fix export prices. Thus, control over a major portion of world supply 
is the economic factor which dominates export pricing policy. Two 



22 OONCENTRATION OF ECONOMIC POWER 

cases out of tlie 9 in group I were of this type. A case of this type 
is described in the following example: 

Example 1. — This company produces various qualities of a single 
chemical product of which the United States is the predominant source 
of world supply. The bulk of the output is sold direct to large indus- 
trial users in both domestic and export markets in carload lots while 
smaller quantities are parcelled out to dealers or smaller users from 
regional warehouses. 

In the domestic market the company sells carload lots on an f . o. b. 
factory basis at a uniform price to all buyers of that quantity. To 
its export customers the company always quotes c. i. f. prices which 
are substantially the c. i. f. prices established by a Webb-Pomerene 
export corporation representing most of the industry but of which 
the company interviewed is not a member. The c. i. f. export prices 
have been set according to a zone or regional system with differentials 
corresponding in part to the larger differences in ocean freight costs 
which are included in the c. i. f. price, but also giving those regions 
which contain the larger industrial users a somewhat lower price. 
Within any region, however, and as among the several regions the 
ocean freight costs from the usual port of export from the United 
States do not vary identically with the c. i. f. prices. The company, 
therefore, sells abroad at any one time at a number of f. o. b. mill 
prices. 

These f. o. b. mill export prices are all higher than the f. o. b. mill 
domestic price. On the average the mill net or export sales, less the 
extra costs of export packing, is about 20 percent higher than the 
domestic price. 

The management states that in its experience selling costs for export 
business are a little higher than for the domestic market and export 
credit terms must be adjusted to the greater distances involved. How- 
ever, export business is still considerably more profitable than domestic. 

Example 2. — One other case in the sample was of this general type, 
also involving a single chemical product. It might be well to give 
a description of the price policy m this case also, so that the reader 
can observe the individual differences in price policies among various 
cases, even though classified as being of the same type. The Ameri- 
can industry in this case, while the major source of world supply, doies 
not possess a large enough share of world output to dictate world 
prices, but prices in foreign markets are fixed through agreements 
with the important foreign producers. 

The enterprises involved include a Webb-Pomerene export corpora- 
tion and the several domestic producing companies which own its 
stock. The domestic producing companies sell only in the domestic 
market, while the export corporation sells only in foreign markets. 
This commodity is sold in the domestic market at uniform delivered 
prices, and as the freight costs to various destinations differ there are 
a variety of f. o. b. prices. Export prices are always quoted c. i. f. 
and have been set with small differences from one geographical area 
to another. These c. i. f. prices are much more similar than would be 
the case if actual insurance and freight costs for each shipment were 
added to a uniform f. o. b. or f . a. s. price as there has been a conscious 
attempt to approximate a uniform delivered price, equalizing the price 
to foreign buyers who are in competition with each other. Therefore, 



CONCENTRATION OF ECONOMIC POWER 33 

on an f. o. b. basis, export prices too differ for almost every point to 
which shipment is made. 

The export corporation pays all the expenses connected Avith the 
export business and turns over the net receipts from sales to the pro- 
ducing companies. Likewise, the producing companies pay all the 
costs of domestic distribution. Costs are higher for export, even 
deducting freight costs in both cases, because selling and other costs are 
higher on the export business. 

It would, therefore, be inappropriate to compare the whole scale of 
f. o. b. domestic prices with the whole scale of f. o. b. export prices. 
Furthermore, as there is discrimination, in a sense, involved in selling 
at uniform delivered prices in both domestic and export markets it is 
the average net realization on domestic and export business which must 
be compared rather than the net realizations for individual transac- 
tions. Of course, production costs per unit of outpiit must be consid- 
ered the same regardless of destination. 

The producing companies in this case report that the average net 
realization (or the net price in our sense) is somewhat higher on export 
sales than on domestic sales. 

Type 2. 

No standard export price ; accept export business only when price is 
equal to or above domestic price. Export price policy in the cases of 
this type can be described as follows: Export prices are quoted on a 
c. i. f. basis. Foreign sales involve higher costs than domestic busi- 
ness — apart froni^ansportation costs — for such items as export pack- 
ing, special handling, longer credit terms, larger selling commissions, 
etc. Furthermore, there is no standard or list export price, but prices 
are quoted for almost each transaction as the business is of that char- 
acter. Export business is not accepted at u c. i. f. price which does not 
cover all the added costs of export and yield a net at least as high or 
higher than its domestic price. 

Three cases with entirely unrelated products were found to have 
a price policy of this type. In fairness to the concerns involved the 
products are not described very specifically in order to avoid disclosing 
information to competitors. Suffice it to say that, in general terms, 
the products of the three concerns respectively are a silk textile prod 
uct, a wood-pulp product, and a related group of chemical products. 
The following example is illustrative of the cases of this type : 

Example 3. — This firm produces a wood-pulp product that is sold 
to industrial consumers for further fabrication — craft board for ship- 
ping containers. In the domestic market the company sells directly to 
manufacturers at a uniform delivered price. Prices are generally an- 
nounced quarterly and contracts drawn to cover the business for the 
coming quarter. It is A^ery seldom that prices are changed during the 
quarter. 

Its export sales are made through commission agents on a c. i. f. 
oasis. There is no fixed price for export as the price is always reached 
by negotiation between the company and the customer through the 
agent. As the mill is located on tidewater there is no inland freight 
on export shipments but there are extra costs for export packing, 
agent's commission, ocean freight and insurance, handling documents, 
rabies, etc. The management will not confirm a c. i. f. price wliioh 



34 OONCENTRATION OF EOONOMIC POWER 

does not at least cover these costs for the shipment plus the average 
net realization (average 1 o. b. price) on domestic sales. But it often 
obtains export orders at prices higher than this minimum. 

At the present time the company is exporting approximately 10 per- 
cent of its output to various customers in five foreign countries at a 
different f. o. b. price in almost each case. The lowest is just about 
equal to the average f, o. b. mill realization on domestic sales while 
the spread from the highest export price to the lowest is roughly 16 
percent. On the average, export prices on an f. o. b. basis are 7-8 
percent higher than the average domestic net realization. 

Type 3. 

List prices for export higher than domestic prices. One other type 
of price policy was found among the cases having higher export than 
domestic prices. The remaining four cases in group I were all of this 
type, involving producers of electrical products — radio receiving sets 
and electrical refrigerators. 

For group I, type 3, products are sold from price lists which are 
identical for all customers in the domestic market of the same class; 
that is, all distributors or wholesalers or retailers, etc., are issued the 
same price list and all sales are made at the prices shown thereon. The 
same procedure is used in export markets. Export price lists are 
issued and all sales are made according to those prices. While the 
prices on the export price sheet may be the same as those on the do- 
mestic price sheet for a few items, for most items or models the export 
price is higher. These differentials in list prices are not related to 
differences in costs. In fact, in those instances where clear answers 
could be obtained, distribution costs on export business were lower 
than on domestic business. The following example is illustrative of 
cases of this type. 

Example If.. — The products in this case are radio receiving sets and 
radiophonograph combinations in a wide variety of styles and models. 
The company also manufactures other lines of products which have 
entirely distinct uses and which are sold by distinct merchandising 
departments. As the price policies for the different lines of products 
are entirely unrelated, the radio department of the company is con- 
sidered here as a separate case for the sake of clarity. 

In the domestic market the products are sold only to wholesale dis- 
tributors from a uniform price list f. o. b. factory. The domestic 
business is a package business; that is, there is no adaptation of the 
product itself to fit the peculiar requirements of the wholesaler. There 
IS a wide variety of models to fit the needs and purchasing power of 
the consumer but all the units of a particular model are exactly the 
same and they are all sold complete and packaged just as they come 
off the assembly line. 

A large part of the export business is of a different character and 
many complications arise because the products must be adapted to 
meet the special requirements of many markets. In the first place, a 
line of export models not sold in the domestic market is produced to 
fit the reception conditions existing in many foreign markets. But 
even the same models which are sold in the domestic market must 
often be adapted for the export trade. These adaptations are of two 
kinds, physical and ecorremic. The physical are required primarilv to 
meet different voltages tliaii those standard in the United States, while 



I 



CONCENTRATION OF ECONOMIC POWER 35 

the economic adaptations are required to meet the peculiarities of tariff 
laws country by country. Because of tariff laws, often designed to 
encouraofe some part of the manufacture or assembly being performed 
locally, shipment must be made in all manners of special packaging 
and various stages of assembly. For example, it may be necessary, in 
order to avoid a duty of prohibitive cost, to ship the receiving set 
without cabinet and allow the foreign distributor to procure cabinets 
locally; to ship tubes in a separate package; to ship only the major 
parts and to have the assembly clone locally; certain parts made of or 
containing metals dutiable at a higher rate may have to be excluded 
or shipped separately, etc., in an endless variety. Nevertheless, a con- 
siderable portion of the exports are shipped right from the assembly 
line, just as in the domestic market. 

INIuch of the export business, therefore, requires special pricing 
either because there is no correspondirg model sold in the domestic 
market or because manufacturing costs are lower or higher through 
the exclusion of certain parts or through the complicated special pack- 
aging that is needed. The management states that on all this business 
the gross-profit margin — that is, the difference between factory costs 
and price — is higher than the gross-profit margin on domestic business. 
This mears, in terms of the concepts useful for our problem, that 
export prices on this class of business are higher than domestic prices 
for dissimilar but comparable commodities. 

The remaining export sales are made from standard export price 
lists. A part of this business also requires special packaging, and 
while this does increase factory costs, the increase is too small to be 
added to the price and is merely offered as an accommodation to the 
customer. But a significant share of export sales are of products 
identical with those sold in the domestic market. A comparison of 
domestic and export prices to distributors shoAvs the export pi-ices to 
be almost corsistently higher from about 50 cents to $3 per set. The 
avorage differential between the list prices for export and domestic 
sale is about 3 percent. The price difference is not a specific adjust- 
ment for any difference in costs but is an arbitrary addition to the 
domestic price. 

Certain other differences between domestic and export price policy 
.should be noted. Domestic sales are f. o. b. factory while export are 
f. a. s. The inland freight costs are quite small but they are absorbed 
by the company. The domestic distributor is given a specified ad- 
vertising allowance which appears on the domestic price list, for each 
set purchased but such automatic allowances are not granted to 
export customers. The company, howe^'er, gives specific allowances 
where the market requires or justifies the expenditure. The export 
customer is given a small quantity discount for volume purchases in 
order to induce larger shipments, but domestic prices are not sub- 
ject to a quantity discount. Credit terms in export are adjusted to the 
longer distances involved. If list prices could be adjusted for all 
these differences it is hardly likely that the relationship of domestic 
and export prices would be changed. 

In order to fully adjust prices, however, account must be taken 
of the difference in selling costs. The management reports that sell- 
ing costs in the domestic market are proportionately much hig\ii^ 

25776&— 41 — No. 3 



3g CONCENTRATION OF EGONOMIO POWER 

than on export sales. The company's expenditure for advertising, 
salesmen, and field representatives is much lower abroad. Thus the 
difference in prices adjusted for all differences in costs would be sub- 
stantially greater than the 3 percent difference in list prices. 

Accounting records are kept separately of the net profit margin 
on domestic and export sales and it is consistently higher on exports. 
In fact, in many recent years the domestic sales department has shown 
an operating loss while the export department has earned a profit. 

In the other three cases of this type there are no essential dif- 
ferences from the facts in the above example with regard to price 
policy or profit comparison. 

GROUP n. CASES OF EXPORT PRICES EQUAL TO DOMESTIC PRICES 

In 21 cases out of the total sample of 76, export prices were equal to 
domestic prices. It is, nevertheless, possible to distinguish several 
types of price policies or pricing methods among these cases. When in- 
voice prices, however, are adjusted for the specific cost items repre- 
sented in different terms and conditions of sale it is found that the basic 
prices are the same whether the sale is domestic or foreign. The 
profit experience in these cases also differs between the net profit on 
domestic sales as a whole and export sales as a whole. It will be 
recalled that this comparison of net profits can measure differences 
in the costs of doing business which, from a business standpoint, 
cannot be taken into account in price making. Since these are not 
significant cost differences, the profit differences are not substantial. 

Type 4. 

Market 'price plus distribution costs for all (mstomers. — The first type 
of price policy in this group was found to be followed by four cases 
(each a separate firm or group of firms) in which the products were 
standardized or accurately graded commodities. These commodities 
have prices which fluctuate from day to day according to conditions 
of the market or according to the fluctuations of a basic raw material 
quoted on an organized commodity exchange. The firms in these four 
cases were processers of packing-house products, flour-mill products, 
canned fruits and vegetables, and certain dairy products, respectively. 

While these products bear the name of the producer, the brand is 
relatively unimportant in the price-making process on wholesale busi- 
ness. The buyers are well acquainted With the market, they always 
have alternative sources of supply, and they buy according to specifi- 
cation, grade, or sample. The buyer almost always asks for a quota- 
tion which includes delivery to his establishment but he always has 
the alternative of buying f. o. b. the processing establishment. 

In these cases there is no essential distinction between domestic 
and export business. The company sells only at the market price and 
while price quotations are made by salesmen in the various domestic 
and foreign sales division for all sorts of terms and conditions of sale 
all these quotations are based upon the f. o. b. market price at the 
processing establishment. As accurately as they can be calculated, the 
exact costs involved in any sale on any other than f . o. b. factory cash 
basis are computed and added to the f. o. b. price to arrive at the 
delivpred ]iricH. Most price quotations are not made f. o. b. factory 



CONCENTRATION OF ECONOMIC POWER 37 

but (e. g.) f. o. b. cars in New York or other United States cities; 
f. a. s. New York or San Francisco, payment against documents; 
c. i. f . some foreign port, payment on first presentation of papers ; etc. 
But in eacli case the domestic or export sales division or branch must 
calculate the costs involved, including selling expenses on that type of 
business, so that the f . o. b. net at the processing establishment will be 
equal to the market price on that day. 

The firms in these cases are engaged primarily in a staple com- 
modity business and the price policy conforms more precisely than 
any other cases in the sample to the picture described as existing 
under conditions of pure competition where there is narrow differen- 
tiation of functions. The cost of each function or service is computed 
as accurately as possible and any service rendered on a particular sale 
is reflected in the invoice price at which that sale is made. The 
company's profit is made in the processing of the product, and details 
of distribution are on a cost basis. Each sales branch or division 
needs only cover its costs plus the market price of the product. 

This description of the price policy is not meant to imply that 
the net return on every single transaction at a particular time is 
exactly equal. The marketing process cannot function with such 
accuracy. But the fluctuations above and below the market price are 
in the nature of random fluctuations and not due to conscious policy. 
It might be said that these differences are due to imperfections of 
the market and uncertainties as to the actual cost of a particular func- 
tion. There is no distinction in this regard between domestic and 
export sales. For all practical purposes domestic and export business 
are equally profitable. 

In several of these cases the producers also market highly adver- 
tised branded products more or less similar to those sold as com- 
modities. Although costs are higher, the profit margin is larger for 
the branded than for the commodity business in the domestic market. 
These branded products are seldom exported as there is no demand 
abroad for justifying the existing differential over similar nonbranded 
products. The small export shipments appear to be for the use of 
Americans residing abroad and are made at domestic prices. 

It might be noted that the profit margin on sales in these cases is' 
quite small and general overhead is not a large proportion of total 
costs in comparison with many manufacturing firms. Thus almost 
every item of expense is a significant item from a business standpoint 
and cannot be neglected in making a price quotation. 

Type 6. 

Factory price plu-s distribution costs for all customers. — This type 
of price policy is, from outward appearances, similar to type 4. It 
varies in that the price is not established by some organized market, 
but the basic f. o. b. mill prices of the company's products are set by 
the administrative and production officers. These internal prices in- 
clude profit and all cost items except selling and distribution expenses. 
These mill prices, which are issued confidentially to the various sales 
departments, include factory costs, designing, general administrative 
overhead, and profit. The various sales departments of the company, 
each of which serves a different type of customer, are charged by the 
mill at the mill prices and establish the prices to their customers so 



Qo CONCENTRATION OF ECONOMIC POWER 

as to cover the mill price plus the actual selling and distribution ex- 
penses of their department. The essence of this price policy is that 
the various sales departments are not expected to show a profit above 
mill price plus departmental expenses as the company's profit is al- 
ready in the mill price. Thus, if the company was only selling to one 
type of customer under the same conditions and terms of sale, the 
quoted prices to all buyers would be exactly the same. But as each 
sales department sells to a different type of customer under widely 
different terms and conditions of sale the quoted prices are different 
by the difference in the costs of doing each type of business. Each 
sales department differs with regard to salesmen, rates of commission, 
costs of samples, method of handling, freight, packaging; require- 
ments, credit terms, size of orders, etc., and must adjust its quoted 
prices to these cost items. The export department is on exactly the 
same footing as the various domestic sales departments. 

Example 6. — Only one case in the sample was found to follow con- 
sistently a pricing policy of this type. It has been segregated as a 
distinct type because the nature of the business is so different from 
the four cases of type 4. The company is a manufacturer of cotton 
and rayon piece goods, most of which are subject to style factors. It 
sells to various types of customers who require different kinds of serv- 
ices in the way of packaging, credit terms, delivery, sales, solicitation, 
etc. The prices for each type of business, whether domestic or export, 
are all built up from an f . o. b. mill price by the addition of the cost 
involved in doing that type of business. The company's profit is 
already included in the f. o. b. mill price so that each sales depart- 
ment, e. g., manufacturers' sales, sales to wliolesalers, to retailers, de- 
partment stores, and export is only expected to cover its expenses. 
The same system is used if additional expenses for a particular type 
of business are incurred at the mill, as, for example, for special pack- 
aging, doubling and rolling, etc. Of course, there is some variation 
from year to year between total receipts from sales and total costs 
(counting the mill price which includes profit as a cost) for all the 
sales departments. There are some overhead items in each depart- 
ment's expenses which may be more or less covered according to 
changing volume of sales. Such variations have been quite small and 
are in any case in the nature of business risks rather than discrimina- 
tory price policies. 

Invoice prices in export are always higher than domestic for similar 
types of customers because of the following costs; handling docu- 
ments, more clerical work, special packing, larger selling commissions, 
and longer terms. 

The style factor, which is so important in this business, introduces 
a peculiarity into the sales and price policy. The price at which a new 
pattern is offered must be high enough to cover the costs of designing 
and engraving on the estimated volume of sales. But at this high price 
tliere may be no demand for the pattern in export markets. After the 
demand in the domestic market lias tired of the style and the mill has 
covered the designing and engraving costs it may be offered to export 
customers at a lower price. AVhile the mill would be willing to sell at 
this lower price in the domestic market it is often impossible to push 
a "finished" number by a similar moderate price reduction. Where 



CONCENTRATION OF ECONOMIC POWER 39 

style is a factor the customers want something new and business cannot 
be captured with last season's patterns. 

Tyfe 6. 

One-price policy for all customers. — The remaining 16 cases of group 
II sell their products to export customers at the prices established for 
the domestic market under substantially identical terms and conditions 
of sale. For all practical purposes these firms draw no distinction 
between domestic and export customers. In some cases there are slight 
modifications in the terms and conditions offered to export customers, 
but these have been introduced to simplify business operations and can 
hardly be considered discriminations. Essentially the company fixes a 
price for its products, with or without such supplementary services as 
credit terms^ packaging, free delivery in the United States, etc., and 
sells to all its customers at those prices. The only distinction that 
cculd be drawn between domestic and export selling terms is that in 
most of these cases arrangements for payment by export customers are 
adjusted to fit the greater distances involved and the special credit 
instruments customary in export practice. In none of these cases are 
long credit terms granted in export in lieu of a price concession nor is 
the longer wait for payment on export business a significant cost item 
to the company. 

Prices in these cases may be adjusted by the company for special 
manufacture, special packing, for freight and insurance on c. i. f . bill- 
ings, etc., but these things are all done for the convenience of the cus- 
tomer who has the option of buying the standard product in the stand- 
ard waj- at the standard price. In fact, in most cases additions to the 
standard price for such additional costs are almost always shown on 
the invoice at cost. 

In all these cases selling expenses are subsummed under the general 
costs of doing business and prices are never adjusted for differences in 
actual selling costs from one locality to another even where the records 
are kept so as to show the difference. The company employs the num- 
ber of salesmen it needs to handle the business, pays the commissions 
required to get the type of representation it desires, advertises in what- 
ever volume it sees fit or not at all if the size of the market does not 
justify an expenditure, and commits itself for any other incidental dis- 
tribution expenses that will get sales in any locality, whether foreign or 
domestic. "Whether selling and distribution expenses are higher or lower 
on export sales as a whole will be indicated below by the comparison of 
profits. It should be recognized, however, that in none of these cases 
is the difference in profits substantial, that it would be impracticable 
for the company to have different prices because of it, and that there 
is no clear division in a functional sense between the company's 
domestic and export business. 

The 16 cases of this type produced the products indicated in the fol- 
lowing table which also shows the comparative profits experience on 
domestic and export business as a whole. 



40 



OGNCENTRATION OF ECONOMIC POWER 



Product 



Is a profit statement 
prepared separately 
for export sales 
which takes full 
account of all cost 
items? 



Are export sales more or leas 
profitable than domestic 
because of differences in 
advertising, selling, or inci- 
dental costs? 



1. Women's hosiery and accessories 

2. Writing; paper 

3. Laboratory apparatus 

4. Adding and calculating machines 

6. Adding; machines ^ 

6. Adding, calchlating, and bookkeeping ma 

chines. 

7. Paper grocery specialties 

8. Men's fumisnings.-. ...:... 

9. Pipe fittings 

10. Hosiery, all kinds 

11. Automobiles 

12. Automobiles and trucks 

13. Machine tools 

14. Scientific equipment 

16. Felt and other hats 

Ifi. Phonograph records 




No difference. 
Do. 
Do. 
Do. 
Do. 
Selling costs lower on exports, 
therefore export sales 
slightly more profitable. 
Questionable. 

Exports somewhat less profit- 
able. 
Questionable; difference 
could not be very signifi- 
cant. 
Special case described in ex- 
ample. 

No difference 

Do. 
No possible difference. 
Questionable, but not great 

in any case. 
Exports a little less profit. 

able. 
Exports more profitable. 



A few examples of this type of price policy will be given to show 
the variety of details and problems encountered. 

Example 6. — This company manufactures a line of women's wear of 
which hosiery is the most important item. It sells to retailers through 
salesmen in the domestic market and through commission representa- 
tives in export markets at the same prices to all customers. There are 
no significant differences in costs for which, prices could be adjusted. 
Selling costs in the domestic market are just about the same as com- 
missions paid in export markets ; advertising is about in proportion to 
sales; the company pays some freight on domestic business as it sells 
f. o. b. through sales offices but only f. o. b. New York City for exports; 
there are a little extra packing costs for export and about a month 
longer wait before payment is received. The company does not have 
profit statements computed separately for export business, but the 
management cannot see any reason for a significant difference in the 
proportionate profitability of domestic and export sales. 

Example 7. — A manufacturer of writing paper uses a zone price sys- 
tem in the domestic market with, export prices equal to prices in zone 1 
(which includes New York City) . A New York exporting house rep- 
resents the company in export business and is paid a commission which 
is approximately equal to domestic selling costs. Export business is 
no different to the company than domestic business and it sees no util- 
ity in preparing separate profit statements. It takes whatever busi- 
ness comes, but it cannot get much export business under its present 
price policy as foreign competitive prices are generally lower. 

Example S. — This company is primarily a dealer in laboratory ap- 
paratus and reagents. It manufactures a few specialized products, 
but the great bulk of its business is in the distribution of the product 
of other manufacturers. The main sales effort of the company is 
made through a world-wide distribution of a large catalog and by 
advertising in many scientific and technical periodicals, although there 
is also some direct solicitation of laboratories by members of the sales 



CONCENTRATION OF ECONOMIC POWER 41 

and technological staffs. Most of the business is direct with, labora- 
tories at retail prices but it does act as distributor for some manufac- 
turers and sells at wholesale to other dealers. The company follows a 
strictly one-price policy in both its retail and wholesale business. 
There is no distinction of any kind in its price or selling policies be- 
tween domestic and export customers except that it takes longer to 
receive payments from customers in more distant markets. 

Example 9. — The products in this case are adding, calculating, and 
listing machines. The company has a one-price policy, but there are 
rt few distinctions between domestic and export customers designed 
to facilitate the conduct of the business. Domestic customers can get 
a slightly lower price for cash or c. o. d. payment. Exp6rt customers 
are only offered the cash price with 25 percent of value in cash to ac- 
company the order and the balance to be paid on sight draft. This 
arrangement favors the export customers, in that the company absorbs 
the cost of waiting for the balance of 75 percent, but favors the domes- 
tic customer in that he can buy on open account if he so desires. Quan- 
tity discounts are offered the domestic trade on orders of 3 to 10 ma- 
chines, but to get the same discounts the export customer must order 12 
and 24 machines. The company furnishes advertising matter to its 
domestic distributors at cost but does not do so to its export distribu- 
tors because of the language difficulties. On the other hand, it sup- 
plies export packing without cost. The management feels that all 
these differences! are negligible in terms of cost and that there is no 
difference in the profitability of domestic and export business. - 

Example 10. — This company manufactures a few grocery special- 
ties — toilet tissue and paper towels. It sells on a one-price policy 
freight prepaid anywhere in the United States to domestic customers 
and f. o. b. any port to export customers. Virtually the same credit 
terms and quantity discounts are offered to both domestic and export 
customers. The company has never considered any other than a one- 
price policy and so has never kept separate accounting for export busi- 
ness. If anything, export business is more profitable than domestic 
because, (1) average freight costs are higher — domestic business is 
Nation-wide whereas the bulk of exports leave from the port of New 
York near which the plant is located, and (2) advertising costs are 
relatively higher on domestic business. However, in a few export 
markets where the products are just being introduced, the development 
expenses are very high so that those markets are not at all profitable 
at present. 

Example 11. — This is a branded line of men's wear of which shirts 
and collars are the major items. The company sells direct to the 
retailer through its own salesmen in the domestic market and through 
commission representatives in export markets. All customersr pay the 
same prices and the conditions of sale are virtually the same except 
that export terms are somewhat longer. 

Profit statements are prepared separately for the export and domes- 
tic departments and the company has found that domestic business 
is more profitable. It costs somewhat more to do export business 
because higher commissions are paid ; there is an added cost in export 
packing, and the proportionate costs of samples and of advertising are 
higher. 

Example 12. — The products in this case are black and galvanized 
iron and brass pipe fittings. Domestic and export price lists and dis- 



42 OONCENTKATION OP ECONOMIC POWER 

count sheets at the present time are identical. This is usually the 
case but as domestic discount sheets are issued more often than export, 
there is sometimes a temporary difference in net prices. Prices may 
vary either way, export prices being either slightly higher or lower. 
The difference could not be very great because if a substantial change 
were made new lists would be sent to both export and domestic 
customers. 

Ai v^arious times the export discounts to a particular country may be 
lower than the standard domestic and export discounts when the com- 
pany is trying to meet the price competition of a foreign producer who 
is trying to get a foothold in the market. The management states 
that so far as this company is concerned, these situations are always 
temporary. For if the foreign competitor continues the cut-price pol- 
icy, the company restores its standard prices and merely takes w^hat- 
ever of the quality business it can get under those conditions. 

Example IS.-^This, case concerns a hosiery firm which has set up a 
subsidiary company to handle its export business. The export com- 
pany has an elaborate selling organization which it maintains by act- 
ing as export commission representative for various related but non- 
competing lines of other domestic manufacturers. The export com- 
pany sells at identical prices as the parent hosiery company. 

Both the domestic sales department and the export company are 
charged at somewhat nominal figures (for bookkeeping purposes) for 
all stocks they draw from the factory warehouse. Tliey both make a 
profit over the nominal factory charges plus their sales expenses but 
in the case of the export company this includes the profit it makes from 
its commission business. The company has no reason to allocate ex- 
penses specifically for the hosiery export business and the management 
was very skeptical that such an allocation would have any meaning. 
It could not maintain the large export organization that it does if it 
did not act as export representatives for several other firms, and it 
coukl not handle its own export business as efficiently as it does if it 
did not have that organization. The management ventured the 
opinion that if the costs of the export company were distributed ac- 
cording to sales of the various products (which it did not think was 
any more reasonable than other possible allocations), the sales expense 
on export business in hosiery would come out higher than domestic 
sales expense of the parent hosiery company. 

Example IJp. — This case and the one following concern automobile 
manufacturers. The first is a company which has no foreign branches 
or affiliated selling or assembly companies. 

In the domestic markets the company sells at two discounts from 
its standard f, o. b. factory retail prices. The larger discount applies 
to distributors on the sales they make to local dealers in their territory 
while tlie smaller applies to sales that the distributors make acting as 
retailers. 

In export the company makes no distinction between dealers and dis- 
tributors because it cannot exercise sufficient supervision to use two 
prices. It therefore sets the export price, f . o. b. factory, on complete 
car units approximately equal to the average of the domestic prices 
so that the net return is the same. All manufacturing extras are added 
to the standard price, e. g., heavier springs, right drive, front end 
stabilizers, better tool kit, export boxing, etc. 



CONCENTRATION OF ECONOMIC POWER 43 

A large part of the export business is in more or less incomplete 
car units due to the specifications of foreign tariff laws. Shipments 
are made of parts for assembly, semiknockdown cars boxed for export, 
less tires, inside upholstery, bumpers, or any other parts or equipment, 
which it may be cheaper for the importer to purchase locally. The 
pricing policy of the company for these incomplete car units is to 
compute the cost plus profit up to the stage of completion in which 
shipment is made. The profit to the company per car would, there- 
fore, be less than that secured on complete car units but the percentage 
of profit on the dollar volume of sales would be as nearly the same as 
cost accounting methods can make it. The company does not compute 
separate profit statements for domestic and export sales as it sees no 
reason to do so since its entire costing procedure is designed to give the 
same net return on export sales as on domestic. The same cooperative 
advertising scheme is used in export markets as in domestic and the 
ratio of other sales expenses could not be much different. 

The only difference between domestic and export pricing policy is 
that domestic terms are cash while in a few distant export markets 
open accounts terms are extended up to 90 days. The management 
states that the majority of export sales are made against letter of 
credit. 

Retail prices in the various export markets ai-e virtually left to the 
discretion of the foreign distributors since they must cover total landed 
costs and be adjusted to local market conditions. 

Examvle 15. — This case concerns a manufacturer of automobiles 
and trucks havinsr many foreiirn factories, assembly plants, and sell- 
ing branches. The foreign branches operate independently of the 
domestic organization — they buy the products of the. parent company 
according to their specifications precisely the same and at the same 
prices as independent distributors buy them. The purpose of the 
foreign subsidiaries is to assure the company of an effective distributive 
agency in all of the larger markets. 

The pricing policy is virtually the same as in the previous case. 
Complete units have a standard price f. o. b. factory from which dis- 
counts are given to distributors and dealers. Thf same discounts are 
used in exports, as the company has found no difficulty in classifying 
its foreign buvers. 

On incomplete cars the various production departments make the 
decision as to how much will be allowed for any deletions. If the 
deletions are small they will usually allow onlv factory costs, thus 
leaving their profit unimpaired. But if the deletion is the product of 
another manufacturer, for examnle tires or glass, they will deduct the 
amount which was originally added for these parts and which includes 
a profit. 

The foreign branches of the companv determine their own selling 
prices upon the basis of their total landed costs, assembly costs, sales 
expenses, and competitive conditions in the market. As all these 
factors vary considerablv from country to country, the profit earned 
per car by the foreign affiliates varies widelv, from about $20 to $200 
on a loAv-priced car (that is. low-priced in the United State« — in for- 
eign markets they are usuallv luxurv items). The volume of business 
that can be done in a particular market is the important consideration 
in the branch's price policy. For example, a country establishes a 



44 OONOENTRATION OF ECONOMIC POWER 

quota of, say, 500 cars for this company when its sales there had been 
averaging 5,000 cars. The branch may now be able to get a much 
higher price for the car, and the profit per car may be doubled or 
more and yet the total profits of the branch operations be smaller than 
formerly. 

The fact that the foreign branches earn a profit on their operations 
cannot be taken as evidence of a higher export than domestic price, as 
they perform additional functions. Whether the foreign companies 
are subsidiaries or independently owned is irrelevant to tlie price com- 
parison so long as equal treatment be accorded both types of buyers. 

Considering the comparative profitability of domestic and export 
sales the management states that export is more profitable if the opera- 
tions for the foreign companies are included, since in export business 
the profits on some of the distributive function^ are included. But 
from the standpoint of the domestic manufacturing and selling organi- 
zation (which includes the export department), there is no consistent 
difference in profitability. There is no difference on the manufactur- 
ing side because prices are adjusted to differences in costs. And on the 
distributive side the ratio of expense to sales for the domestic and 
export departments varies from year to year with the volume of sales 
and is not consistently larger in one department or the other. 

GROUP III. OASES or L0"^ER EXPORT THAN DOMESTIC PRICES 

All of the remaining case' fall into one or another of the types of 
price policy under group III, cases having some export prices lower 
than domestic. The reader will recall that every case in which some 
export prices were lower than domestic prices for similar goods to a 
similar type customer, after adjustment for differences in costs, was 
classified under group III, except where it was definitely a temporary 
phenomenon. The lower prices may apply to only a few items in a 
wide and varied line of products or to only a few foreign markets out 
of a world-wide distribution. Prices of other products of the business 
organization may be higher than domestic prices and profits on export 
business as a whole may be substantially greater than profits on domes- 
tic business. All these facts will be brought out in the following 
discussion. But in each of these cases at least some export sales are 
made at an actual price concession or the equivalent of a price conces- 
sion in the terms and conditions of sale. 

It is worth noting at the outset that in all but one of the cases in 
group III there is some price variation from market to market in the 
export business. That is, regardless of the type of export price 
policy, some markets are being sold at lower prices than other markets 
for a few or more items that the company manufactures. Price vari- 
ation among export markets also appeared in the first five cases of 
group I in which export prices were higher than domestic prices. In 
those cases export prices were not uniformly higher to all export 
markets and in the cases in group III (except one) export prices are 
not uniformly lower to all export markets. 

Type 7. 

Statidard export prices same as doTnesfic hut conrrss/otis given in 
som-e markets. — The first type to be considered is tliat in which the 
basic export price policy, and that which applies to the bulk of the 



C?ONCENTRATION OF ECONOMIC POWER 



45 



export sales, is the same as type 6. That is, these companies use their 
domestic prices as standard export prices and consummate a large 
share of their export sales at those prices. However, in each of the 
eight cases in this group, there are exceptions — ^to particular markets 
or on particular transactions price concessions are granted. In no 
case was more than 20 percent of the export sales made at prices below 
the standard prices, so it can be said that the price concessions are 
exceptions to the general policy of selling domestic and export at the 
same prices. 

The products in these cases are given in the following table. It will 
be noted that three of these cases show export business to be a little 
more profitable than domestic despite lower prices on a portion of 
exports." This is due to the price differential being offset by smaller 
selling costs for exports as a whole. 



Produft 


Export profits kept 
separate? 


Export more or less profitable 


1. Machine tools and air-conditionin? equipment. - 


No. 


Questionable 


2. Extensive heavy machinery line 


No.. 


Do. 


3. Paper and stationery specialties 


Yes 


Export slightly more profit- 
able. 
Do 


4. Control and measuring instruments. 


Yes 


5. Heavy industrial chemicals... .. 


Yes.. 




6. Brass plumbing specialties . 


No 




7. Cigarettes and other tobacco products 


No . 


Do. 


8. Abrasive grains. 


No 


Export slightly more profit- 
able. 





Several examples are given below for illustrative purposes: 

Example 16. — This company manufactures machine tools, ventilat- 
ing fans, and air-conditioning equipment. jMost of its business is in 
stock items, but some is contract business which is obtained by sub- 
mitting bids. 

The stock items all have standard prices f. o. b. factory. As the 
usual practice in export is to quote f . a. s. New York, the company adds 
a flat 10 percent to the domestic price to cover the costs of export pack- 
ing, inland freight, document, etc. While these costs vary from ship- 
ment to shipment, the average is about 10 percent, so that this per- 
centage is used to avoid numerous small calculations. On occasion 
however, when the foreign agent reports competition that can be met 
by a moderate price concession the company will absorb this 10 percent 
co.st for f. a. s. billing. Only a small share of the export business is 
subject to this price concession. 

For the contract business the company has a formula of the usual 
labor-materials-and-overhead type that .is applied to determine the 
pric« quotation. But competition does not allow the consistent use of 
this formula. However, the management states that downward revi- 
sions of prices on this type of business are more frequent in domestic 
({notations than export, because the company in most instances is too 
far away from the export market and knows too little about the com- 
jjetition there to be able to price specifically for it. 

The company does not have separate accounting for export sales, 
and therefore does not know how the profit on export business com- 
pares with domestic. The guess of the executive is, however, that 
exports are a little more profitable, as there is proj^ortionately less 
servicino; after a sale is made and veiv little advertising abroad. V>nt 



4g CONCENTRATION OF ECONOMIC POWER 

exports would definitely be much less profitable if the 10-percent price 
concession had to be given on all sales abroad. 

Example 17. — This company manufactures an extensive line of paper 
and stationery specialties. It has two price lists for the domestic mar- 
ket — one for jobbers, the other for direct retailer accounts purchasing 
$500 or more a year. Freight on domestic sales is absorbed by the 
company except to a few accounts in the far west, where the billing is 
f. o. b. its Chicago sales office. Terms are 2 percent 10 days, net e. o. m. 

Domestic prices are used for over 90 percent of the export sales. 
On a small percentage, probably not over 2 percent, direct price cuts 
are given of from 5 to 15 percent of the domestic price. On another 
small percentage of the business the products are not sold in the same 
form as in the domestic market. In order to reduce ocean-freight costs 
or high tariff charges based on gross Aveight, the products are shipped 
in bulk, unboxed, or in special light-weight containers, and an allow- 
ance given for the cartons or wrappings that must be supplied by the 
importer. His allowance is generally larger than the cost would be to 
the company and the net return on these sales consequently lower. 

All export sales are f . o. b. factory and terms net 60 days after arrival 
of the goods. The company does not charge for export packing, but it 
limits direct accounts to those who can purchase $1,000 or more a year. 

Profits on the export business are kept separately, and consistently 
show a somewhat higher rate of return on sales as a whole than 
domestic. This is due to lower selling expense, less advertising, and no 
freight cost on export sales. 

Example 18. — The products in this case are heavy industrial chem- 
icals, predominantly bulk materials. All sales, domestic and export, 
are on a f. o. b. factory basis. In most of the export transactions, 
prices are identical with domestic prices. In some instances, how- 
ever, dependent upon market conditions in the particular country 
involved, and upon the profit margin in the particular product, price 
concessions are offered to export customers of as much as 8 percent. 
The management estimates roughly that the average price of export 
sales is about 3 percent less than for domestic sales for those products 
which are exported. Profit margins for many products are so small 
that no concessions can be made and most items inthe line cannot be 
exported. Profit statements are prepared separately for export and 
domestic business. Domestic business is consistently more profitable 
than export due entirely to higher average prices. The ratio of 
selling expenses to sales does not differ materially between export and 
domestic business. 

Example 19. — This case concerns a manufacturer of tobacco prod- 
ucts, of which only cigarettes are exported. The net price to most 
export markets is equal to the domestic price less excise taxes and 
dealers' discount. On occasion price concessions are made to markets 
in which the currency has depreciated. The depreciation of a foreign 
currency might also result in a lower net export price to the company 
because it has been selling in the foreign currency or because it was 
under contract to a foreign government monopoly' to deliver its prod- 
ucts at a price fixed in the foreign currency. A profit statement is not 
computed separately for export sales, nor could the executive estimate 
whether export business was more or less profitable than domestic. He 
did not think that the question was very meaningful in view of the 
small volume of export sales. 



CONCENTRATION OF ECONOMIC POWER 



47 



The comparison of profitability of domestic and expoi't sales in these 
cases represents a combination of two factors. The first is the lower 
prices received on some part of the export sales which would, if all 
other things were equal, make export business as a whole less profit- 
able than domestic. The second factor i^ the relation of selling and 
distribution costs on domestic and export sales to the difference be- 
tween the standard domestic and export prices. Of itself, this factor 
may result in a difference in the profitability of exports either way 
just as in the cages of group II, type 6. 

Type 8. 

Export business with different type of customer than domec'cic; 
concessions given in some markets — quite a few firms in the sample 
follow a different method of distribution in export markets than in 
the domestic market. For example, domestic sales may be only to 
retailer or directly to the consumer, while export sales are made to 
wholesalers or exclusive distributors. Since the company performs 
more distribution functions in the domestic than in export markets, a 
lower invoice price to export customers need not represent a price 
concession. 

The seven business organizations which have been classified under 
type 8 all transact a substantial part of their export business with a 
different type of customer than in the domestic market. Furthermore, 
they have a relatively standardized price differential between the two 
types of customers which, if adjusted for the added costs of the func- 
tions performed in the domestic market but not in export markets, 
does not represent a price concession on export sales. If all export 
sales were consummated at the company's standard export price, one 
could say that domestic and export prices were equal and these cases 
would be in group II. But, in each of these cases, some part of the 
export transactions are made at prices lower than the standard ex- 
port price, and therefore at lower than domestic prices. The price 
concessions are to particular countries to meet local market conditions. 

These seven cases are listed in the following table. 



Product 



Is a separate profit 
statement prepared 
for export sales? 



Is export business more or less 
profitable than domestic? 



1. Artificial teeth... 

2. Fountain pens and mechanical pencils 

3. Safety appliances 

4. Panitiiry napkins and cleansing tissues 

5. Typewriters. 

6. Typewriters 

7. Abrasive and refractory products 




Questionable. 
Export less profitable. 

Do. 

Do. 

Do. 
Export more profitable. 
No difierence. 



The following examples are of this type. 

E.rampJe 20. — This company manufactures an extensive line of 
artificiid teeth. In the domestic market its sales are entirely to whole- 
salers (dental depots) who in turn supply the needs of the profes- 
sion — dentists and dental laboratories. These wholesalers carry the 
products of many manufacturers. The promotion function, therefore, 
rests chiefly upon the manufacturer. It must acquaint the profession 
with its products and induce the profession to order those products 
from the wholesaler. In order to do this, the company advertises in 
professional journals, maintains exhibits at the conventions of the 



4g CONCENTRATION OF ECONOMIC POWER 

profession in order to demonstrate its products, and canvasses the 
profession, individually and in groups. As a consequence, selling costs 
are an appreciable item of expense, at a rough estimate about 25 
percent, on the average, of gross sales. 

In its export business, the company has two types of selling pro- 
cedures. For covering Europe and adjacent territories, the company 
has appointed an exclusive agent to sell to wholesalers and perform 
all the selling functions with the profession that the company does 
in the domestic market. Net prices to this exclusive agent are about 
30 percent lower on the average than domestic wholesale prices. This 
discount is not the same for all items in the line but varies from 
approximately 25 to 35 percent, depending upon the profit margin 
in the item and foreign prices for similar items. The management 
was inclined to believe that the net returns to the company on this 
portion of export business was on the average somewhat less than the 
net return on domestic business when selling expenses in the domestic 
market are deducted. However, an unqualified answer was difficult 
to get because the ratio of selling expenses to sales differs from year 
to year as the volume of domestic business fluctuates. While it cannot 
be said that the discount to the exclusive distributor on the whole 
represents a price concession there are price concessions in the higher 
discounts given on a few items in the line. 

The remainder of the export business is handled precisely the same 
as domestic; that is, the company sells directly to wholesalers in the 
various markets and performs all the selling functions with the pro- 
fession that it performs in the domestic market. It advertises in the 
local professional journals, prints catalogs in various foreign lan- 
guages, and canvasses the profession in various ways to acquaint it 
with the products of the company. Standard prices for this class of 
export business are identical with domestic prices and the bulk of 
the sales are consummated at those prices. At the present time, how- 
ever, in a few markets the company is giving price concessions, aver- 
aging about 5 percent, due to the fact that a foreign producer is 
trying to get a foothold in those markets. 

The management has never attempted to compute profit statements 
separately for overall domestic and export business. There is ap- 
parently some difference of opinion within the organization as to 
which is the more profitable although the executive interviewed be- 
lieves that there could not be a significant difference. 

Exa/mple 21. — The company in this case manufactures a few high- 
quality stationery items — fountain pens, mechanical pencils, and inks. 
In the domestic market all sales are made directly to the retailer, but 
in export markets the company has two types of customers. In 
Latin America and the Far East the company's own salesmen deal 
directly with the retailers at prices the same as in the domestic market. 
In Europe and most other territories, the company has appointed 
exclusive distributors who assume all local selling and credit func- 
tions. The price policy of the company in terms of discount from 
standard list prices is as follows: On the direct-to-retailer business 
there is a slight difference between domestic and export procedure 
designed to expedite the conduct of the business. In the domestic 
market the basic discount is 40 percent, to which is added quantity 
discounts on a sliding scale from 4 to 10 percent in proportion to the 
volume of purchases. In exports on the direct-to-retailer business, 



CONCENTRATION OF ECONOMIC POWER 49 

the basic discount is likewise 40 percent. Instead of a sliding scale 
of quantity discounts, however, the company offers an additional 10 
percent on orders of 12 dozen or over only. There is a greater differ- 
ence in the price policy because domestic customers are given cash 
discounts of 2 percent while export customers are given 5 percent for 
cash and 2 percent for payment on first presentation of papers. 

To its exclusive distributors abroad the company gives a basic dis- 
count of 50 and 10 percent, but there are some variations which made 
the discount slightly greater in a few markets. 

The company computes a separate profit statement for its export 
department and has found that export business is consistently less 
profitable than domestic. The reasons for this are that (1) sales ex- 
penses in exports under direct-to-dealer business are considerably 
higher than in the domestic market, being apt to run around 20 per- 
cent of receipts in exports and about 10 percent domestic. This is -due 
to the fact that more expensive type of salesmen must be used in 
export, travel abroad is more expensive, and advertising expenditures 
are larger abroad in proportion to volume. (2) On the exclusive dis- 
tributor business the net return to the company is lower than domestic 
sales receipts minus selling costs. (3) Larger cash discounts are paid 
in the export business and the company has to wait longer for its 
money on business which is not discounted — for example, it takes 
about 5 months to get money on a 90-day sight draft from certain 
distant points. 

Example 22. — This case and the one following present an interest- 
ing contrast because of the different results achieved by two companies 
producing the same commodities and following substantially the same 
price policy. This company manufactures a complete line of standard 
and portable model typewriters. In the domestic market the standard 
model machines are sold direct to the consumer through the branch 
sales offices of the company and by the company's own salesmen. The 
bulk of the portable machines, on the other hand, are distributed 
through retail establishments of various types. Thus the standard- 
model machines are sold by the company only at retail at well-known 
4ist prices, which are the same throughout the nation, but from which, 
liowever, discounts are given to large consumers, depending upon the 
quantity purchased. The portable machines are sold to dealers at 
standard trade discounts, which do not vary with quantity. 

In export markets the company has appointed exclusive dealers to 
liandle all machines. Wh'le the company has field representatives 
ti-aveliiig abroad who call on the dealers in order to stimulate their 
sales eflforts and advise on policy, the independent dealers must do- 
their own advertising and bear all distribution and selling expenses. 
The list prices used in exports are slightly lower than the domestic list 
prices. But as export prices are all subject to discounts given to the 
dealer, the list prices are not p>articularly meaningful. On standard- 
model machines the discount given to dealers abroad varies somewhat 
from market to market in order to allow the local dealer to meet the 
competition existing in his market. The range of variation is approxi- 
mately frCm 40 percent off the export list price to somewhat over 50 
percent. 

The management has attempted to compute the average net prices 
received by the company on domestic and export sales. It finds that 
the average net received on domestic sales through branch offices, after 



50 



CONCENTRATION OF ECONOMIC POWER 



deducting advertising, commissions, and branch expenses, is approxi- 
mately $58, while the average net received on export sales of an iden- 
tical machine would be approximately $55. 

Net prices received by the company on portable models are more 
nearly comparable as the bulk of the sales, both domestic and export, 
are to dealers. Net export prices in most instances are slightly le^s than 
domestic prices for the higher-price models and slightly more than 
domestic prices for the cheaper models. There are some variations 
from the standard export prices. In a few niarkets the company is 
getting higher prices on the whole line, while in other markets where 
the competition is more intense, prices are even lower than the standard 
export prices. 

The management has separate profit and loss statements prepared 
for export sales and has found that its export business is less profitable 
than domestic. The average net price in the domestic market, less 
all the costs involved in direct-to-consumer business is still higher 
than the average net price received from export sales. In addition, 
there are other costs in export, which, while not very great, still con- 
tribute to make export business less profitable. For example, there is 
some special manufacture for export, the products must be more 
expensively packaged, etc. 

Example '23. — The second company also produces a complete line of 
standard and portable model typewriters, as well as other products 
which will not be considered here. Its selling policy in the domestic 
and export markets is essentially identical with that of the preceding 
case. It, too, has found it necessary to give price concessions from 
its standard export discounts in order to meet the encroachment of 
foreign competition which is producing lower priced machines. 

The company has separate profit and loss statements prepared for 
its export business, but in contrast to the previous case, it has found 
export to be more profitable than domestic. The cost of advertising, 
distribution, selling, and the maintenance of branch offices are more 
in this case than the difference between the net price received in the 
domestic market and the net wholesale price received on export sales. 
The company has virtually no advertising expenses in export and 
selling costs are very small. In addition, a considerable part of its 
sales in the domestic market are to large users at substantial dis- 
counts. 

Type 9. 

Sfandard export prices loioer than domestic prices for some cotti- 
modities. — The price policy in the six cases of this type can be de- 
scribed as follows: The company has standard export prices which 
are closely adhered to but their export prices for at least some of the 
products in the company's line are lower than the domestic prices for 
identical products. That is, the standard net export price is lower 
than the standard net domestic price for some products, with full 
consideration given to whatever differences in the cost of doing busi- 
ness that there might be. In two of these cases export sales are made 
to a different type of customer and invoice prices had to be adjusted 
for that fact. ^ 

The one case of group III which made no exceptions or concessions 
from its standard export prices is among these six cases. In the other 
five cases there were some special price concessions given to par- 



CXDNOENTRATION OF ECONOMIC POWER. 52 

ticular markets in addition to the price concessions existing in the 
standard export prices. 

In one case, a paint and varnish company, selling costs on exports 
as a whole are so much lower than on domestic busmess that exports 
are more profitable despite the fact that standard export prices on 
approximately 21 percent of the items are lower than domestic prices. 

The six cases of this type are shown in the following table : 



Product 


Are profits on export 
sales segregated? 


Is export business more or 
less profitable? 


1. Office supplies. 

2. Compressors and pumps 


Yes 


Export less profitable. 
Exports probably less profit- 
able. 


No 

Yes ...- 




Yes 




6. Stationery supplies . 


No 

Yes 


able. 
Exports less profitable. 




Export more profitable. 









Exojmple 2If. — This company manufactures a few items of office 
supplies. In the domestic market the company sells only directly 
to the consumer through its own sales branches and traveling sales- 
men. All customers in the domestic market are sold from the same 
price sheet which shows prices in a descending scale as quantity 
purchased increases. 

In export markets the company sells to independent wholesalers 
who must assume the burden of distributing the product to inde- 
pendent retailers or to the consumer. The domestic price sheet is 
used for export sales, but as these are wholesale transactions prices 
are subject to a trade discount. The only significant difference in 
the cost of doing business, domestic and export, is the maintenance in 
the domestic market of the branch salesrooms and salesmen which 
perform the retail function. The expenses of the sales branches and 
of the salesmen attached to each vary approximately from 38 percent 
of sales to 50 percent, with the average about 45 percent. The 
standard discount given in exports is 50, 10, and 5. Thus, the 
standard net «xport price is lower than the domestic price less average 
selling expenses. In addition, the company gives somewhat higher 
discounts in a few markets where competition is unusually intense. 
Profitability of export sales is calculated separately from domestic, 
and consistently shows export business to be less profitable than 
domestic, owing primarily to net prices of exports being lower. 

Example 25. — This company manufactures a few types of ma- 
chinery products of which compressors and pumps are the primary 
items. It maintains several branch sales offices in the domestic mar- 
ket and also distributes through independent manufacturers' repre- 
sentatives. Sales are made eitlier direct to the consumer or to other 
manufacturers who incorporate the equipment in their products re- 
ceiving a discount of 15 percent under list. The company distributes 
abroad through local commission representatives. Its standard prii^^ 
for export are identical with domestic prices. However, the billing 
is f. a. s. New York and includes export packing. These costs repre- 
sent a price concession of about 5 percent. 

The company has never prepared comparative profit statements 
for domestic and export business. Since the organization is rather 

257769 — 41 — No. C 5 



g2 OONCBNTRATION OF ECONOMIC POWER 

small and exports only between 5 and 6 percent of its output, the 
management does not believe that any extensive record keeping would 
be justified. It estimates that in view of the conimissions paid to 
local agents and the moderate price concession that is made on export 
sales, that export business is slightly less profitable than domestic. 

Example 26. — The manufacturing efforts of this company are con- 
centrated upon two products of stationery goods. "Although the com- 
pany makes several other products, they are of minor importance 
and are not exported. One of its two main products, which accounts 
for the bulk of its sales, both domestic and export, is produced to sell 
in three price classes for three different types of trade. Only that 
product which in the domestic market represents the highest price 
class is sold in export, as foreign prices for all but first-quality 
goods in this line are so low that the company cannot compete on a 
price basis. In the domestic market the company issues separate 
price lists for wholesalers and retailers, but in export only one price 
list is used, as the distinction between wholesalers and retailers in 
many foreign markets is usually not clearly drawn. From the com- 
pany's standpoint, however, export sales are comparable to sales to 
wholesalers in the domestic market. The standard export price for 
this product is 20 percent lower than the standard domestic price to 
wholesalers for identical commodities. In a few markets, the com- 
pany is selling as much as 25 percent below its standard export price 
in order to meet special temporary circumstances. 

The firm's other major product is manufactured to sell in domestic 
markets in a specific price class ; some models are made to sell at retail 
for $1 while other models sell for $1.50. The domestic prices to whole- 
salers are $6 and $9 per dozen, respectively. As the $1 and $1.50 prices 
have no significance in export markets, the company has established 
export prices of $7.20 and $10.80 per dozen, respectively, for these 
models, or a price 20 percent higher than the domestic for the largest 
selling items. 

The company has never attempted to calculate separate profit-and- 
loss statements for export sales. There is no doubt in the management's 
mind that export business is much less profitable than domestic. While 
selling costs for export are somewhat lower than in the domestic mar- 
ket, they are not sufficiently lower to offset the 20 percent lower price 
received in export on sales of the firm's major product. In fact, the 
management is inclined to believe that the export department was run 
at a loss before the introduction of its new product 3 years ago, for 
which it receives a higher price from export customers. 

Type 10. 

Domestic and export sales departments establish prices independ- 
ently on basis of factory costs plus distribution costs; sonne concessions 
in export.— -Th^ distinguishing characteristic of pricing policy in cases 
of this type is that the export and domestic sales departments are 
operated as independent business units and each unit is completely 
autonomous over matters of selling policy and price. It so happened 
that all the cases using this type of procedure made some of their 
export sales at lower than domestic prices. Each sales department is 
charged by the factory at factory costs (labor, materials, and factory 
overhead) for all orders it places. It is also charged its share of gen- 
eral administrative overhead. It spends whatever it sees fit on selling 
and distribution, and each department fixes its own prices in an effort 



OONOENTRATION OF ECX>NOMIC POWER 53 

to cover its cost items — factory costSj administrative overhead, and 
department expenses — and show a pront. The point that distinguishes 
this type of price policy from type 5 is that the factory price does 
not include a profit so that the various sales divisions are expected to 
fix such prices as will yield a profit after all costs are met. 

This description is not meant to imply that the domestic sales man- 
ager has final responsibility for domestic prices. The leading officers 
of the company are almost always concerned with the determination 
of domestic prices. It was found, however, that export prices are gen- 
erally left to the judgment of the export manager and that he is under 
no obligation to consider domestic prices in any way in fixing prices 
for export. His obligation to the company is to manage his depart- 
ment so as to get the volume of sales that satisfies the head office and to 
show a maximum profit on his operations. 

"Where a procedure of this type is followed there is likely to be a 
significant difference between the pricing and selling policies in the 
domestic and export markets. The domestic department must usually 
offer substantially the same price to all customers of a particular class, 
both because of legal restrictions against price discrimination and be- 
cause of the difficulty of keeping price concessions to certain customers 
a secret between the two parties. But the export manager usually finds 
no such limitations upon his pricing and selling policies, at least for 
distinct national markets. He can vary selling expenses from market 
to market, depending upon what he thinks will produce the best 
results in each market. And he can vary prices from one market to 
another from a point at which the price covers only factory cost, 
plus out-of-pocket expenses, plus a small portion of overhead (or 
even take a loss, if he anticipates a future return from developments) 
to a point at which the price yields a substantial profit to his depart- 
ment. In all the cases of this type it was found that export prices 
varied considerably from market to market. While the export de- 
partments in most instances have price lists showing their standard 
quotations, the departures from the list are so numerous as to make 
the standard prices virtually meaningless. 

The 15 cases shown in the following table have a price policy of this 
type. It is obvious that the company must be able to judge rather 
accurately the profitability of export sales in all these cases, even 
though actual profit and loss statements for export sales are not pre- 
pared by the accounting department. 

Are export sales more or less profitable than domestic? 
Products : 

1. Stationery and school supplies No consistent difference. 

2. Phannaceutical specialties Export less profitable. 

3. Extensive drug line Do. 

4. Extensive drug line No consistent difference. 

5. Automotive and household chemicals Export more profitable. 

6. Industrial lubricants and si)ecialties Export less profitable. 

7. Photographic equipment __. Do. 

8. Industrial machinery and equipment Do. 

9. Tools Do. 

10. Linoleum and related products Do. 

11. Structural insulating and wallboard Do. 

12. Lime, plaster, and related building materials.,. Do. 

13. Reinforced building paper Do. 

14. Electrical machinery and equipment Do. 

15. Carbon products Do. 



^4 CONCENTRATION OF ECONOMIC POWER 

Example 27. — This company manufactures a high-priced line o'l 
stationery products and school supplies. The domestic sales depart- 
ment deals with jobbers, wholesalers, chain stores, commercial and 
contact agents, retailers, and school-supply houses. It issues only one 
price list which shows various prices for each commodity according 
to the quantity purchased. No special discounts are given to any 
class of trade. 

The export department also issues a price catalog which shows con- 
siderable variation both above and below the domestic prices, item 
by item. But as most transactions in export are made at some dis- 
count from the prices shown in the catalog, a comparison of the 
catalog prices with domestic prices would not be very useful. In 
actual practice, the export sales manager attempts to set a price for 
each product and in each market to meet local competitive conditions. 
The net result is that each product is sold at many prices, in some 
cases above the domestic price, but in many more, below the domestic 
price for a comparably sized order. 

The export manager has a minimum price below which he knows 
be cannot go without causing an actual loss to his department. But 
above that minimum he simply tries to get the best price that local 
market conditions will allow, taking into consideration the volume of 
sales that can be made at whatever price he chooses. As the company 
manufactures a good many commodities and as each product is sold 
at many prices in various export markets, some higher, some the 
same, and some lower than domestic prices, it is hardly possible to 
arrive at an average export price with which to compare the domestic 
price schedule. However, the range of prices in exports in compari- 
son with domestic prices is well illustrated by the prices of two of 
the company's more important products. 



Doineslic price per gross... 

Argentina (f. a. s. New York)... 

Cuba (f. a. s. New York) 

Colombia (f. a. s. New York). ... 
Puerto Rico (f. a s. New York). 
Philippines (f. a. s. New York).. 
Mexico (f. a. s. New York) 



Product A 


Product B 


$8. 00 


$18 


9.00 


27 


7.50 


21 


7.20 


24 


7.20 


18 


7.20 


21 


6.75 


18 



Prices to other countries lie between the extremes shoAvn in the table. 

It is on relatively few products that the export department can set 
prices higher than the domestic price. Export prices are either about 
the same or, more often, lower than domestic prices. (This, of course, 
refers to invoice prices.) 

The company has separate profit statements prepared for its export 
and domestic sales. Despite the fact that export prices are 1o\a er than 
the domestic prices in more cases than they are higher, the company 
has found very little difference between the profitability of domestic 
and export business. There is, of course, some variation from year 
to year. In the management's opinion, the difference in the rates of 
return from one year to another is more dependent upojn general 
business conditions here or abroad than it is upon whatever price 
differences may exist. 



CONCENTRATION OF ECONOMIC POWER 



55 



Exomiple 28. — This company manufactures a few pharmaceutical 
specialties. Domestic sales are made to wholesale drug houses and 
retailers large enough to buy in wholesale quantities. All sales efforts, 
however, are directed toward the medical profession itself, as the prod- 
ucts are usually bought by the consumer only upon the recommenda- 
tion of his physician. 

The export department is charged by the laboratory at cost of pro- 
duction for the orders placed with it, in the same way as the domestic 
sales department is charged. In the case of a few products the labora- 
tory costs for export are not the same as domestic costs, as special 
containers or other differences are required. On several products, 
also, the containers have directions to the user in the language of the 
country of destination, and when the volume of sales to that particular 
language group is small the cost of manufacture is increased. 

The export manager states that in pricing his product he tries to 
arrive at an f . a. s. price for each country which will allow the product 
to be sold in the country of destination at a retail price approximately 
equal to similar competing products. He does not like his product to 
be the highest priced of its kind on the druggist's shelf, nor does he 
feel that it should be among the lowest-priced products. The point is 
that in trying to arrive at a retail price in the country of destination 
he must take full account of what the landed cost of the product will 
be in that country in arriving at his price in dollars f. a. s. New York. 
The result is that each of the products of this company is sold in export 
at a rather wide variety of prices. The export manager states that if 
he does not happen to be acquainted with local competitive conditions 
in a particular market he is apt to use the domestic price until he finds 
that some other price might be more profitable. 

In comparison with the domestic prices, the variations in export 
prices are all downward; that is, no export sales are being made at 
prices higher than the domestic price, although there is some volume 
of exports being made at identical prices. The export manager could 
not even roughly estimate how much lower the average export price 
was than the domestic price for any product. An indication of the 
range of export prices can be obtained from the following example of 
one of the company's major products. The product sells in the do- 
mestic market at $8.33 per dozen, delivered. At the present time this 
product is being exported to 24 foreign markets at the following net 
prices, f . a. s. New York : 



19 countries $8. 35 

1 country 7. 75 

1 country 6. 95 



1 country $6. 56 

1 country 5.30 

1 country 5.00 



It SO happens that in this case the laboratory costs are the same for 
export as for domestic sales. 

While the export department consistently shows a profit after pay- 
ing laboratory costs, general overhead, and expenses of the export 
department, this net profit on sales is consistently lower than that of 
the domestic sales department. The reasons for this are as follows: 
(1) The average domestic prices are higher than the average export 
prices; (2) the laboratory costs of manufacturing for domestic are 
lower; (3) both sales departments have approximately the same pro- 
portionate expenses in soliciting the profession, but the export depart- 
ment must pay commissions to local agents while the domestic depart- 



55 CONCENTRATION OF ECONOMIC POWER 

rnent has no comparable sales expense; (4) the profit of the export 
department is continually reduced by exchange losses where sales are 
being made in local currency. It has largely discontinued the practice 
of pricing in terms of local currency, after experiencing substantial 
exchange losses during the past decade. . 

Example £9. — This company manufactures an extensive line of 
pharmaceutical products, including biological products, home neces- 
sities, vitamin products, pharmaceuticals, professional pharmaceutical 
specialties, 'and chemicals for the drug trade. The export department 
has complete autonomy over export prices and tries to set an f . a. s. 
export price for each foreign market so that the local merchants will 
be able to sell the product at approximately the same price as compet- 
ing products in that market. Where there is no need for a special 
export price or where the export manager is not sufficiently acquainted 
with local conditions to set a special price, the domestic price for the 
product is used. A large share of the export sales are made at prices 
identical with domestic. 

A few products are sold in some foreign markets as much as 10 
percent higher than the domestic price, and many more are sold at 
lower than domestic prices with the diflFerential as high as 25 percent. 

The costs of doing business differ widely from market to market 
and on the whole differ considerably from domestic distribution costs. 
The export department has profit statements prepared separately for 
every foreign country to which it exports, precisely the same as the 
domestic department has separate statements prepared for its various 
branches throughout the country. Profitability of export sales varies 
from country to country, but on the whole, no more so than the 
profits earned by the various domestic sales branches. On the average, 
the export business is just as profitable as domestic. 

Example SO. — The following case is particularly interesting, as it 
illustrates the variety of selling procedures that has been virtually 
forced upon many manufacturers because of the development of 
diverse types of retail distribution of consumers' goods. The com- 
pany manufactures over a hundred products which can best be classi- 
fied as automotive chemicals and household specialties. 

Ignoring the complications of corporate structure which have no 
significant influence upon the conduct of the business, the selling 
procedure of the company may be described as follows : In order to 
service the domestic market, the organization has several selling 
departments, each of which caters to an individual type of customer, 
such as 5-and-lO-cent stores, automotive chain stores, large depart- 
ment stores, private-brand wholesalers, and independent jobbers and 
dealers. The company's own branded line of products which is 
nationally advertised and its first-quality merchandise are sold only 
to independent jobbers and dealers. The other types of trade buy 
unadvertised brands or nonbranded products on a strictly price basis. 
In some cases, the actual contents of a container in the nondescript 
brand may be exactly the same as a product sold under the com- 
pany's own brand. In other cases, the size of the container may be 
varied; for example, to allow the product to be sold at a profit in 
5-and-lO-cent stores. In still other cases the product itself may be 
cheapened in order to get it down to a price class that meets the 
customer's needs. The important factor, however, which makes all 



OONCENTRATION OF EOONOMIC POWER 57 

other prices lower than those of the branded line is the small propor- 
tion of selling costs when advertising is eliminated and quantity sales 
are made. 

Each of these sales departments is billed by the factory at factory- 
cost whether these costs are the same, higher, or lower than the cost 
of similar products in the company's branded line. Each of the. sales 
departments is also charged with the direct expenses of its depart- 
ment plus its share of the general administrative overhead, and is 
expected to earn a profit over these costs. 

The export department handles only the company's branded line 
of products. It is charged by the factory exactly the same as the 
corresponding domestic sales department handling the same line of 
products, and it is expected to cover its departmental expenses, its 
share of general administrative overhead, and to show a profit above 
these costs. 

The selling expenses of the domestic department servicing inde- 
pendent jobbers and dealers are vastly greater than those of the 
export department. It advertises on a national scale. It has a host 
of salesmen covering the country from one end to the other. The 
export department, on the other hand, handles the bulk of its busi- 
ness by mail except for occasional trips abroad by the export mana- 
ger. The export department has virtually no advertising expenses. 
Thus, while the export department handles exactly the same products 
as the corresponding domestic department, its entire selling pro- 
cedure is different. 

Other than the product itself, the only competitive weapon which 
the export manager employs to help him increase the volume of his 
sales is price. He may have a different price for almost each of the 
150 markets to which he sells. He varies the price according to the 
type of representation he has in the foreign market; that is, jobbers, 
dealers, manufacturers' agent, or exclusive distributors. He varies 
it also according to local competitive conditions and to what the 
retail price in the local market must be after landed cost and the 
dealer's margin have been added to the f, a. s, price. The conse- 
quence is that the range of prices at which export sales are consum- 
mated is very wide. The lowest price is considerably less than the 
domestic price even allowing for a much higher proportion of selling 
cost in the domestic market, while the highest price in export is 
considerably above tlie domestic price if allowance was made for the 
difference in sales expenses. As an example of the range in export 
nrices and the comparison with the domestic price for an identical 
product, the following figures are representative. 

Domestic price per dozen $3. 51 

Export prices: 

Colombia, Gibraltar, New Guinea, etc 3. 24 

Japan 2. 55 

Syria 2.50 

Union of South Africa 2. 40 

Cuba, Uruguay 2. 25 

New Zealand 2. 15 

India ; 2.02 

Argentina 2. 00 

England 1.96 

Belgium 1.76 

Australia : 1.75 

France 1.50 



5g OONOENTRATION OF EOONOMIC POWER 

These prices are f . a. s. New York, in wholesale quantities. Ketail 
prices abroad, after payment of ocean freight and duties are invar- 
iably higher than the domestic retail price. For example, on the 
above product, which retails in the American market at $0.60; the 
price in England at the current rate of exchange is $1.12; Australia, 
$0.85; France, $0.86; Union of South Africa, $0.74; the Argentine, 
$0,621/2. 

The export manager explained that his rule-of-thumb method of 
pricing is to double the price at which the product is charged to him 
by the factory. He knows from experience that if on the average he 
gets double the factory cost for each product, at the end of the year 
his department will show a profit. For example, the factory costs 
for the above product are $1.02, so that even the price to France of 
$1.50 covers the factory cost, the out-of-pocket expenses of the export 
department, and part of the administrative overhead with which the 
department is charged. 

As has been indicated above, the operating expenses of the export 
department are considerably lower than the operating expenses of 
the domestic department handling the company's branded line of 
products. The manager of the domestic department states that his 
department's expenses, that is, the selling expenses, average approxi- 
mately 50 percent of receipts from sales, while the export manager 
states that his departmental expenses vary between 20 and 35 percent 
of sales per month, depending upon the profitability of the items ex- 
ported and the market to w dch the bulk of the shipments happen 
to go. There is no way of comparing the overall experience of these 
two departments except by the profitability of their operations. This 
comparison is a very simple one because of all the departments in this 
organization, the only one which has consistently lost money in recent 
years is the domestic sales department which handles the branded 
line. The export department has continuously shown a substantial 
profit, as have the other domestic sales departments. But the domes- 
tic sales department which services independent jobbers and dealers 
has for years been faced with higher and higher selling costs as its 
volume of sales have tended to decrease. In fact, the company was 
forced to sell to the newer merchandising outlets (chain stores, etc.) 
because its sales to independent dealers were dwindling and it thus 
had no outlet, or not sufRcife:it outlet, for its manufacturing capacity. 

Type 11. 

All foreign sales made hy company hranches; concessions in some 
murkets. — There is a similar type of export price procedure which, 
while followed by several cases in the sample for part of their export 
business, was employed exclusively by only one case. This method 
of pricing is one which can be used only by firms with foreign selling 
branches. The foreign branches are invoiced at factory costs and they 
fix their prices independently of domestic prices. The invoice prices 
are only nominal, representing intercompany bookkeeping entries, 
and they do not include any profit on liie transaction. The foreign 
branch must calculate its landed cost, its local distribution costs, and 
attempt to get prices and volume large enough to yield a profit. 

This system is being used by several cases in the sample, for part 
of their exports, usually by companies with branch factories abroad. 
Goods are shipped in a semimanufactured condition and finished 



OONCENTRATION OF ECONOMIC POWER 59 

abroad. Either because a large proportion of the final costs are con- 
tracted abroad or because it otherwise facilitates the conduct of the 
business, the foreign branch is billed at factory costs and profits are 
reported as earned by the branch. But in these cases most of the ex- 
ports are to independent importers and the price comparison pre- 
sented in the study made was between those export sales and domestic 
sales. Branch factory transfers could thus be ignored. 

In one case, however, all export sales are made to foreign branches — 
the company and its foreign affiliates handle all business. There is 
no intermediary between it and the consumer, either in domestic or 
foreign markets. 

The approximate measure of price differences in such a case is the 
net per unit profit market by market. Since each factory branch is 
billed at factory costs to which it must add all its distribution costs, 
the net return per unit of sales measures the difference in price above 
differences in costs. 

In this case the net return on sales in several foreign markets is con- 
siderably lower than the net return earned by any sales branch in the 
domestic market. Not only are prices adjusted to the lower purchas- 
ing power prevailing in those foreign markets but a cheaper product, 
not sold in the domestic market, is produced for them upon which a 
relatively smaller mark-up is included in the price. 

Type 12. 

All foreign sales rtiade at less than average costs. — All the cases of 
group III which have been discussed up to this point generally operate 
their export departments at a profit with all costs considered. Al- 
though the export prices on some products or some transactions are 
often less than long run or full costs of production — i. e., the export 
price does not cover full overhead or even factory costs — the prices 
on export business as a whole are high enough to cover all costs and 
yield a profit. The rate of profit on exports is as has been pointed 
out, often less than the rate of profit on domestic business but, except 
during periods of depressed business conditions, the export depart- 
ment is profitable. 

The next six cases have been grouped together because in all of them 
virtually all export sales are consummated at prices which do not 
cover full or average costs. It is, perhaps, straining a point to speak 
of this as an export-price policy. Nevertheless, these cases are similar 
in the results achieved by their export departments. In the products 
handled by these firms export sales can be obtained only at prices 
which do not cover full factory and administrative overhead. It 
might be said that the price policy is to accept export business at any 
price above out-of-pocket costs or even less on the transaction. An ex- 
port department which cannot earn a profit after being charged with 
its full costs is, nevertheless, operated because its sales reduce over- 
head, cut factory costs, or in some other way assist in the conduct of 
the business. However, occasional sales in all the cases of group III 
are probably made at prices equally low. But in the six cases consid- 
ered here there simply is not any other export business at offsetting 
higher prices. 

It is quite probable that in some of these cases a small volume of 
export sales would be obtained even if the firm refused to sell at less 
than domestic prices but the volume would be too small to maintain 



gQ CONCENTRATION OF ECONOMIC POWER 

an export organization or even an export manager equipped to handle 
the business. The low export j)rices are quoted, therefore, in order 
to get a volume of business sufficiently large to enable the company to 
maintain a staff equipped to handle export orders. In other of these 
eases, however, no export sales could be secured at domestic prices. 
The products of these six firms are : 

1. Cotton yarns. 

2. Household cotton textile products. 

3. Plumbing fixtures and related products. 

4. Specialized chemical products. 

5. Glass products. 

6. Glass products. 

A few examples will reveal that the circumstances in these cases 
are not identical except for the fact that export prices are substan- 
tially below domestic price. There is a common element of policy 
in the fact that these firms engage in exporting at ail in the fact 
of quite unfavorable foreign market conditions. Many other firms 
including some of those in our sample would simply forego export- 
ing under such conditions. 

Example 31. — This firm produces certain household textile prod- 
ucts of which turkish and hand towels and bed linens are the im- 
portant items. The domestic market is serviced by various sales 
departments, each selling to a distinct type of trade — e. g., independ- 
ent retailers, wholesalers, department stores, chain stores, institu- 
tions, etc. Products are manufactured specially for each type of 
trade according to the price class required and each line of products 
is sold only to the type of trade for which it was designed. The 
salas departments usually have a quantity scale of prices and dis- 
cretionary prices which can be used by the salesmen under special 
circumstances. 

The export department does not have a special line of products 
but it can sell any of the products of the domestic sales department 
without regard to the type of customers. It can, furthermore, sell 
in small quantities at the domestic quantity and discretionary prices. 
There are very few large orders in its export business and the small 
orders could not be obtained at the domestic prices for comparably 
sized orders. In addition the company must pay foreign agents 
commission of 5 percent, which it considers a net addition to costs 
as domestic and other export distribution expenses are otherwise about 
equal. Even with these price concessions there is little foreign demand 
for its products. The export business is in the specialty goods rather 
than the staple products of the company. 

The management has never been enthusiastic about export business 
because foreign prices are so much lower than those prevailing in the 
American market. 

Example 32. — The product in this case is a specialized chemical 
commodity. European competition quotes approximately 40 percent 
under United States prices, delivered in Latin American markets. 
This firm takes business at approximately 20 percent less than its 
domestic prices. At such prices it gets a significant volume in only 
one market, Cuba, where American products receive preferential 
tariff treatment. While the firm gets occasional orders from other 
markets these are small in total and of an accommodation character 



CONCENTRATION OF ECONOMIC POWER QJ 

where fast delivery or some other factor compensates the buyer for 
the higher than European price. There is no significant export market 
for this product. 

Example 33. — This company manufactures plumbing fixtures and 
related products. In the domestic market it distributes through its 
own branches direct to the trade or through independent wholesalers. 
The company's branches and independent wholesalers are charged at 
the same prices. 

A large part of the export business is done at the domestic wholesale 
prices but in order to do this the company must give the export de- 
partment a 10 percent discount from domestic wholesale prices. Of 
this 10 percent, 5 percent is required for commission to the foreign 
agent and 5 percent for the expenses of the expor*- department. The 
net to the company is, therefore, approximately 10 percent less on ex- 
port than on domestic business. 

Moreover, on occasion, an additional 10 percent discount is given 
in export if it is necessary to get volume business. 

Type 13. 

Export agents and commission houses. — The remaining three cases 
are export trading companies which do not manufacture and do not 
have any domestic business. Most of their business is as commission 
representatives of the United States manufacturers but two of them 
buy and sell on their own account. They were included in the sample 
in an effort to determine the export pricing policies of American manu- 
facturers who export through commission agents. The information 
presented below came from the export commission house and not from 
the manufacturers themselves. In all three of these cases a consid- 
erable part of the exports are at lower than domestic prices. 

Exam^ple SJf. — This company is an export commission house which is 
handling the following products in export markets for American 
manufacturers : 

Men's shoes. Cosmetics. 

Underwear, men's and women's. Textile finishes. 

Men's shirts. Dyeing machinery. 

Pajamas, men's and women's. Industrial products for hosiery and 

Girdles. girdle manufacturers. 

Shoes, underwear, shirts, pajamas, and girdles are sold by the ex- 
porter for approximately the same prices (on an f. o, b, basis) as they 
are sold b}^ the domestic manufacturers. The exporter works on a 
commission that is usual for this type of business. There could not be 
much difference, if any, between selling costs in the domestic market 
and the exporter's commission, so the net return to the manufacturer 
in each case is probably about the same on export as on domestic sales. 

Export prices on the other products are all lower than domestic 
prices ; 10 to 15 percent lower on cosmetics, 20 percent lower on textile 
finishes and dyeing machinery, and about 10 percent lower on indus- 
trial products. In these cases the producing mills are inclined to look 
upon exports as windfall business to take up some of their excess 
capacity. Obviously they consider it more profitable to take it at the 
price than to forego the business altogether. Bat (according to the 
export agent) they would be out of business if domestic prices were as 
low as export. 



Ao OONGETiTIlATIOr^ OF EOOnOMIC power 

Example 35. — This company deals in all types of cotton staples and 
yarns. It is the export selling agent for many domestic mills and also 
buys and sells on its own account. 

For products of this type domestic prices are very competitive and 
the margin of profit rather small. There are many producers of each 
product and price quotations are easily available and well known. 

On the general run of exjjort business the export agent merely quotes 
the market price and receives its selling commission from the mill. 
Its agents abroad are furnished with price quotations but they con- 
tinually cable offers at lower prices. Such offers are submitted to a 
mill manufacturing the particular product and it either accepts, re- 
jects, or makes a counter offer. The agent himself cannot quote under 
the market price. The price concessions that the mills may accept are 
always small — less than 5 percent. 

The view taken by the mills is much different. Some are more will- 
ing to make price concessions than others, and in any case the willing- 
ness to make a concession is quite dependent upon how good domestic 
business is. 

The commission paid the exporter is larger than usual domestic sell- 
ing costs on this type of staple merchandise. The exporter must cover 
the costs of export packing, foreign agents' commissions, cables, cart- 
age in New York, and his general overhead and profit. Therefore, the 
net return to the mills must be less on export business in almost all 
instances even when sales are made at the market price. 



CHAPTER VI 

THE ECONOMIC FACTORS DETERMINING EXPORT 
PRICE POLICY 

In this chapter an effort will be made to explain the reasons for the 
diverse price policies disclosed in chapter V. To be sufficiently com- 
prehensive, this explanation must embrace the reasons of management 
for its price behavior and also the economic or objective factors which 
limit management in its choice of price policy. Explaining price be- 
havior is a precarious task, so that the discussion to follow must be 
considered tentative and exploratory rather than definitive. 

EXPORT PRICES HIGHER THAN DOMESTIO PRICES 

When an individual or a group of individuals orp^anize a business 
enterprise there is a presumption that all efforts will be directed to 
making profits as large as possible within the limitations of legal re- 
strictions and current business mores. It is to be expected that any 
firm will try to get that price for its product which will yield the 
greatest net return on its total operations. The impediments to a rela- 
tively high price are due, in general, to the prices of competing or 
substitute products, and/or the reduced volume of sales that i-esults 
as the price is increased, and/or the variation in costs per unit of 
product as the output is reduced. If, in view of these conditions, a 
higher price will result in larger profits, there is a presumption that 
any firm will charge the higher price. No particular rationalization, 
therefore, is required to explain the willingness of the firms in group I 
to charge higher prices on export shipments than in the domestic 
market. With their knowledge of demand and cost conditions, they 
presumably are convinced that the higher export prices -make their 
business more profitable than a price equal to, or lower than, the 
domestic price. What does require explaiiation, however, is how they 
are able to get the higher price. What peculiar circumstances give 
these firms the power to exact a higher export price and what prevents 
an equally high price in the domestic market ? 

With regard to the cases of type I the answer to this question is 
quite simple. The products in both these cases are derived from a 
raw material of which the major economically available supply is in 
the United States. Export prices in these cases are admittedly mo- 
nopoly prices. This export monopoly rests upon two factors : (1) The 
United States producers collectively control a dominant share of 
world output and (2) they are effectively organized to control export 
prices — in these cases legally under the provisions of the Webb- 
Pomerene Act. Both of these factors are necessary for the mainte- 
nance of the higher export price. There must be control of output 
over the relevant price range. It is obvious that the supply abroad 

63 



QA CONCENTRATION OF ECONOMIC POWER. 

must be relatively inelastic; that is, foreign production must not in- 
crease much when the price goes up, or the American producers will 
lose their foreign markets as they raise the price. And while the 
control of supply would be ineffective without the organization to 
exercise that control, the organization in itself cannot create that 
control. In all there are six Webb-Pomerene export corporations in 
our sample and only two fall in group I. Two of the others are in 
group II and two in group III. 

As the producers in these industries do not have the legal right to 
organize and fix prices in the domestic market the presumption is 
that the lower prices in the domestic market are due to the degree of 
competition. While this does not mean that competition is abso- 
lutely unfettered among the producers in the domestic market the 
latter obviously does not have the same legal freedom to fix monopo- 
listic prices as in export markets. Possibly there is no agreement as 
to prices in the domestic market ; possibly the producers are deterred 
from fixing a higher domestic price because an antitrust action might 
be instituted; or possibly the -deterrent is the likelihood that large 
domestic consumers would force their way into the industry. One 
can hardly expect to get an adequate and precise answer to this 
question from the industry itself. 

It is interesting to inquire how it is that the foreign customer can- 
not buy at the domestic price simply by concealing his identity or by 
using a third party in the United States as an agent. In example 1, 
where the differential between export and domestic price was 20 per- 
cent, there would seem to be a pecuniary inducement large enough to 
lead to "bootlegging" of the product out of the United States. The 
management in this case states that the problem has never arisen but 
that foreign customer^ could not buy at domestic prices for two rea- 
sons. (1) The producers are well acquainted with the trade and know 
who in the domestic market is buying for his own use. If an order 
came in from an unknown person and the destination of the shipment 
was uncertain, they simply would not sell to him at the domestic price. 
(2) On the other hand, the customers who are buying at the domestic 
price would have little margin to cut the export price after paying 
freight costs and repacking for export shipment. Unless they directed 
shipment to the nearest port of export they could hardly sell under the 
export price of the company, and they could not request delivery at 
the nearest port of export without revealing their intention to the 
company. 

While the cases in type 2 do not have the monopoly element in ex- 
port markets that the cases of type 1 have, the ba^ic explanation for 
the higher export prices is still that these firms are faced with a 
higher degree of competition in the domestic market than in their 
export markets. The products in all three cases of type 2 are more 
or less standardized commodities 3old to industrial consumere for 
whom a brand name is of little significant. Prices for export are 
quoted c. i. f . and either there are no f . o. b. prices known to the export 
customer or he is unable to arrange for shipment himself. 

Consider the facts given in example 3. The company sells in export 
at c. i. f. prices for which mill net3 vary as much as 16 percent, and its 
mill net on export sales is never less than its net realization on domestic 
sales. Why is this rather wide variation in export prices possible? 



CONCENTRATION OF E<X>NOMIC POWER g5 

The customer, of course, 13 interested in getting the product at a landed 
cost which will enable him to use it profitably or more profitably 
than using some other material. His landed cost is equal to the c. i. f . 
price plus the import duty. A very high duty will make sales impos- 
sible, and it is only in countries that have no local industry producing 
a similar product and where the duty is for revenue purposes that the 
company can get any business. A relatively low rate of duty or a 
favorable ocean freight rate or both will usually allow the company 
to get a higher f. o. b. price. Or it may be that these costs are merely 
lower than similar costs for a substitute product. Factors 3uch as 
these determine local market conditions. The company is able to vary 
its price for export in accordance with local market conditions because 
the various local markets are independent of each other. 

Wliat if local market conditions demand a lower ,f . o. b. price than 
the average domestic net ( f . o. b. ) price ? The answer is merely that 
the company, as a matter of policy, is not interested in export business 
at such prices and will not consummate sales that yield less than its 
domestic net price. The company ha^ not been burdened with any 
serious excess capacity, it has not been forced to seek new markets 
for its output, and it has, in fact, been drawn into the export business 
only because it could get more attractive prices. In other words, the 
company has a favorable business position in the domestic market 
which permits considerable latitude with regard to export price policy. 
But the rationale of export price policy from the standpoint of the 
company does not explain the economic conditions which allow the 
company to maintain that policy. Why is it, then, that the company 
can get a higher price abroad than it can at home ? 

The answer is tliat there is less competition from other mills in the 
industry for export business, than for domestic business. Most of the 
mills in the industry make no attempt to get export sales, but they do 
compete on a price basis for domestic business. There are several 
reasons for this condition. In the first place, while it is easy to canvass 
the domestic consuming trade by telephone or in person it is not so easy 
to make contacts with the foreign consumers. It could be done, but it 
is expensive and the volume of business that a mill just entering export 
could get would hardly pay for the effort and expense of getting it. 
Then, too, the industry knows that the possible volume of export busi- 
ness is not great enough to warrant the attention of many mills, so 
there is not much incentive to go after export business. Another factor 
of importance is that many mills are not located on tidewater, hence 
not so favorably situated to export their product. They could not 
accept export business unless the price covered inland freight, and for 
those located far enough inland this would erase the price differential. 
It must also be remembered that the export prices of the exporting 
company are very much a business secret. The foreign buyer, on the 
other hand, would probably be faced with difficulties in getting another 
supplier even if he knows that he might be able to get a lower price. 
He does business Avith the foreign agent on the spot and no other agmts 
compete for his trade. He cannot without expense contact other fixuis 
and as he knows their United States delivered prices, which are either 
identical with or comparatively close to the domestic prices of the firm 
with which he is already dealing, he probably sees little incentive to 
do so. For these reasons competitive forces have failed to break 



gg CONCENTRATION OF ECONOMIC POWER 

through the established lines of trade and bring export prices down 
to domestic prices. The companj^ that was in the export market first 
remains in an advantageous position. Quite possibly this condition is 
not a permanent one, but the result only of what are usually called 
frictional impediments to the operation of the competitive process. At 
the present time, however, the export business is a series of isolated 
transactions in which the buyer and seller agree on a price. The buyer 
apparently has only limited knowledge of the American market and 
the seller has only limited competition. Prices are not made in af airly 
well informed market consisting of a number of buyers and sellers, as 
is more or less the case in the United States. 

The explanation of higher export prices in the other two cases of 
type 2 is quite similar ; more firms are competing in the domestic market 
than in the export market. Coupled with this is the fact that the 
exporting firms are in a position to maintain their price policy ; that 
is, they can refuse export business that does not yield a higher net 
return than domestic sales. 

The economic or technological factors that restrict the export busi- 
ness to fewer firms than compete in the domestic market differ from 
industry to industry. In one of these cases the risk factor which has 
arisen in the past decade of exchange restrictions is an important deter- 
rent while in the other case the complicated character of exporting 
techniques and the elaborate organization required to handle exports 
prevents the smaller firms from competing for this business. 

The greater degree of competition in the domestic market is also the 
explanation of higher export prices in the type 3 cases. Because fewer 
firms are competing for the export market it has been possible to main- 
tain higher list prices and proportionately lower selling costs. The 
products in these cases are branded consumers' goods and all the brands 
have definite consumer appeal. The company is able to exact a slightly 
higher price from the foreign distributor, because no one else can 
supply him with that particular branded line, of products. The com- 
pany appoints him the distributor and his business thereby becomes tied 
up with a particular brand. The distributor is hardly in a position to 
do anything but accept the price quoted him by the company. 

Why are not more domestic producers competing in export mar- 
kets? Many companies can produce and sell for thd package trade 
of the domestic market but to do an effective job in export is a more 
difficult matter. The mere problem of getting an export organization 
abroad is a formidable one. The small size of many foreign markets, 
the limited number of dealers available in contrast to the domestic 
market, and the established reputation of certain trade names all 
limit the number of firms that actually do an extensive export busi- 
ness. For these reasons the position of a company that is established 
in export markets is more secure than its position in the domestic 
market. This fact suggests why advertising and selling costs are a 
much higher proportion of domestic sales than of export sales. But 
whatever the reasons, it is clear that competition by domestic pro- 
ducers in these industries is a more effective regulator of price in 
the United States than in many foreign markets. Another important 
factor from the company's sta'.dpoint is that in the domestic market 
there are models priced for almost every type of buyer. The relation 
between purchasing power and price is such that this product has 



CONCENTRATION OF ECONOMIC POWER g^ 

achieved mass distribution. This is hardly possible in most foreign 
markets to which the company exports. Total landed costs make the 
retail price much higher than in the United States and low purchasing 
power makes the product somewhat of a luxury item. Such a con- 
dition militates against price reductions. 

At the same time the difference between domestic and export list 
prices for identical models must be kept rather narrow or this busi- 
ness would soon fall into the hands of the domestic distributors. 
While they are not at present equipped to handle exports they WDuld 
soon establish the necessary marketing organizations if the price 
differentials were wide enough to make it attractive. 

It is of great importance to note that the differing intensity of price 
competition in the domestic and export markets is not only a matter 
of the number of manufacurers selling in those markets. The variety 
of distribution channels in the domestic market and competition 
among the various types of retail outlets puts considerable pressure 
on the manufacturer to offer his product at a price that can meet the 
competition. The initiative taken by certain mass-distribution organ- 
izations in procuring lower-priced products in the industries under 
consideration are well-known examples of the competitive business 
created in this way. 

The same thing is observable within the single manufacturing or- 
ganization described in example 30. The new channels of distribution 
that have grown up and captured a large share of the domestic busi- 
ness have forced this company to manufacture for those price mar- 
kets. On its chain-store line, 5- and 10-cent line, or private brands, 
prices are decidedly lower than export prices. It is true that only the 
branded line is sold in export, but the brand is of no great significance 
as it is not advertised abroad. There is no telling what the company's 
export policy would be if it had the same kind of price competition 
from 5- and 10-cent stores and chain stores abroad as it has here. 

Another consideration that may lead to a higher export price, while 
not clearly exhibited in any of the group I cases, is illustrated in 
examples 26 and 27 of group III. We have in those examples com- 
panies that sell a large share of their export shipments at lower than 
domestic prices, but for some products get a higher price on export 
sales. The reason for the higher export prices is that the products are 
designed for a particular price class in the domestic market. The 
products in the examples are $0.25, $1, and $1.50 "sellers" at retail 
throughout the United States. But while these price classes have 
meaning for the domestic market they have no particular meaning in 
foreign markets when converted into a price in local currency. The 
export price can, therefore, be adjusted to fit local market conditions 
and in these cases local market conditions make a higher price more 
profitable for the company. There are other cases, discussed later in 
the chapter, in which local market conditions or a foreign price class 
make a lower export price necessary. 

WHAT VOLUME OF EXPORT TRADE IS SOLD AT HIGHER THAN DOMESTIC PRICES? 

After reviewing the cases with higher export prices and the prob- 
able explanation of the price differences a question naturally arises 
as to the quantitative importance of these cases in our export trade. 

257769— 41— No. 6 6 



gg CONCENTRATION OF ECONOMIC POWER 

With 10 cases out of the sample of 76 in this category there is aji 
indication that a not insignificant proportion of our export business 
in manufactured goods is done at higher than domestic prices. 
What then, is the probable proportion of exports priced higher than 
similar goods in the domestic market? Is the proportion indicated 
in the sample an exaggeration? 

It is, of course, impossible to answer these questions with any! 
statistical validity on the basis of the present study. This is essen- 
tially a case study, which cannot provide quantitative results. How- 
ever, the 10 cases of group I are not merely freaks of the business 
world, and it is very improbable that they exaggerate the quantitative 
importance of higher export prices. One should note also that many 
of the cases in group III are firms that sell some of their exports 
at higher prices, and many other companies have lower selling costs 
on their export sales. The summary table at the beginning of this 
chapter shows that 18 cases in the sample find export business more 
profitable than domestic and that 4 others in group III find exports 
as profitable as domestic sales. For these reasons it is probable that 
the ratio of 10 to 76 is not an overstatement of the area of higher 
export prices; quite possibly it is an understatement of the actual 
volume of export sales made at higher prices for the industries 
represented in the survey. The writer has the decided impression, 
after contact with many individuals in the export business, that 
higher export prices are not limited to a few isolated instances; 
they are of quantitative importance in the total volume of our export 
trade in manufactured goods. 

EXPORT PRICSES EQUAL TO DOMESTIC PRICES 

There seems to be a widespread belief that the normative procedure 
of a producer in a competitive industry is to sell to all customers at 
the same price and that there is, therefore, no reason why export 
prices should be any different from domestic prices. The rationale 
for this belief derives from the observable facts of the organized 
impersonal markets in which standardized commodities are bought 
and sold. In such markets, of course, the seller cannot differentiate 
among customers because the transactions are arranged by a third 
party and there is no personal contact between buyer and seller. 
Thus, there cannot be any separation of domestic and foreign buyers 
because the seller cannot control the destination of shipment. 

Leaving aside till later in the chapter the difficult question as to 
when an industry is competitive, it should be observed here that 
where goods are not bought and sold exclusively on an organized 
market, or what amounts to an organized market, there is no reason 
why, from the mechanics of distribution itself, shipments to all desti- 
nations must be made at the same net price. There is a personal 
contract between the seller and the buyer so that the seller can quote 
a special price for a particular buyer and can control the destination 
of the shipment. ^ This is substantially true for most products manu- 
factured by the firms reviewed in this survey. The management in 
all these cases could adopt export prices that differed from their 
domestic prices if they considered it desirable to do so. In a sense, 
therefore, all the companies in group II whose export and domestic 
prices are the same have adopted a conscious price policy just as 



CONCENTRATION OF ECONOMIC POWER 59 

much as the companies that have different domestic and export 
prices. From the objective standpoint domestic and export prices 
can be unequal just as well as equal. Hence, there must be reasons 
for the price policy in either case. The one type of policy is no more 
normative than the other for all goods not traded in organized 
markets or their equivalent — well-informed groups of buyers or sellers 
with about the same bargaining strength. 

It was with this p6int in view that the firms in group II were asked 
why they adhered to a policy of identical domestic and export prices. 
The following list represents the investigator's interpretation of the 
reasons given for equal domestic and exj)ort prices in these cases. 

1. In a few cases involving standardized commodities the manage- 
ment believes that any other than domestic prices that could actually 
be obtained in export would be less profitable. Higher export prices 
are impossible because foreign buyers know the domestic market well 
and can always find firms willing to sell at the domestic market price. 
Lower export prices would be unprofitable because the trading profit 
margin is small, and unnecessary because a price concession in the 
domestic market for the purpose of disposing of merchandise is just 
as effective as in export markets. 

2. Foreign buyers often come to the United States on buying trips 
and visit the salesrooms of the company, so higher export prices would 
cause a great deal of trouble. Again, the company does not have to 
sell at lower prices — it could do that in the United States. Several 
other firms also said they were not interested in exports if they could 
not get their price. 

3. The management in a few cases stated that the domestic price was 
too well known to be altered for export customers. 

4. Price concessions were experimented with in 1931 and 1932 when 
many foreign dealers were hard hit by exchange depreciations. The 
company states that it had so much trouble with those concessions that 
it does not intend to give any again. 

5. One company states that its products must sell on their efficiency. 
Price is a relatively minor matter if they have the best equipment for 
the job. Failing this, no price concession that the company could 
afford to give would help make the sale. The company has never tried 
to get a higher price in export because it is satisfied to get the domestic 
price. 

6. In a few cases it is obvious that the management has never drawn 
a distinction, even in its own mind, between domestic and export cus- 
tomers. A one-price system is followed as a matter of policy. Differ- 
ent prices to different types of customers have been contemplated but 
never on the basis of domestic or export shipment. That distinction 
has no meaning for the business of these firms. 

7. Most of the firms maintain equal prices to all customers as a mat- 
ter of policy because that policy conforms to their conception of ethi- 
cal business practice. They seem to feel that it would be unfair to 
their domestic customers to sell abroad at lower prices and unfair to 
their foreign customers to ask them a higher price. They think that 
sound business must be built upon fair dealing and that is interpreted 
to mean an identical price for all customers. 

8. A reason for equal domestic and export prices given by some of 
the group III cases should be mentioned here. The firms are willing 
and often do adjust prices to fit conditions in tie given export market, 



70 



CONCENTRATION OF ECONOMIC POWER 



but if they have no special knowledge of local market conditions they 
simply quote domestic prices and take whatever business comes. It 
seems to the investigator that this is also the real reason why domestic 
and export prices are equal in some of the group II cases. Firms 
selling the large bulk of their output in the domestic market establish 
their price schedules to fit domestic market conditions. Export sales 
are a byproduct to domestic operations. The firms are not making an 
intensive effort to get export business, and they frequently do not have 
an intimate knowledge of market conditions in foreign countries. In 
many eases, being in the export business only means that the firms have 
established some sales contacts abroad. They do not know enough 
about conditions abroad to price specifically for local market. Such is 
often the policy of companies that export a small proportion of their 
output. 

The 8 reasons given above for identical domestic and export prices 
also apply to that part of export sales of the group III cases for 
which prices are the same as domestic prices. It should be evident 
that the volume of exports at prices equal to domestic prices is much 
greater than could be inferred from the fact that only 21 cases out of 
76 were in group II. In many of the group I and group III cases a 
large part of export sales are at domestic prices. It is probable that 
the volume of exports for which prices are equal to domestic prices is 
larger than the volume sold at lower prices. 

EXPORT PRICES. LOWER THAN DOMESTIC PRICES 

The following discussion is devoted to explaining why prices for 
export in many cases are lower than domestic prices. There are 
various aspects of this problem. 

1. Why the management of a firm is willing to make price conces- 
sions on export sales. 

2. The factors in foreign market conditions that necessitate price 
concessions. 

3. Why higher domestic than export prices are possible. 

a. The monopoly aspects of the problem. 
h. The influence of tariff protection. 

c. The difference between the selling problem in the domestic 
market and that in foreign markets. 

d. The influence of disequilibrium conditions. 

4. Other factors influencing export-price policy. 

While these factors will be discussed separately, a complete ex- 
planation involves all of them. 

1. Why Is a Firm Willing To Grant Price Concessions on Export 
Shipments f 
In any analysis of the price mechanism it must be assumed that in 
business operations undertaken for a profit the aim of management 
is always to make profits as large as possible with the economic 
resources at' its command. The problem in every business is to find 
the volume-price relationship which will yield the greatest net return 
above the costs of producing that volume of output. Where the pro- 
ducer has no option but to sell at the market price and any possible 
output that he might produce is too small to have a significant in- 



CONCENTRATION OF EOONOMIC POWER 'J^ 

fluence on the market price then the relation between costs and the 
volume of his production offers the only control he has over the profit- 
ability of his operations. But where the producer can get some sales 
at a series of prices or where he knows that the volume of his produc- 
tion has a significant influence on the price then he has also the price 
variable to consider in finding his most profitable scale of operations. 

The point is that for any given volume of output a producer wants 
to get as high a price as possible since that will maximize his profit — 
with the proviso, of course, that he will not exploit a temporary situa- 
tion to the full if such conduct is likely to result in less profitable 
operations in the future. A firm is willing to grant a price concession 
in a particular market, therefore, only because it has no alternative 
market in which it could obtain a higher price for that part of its 
output in addition to its existing receipts from each market and be- 
cause its total operations would be less profitable if it were to forego 
that business at lower prices. Once again it is the profitability of 
the business in the long run that is the dominant consideration. 

Among the 46 cases of group III in this study the following reasons 
were given as to why the lower export prices currently in effect in- 
crease the profitability of operations. It is not feasible in outlining 
these reasons to indicate the number of cases which mentioned each 
one because the answers to any inquiry of this type vary considerably 
with the articulateness of the executive interviewed rather than with 
the actual considerations behind the price policy. As the investigator 
was making every effort to allow the executive to make his own case 
and not to interject suggestions which might merely provide a ration- 
alization for the price policy, only meager responses were obtained in 
several cases on this problem. However, each of the following reasons 
were given in at least 2 of the 46 cases. The exports referred to 
below are only those which are sold at lower prices : 

(a) Many of the cases stated that any attempt to sell the lower- 
priced exports in the domestic market would be possible only at less 
profitable prices for the entire output. Even though the domestic 
market might absorb the exports at the lower export price or perhaps 
at a smaller price reduction than is now given in export, the conse- 
quence of reducing the price on the existing large volume of domestic 
sales would lower gross receipt from sales on total output and hence 
make the business less profitable. In other words, it would not pay to 
break the domestic price. 

(5) Quite a few of the cases believe that the domestic market is 
absorbing as much of the products as is practically possible and 
that no feasible reductions in the domestic price would appreciably 
increase the volume sold. It is their belief that the domestic demand 
is highly inelastic and consequently there is no further outlet in the 
domestic market. 

(c) In many cases it was stated that while some export sales would 
be possible at the domestic price, the lower export price results in so 
large an increase in sales that total profit on exports is enhanced. 

(d) Others consider foreign market conditions such that no sales 
(in that particular market or in all markets as the case might be) 
are possible at domestic prices. By giving a price concession they 
get some sales and while the margin of profit is less than on domestic 
sales the exports are still profitable. 



72 CONCENTRATION OF ECONOMIC POWER 

{e) In some cases the export price does not cover full costs but it 
does cover factory costs and part of the overhead and thus reduces 
the burden on domestic sales. 

(/) In other cases it was stated that the increased volume obtained 
by the export-price reduction lowers the average manufacturing costs. 
The exports are, therefore, profitable even if prices only cover out- 
of-pocket costs involved in the transaction as the profitability of 
domestic sales is thereby enhanced. It should be noted that this is 
not a universal proposition as some firms find that filling export orders 
often increases manufacturing costs. These are cases with diversified 
lines of products all of which are not manufactured simultaneously. 
When export orders do not fit in with the domestic production schedule 
the cost of both export and domestic manufacture is increased. 

(g) Some stated that the volume that could be absorbed by the 
domestic market would not provide reasonably full employment for 
their labor and that without exports labor turnover would be much 
larger. As the cost of training new hands is very high (over $150 in 
one case) it pays to continue exporting even though exports show a 
book loss. 

(k) Several of the firms stated that they sell a few items in their 
lines at a lower profit, or at a loss, because it enables them to sell 
other items on which they get the full domestic price or more. These 
are cases in which the foreign distributor requires a full line in order 
to stay in business or to increase his sales to a more profitable level 
for the American producer. 

(i) It was quite frequently claimed that the price reductions were 
made for the purpose af tiding over a temporary situation due to 
depressed business conditions in a particular country or to a de- 
preciation of the exchange. The company did not want to withdraw 
from the market as it had an investment tied up in it in development 
costs. It was felt that a return on that investment would again be 
possible and profitable business in that market would come back if 
only the dealers could be maintained in business and the product 
kept before the public in the interim. It should be apparent that 
these factors are not independent but are interrelated in determining 
a firm's price policy. 

^. Factors in Foreign Market Conditions Which Necessitate Lower 
Export Prices. 

The discussion above may be summarized merely by saying tliat a 
firm exporting at lower than domestic prices does so because its total 
operations are more profitable with those export sales than without 
them. Once this point is recognized it is pertinent to ask why it is 
that export prices equal to domestic prices cannot be obtained in 
some or all export markets. What conditions are there in the foreign- 
market situation different from the domestic which make lower ex- 
port prices necessary? These are the conditions, one might say, 
which the management is attempting to overcome by a price conces- 
sion. Tlie following factors were all mentioned by the 46 cases of 
the sample which are currently exporting at lower than domestic 
prices. 

(a) The existence of foreign competition of similar goods priced 
lower than American products is the factor most often cited as 



CM3N0ENTRATI0N OF ECONOMIC POWER 73 

necessitating a lower export price. In some cases it is locally made 
products and in others it is imported products from other countries 
competing with United States merchandise in third markets. It was 
frequently stated that while the American product is of superior 
quality and can command a higher price than foreign-made goods 
the differential cannot be as great as would be required if the 
products were exported at domestic prices. 

(b) A few firms have lower export prices for particular foreign 
markets in order to meet the price competition of other United States 
producers who are attempting to enlarge their share of the market. 
United States competition was cited much less often than foreign com- 
petition as the reason for lower export prices. 

(c) Quite similar to the existence of lower-priced competing prod- 
ucts are the cases in which the producer lowers his price to particular 
markets in order that his product may be sold in the conventional price 
class in the currenc}^ of those markets. This is an important market- 
ing consideration for many . type3 of novelty consumers' goods. A 
product is made to sell for 10 cents, 50 cents, or a dollar in the domestic 
market regardless of the fact that there are somewhat similar prod- 
ucts selling at other prices. The vagaries of the consumer are such 
that many quite similar products are sold in the same store at a 
variety of prices. The American producer might know that his (say) 
25-cent seller would go over better in foreign markets if the price in 
local currency was (say) 5 pesos (Chilean), 1 krona (Swedish), and 5 
milreis. He, therefore, lowers the export price to those countries to 
enable the foreign dealer to sell at those price^s. 

(d) Lower export prices are often established because the high 
landed costs to the importer would otherwise raise the price in the 
foreign country above a salable level. High tariffs is the cost item 
most frequently cited, but ocean freight costs is also an important 
factor. These factors can be operative even if there is no local compe- 
tition with lower prices which must be met. 

(e) Export prices are often lowered to put the product within the 
reach of a people with low purchasing power. The relatively high 
average income level in the United States allows the firm to sell at the 
domestic price, but that price would put the product beyond the 
means of most of the consumer3 in countries with a much lower 
average income. 

(/) Price concessions are given in order that the foreign distributor 
or dealer might have a gross-profit margin large enough to keep him 
in business. This is often necessary in markets where the volume of 
gales is low in comparison with the sales volume of a dealer or dis- 
tributor in the American market. The retail price cannot be any 
higher abroad than it is here, so the American producer must absorb 
some of the foreign agent's high unit costs of operating in his market, 
his high unit costs being due to small volume. 

(g) Another form of essentially the same situation is found in cases 
where a company gives an allowance to its foreign representative to 
cover his costs in supplying services required in the marketing of the 
product. The small volume of sales in the foreign market raises the 
service costs per unit much above the company's own costs in the 
domestic market so that the allowance given is equivalent to a price 
reduction. 



74 CONCENTRATION OF ECONOMIC POWER 

(A) A factor very frequently cited as requiring lower export prices 
is the depreciation of foreign currencies. Such depreciation would 
automatically rai^e the local currency price if the same dollar export 
price were maintained. Since the market cannot stand the higher 
price, because the prices of locally made goods do not rise, or the 
product has become established in the market at a certain local currency 
price, or the rise would take the product out of its price class, etc., 
the dollar export price must be lowered. 

(i) The general business situation is not the same in all coun- 
tries at the same time. While business is depressed and prices low 
in some markets, trade is active and prices strong m other markets. 
A producer selling in many markets must adjust prices to meet local 
business conditions. This is particularly the case where the bulk 
of producers in each market do only a local business while a few 
firms are active on an international scale. 

S. Why Domestic Prices Are Higher. 

It is evident that the factors in foreign market conditions cited 
above as the reasons for United States firms selling in export at 
lower than domestic prices could all be reversed to explain why 
they sell at higher prices in the domestic market. That much is 
implicit in the factors themselves; they do have importance in 
foreign markets and they do not have importance in the domestic 
market. The domestic pricf is higher because these factors are not 
present to induce the prodi ;er to make them lower. The question 
at issue then becomes: What enables these producers to maintain 
price differentials, to get higher domestic than export prices? 

A. Monopoly aspects of the problem. — This leads to the funda- 
mental problem of our study. Does the existence of lower export 
than domestic prices imply that competition in the domestic market 
is in some way restricted, that the producer to some extent is in a 
monopolistic position? Can competition and price differences exist 
side by side, or are the two conditions incompatible? 

In order to answer this question it is necessary to reach an under- 
standing of the meaning to be attached to the term competition. 
The business practices implicit in competition must be distinguished 
from those associated with monopoly in order to decide whether a 
business or an industry is competitive or monopolistic. 

The popular conception of competition, held by most business men 
and by the general public, may be defined as the independent rivalry 
of a number of producers of a rather similar product for the busi- 
ness patronage of the consumers of that product. The essential 
elements of this conception are that there are several producers 
engaged in the production of the commodity and that they act 
independently in setting their price, production, and selling poli- 
cies. Each uses his own judgment as to how much to produce, 
what price to charge, and how to reach the consumer. Each tries 
to get as large a share of the market as he profitably can. 

As opposed to a condition of competition, there is generally con- 
ceived to be a condition of monopoly in which the essential elements 
of competition are not operative. Either the total production of 
the commodity is in the hands of one business organization, or else 
there is an agreement — tacit or explicit — among the several pro- 
ducers of the commodity to maintain prices, limit production, or 



(X)NOENTRATI0N OF ECONOMIC POWER 75 

allocate market areas. Competition and monopoly are looked upon 
as alternative forms of business activity and mutually exclusive 
categories of business behavior; an industry is either competitive or 
monopolistic. To a large extent, antitrust legislation is based upon 
this conception. It seeks to prohibit actions by business which limit 
independent rivalry for trade except insofar as those limitations 
arise from patents, copyright, or regulated monopolies. 

A little reflection will convince one that this dichotomy does not 
accurately describe the price-making process. It is evident that many 
kinds of marketing procedures and situations are possible under such 
an all-embracing competition : the competition may be more or less 
severe and may take many different forms. The monopoly, too, may 
be more or less restrictive. 

For this reason the economist attempts to be more analytical in 
defining competition. As his interest is in describing the price-mak- 
ing process as accurately as possible, he seeks all the gradations in 
competition and the differences in degree from one type to another. 
He tries to get at the essence of competition by describing the com- 
petitive process in its purest form. 

A condition of unrestricted competition may be called pure com- 
petition. An examination of tlie few productive areas in our eco- 
nomic system in which competitive forces are almost entirely unim- 
peded reveals that two conditions are necessary for pure competition. 
The first is that there be a large number of buyers and sellers in the 
market. The second is that the product be highly standardized. 

What constitutes a large number of buyers and sellers? In this 
context a large number of buyers and sellers is one large enough to 
deny to the sales or purchases of anyone a significant influence on 
price. The amount demanded or amount offered by each buyer or 
seller must be so small with relation to the total market that what- 
ever decision he makes as to buying or selling will not affect the 
market price. Thus, for each, the market price is an objective fact. 

When is a product highly standardized? That condition is ful- 
filled when the output of any producer is so similar to that of other 
producers that the buyers are indifferent as to which they get. They 
will not pay a higher price for any particular seller's product. 

Under these conditions no one producer or buyer can influence the 
market price. Although the decisions of the sellers and buyers col- 
lectively determine' the price, that price is beyond the control of any 
one of them. The producer has many decisions to make under these 
conrlitions, but in all of them he takes the market price as an objec- 
tive fact over which he has no control. Regardless of how much he 
decides to produce (within extremely wide limits) he knows that he 
cannot materially alter the market price. 

There are, in our economic system, only a few commodities pro- 
duced and sold under conditio .s that resemble perfect competition. 
Such competition is restricv-ed practically to a few grains and fibers 
which are sold on organized commodity exchanges. 

In the production and sale of most commodities these conditions 
are not fulfilled and competition is not pure, particularly over short 
periods of time. Either the number of producers supplying a given 
market is relatively small or the product is not highly standardized 
or both. In either case the individual producer has the power by his 
decisions to influence the price of the product. If the number of pro- 



75 OONCENTRATION OF EOQNOMIC POWER 

ducers is relatively small but the product homogeneous then the pro- 
ducer can influence the price by the quantity he produces. If the 
product is not standardized the producer may influence the price of 
his product by catering only to those consumers who have a prefer- 
ence for his product. It should be observed that in the case of non- 
standardized products it makes little difference whether each producer 
is considered to have a monopoly over his output or whether the 
competition in the industry is considered to be imperfect or monop- 
olistic competition. 

Thus, from an objective standpoint, it is the ability of a single 
producer to influence the price of the product that is the essence of 
monopoly. Whenever a producer must include in his calculations the 
effect of his decisions upon price he is not operating under condi- 
tions of pure competition. He is to a greater or lesser extent in a 
monopolistic position. There is no essential difference between his 
having to calculate the quantity he will sell at the various prices he 
can quote or the market price which will result from the various quan- 
tities he can produce. In either case he recognizes that the quantity 
of his output and the price he can get are interrelated — he is able 
to recognize the slope of the demand curve for the products of his 
firm. 

It will be evident that the departure from conditions of pure com- 
petition is a gradual one ; that is, that the monopoly element is present 
to a greater or lesser extent in actual economic life as the conditions 
of perfect competition are more or less relaxed. Other things being 
equal, the fewer the number of independent producers and the more 
distinctive the product of each, the greater is their possible effect upon 
price and the greater their monopoly position. Likewise, the larger 
the number of producers and the more homogenous the product, the 
more nearly is the condition of pure competition approached. In 
other words, competition or monopoly is a matter of degree. Starting 
from pure competition market situations may be less and less competi- 
tive as the powers of the individual producer over price increase. 

On the other hand it must be recognized that there is no such 
condition as perfect monopoly at the other end of the scale opposite 
pure competition. The monopoly power is the power to affect price 
and there is no producer who has that power to an absolute degree. 
That power is always circumscribed by competing products, by other 
means of satisfying the same wants, or by the consumer's alternative 
desires. There is no single economic good that we cannot do without 
if the price is set too high. Therefore, even if one producer controls 
the output of a commodity his monopoly power cannot be infinitely 
great. Monopoly, or competition for that matter, is purely a question 
of degree. The greater the power to affect price the greater the 
monopoly power and the less the competition. 

Now under conditions of or even closely approximating pure com- 
petition it would obviously be unprofitable for a producer to export at 
prices below the domestic market price. For he is in a position to 
sell as much as he can without perceptibly lowering the domestic price. 
If a part of the domestic output were being exported at the domestic 
price and the foreign price declined then the producers would im- 
mediately shift their sales to the domestic market until the two 
prices were again equal. It would not pay any one of them to con- 
tinue exporting at less than the domestic price. It can be said, there- 



CXDNCENTRATION OF ECONOMIC POWER 77 

fore, that under conditions of pure competition price discrimination 
among markets by a single producer is impossible. 

But once the degree of competition is somewhat restricted, once an 
element of monopoly is introduced, then exporting at less than the 
domestic price may be profitable and, therefore, is apt to arise. It is 
precisely this and only this that should be implied by saying that 
monopoly is a necessary condition for dumping (selling for export at 
lower prices). Dumping and pure competition are incompatible con- 
ditions and cannot exist side by side. The existence of dumping is 
thus prima facie evidence that competition is somewhat restricted, 
that some element of monopoly from an economic standpoint is present. 

This does not mean that competition in the popular or legal sense ■ 
of the term is not present. There may be independent rivalry for 
trade among the producers of a given commodity and yet the condi- 
tion in the industry be far from pure competition. That is, lower 
export prices do not imply necessarily that either a single producer 
controls the output of a commodity or that the several producers in 
the industry have an agreement as to price and production policies. 
The mere fact that competition is not perfect is no indication that 
there is not independent action by all producers in the industry. 

This distinction between pure competition in the economic sense 
and competition in the "independent rivalry for trade" sense is not 
always clearly distinguished in discussions of the dumping problems. 
The following statement shows the confusion that can arise on this 
point. 

"A necessary condition (for dumping) is monopoly upon the home 
market. If price competition in the strict theoretical sense is pres- 
ent — that is to say if no one producer can perceptibly influence the 
price of his product so that each producer is confronted with a prac- 
tically horizontal demand curve — the home price must be forced 
down. The monopoly may take several forms. One concern may 
have a monopoly, either because it is so large relative to the market 
that no other concern can profitably enter or because it alone has 
some secret process of production or possesses a patent or some simi- 
lar legal knowledge. Several producers may have a tacit agreement 
or may be explicitly united in a cartel for the purpose of limiting 
the amount produced." ^ 

In the first part of this statement it is implied that monopoly is a 
situation in which a producer can perceptibly influence the price of 
his product. Price competition in the strict theoretical sense is per- 
fect competition, and anything except perfect competition is monop- 
oly. Wlien "a single producer is confronted with a practically hori- 
zontal demand curve," it means that he can dispose of all his output 
without affecting the price of the product. 

But the second part of the statement implies that monopoly is a 
situation in which either one producer controls the entire output of 
the product or the several producers of the product have an agree- 
ment to limit production. The implication is that if there is more 
than one producer and the several producers do not have an agree- 
ment to limit production, there is competition in the industry. 

The point is that these two definitions of competition and monopoly 
are not the same; a part of what would be classed as monopolistic 

> Gottfried Von Haberler, The Theory of International Trade, New York, 1936, pp. 
301-302. 



yg CONCENTRATION OF ECONOMIC POWER 

conditions under the one would be competition under the other. 
For whenever there is not pure competition there is not necessarily 
an absence of independent rivalry for trade. There can be restric- 
tions to competition without total output being controlled by a single 
producer or Avithout any agreement on the part of the several pro- 
ducers. While industry situations of this type have been described 
adequately in earlier economic literature, they have been given more 
prominence in current writing.^ These situations which are not 
pure competition and not monopoly (in the popular sense of the 
word) have been called imperfect competition or monopolistic com- 
petition. The terms are used to describe situations in which a pro- 
ducer has some power (however limited) to affect the price of his 
product without having entered into a tacit or explicit agreement to 
fix prices or limit production with other producers of the product. 

To convince himself that this is quite possible the reader need only 
consider the position of the producer when the conditions of pure 
competition are relaxed; when monopolistic competition prevails. 
Those conditions were (1) that there be a large number of producers 
and (2) that the product be highly standardized. 

Consider the second condition first. When a product is not stand- 
ardized a single producer may have some control over the price of 
his product if some consumers have a preference for it. The intro- 
duction of brand names, trade-marks, style differences, packaging, 
quality differences, the reputation of the firm, the type of appeal used 
in advertising and so on may all differentiate one producer's goods 
from that of another and result in different prices for rather similar 
products within the same marketing area. That means that some of 
the producers have some power to influence the price of their prod- 
uct. For one reason or another some consumers have a preference 
for the product of a particular firm and that gives the firm the power 
to get a higher price in that market. 

This phenomenon is too familiar to require much comment. It is 
well known that in many consumer goods fields the products of the 
various firms are differentiated in the minds of the buyers. A large 
variety of brands, more or less well known, are available at quite 
different prices. A producer is often in the position of having to 
decide upon a price and marketing policy rather than, as in pure com- 
petition, merely selling at the market price. 

A distinction is drawn in law between a patent and a brand or 
trade-mark. A patent is conceived as conferring a monopoly right 
whereas a brand name is held by its very nature to imply competition 
as it merely differentiates one's product from that of his competitors. 
This distinction may be important for certain purposes but from an 
economic standpoint it is not important. A brand name may make 
a product just as distinctive in the mind of the consumer and thus as 
little subject to price competition as a patented product for which 
there are many substitutes. And, as has been pointed out, it is just 
as logical to say that each producer of a branded product has a 
monopoly of his brand as to say that there is monopolistic competi- 
tion among brands. Of course, this does not mean that the mere 
brandmg of a product will differentiate it in the mind of the con- 
sumer. But it may, and very often does. 

Th/^r'^"'Y^y E Chamberlain, The Theory of Monopolistic Competition, and J. Robinson, 
ine Economics of Imperfect Competition. 



CONCENTRATION OF ECONOMIC POWER 79 

Under a condition of monopolistic competition of this type there 
is no reason why the domestic and export prices of any particular 
producer must be equal. Even though the producer has competitors 
making somewhat similar products and even though he is not in 
collusion with them to maintain domestic prices his export price may 
be lower than his domestic price. He may have a reputation in the 
domestic market that enables him to get a higher price than his 
competitors and not have a superior reputation in foreign markets. 
He may be directing his appeal to a higher income group in the 
domestic market while in certain foreign countries there is no such 
income group large enough to constitute a market. The American 
consumer may be willing to pay a premium for the higher quality 
he offers but the foreign consumer may value that quality less highly. 
His styling may be particularly designed for American tastes and 
that may enable him to get a higher price at home than abroad. 
In all these circumstances it is economically correct to say that the 
producer has a monopolistic position in the domestic market which 
he does not have (at least to the same extent) in the foreign market. 

A somewhat similar situation results wh-^.n the other condition of 
pure competition is relaxed; that is, when there is a small number 
of producers in relation to the size of the market. The number of 
producers is small when each of them or some of them are able to 
influence the price by a change in the scale of their operations. Quite 
often product differentiation and fewness of producers are present 
together and supplement each other in injecting a monopolistic ele- 
ment in the market situation. But there are many cases where the 
products of the various firms are very similar and the fewness of 
producers alone creates an imperfectly competitive situation. 

Under monopolistic competition of this type the producer must 
calculate the effect upon price of any change in the scale of his 
operations and hence the effect upon his total profit. He cannot 
merely produce to the full extent of his resources and expect that 
the price will remain unchanged. The products of all the firms will 
sell in the market at the same price but each or some of the firms 
are able to affect the price by deciding to produce more or less. 

When, under such circumstances, several producers in the industry 
have unused capacity, they may recognize that an attempt on their 
part to increase production will lower prices and that the price 
reduction necessary to take the larger volume off the market may 
make their entire operations unprofitable. Each one knows that if 
he lowers his price in an effort to get more business his competitors 
must lower their prices. They produce whatever quantity they can 
sell at the existing price but they may or may not produce additional 
quantities which will lower the price. That will depend upon how 
much the price must be lowered to absorb the increased quantity and 
whether or not and how much unit costs will decline as production is 
increased. But because each knows that increased production will 
lower the price the individual producer may restrict his output and 
leave some of his capacity idle without entering into any agreement 
with his competitors to affect the market price. 

In general it can be stated that the more producers there are com- 
peting for a particular market, the more competitive will the market 
price be. As the number of producers increases it becomes more 
difficult for any one of them to influence the market price and to 



gQ CONCENTRATION OF ECONOMIC POWER 

take into account the effect that his actions will have upon his com- 
petitors until a point is reached where the individual producer disre- 
gards his own influence upon price. The fewer the number of pro- 
ducers the less likely is it that any one of them will pursue any 
course that will seriously disturb the market price. Thus there are 
degrees of monopolistic competition. Some cases are very close to 
pure competition in that any single producer has little ability to 
affect the price. In other cases, however, the number of firms is 
so small and each one is so reluctant to initiate price changes that the 
situation is very similar to that in which a single producer controls 
the entire output. 

It is easy to see that when competition is imperfect because of the 
small number of producers it can be profitable to export at less than 
the domestic price. A firm which is selling all it can at the market 
price may have unused capacity that it can utilize in supplying for- 
eign markets at a lower price. After producing all it needs for the 
domestic market it may be able to produce additional output at the 
same or even lower costs. To sell this output in the domestic market 
would force down the price not only for the additional output but 
for the volume of sales it is already making in the domestic market. 
By selling this additional output for a lower price in the foreign 
market it does not disturb the existing price in the domestic market. 
Under monopolistic competition it may, therefore, be profitable to 
export at lower prices because an attempt to force that output on to 
the domestic market would lower the domestic price. Under pure 
competition, however, there would be no incentive for the individual 
producer to export at lower prices because that output could be sold 
in the domestic market without materially lowerinp- the price. 

Hence, it may be said in summary that lower exi-<^'rt than domestic 
prices cannot be accepted as prima facie evidence of monopoly in 
the usual sense of the term. That is, if one defines monopoly as a 
condition where one producer controls total production of a com- 
modity or the several producers are acting together to control pro- 
duction and prices then monopoly is not a necessary condition for 
dumping. It can take place under competition. But two kinds of 
competition must be distinguished; pure and monopolistic com- 
petition. Dumping can take place under conditions of imperfect 
competition as well as under monopoly. Therefore, the most that 
can be proven by the existence of lower export than domestic prices 
is that competition is monopolistic in character. This does not mean 
that an actual monopolistic situation may not exist, but merely 
that lower export prices alone cannot prove that it does. 

This theoretical conclusion is completely supported by the facts 
brought out in the field survey. There were 46 cases in which at least 
some export prices were lower than domestic prices. A wide diversity 
of products and industries are represented by this group. Most of 
them are usually held to be competitive industries and have never 
been charged with monopolistic practices in the legal sense. What- 
ever price policies these firms have, they have adopted them inde- 
pendently. They represent instances of monopolistic competition 
rather than monopoly. Any one who scans the list of products in- 
cluded in these 46 cases will be convinced of this conclusion. There 
are undoubtedly some cases of monopoly in the list but the majority 



CONCENTRATION OF ECONOMIC POWER gj 

are surely what are generally conceived of as competitive industries. 

It would be interesting to know how many of the 46 cases in group 
III are instances of monopoly as distinguished from monopolistic 
competition. Of course, this is a difficult question to answer because 
proof of monopolistic practices is not readily available. But this 
much can be said. In 7 of the cases the holding of important patents 
certainly puts those firms in the category of monopolies. In several 
other cases certain peculiarities of price behavior, or the opinion of 
specialists in the industry concerned, or the confidential admission by 
the firm itself suggests that the firms in the industry are not acting 
with complete independence. We doubt that the most critical person 
would put that number higher than 8 although our conviction is not 
\ery strong in more than 6 cases. The rest are cases of monopolistic 
competition. On the other hand there appear to be 5 cases among 
the 30 in groups I and II where monopolistic practices seem likely. 

B. The influence of tariffs. — The existence of tariff protection is 
often considered to be a necessary condition for a continued policy of 
lower export than domestic prices. This is not strictly true. All 
that is necessary is that the exported goods be prevented from reen- 
tering the country of origin and underselling the domestically offered 
goods on the home market. A tariff can be the means of blocking 
such reentry but it is not the only means. In most cases the exporter 
has enough control over the foreign buyer to prevent him from re- 
shipping to the exporter's home market. The foreign buyer is usually 
dependent upon the exporter for the continued supply of the com- 
modity which enables him to stay in business and he would not jeop- 
ardize a profitable business relationship for a temporary gain. Be- 
sides this the transportation costs both ways would often be high 
enough in relation to the price concession given to prevent re- 
shipment. 

The tariff does, however, play a significant role in many instances 
of lower export prices in that it limits the competition which foreign 
firms may inject into the domestic market. In many cases it was 
stated that lower export than domestic prices are necessary in order 
to meet low-priced foreign competition. A tariff which intentionally 
excludes such competition from the domestic market thereby creates 
the economic conclitions under which prices may be higher in the 
domestic market than abroad. Competition is less intensive with 
tariff protection (provided that protection is effective) than it would 
be in the same industry without tariff protection. 

Of all the major products represented among the 46 cases of group 
III only one is on the free list. All the others have a greater or lesser 
degree of tariff protection against foreign competition. In export 
markets the firms must meet this competition on an equal footing 
and in many cases they must meet it by price concessions. 

It cannot be said that the tariff is the decisive factor in all cases 
of lower export prices. Products which do not have protection may 
be exported at lower prices and products which have protection may 
be exported at identical or higher prices. Even among the cases of 
group I and II there is only one major product on the free list. It is 
generally true, however, that the products in these cases do not have 
as much foreign competition in foreign markets as those in group III. 
Many industries have tariffs which are largely meaningless because 



g2 CONCENTRATION OF ECONOMIC POWER 

there would be no significant foreign competition even if there were 
no tariff. In these cases there is no significant foreign competition 
facing United States products in foreign markets. 

Among the 46 cases of group III, therefore, there are some in which 
the tariff is of no importance as a factor in lower-priced exports 
and many more in which it is of little importance. While it is 
difficult to assess the precise role of the tariff in every case or to 
determine what the price situation would be without it, it is probable 
that the tariff is a factor of significant importance in 22 cases out of 
the 46 which are exporting at lower prices. In those 22 cases a 
removal of the tariff might considerably influence the domestic price 
and thus bring export and domestic prices more clearly into line. 
In the other 24 cases it would appear that the condition of mo- 
nopolistic competition in the domestic market would not be seriously 
disturbed by the removal of the tariff. Therefore, there would be 
exporting at lower prices even without the tariff. 

The relation of the tariff to our problem may be summarized as 
follows: International price discrimination is due to the existence 
of a condition of monopolistic competition or a condition of mo- 
nopoly. Either of these conditions can arise independently of tariff 
protection. In many cases, however, approximately half in our sample, 
the protective tariff is of prime importance in the maintenance of a 
high degree of monopolistic competition or a monopoly position. 

C. The selling prohlem in the domestic and foreign markets. — 
In the cases of imperfect competition arising from product differ- 
entiation the selling problem is an important factor which often 
leads to higher domestic than export prices. The individuality of 
one firm's products which is developed in the domestic market can 
not be developed in many cases in foreign markets. The marketing 
procedures and competitive weapons which are available to a firm 
in the domestic market are often not available to it in foreign mar- 
kets. 

The average American firm entered business and is in business 
today primarily to produce for and sell in the don^estic market. If 
it develops an export business it is usually only as a'supplement to its 
domestic business. By and large, it develops its reputation in and 
designs its products for the domestic market. 

A typical firm, let us say, sells 90 percent of its output in the do- 
mestic market and 10 percent in a hundred or more foreign maikets. 
The domestic market is a highly concentrated market with a rather 
homogeneous population. It has somewhat similar tastes and it has 
a relatively high per-capita income. The foreign markets are spread 
to all parts of the world; the populations are extremely diversified 
in language and modes of living; standards of living are markedly 
different and income is generally much lower than in the United 
States. 

These differences give ample evidence that the selling problem of 
the export manager is much different than the problem of the do- 
mestic-sales manager. Having a large volume of sales concentrated 
in one market in which it is usually necessary to maintain a one- 
price policy makes it imperative that domestic prices over the years 
cover full costs. But it also allows much greater latitude in the 
methods by which sales are obtained and profitable prices maintained. 



CXDNCENTRATION OF ECONOMIC POWER g3 

In selling in the domestic market the entire equipment of salesmen 
and advertising can be effectively used as competitive weapons in 
addition to price policy. The export manager who cannot expect 
more than a small volume from any one of his many foreign markets 
cannot indulge in these sales methods. He is thrown back upon price 
as his essential competitive weapon. Usually if he cannot meet com- 
petition on a price basis he does not have the alternative of adver- 
tising or organizing a traveling sales force. He cannot develop con- 
sumer preference for his product, he cannot create a reputation for 
his firm or brand, and he is therefore forced to sell on a price basis. 

In many cases, the domestic- and export-sales managers have an 
entirely different point of view toward competition. Domestic prices 
may be set by the ranking executives of the company, of course, not 
without consideration of market conditions. The sales manager 
views his job as one of going out and getting the business by ef- 
fective advertising, effective coverage of the market, and by an ef- 
ficient sales force. Of course, he thinks the price must be right but 
he often does not look upon price as the primary means of getting 
more sales. 

The export manager, however, is much more price conscious be- 
cause he often has no other way of enlarging his sales volume. This 
was particularly true in the type 10 cases. After finding agents or 
outlets to handle the product he depends upon quality and price to 
get the business. He is not in a position to expect business through 
an effective selling job. 

D. In all discussions of the dumping problem the importance of 
monopoly as a necessary condition is stressed only for systematic 
dumping over long periods of time. It is recognized that sporadic 
dumping can occur under highly competitive conditions for a variety 
of reasons such as to get a foothold in new markets, to dispose of 
outdated styles or models, to avoid temporary flooding the domestic 
market, etc. 

"'A long period of time ' in economic literature is a period in which 
there is a chance for long-run equilibrium price to be established — 
in the absence of changes which might alter that equilibrium. That 
means a period of time in which the quantity of productive resources 
available for the production of a particular commodity can become 
adjusted to the volume of demand. 

Now the evidence of lower export prices gathered in the field 
survey of necessity refers to the current practices of business organ- 
izations. The evidence does refer to the practices in use for the past 
few 3'ears, usually for most of the past decade, and not to instances 
of a sporadic character. But it does not coincide with conditions of 
long-run equilibrium in the economic meaning of the term. Many 
industries have been operating under conditions far removed from 
equilibrium during recent years. 

The existence of rather serious disequilibrium is of primary "mpor- 
tance in explaining lower export prices in several cases in the sample, 
and particularly so in several cases of quite standardized pro ^'icts. 
In these industries which are characterized by a high degree of price 
competition in the domestic market there are firms with a large excess 
of capacity. The excess is due to the fact that demand has declined 

257769 — 41— No. 6 7 



^A CONCENTRATION OF ECONOMIC POWER 

over the past 10 or 15 years. The existing equipment would not be 
required even with any feasible reduction in the domestic price. 

Of course, this represents a condition of imperfect competition but 
if the industry was in approximately an equilibrium position it is 
unlikely that any firm would export at lower than domestic prices. 
If existing equipment was being utilized to pupplj^ the domestic mar- 
ket it would not pay any firm to purchase additional equipment to 
produce for foreign markets at lower prices. In other words, current 
export prices are not high enough to maintain a continuous supply of 
the product when the existing equipment needs replacement. It pays 
to use the equipment rather than let it deteriorate by idleness but it 
would not pay to install equipment to produce at current export prices. 

In a few cases of declining industries the current disequilibrium be- 
tween productive capacity and demand is the most important factor 
in export price policy. It is also a factor of minor importance in many 
other cases. Many firms started their export business with prices equal 
to domestic prices. They developed a certain volume of export busi- 
ness during the 1920's and did not attempt to increase that volume by 
adjusting price to local market condition. After 1929 they found ex- 
port sales dwindling, more in some markets than in others. Currency 
depreciation added more complications to the exporter's problem. It 
was often found necessary to reduce export prices to get some of the 
volume of exports to which the business had been adjusted. While the 
firm would never have entered export markets at lower than domestic 
prices, it found it better to stay in those markets even at lower prices 
after having developed facilities for exporting. 

^. Other Factors Influencing Export Price Policy. 

The conclusion was stated earlier in this chapter that none of the 
cases of group III were operating under conditions of pure competi- 
tion. Monopolistic competition characterizes the majority of the cases 
and monopoly in the usual sense of the term probably prevails in about 
one-seventh of the cases. It will be readily recognized that this does 
not differentiate the group III cases from those in groups I and II as it 
can hardly be said that many cases in the sample are operating under 
conditions which even approximate pure competition. Probably the 
nearest thing to pure competition is represented by the four "commod- 
ity" cases of type 4: Packing-house products; flour-mill products; 
canned fruits and vegetables, and (certain) dairy products. On the 
basis of the domestic competitive factor alone, therefore, there is no 
reason why most of the cases in groups I and II could not price some 
of their exports lower to the advantage of the company. Hence, it is 
desirable to point out some of the otlier differences between the groups. 
Because of the limitations of the sample and because it was not feasible 
to obtain a statistical measure of the extent of lower prices exporting 
case by case the importance of these factors does not always show up in 
a contrast of the groups. But their importance will nevertheless be 
evident. 

The first thing to consider is the difference between the types of 
products exported at higher or ecjual to domestic prices and those 
exported at lower prices. The major products in each of the 76 cases 
are shown in the following table: 



CONCENTRATION OF ECONOMIC POWER g5 

Leading products of firms included in sample 
Group I : 
Type 1: 

1. Chemical product. 

2. Chemical product. 
Type 2: 

3. Wood pulp product. 

4. Silk textile product. 

5. Chemical product. 
Type 3 : 

6. Radios. 

7. Radios. 

8. Electric refrigerators. 

9. Electric refrigerators. 
Group II : 

Type 4 : 

10. Packing house products. 

11. Flour mill products. 

12. Canned fruits and vegetables. 

13. Canned milk. 
Type 5 : 

14. Piece goods. 
Type 6 : 

15. Adding and calculating machines. 

16. Adding machines. 

17. Adding, calculating, and bookkeeping maehin*fe. 

18. Laboratory apparatus. 

19. Scientific equipment. 

20. Machine tools. 

21. Pipe fittings. 

22. Phonograph records. 

23. Writing paper. 

24. Paper grocery specialties. 

25. Felt and other hats. 

26. Men's furnishings. 

27. Women's hosiery and accessories. 

28. Hosiery, all kinds. 

29. Automolbiles. 

30. Automobiles and trucks. 
Group III : 

Type 7: 

31. Machine tools. 

32. Diversified machinery line. 

33. Paper and stationery specialties. 

34. Control and measuring instruments. 

35. Industrial chemicals. 

36. Plumbing specialties. 

37. Cigarettes. 

38. Abrasives. 
Type 8 : 

.39. Profes.sioiial supplies. 

40. Fountain pens. 

41. Safety appliances. 

42. Sanitary napkins and cleansing tissues. 

43. Typewriters. 

44. Typewriters. 

45. Abrasive and refractory products. 
Type 9 : 

46. Carbon paper and ink ribbons. 

47. Compre.ssor.'! and pumps. 

48. Professional equipment and supplies. 

49. Packaged foods. 

50. Stationery supplies. 

51. Paiiitti, vaniislios. etc. 



gg OONCENTRATION OF ECONOMIC POWER 

Leading products of firms included in sample — Continued 

Group III— Continued. 
Type 10: 

52. Stationery and school supplies. 

53. Pharmaceutical specialties. 

54. Extensive drug line. 

55. Extensive drug line. 

56. Automotive and household chemicals. 

57. Industrial lubricants and specialties. 

58. f*hotographic equipment. 

59. Industrial machinery. 

60. Tools. 

61. Linoleum and related products. 

62. .Structural insulating and wall board. 
6o. Lime, plaster, and related products. 

64. Reinforced building paper. 

65. Electrical machinery and equipment. 

66. Carbon products. 
Type 11: 

67. Household and industrial machines. 
Type 12: 

68. Cotton yarns. 

69. Household textiles. 

70. Plumbing fixtures and related products. 

71. Chenu'cal product. 

72. Glass products. 

73. Glass products. 
Type 13: 

74. Staple textile products. 

75. Paper products. 

76. Merchandise. 

Among those exported at higher or equal prices one can distinguish 
three classes of products: (1) Peculiarly American products for 
which there is as yet no serious foreign competition, (2) a few com- 
modities which are widely traded internationally, and (3) branded 
consumers' goods. 

The mass production items of which American producers are world 
leaders include such products as automobiles, electric refrigerators, 
adding machines, radios, and full-fashioned silk hosiery. While 
these goods are produced in many countries foreign producers can 
not compete eifectively with American products on a price basis 
where both products are on an equal footing. Of course, it is no 
doubt possible for American firms in these industries to vary export 
prices to fit local market conditions but since they obtain a good 
export business without that complication they have no strong in- 
ducement to alter their present price policy. The point is well illus- 
trated by the difference between adding machines and typewriters. 
It was found in three cases that producers of adding machines 
export at domestic prices and all three said they were able to do so 
because there was no effective foreign competition. The products 
of the three companies are all different in design and price and com- 
pete with each other in the domestic market. They also compete in 
foreign markets but not with foreign competition which they do not 
have in the domestic market. The two typewriter companies inter- 
viewed, on the other hand, have been forced to make price conces- 
sions in export markets because of the competition of foreign 
products. Typewriters are one of the few industrial products on the 
free list. Foreign machines are imported and sold in the American 



CONCENTRATION OF ECONOMIC POWER g7 

market. But while that competition has not been effective in the 
domestic market it has been attractive to the foreign consumer. 
The typewriter was developed and perfected in this country and for 
years the American product had virtually no foreign competition. 
Productive capacity was and is geared to a large volume of exports. 
It is only natural that when foreign competition developed that our 
producers should try to hold their share of the market. 

The staple commodities exported at domestic prices require no 
special comment. They are sold on world markets at the market 
price and all the companies interviewed claimed that pricing lower 
on a continuous basis would not be profitable. Several of them 
admitted to occasional export sales under the domestic price when 
stocks are excessive but all felt that the processor's margin was too 
small for extensive use of this practice. 

The few cases of branded consumers' goods which are not par- 
ticularly American products would seem to represent merely in- 
stances of arbitrary export-price policy. There is no reason why 
those export prices should be equal to domestic prices, except that 
the companies want to do business that way. They do not sell in 
the United States on a price basis and they do not care to sell in 
foreign markets on a price basis. 

The products in group III which are exported, to some extent, at 
less than the domestic price generally compete with similar goods 
of foreign manufacture. They are often outstanding in quality but 
there is usually a reasonable substitute which the foreign purchaser 
can buy at a lower price in his local market. Quite often the price 
of the local product is lower because of the high tariff paid on 
imported goods or high freight costs ; nevertheless, the consumer has 
the cheaper alternative. As difficult as it is to make generalizations 
about these groups it can be said that the group III cases are subject 
to much greater foreign competition than the other two groups. 

It is frequently stated that price competition is less intense among 
products that have reached the stage of final consumers' goods than 
among products that are to be used in business presumably because 
brand names are apt to have more influence upon the consumer than 
upon businessmen. In the following table tlie major products of the 
cases have been classified into consumers' and various producers' 
goods. All building materials have been classified as capital goods. 
Out of the 44 cases classified as producers' goods 30 are in group III 
while of the 32 cases of consumers' goods only 16 are in group III. 
That is, two-thirds of the producers' goods cases export at lower 
prices while only one-half of the consumers' ^oods cases follow that 
practice. Since the practice presumably indicates less competition 
in the domestic market it might be argued that this evidence shows 
less competition among producers' than among consumers' goods. 
The sample, however, is hardly large enough to justify this conclu- 
sion although it does indicate that the reverse conclusion is not 
self-evident. 



88 



OONCBNTRATION OF EOONOMIC POWER 
Classification of cases by types of product 



Group I -. 

Export prices higher than domestic 

Typel - - 

Type 2 

Type 3 

Group II 

Export and domestic prices equal: 

Type 4 

Types... 

Type 6 - 

Group III 

Export prices lower than domestic: 

Type? 

Types - 

Type 9 

Type 10... 

Type 11 

Type 12 

Type 13. 

Total 



Total 



46 



Final 
con- 
sumers' 
goods 



76 



32 



Branded 
final con- 
sumers' 
goods 



27 



Pro- 
ducers' 
goods for 
further 
process- 
ing 



15 



Pro- 
ducers' 
supplies 



Capital 
goods 



The following table indicates several other factors of importance 
in the determination of export price policy. 

It is obvious on the face of it that by lowering export prices a 
company will increase the volume of its export sales. There is no 
other reason for adopting that price policy. It does not follow that 
among firms producing diflferent products those which make conces- 
sions on export prices will export a larger share of their output. 
The table shows the percent of sales exported by the various types 
of cases. Of the 30 cases in groups I and II, 22 export 10 percent 
or more of total sales. But of the 46 cases in gi'oup III, only 22 have 
that large a percentage of sales in export markets. In this group 
13 cases are able to export only 2 percent or less despite price reduc- 
tions while no more than 2 cases in the other groups fall into that 
category. 



CONCENTRATION OF ECONOMIC POWER 



89 





Total 
cases 


Percent of sales exported 


1 or more 
foreign 
plants 


Export 




2 percent 
or less 


2 percent 

to 10 
percent 


10 percent 
or over 


from the 
foreign 
plants 


Group I- - 


9 




1 


8 


3 


2 








Type 1 --- 


2 

3 
4 






2 
2 
4 






T3^e2- 




1 






Types 




3 


2 










Group II - . - 


21 


2 


5 


14 


3 


3 






Type 4 . 


4 

1 

16 


1 


1 
1 
3 


2 


1 


1 


Types 




Type 6 


1 


12 


2 


2 






Group III 


46 


13 


11 


22 


22 


19 






Type? 

Types. 


8 
7 
6 
15 
1 
6 
3 


2 


4 
2 

1 
3 


2 

5 
3 
10 

1 
1 


2 
2 
2 
12 

1 
3 


2 
1 


Type 9 - . 


2 
2 


2 


Type 10.- 


11 


Type 11 


1 


Type 12 


4 
'3 


1 


2 


Type 13- - 















' Percent exported is somewhat higher for a few of the manufacturers represented by these exporters. 

This is a definite indication that those firms which are forced to 
make price concessions on export sales are exporting less of their 
total sales than firms which make no price concessions. Even among 
the group III cases the same relationship exists; that is generally 
speaking, the more extensive the concessions the smaller the per- 
centage of sales exported. The reason for this is not difficult to find. 
It is that the firms with a natural export product do not have to 
make price concessions to get a large volume of exports. The pecul- 
iarly American products mentioned above are exported in large 
quantities at the domestic price. There are, economically speaking, 
our natural export products. On the othf hand, those products 
which can only be exported at reduced prices are not so readily salable 
in export markets. A small market is obtained by price concessions 
but export volume is not easily obtained for those products. As a 
corollary it may be stated that the larger the volume of exports the 
less able is the firm to give price concessions. A large volume of ex- 
ports must bear its full costs and return a profit much more so than 
a small volume. 

The size of the export area in which a firm is doing business also 
has an influence on its export price policy and is often a determining 
influence. As many of the products in groups I and II find natural 
export markets in most countries, this fact does not show up in a 
statistical comparison with group III. Nevertheless, it is a fact 
that when a company tries to sc'^ ir many diverse national markets 
it is more apt to be forced into price adjustments to meet peculiar 
local conditions than if it restricted its efforts to a few markets. 
For example, all the cases of type 7 would be in group II if they were 
willing to withdraw from the few markets to which they now give 
price concessions. And several of the cases in group II sell to rela- 
tively few markets because they insist upon exporting only at domes- 
tic prices. 



90 OONCENTEATION OF EOONOMIC POWER 

Another factor which ajffects export price policy is foreign branch 
plants. In general the same forces which would induce a firm to give 
export price concessions would make it profitable to establish manu- 
facturing branches abroad. From the above table it can be seen that 
one-half of the cases in group III have foreign manufacturing 
branches as against less than one-third in the other groups. 

In each case, however, the establishment of a foreign branch re- 
duces the necessity of exporting below the domestic price. Several 
of the companies stated that it was their policy to use domestic price 
on export business and to supply lower priced markets from their 
foreign factories. There is no doubt that some of the cases in group 
II would not be able to maintain export prices if they were not 
producing abroad and that many of the cases in group III would be 
exporting a large share of this output at lower prices if they were 
not supplying some markets locally. It may be noted that in 24 of 
the 28 cases with branch plants abroad those plants supply exports 
for other markets in addition to supplying their local market. Those 
companies which are not in a position to manufacture abroad or who 
cannot economically decentralize their operations are more often 
forced to rely upon price concession to maintain their export trade 
than firms which can produce in several countries. 



CHAPTER VII 

CONCLUSIONS 

Tliis study Avas directed primarily toward answering a specific 
question : Can the existence of higher domestic than export prices be 
accepted as prima facie evidence of actions which are prohibited 
under tlie antitrust laws or, stated more broadly, does international 
price discrimination occur only under conditions of monopoly in one 
or more markets? It will be recognized that a comparison of do- 
mestic and export invoice or quoted prices may be entirely inappro- 
priate in answering this question since such prices may merely reflect 
the costs involved in different terms and conditions of sale. Net 
factory realizations on domestic and export sales must be used to 
determine the difference, if any, between prices. 

This investigation demonstrates that international price discrimi- 
nation is not a sure sign of monopoly as that term is generally con- 
ceived. If one means by monopoly that an industry is composed of 
a single producer or that there is an explicit or tacit agreement among 
the producers of an industry controlling price or production policy, 
then it must be said that different export than domestic prices is, 
not clear proof of monopoly. Such price behavi-^r can and un- 
doubtedly does occur» in monopolistic industries but it also often 
occurs in industries or firms which are not monopolistic as defined. 

In this study of 76 cases, all of which sell in both domestic and 
export markets, it w^as found that 45 cases transacted at least some 
of their export sales at other than domestic prices. In 9 cases of this 
45, export prices were sometimes higher than domestic prices but 
never lower, while in the remaining 36 cases export prices differed 
from domestic in both directions although lower prices were much 
more predominant. In only 6 cases was it found that all exports 
sales were consummated at less than the domestic price. In only 21 
cases of the 76 were export prices always identical to domestic prices. 
Tlius more than two-thirds of this limited sample show some flexibil- 
ity in export pricing policy. 

It was brought out in chapter V that there were considerable dif- 
ferences in pricing methods and attitudes toward price policy among 
the 45 cases which had some variation between domestic and export 
prices. These differences in price policies cannot be summarized in 
this concluding chapter. It need only be emphasized, however, that 
a large majority of the cases were not monopolies — that is, instances 
of production being controlled by one firm or by several firms acting 
under an agreement. In the opinion of the investigator not more 
than 12 out of the 45 could be so classified. 

The others, to be sure, are not instances of pure price competition 
such as one finds among producers of (say) wheat. The term mo- 
nopolistic competition, as contrasted to pure competition, has been 

91 



g2 OONCENTRATION OF EOONOMIC. POWER 

used to describe the competitive situation in these cases. The man- 
agement in each of them does have some control over the prices at 
which the product is sold — beyond the mere decision to produce or 
not to prodiice such as confronts the wheat farmer — but this element 
of price control does not arise either because the concern is the sole 
producer of the commodity or because it is acting in collusion with the 
other producers. The element of price control arises rather from 
either of two conditions which were not contemplated by the anti- 
trust laws or included in the concept of monopoly around which the 
antitrust laws were written. These conditions are (1) the non- 
standardized character of the product itself which allows consumer 
preference in the face of price differences, and (2) the fewness of 
producers of a commodity which gives to each some power to effect 
the price which all receive and thus enables each to see the profitability 
of maintaining a certain price without any agreement among the 
group to do so. Neither of these situations can be called monopoly and 
neither is unlawful under the antitrust laws. 

Such widespread use of international price discrimination by in- 
dustrial concerns as brought out in this study and the ability to 
exercise some control over prices that is implicit in this situation, 
obviously raises a serious public question. The economic system based 
upon free private enterprise has placed reliance, both in practice and 
in theory, upon intense price competition for securing equity to the 
consumer and the full utilization of resources in production. But 
international price discrimi lation is an indication that intense price 
competition may not be the prevalent industrial norm. 

At first glance it might seem that the interest of government should 
be directed to the sphere of export prices in an effort to determine 
if public control of those prices can benefit the domestic consumer. 
Taking the lack of intense price competition in the domestic market 
for granted, one may inquire into the domestic repercussions of grant- 
ing price concessions in foreign markets. The theoretical considera- 
tion of this problem shows that no single conclusion is possible. 
Conditions can be set forth, and such conditions undoubtedly exist, 
under which the domestic price would be lower if price concessions are 
made in export markets than if such concessions are not made. Other 
conditions can be set forth, and these too undoubtedly exist, under 
which export price concessions would tend to raise prices to the do- 
mestic consumer. The conclusion, therefore, will vary with the under- 
lying conditions in the industry concerned — conditions regarding the 
character of domestic and foreign demands and the effect of increasing 
or decreasing output upon costs.^ 

Since domestic prices in some instances may be raided because lower 
prices are set on foreign sales there is a suggestion that the public pre- 
vention of such export price concessions offers a possibility of lower- 
ing domestic prices in such cases and thus benefiting domestic con- 

..■J ^''ofessor Vlner has summarized two of the most interesting situations as follows : 
'For the special case where under a uniform price policy the optimum price would not 
permit of any export sales, it has been shown that resort to dumping with a consoquejt 
increase in output would lead to a higher domestic price if marginal costs increased and 
to a lower domestic price if marginal costs decreased. The important problem, however, 
of what is the effect of dumping on domestic price when some export business could be 
obtained even under the optimum uniform price still awaits solution ; under these circum- 
stances it appears that resort to dumping always raises the maximum revenue domestic 
price and increases the cost ,to the domestic consumer by more than the Increase In 
monopoly revenue." — Jacob Viner, Encyclopedia of the Social Sciences, vol. 3, p. 276. 



CONCENTRATION OF ECONOMIC POWER 93 

sumers. While not denying the possibility, the writer is of the opinion 
that, in a world where foreign trade i^ left substantially to individual 
initiative, the restriction of export price concessions generally would 
be unfruitful in producing favorable results on the domestic price 
structure. Three arguments may be offered in support of this con- 
clusion. 

(1) It would be virtually impossible to analyze actual demand and 
cost conditions with sufficient accuracy to provide a guide for public 
policy and, therefore, virtually impossible to know in any given in- 
stance whether a lower or a higher domestic price would result from 
Government control of export prices. 

(2) But there is a more important objection to the general preven- 
tion of lower export prices. After examination of the cases included 
in this study and conversations with the business executives involved, 
the writer is convinced that in most instances export price policy is 
determined quite independently of domestic price policy and often by 
different individuals. While there seems to be a general recognition 
among business executives of the effect of added output upon costs and 
thus a recognition of the possibility of increasing profits by making 
export price concessions, this reasoning is seldom carried so far as to 
give an interrelated domestic and export price policy. Such being the 
case, there is a likelihood that any general control of export prices 
would result in lower exports and reduced employment without the 
offsetting advantages of lower prices and increased production for the 
domestic market. 

(3) The third reason is that the economic adjustment which would 
produce lower domestic prices can only be assumed to operate under 
conditions of full employment. The pressure upon the producer to 
reduce domestic prices if he should be forced to discontinue export 
price concessions and hence lose some foreign sales comes from the 
unused capacity which those lost sales create. However, as this study 
was made at a time when there was considerable excess capacity in 
industry, little reliance can be placed upon the power of a small in- 
crease in that excess to effect profound price changes. 

Thus, if monopoly or monopolistic competition in domestic industry 
leads to price concessions being made in export markets, not much is 
apt to be gained through the Government's operating directly upon 
export prices. This does not mean that the existence of international 
price discrimination does not present a problem which demands the 
serious attention of government and business. But it is a problem 
which lies primarily within the domestic market rather than in export 
markets. Export price discrimination is a clear sign that some im- 
pediment is restricting competition in the domestic market, even 
though it is not an illegal impediment. It is the impediment to 
domestic competition which creates the problem and demands atten- 
tion, however, and not the signs of the problem in export price policy. 
It should be recognized furthermore that the possible ill effects of 
monopoly — in the way of obstructing full employment and the best 
allocation of resources — can flow just as well from widespread 
monopolistic competition. 



PART II 

DIRECT FOREIGN INVESTMENTS IN 
AMERICAN INDUSTRY, 1937 

Prepared by 
PAUL D. DICKENS 

in the 

Bureau of Foreign and Domestic Commerce 
DEPARTMENT OF COMMERCE 



95 



FOREWORD 

American industry was built up witli the help of large amounts of 
foreign capital. The problem to which this study is directed is the 
extent to which industrial operations in the United States are today 
in the hands of foreign ownei^. 

Of the $7,398,000,000 of foreign investments in the United States 
$1,883,000,000 represent direct investments involving 1,172 companies 
and branches located in the United States. These new estimates are 
broken do'^n in the report by industry and by foreign country in- 
volved. 

This study does not attempt to cover other phases of the problem 
of international controls over our economic activity. The effect of 
foreign competition through imports, the existence of working ar- 
langements for dividing the world market or of reciprocal agreements 
to respect each other's home market, and the possibility of controls 
through patent rights, are none of them here considered. This study 
does show that the domestic problems of industrial management are 
not significantly complicated by foreign controls reaching into the 
American scene in the form of actual operations within our bounda- 
ries. 

WiLLARD L. Thorp. 

Washington. D. C. 

97 



DIRECT FOREIGN INVESTMENTS IN AMERICAN 
INDUSTRY, 1937 

INTRODUCTORY 

Cartels, such as are common in Europe, are not a feature of indus- 
trial organization in the United States. The antitrust laws have pre- 
vented that. However, there has been nothing to prevent cartels from 
obtaining a share of the American market by establishing branches 
or subsidiaries in this country. The study, the results of which are 
here presented, has shown that the foreign cartels as such have rarely 
established branches or subsidiaries in the United States. Several of 
the larger members of such cartels have entered this market by those 
means and do exert an influence in that manner. The extent of that 
influence, as shown by the value and character of foreign investments 
in this country, is analjrzed in this report. 

Foreign investments in the United States at the end of 1937 aggre- 
gated $7,398,000,000, as shown in table I. The short-term investments, 
which totaled $1,920,000,000, took the form largely of deposits in 
United States banks. Direct investments amounted to $1,883,000,000 
followed closely in size by investments in common stocks at $1,850,- 
000,000. Foreign holdings of United States preferred stocks and 
bonds and other investments were much smaller. 

Deposits of foreign funds in United States banks are extremely vol- 
atile, flowing freely and rapidly into and out of the country as Influ- 
enced by political and economic rumors and developments in this and 
in foreign countries. Investments in United States common and pre- 
ferred stocks and bonds, particularly the first, are also subject to con- 
siderable fluctuations in value. These fluctuations arise from the 
volume of purchases and sales, which are affected by political and 
economic conditions, like deposits of foreign short-term funds, al- 
though to a somewhat lesser degree. In addition, fluctuations arise 
from the considerable changes in the average market prices of Ameri- 
can common stocks that frequently occur. The so-called "other in- 
vestments" are composed of estates, trust funds, holdings of real 
estate and real-estate mortgages, and other miscellaneous items. 
These are not highly liquid and show relatively little change from 
year to year. The same is true of "direct investments." 

Table I. — Estimate of Foreign Investments in the United States, End of t037 

Type of investment 

Long-tprni investments : Extimatct Value 

Direct investments (book value)' $1,883,000,000 

Common stocks (market value)'' 1,850.000.000 

Preferred stocks (par value)' 430. 00;), OOO 

Bonds (par value) 565.000.000 

Other investments 750, 000, 000 

Total long-term 5. 478, 000. 000 

Short-term investments 1, 920, 000, 000 

Grand total 7, 398, 000, 000 

• Revised. 

* The Finance Division. Bureau of Foreign and Domestic Commerce, is making an inten- 
sive study of these investments ; the results of this study should be available during the 
summer, of 1940. 

257769— 41— No. 6 8 99 



FOREIGN DIRECT INVESTMENTS IN THE UNITED 
STATES AND THEIR SIGNIFICANCE 

At the end of 1937 foreign companies and individuals domiciled 
abroad controlled a total of 1,172 companies and branches located 
in the United States. The total investment interest of the foreign 
ownei*s of these companies and branches amounted to $1,882,603,000, 

Foreign direct investments in the United States are all foreign 
investments in those United States corporations or enterprises which 
are controlled by persons or small groups of persons (corporate or 
natural) domiciled in foreign countries, or in the management of 
which such persons or groups have an important voice.^ It is through 
this type of investment that foreigners most directly influence pro- 
duction and distribution in the United States and for that reason 
it is this type of foreign investment that is discussed here in detail. 

The^se investments had no common cause, unless it was a desire 
to participate more fully in the great American market. Some date 
their beginning before the Civil War while others were only re- 
cently started. Some have grown to considerable size, as any pros- 
perous well -managed business may, while others are the result of 
the merger of several units, some of which may have been domes- 
tically owned. Many of the maimfacturing enterprises are based 
even now on patent control. Frequently patent controls were im- 
portant in tlie beginning of the enterprise but now the reputation 
for a good product and good service is more vital to it. The United 
States tariff was undoubtedly a factor in causing some factories 
t<^ be established to manufacture products in this country that could 
not be imported and meet the competition of domestically produced 
goods. Other factors, such as the costs of transportation, or the 
availability of a raw material, were influential in individual cases. 

Tarle II. — Forciffn direct invcstincnts hi the United States, hi/ hidtistriefi, lOM 

[In thousuiuls of clolljii-s] 



Industry Investment 
Manufacturing : 

Automobile parts $34,821 

Iron and steel 6,348 

Nonferrous metals 24, 200 

Transportation e q u i d- 

mont 1, 790 

Machinery 31,977 

Heating and electrical 

equipment 11,963 

Hardware 12,276 



Induntrn In •'r'<t mm t 
Manufacturing — (Continued. 
IJuilding and constructed 

material .$1"), 827 

Paper and wood prod- 
ucts 18, 23^i 

r''iemicals 220,304 

Rubber 2, ,%1 

Leather 2, 725 

Textiles 217,164 

Foodstuffs . 31, 9:W 



' 'I'hp basis of tlie classification of an investment as '•diioot" has liecn tiio ownership of 
thf? common stocK of tlie enterprise. No arliitrary jMTcenfaKe of owncrsliip of tin* common 
stock has been adopted hecavisf' a eoiicentrated lii.ldiiifr of .'iO percent of tin stock may give 
control of i)olicies us effectively as a mor(> widely distributed holdinK of 50 or 00 percent. 

100 



CONCENTRATION OF EOONOMIC POWER 101 

Tablk II. — Foreign direct investments in the T'uited States, by Industries, 1937 — 

Continued 



Industry Investment 

Manufacturing — Continued. 

Beverages $65,275 

Tobacco 18, 764 

Other manufactures 12, 500 



Total, manufacturing— 728, 669 

Distribution 119, 161 

Transportation 257, 002 

Public utilities 9, 182 

Petroleum 283, 450 

Mining 23,902 



Industry Investment 

Finance : 

Banking, i n v e s tments, 

etc $61, 103 

Insurance 351,262 



Total, finance 412,365 

Agriculture 12, 670 

Miscellaneous 36, 202 



Grand total 1,882,603 



INDUSTRIAL DISTKIBUTION 

Foreign direct investments in United States enterprises in 1937 
were distributed over the whole range of business activity in this 
country. ("See table II.) Every major industry was represented 
from manufacturing to agriculture and from retail distribution to 
railroad systems. The distribution by industries was not even, how- 
ever, nor did it conform to the relative importance of the various 
industries in the United States. Controlling investments in United 
States public utility enterprises, for example, were the smallest in 
any group. Undoubtedly one reason for this was the fact that the 
period of greatest development in the public utility field occurred 
after the United States became a lender rather than a borrower. An- 
other reason, however, was the attainment by electric and gas utilities 
in this country of a position of financial strength and technical 
efficiency before they did in foreign countries. 

Manufacturing, with its wide range of nonstandnrdized highly com- 
petitive products, was the field of investment in 1987 of $729,000,000, 
or approximately 40 percent of the total foreign direct investments 
in the United States. Although the range of product is extremely 
wide, in some branches entrepreneurs in this country developed ad- 
vanced techniques and superior products earlier than foreign com- 
panies and the conditions have not been favorable for investments by 
the latter. Other branches of manufacturing revealed the existence 
of competitive conditions which induced foreign investments. Under 
this latter head mention needs to })e made ])articulai'ly of chemical, 
textile, and beverage manufacturing. Among the bi'anches of mami- 
facturing that were atfocted least l)v the entrsmce of foreign affiliates 
into this market were iron and steel. transj)oitat ion i'(|nipnient, and 
rubber. 

Just before the United States eiiteied the World War. the domestic 
chemical industi'v was dominated by a few large Geinian concerns. 
The Seizure of the United States assets and patents of those con- 
cerns, and their sale to domestic intei-ests, served to break' that dom- 
ination. This is an industry, however, in which patents play a ])rom- 
inent role. As a result foi'eign investments in the cheinical indnstry. 
including toilet goods and cosmetics, amounted to $22().(K)0,()00 at the 
end of 1937. As large as this investment seems, it was oidy about 5 
or 6 percent of the total capital invested in the United States chem- 



102 OONCENTBATION OP ECONOMIC POWER 

ical industry.'^ Furthermore, the geographic distribution of that for- 
eign investment was much wider in 1937 than in 1914, with England, 
France, Netherlands, and Switzerland, as well as Germany, in im- 
portant roles. 

Textile manufacturing presented yet another picture. Cotton, 
wool, and silk textile production have not for years, if ever, been 
dominated by foreign capital. There were, nevertheless, several old 
companies of more than average size that were controlled abroad, 
particularly in England and France. Rayon manufacturing con- 
cerns, on the other hand, were largely foreign in their origin and 
control, and in 1937 several of the largest companies were wholly or 
partially owned by British, Dutch, and German companies. The 
textile group as a whole, in which $217,000,000 of foreign capital was 
invested, showed about the same degree of foreign control as did the 
chemical industry. 

Approximately 6 percent of the capital invested in the manufactur- 
ing of beverages (alcoholic and nonalcoholic) was owned abroad in 
1937. Foreign ownership, however, was confined largely to the manu- 
facture of alcoholic beverages and in that branch comprised a much 
larger part of the total investments. The latter was, of course, a 
development of the years after 1933. Almost all of the $65,000,000 
of foreign investments in United States beer and whisky manufac- 
turing companies were held by a few large Canadian companies. 

The investment in financial institutions was next in size to the 
manufacturing industry, although only about 60 percent as large. Of 
the $412,000,000 of foreign capital invested in this type of enterprise, 
the net worth ^ of 134 foreign-owned insurance branches and sub- 
sidiaries amounted to $351,000,000. Seventy percent of the net worth 
of these insurance investments was in fire and marine insurance 
branches and companies and only 4 percent in life insurance com- 
panies although the admitted assets of life insurance companies were 
nearly as large as those of the fire and marine companies. The dif- 
ference was the result of the varying statutory reserve requirements 
applying to these types of companies.* Three-fourths of the direct 
investments by foreign insurance companies were British. (See table 
II.) No other country comprised as much as 10 percent of the total. 
Direct investments in banks, trust companies, and investment com- 
panies amounted to $61,000,000. 

Foreign direct investments in the petroleum industry, which 
amounted in 1937 to $283,000,000, covered the entire range of produc- 
tion, pipe-line transportation, refining, and distribution. Some of 
these investments had their origin before 1914. Their principal ex- 
pansion, following the trend of the industry took place after the 
close of the war. England, Canada, and Netherlands all figured 
prominently in the total. | 

"Based roughly on the total assets of chemical companies as reported in Bureau of 
Internal Revenue, Press Service No. lfl-13, showing the assets and liabilities as of 
December 31, 1937, of corporations submitting; balance sheets. 

' The net worth of these branches and affiliates of foreign companies, rather than the 
total admitted assets or total investments, has been adopted as the correct method of valu- 
ing insurance investments because a large part of the assets of insurance companies are 
required by law to be deposited against policy liabilities with State insurance commis- 
sioners as statutory reserves. 

* For more detailed data regarding foreign insurance investments In the United States 
see the following publications of U. S. Department of Commerce : Trade Information 
Bulletin No. 8.'{4, Insurance Transactions in the Balance of International Payments of 
the United States, 1919-35, by Dr. August Maffry, published in 1936 : The Balance of 
Inrernatlonal Payments of the United States (published annually), and Foreign Invest- 
ments In the United States, pp. 38 and 43. published in 1937. 



OONCBNTRATION OP ECONOMIC POWER 



103 



With one exception the controlling foreign investments in United 
States railways were held by the two large Canadian systems. These 
holdings were acquired for the most part during the last half of the 
last century when the Canadian companies were seeking direct access 
to Chicago and to the eastern seaboard of the United States. 
Foreign direct investments in transportation enterprises in 1937 
were estimated at $257,000,000. 

Direct investments by foreigners in United States mining and 
agricultural companies were, up until about 1910, more numerous 
and valuable than at present. This was particularly true of agri- 
culture." During the 1870-80's British capitalists obtained large 
tracts of land in the South and Middle West either for exploitation 
or as speculations. The liquidation of such holdings was very rapid 
after about 1900 and during the World War, and as a result were 
relatively unimportant in 1937. Controlling investments in United 
States mining enterprises in 1937 were generallj^ of rather recent 
origin. The pre-war foreign holdings were usually sold gradually 
to United States investors so that while foreigners still have large 
investments in mining enterprises in this country they are no longer 
controlling interests. The development of American potash re- 
sources, which is of fairly recent date, has been financed largely by 
foreign capital and accounts for a substantial portion of the $24,- 
000,000 invested in mining enterprises. 

Import-export houses, and distributors of foreign specialty articles, 
such as some Japanese and Philippine goods, comprise the bulk of 
the foreign direct investments in the distribution industry. 



Table III. 



-Foreign direct investments in United States, by principal countries 
and industries, 1937 







[In thousands of dollars] 












Manu- 
factur- 
ing 


Distri- 
bution 


Trans- 
porta- 
tion 


Public 
Utili- 
ties 


Petro- 
leum 


Min- 
ing 


Fi- 
nance 


Miscel- 
lane- 
ous 


Total 


Europe: 

United Kingdom 

Netherlands 


366,547 
27,825 
65, 662 
45, 805 
24, 175 
24,109 
24,998 
11,937 


29.674 
5,009 
3,573 
6,279 

12,864 
7,411 
1,433 
3,446 


30,285 
1,032 

142 
2,467 

172 
1,490 

736 
2,801 


925 


92,940 
142, 551 


13,146 
325 
112 


277, 074 

1,266 

1,071 

147 

28,045 

11,629 

2,569 

13, 077 


22, 752 

511 

630 

249 

6,400 

1,786 

""7,'895" 


833,343 
178, 519 
71 190 


Belgium 


Qermanv 




38 
2,276 
10, 078 


54 985 


8wit7j»rlftn(1 , 


73, 932 


France 


56, 503 


Sweden 


29,736 


other Europe . . 








39, 156 












Total 


591, 058 


69,689 


39,125 


925 


247.883 


13,583 


334, 875 


40,223 


1, 337, 364 


Canada ' 


130, 873 
2,205 


11,008 
13, 975 


215, 624 
6 


8,057 
200 


34,987 
149 


10, 199 
55 


45, 742 
1,516 


6,205 
292 


462. 693 


Latin America 


18, 397 






Africa, Asia, and Oceania: 
Japan. _ 


927 
1,869 


16, 531 
7,936 


1,757 
44 








21, 805 
8,386 


10 
1,085 


41,030 


other . 








19,320 












Total 


2,796 


24,467 


1,801 








30, 191 


1,095 


60,350 












Unknown 


1,737 


22 


447 




431 


65 


33 


1,057 


3,797 






Grand total 


728,669 


119,161 I257.n02 


0,182 


283,460 


23,902 


412, 365 


48,872 


1,882,603 









' Including $102,000 for Newfoundland ($2,000 in mining and $100,000 in "miscellaneous"). 



• There are undoubtedly some large unincorporated farms r'mi urban properties owned 
by foreigners today that are not included in the 1937 estimates. 



JQ4 CONCENTRATION OF ECONOMIC POWER 

GEOGRAPHIC DISTRIBUTION 

Seventy percent, or over $1,300,000,000, of the foreign direct invest- 
ments in the United States in 1937 belonged to the United Kingdom 
and the British Dominions. The bulk of these large investments — 
$833,000,000 — was made by corporations and individuals in the 
United Kingdom. Canada with $463,000,000 made up most of the 
remainder. Manufacturing and insurance were the two industrial 
L'^roups in which British investments were largely centered. To an 
important degree both had a long history, some of the latter going as 
far back as 1804 and the former to 1853. In many cases the only 
exphmation of their continued existence as foreign-controlled enter- 
))rises was this historical factor and their profitability. In other 
cases important English investments arose out of patent controls, 
tariff measures, and the demands of competitive marketing. 

Canadian direct investments in the United States covered a wide 
range of activities. They seem to have been the result of nearness 
and the similarity of markets and methods. Nearness or contiguity 
were, of course, the determining factor in the investments in branch 
railway lines in this country. To a very real degree nearness can 
also be said to be a factor in the manufacturing investments, the 
next most important group, as is evident from the notable extent to 
which these enterprises are concentrated in Buffalo and northern 
New York. Furthermore, the close relations that exist between 
Canadian and United States businessmen naturally lead to their asso- 
ciation in various enterprises or industries. 

European countries, other than the United Kingdom, likewise had 
large direct investments in the United States in 1937. Netherlands, 
with $178,000,000, followed Canada in size. Switzerland, Belgium, 
France, and Germany were next in that order of importance. While 
j)etr()l(Mnn comprised the bulk of the investment of the Netherlands, 
manul'av'turing was a large part of the total of each of the countries 
listed above. (See table III.) Chemical, textile, and mechanical 
})ranclies of manufacturing were most prominently represented. 

Direct investments by other foreign countries were scattered and 
relatively unim])ortant with the exception of the Japanese interests. 
The, latter totaled $41,000,000, in which insurance and distribution 
enterpi-ises wei'e the only ones of significance. 






CONCENTRATION OF ECONOMIC POWER 



105 



Tabi^ IV. — Foreign direct investments in the United States, by countries, 1937 



Country 

Europe: 

Austria 

Belgium - 

C zechoslovakia _ 

Denmark... 

France 

Germany 

Oreece 

rrish Free State 

Italy _ 

Lich tenstein. 

Lithuania 

Luxembourg 

Madeira 

Monaco 

Netherlands 

Norway _.. 

Poland.. 

Portugal 

Spain 

Sweden 

Switzerland 

Union of Soviet Socialist Republics. 
United Ki ngdom 



I In thousands of dollars] 



Total 

investment 

155 

71, 190 

1,467 

8,138 

56, 503 

54, 985 

765 

1,107 

12, 476 

8, 257 

35 

2,757 

147 

67 

178,519 

2,318 

26 

2 

1,419 

29, 736 

73, 932 

20 

833, 343 



Total, Europe 1,337,364 



North America: 

Canada 4S2,593 

Newfoundland 102 



Total, North America. 



Mexico and Central America: 

M e.xi CO - 

E! Salvador. 

Guatemala 

Honduras 

Panama... 



Total, Mexico and Central America. 



Country 



South America-. 

Argentina... 


Total 
investment 
987 


Bolivia 


14 


Brazil... 


1,674 


Chile 


.. .. 7,777 


Peru . . 


21 






Total, South America ... 

West Indies: 

British West Indies 


10,47:} 
914 


Cuba 


4,980 


Dominican Republic. 

Total, West Indies 


76 

5,97.'i 


Africa: 

Britisli Africa - 


255 


Egypt 

Total, Africa 


3 

258 


Asia: 

British India 


I, 260 


China 

nong Kong 


4,803 

436 


Iraq 


106 


Japan * . . 


41,030 


Netherlands East Indies 

Palestine 


1 

44 


Philippine Islands 

Turkey . . • . 


9,803 

.. . 4 


Total, Asia _ 


57, 487 


Oceania: 
Australia 


741 


New Zealand. .. 


1,864 


Total, Oceania.. 


. . 2,605 
3,797 






Grand total 


.... . 1.SS2. 603 



FOREIGN CONTROL OF UNITED STATES PRODUCTION 

The control over United States production exercised by foreign cor- 
porations through their direct investments in this country was, on the 
whole, negligible in 1937. In agriculture, for example, while foreign- 
ers controlled one of the largest cotton-plantation enterprises in the 
United States its production was a small fraction of total cotton pro- 
duction of this country. While foreigners owned several ranches and 
one of them was between 800,000 and 900,000 acres in size, with about 
50,000 head of cattle, that too was only a fraction of 1 percent of the 
total acreage and stock of cattle. Foreign ownership of United States 
coal, iron, copper, and timber resources, to mention a few important 
raw materials, were insignificant. 

In a few instances a larger proportion of the United States produc- 
tion of raw materials was controlled by foreign corporations. Accord- 
ing to data supplied to the Department of Commerce by the Bureau of 
Mines, foreign-controlled oil corporations in the United States pro- 
duced in 1937 about 5.0 percent of tlie total crude-oil production in this 
country. The aggregate crude runs of tlie same corporations was about 
6.9 percent of the total crude runs. As of January 1, 1938, the crude- 
oil refiner}' capacity (operating) of the foreign-owned United States 



106 



OONCENTRATION OF EXX)NOMIC POWER 



corporations was about 6.4 percent of the refinery capacity of the 
United States.^ 

Certain other branches of the mineral industry revealed a larger 
concentration of foreign control. In 1937 the only smelter of antimony 
metal in the United States was owned abroad. This company pro- 
duced little or no ore but obtained a substantial part of its antimony- 
ore requirements from aflBliated mines in Mexico. The antimony-oxide 
output of this smelter in 1937 was roughly 25 percent of the domestic 
total. In 1938 a new antimony smelter was put in operation in Cali- 
fornia.'^ Almost three-fourths of all of the potash produced in the 
United States in 1937 was produced by corporations in which foreign- 
ers had substantial interests. The first real beginning of the potash 
industry in this country was made after the outbreak of the World War 
in 1914 which prevented imports from the former German sources. 
The most substantial advances were made after 1926 and at the present 
time over half of the United States consumption is produced here.® 
Only a very small part of the production of phosphate, another great 
fertilizer material, was in the hands of foreign-owned companies. 
More than 90 percent of the domestic output of boron minerals, from 
which commercial borax and boric acid are produced, was accounted 
for by companies under foreign control. 

Table V. — Study of international affiliations of American industry based on 
Census of Manufactures, 1937 





Value of products 


Number of— 


Ipdustry 


United 
States 


Selected 
companies 


Percent of 

United 

States 

total 


Establishments 


Concerns, 
selected 




United 
States 


Selected 


Paper 


$957, 939, 764 
345, 918. 343 
638, 460, 629 

788, 927, 440 

278,638,830 

113,102,963 
537, 105, 238 
144, 455, 224 

932, 749, 910 
254, 697, 216 

964, 150, 996 
652, 751, 157 


$16, 790, 895 
6, 997, 061 
2,515,886 

\ 23, 790, =02 

I 108,686,299 

} 221,444,829 
} 27,365,167 


1.8 
2.0 

.5 

2.2 

13.7 

18.6 
1.7 


647 
1,013 
1,124 

1 2, 772 

1 1, 049 

( 151 
\ 653 
( 210 

f 601 
I 33 

/ 2,298 
I 2, 957 


8 
11 

7 

7 

10 

12 
11 
12 

52 
10 

10 
5 


8 


Drugs and medicines 


11 


Paints, pigments, and varnishes. 

Canned and dried fruits and 
vegetables; canned and bot- 
tled juices; preserves, jellies, 
fruit butters, pickles, and 
sauces 

Food preparations noi, else- 
where classified.. 


4 

6 
4 


Liquors: 

Distilled.. 


4 


Malt . 


9 


Rectified or blended 

Chemicals, not elsewhere classi- 
fied 


4 
20 


Rayon and allied products 

Machinery not elsewhere classi- 
fied 


5 
9 


Machine-shop products . .. . 


4 











Source: Department of Commerce, Bureau of the Census. 

Note by Finance Division, Bureau of Foreign and Domestic Commerce. The list of foreign-controlled 
companies, the "Selected companias,"" was supplied to the Bureau of the Census by the Finance Division. 
The "Numberof establishments" refers to the number of plants in operation during 1937 and the number of 
"Concerns'" refers to the United States companies owning the plants. 

On the whole foreign-controlled United States companies accounted 
for only a very small part of the total output of manufacturing 
enterprises in this country in 1937. In this industrial group, how- 
ever, as in tlie raw-material industries, there was a significant con- 

' Based oa data in Department of Interior, Bureau of Mines, Information Circular 7034, 
and in the files of the Finance Division, Department of Commerce. 

' Bureau of Mines, Minerals Yearbook, 1937, p. 733, and 1939, p. 720. 

* The Annalist, "Potash, a New Industry Making Satisfactory Progress," by Paul Port- 
zelt, July 6, 1939, pp. 4 and 7. 



CJONCENTRATION OP ECONOMIC POWER 107 

centration of forei^ control over certain commodities. In order 
to obtain a more accurate idea of the volume of production and the 
percentage controlled by foreigners, the Bureau of the Census was 
requested to compile the pertinent data on the basis of a list of 
foreign direct investments in the United States which was supplied 
by the Finance Division, Bureau of Foreign and Domestic Commerce. 
Those data, as compiled by the Bureau of the Census, are given in 
table V. 

There were several fairly important industry groups not covered by 
table V because in those gi^oups there were less than four concerns in 
the list of foreign -owned companies or the production of one con- 
cern in the group comprised such a large part of the total for the 
"selected companies" that, in effect, that total revealed the approxi- 
mate production of the one large concern. Some of the industrial 
groups excluded from the table on those grounds were cotton yarn 
and thread, woolen yarns, soap, perfumes, cosmetics, and other toilet 
preparations, rubber tires and inner tubes, glass, and tobacco and 
snuff. 

The chief concentrations of foreign-j3ontrolled manufacturing pro- 
duction proved to be in two combinations of industries, shown in 
table V; first, liquors — distilled, malt, and rectified or blended; and, 
second, chemicals, not elsewhere classified, and rayon and allied prod- 
ucts. All of the other groups in table V showed the production of 
the "selected companies" to be 2.2 percent or less of the total produc- 
tion. The two industry combinations 'mentioned above were neces- 
sitated by the small number of companies in the industries combined 
or by a concentration of production in one concern in the industry. 

It is quite generally known that the United States production of 
rayon, distilled liquors, and dyestuffs in 1937 was centered in forciirn- 
controlled companies to a greater degree than the percentages in 
table V indicate. Accordingly it was desirable to ascertain, from 
other sources, the information desired. 

In 1929 in an article on World Investments in Rayon published 
by the Manchester Guardian^ (England) the statement was made 
that foreign capital invested in five United States rayon companies 
amounted to £35,000,000 or 55 percent of the capital invested in the 
rayon industry in the United States. The same comparison cannot 
be made for a more recent date but data regarding the installed capa- 
city of the rayon plants in this country " shows that between 55 and 
60 percent of that capacity was, as of the end of 1938, owned by 
foreign -controlled companies. While the percentage has remained 
about the same or slightly increased, it is true that United States 
capital is associated "with the foreign capital in those companies to a 
larger extent than in 1929. 

The production of dyestuffs, which in 1914 was almost exclusively 
under the control of foreign corporations, was, on the basis of sales 
data compiled by the United States Tariff Commission, controlled to 
the extent of only about 30 percent in 1938. 

The repeal of the prohibition amendment in 1933 presented an op- 
portunity to foreign whisky producers to obtain an important posi- 
tion in this market. Partly because of the import duty of $5 per 
proof gallon, those foreign corporations, particularly Canadian, or- 

»The Commercial, published by the Manchester Guardian, July 11, 1929, p. 11. 
" Rayon and Staple Fiber Yearbook, third edition, 1939, pp. 752-771. 



IQg OUNCENTKATION OF ECONOMIC POWER 

^anized subsidiaries and built large plants in this country. One of 
those plants is the largest distillery in the United States with a capa- 
city of 100,000 gallons a day." Two of the foreign-owned corpora- 
tions, with the affiliated companies, are among the first four largest 
companies distilling and distributing whiskies and other alcoholic 
beverages in the United States, According to data supplied by the 
Federal Alcohol Administration, the production of all foreign- 
controlled companies was between 35 and 40 percent of the total 
whisky production of the United States. 

The impact of foreign control on United States production cannot 
be measured on a purely quantitative basis. Occasionally one of 
these companies is one of two or three makers in the United States 
of some specialized product which has an important place in some 
complicated machine or process. It, therefore, acquires a significance 
far surpassing the value of the part when compared with the value 
of the finished machine. Some of these foreign-controlled enterprises 
manufacture articles that are particularly desired by immigi-ants 
from a foreign country or area. The significance of the latter enter- 
prises is more sentimental than practical. 

CONCENTRATION OF ASSETS AND INVESTMENT 

A special analysis was made of data relating to 651 foreign-con- 
trolled United States companies, excluding insurance companies, in 
order to determine the technical investment and financial character- 
istics. The foreign investment in these companies amounted to $1,347,- 
000,000, or 88 percent of the total foreign direct investments in the 
United States, excluding the investments in insurance companies. 
These 651 companies had total assets, at the end of 1937, of $2,586,- 
000,000. Among these, 37 concerns, or 5.6 percent, had assets in excess 
of $10,000,000^heir total assets comprising about 64 percent of the 
assets of the entire group. ^^ 

This degree of concentration followed quite closely the pattern of 
United States industry in general. The manufacturing, transporta- 
tion, petroleum, finance, and trading industries were represented in 
the group of larger companies. At least one was the result of a 
merger near the turn of the last century, others resulted from the 
rapid growth of industries, such as the production of rayon yarn, 
where patent control was important, while still others had grown to 
unusual size just as other domestic units in the same industry had 
during the same period. 

The total capitalization of the 651 companies amounted to $1,911,- 
000,000, and the total common stock to $893,000,000. Sixty-three per- 
cent of the capitalization ^^ and 81 percent of the common stock of 
those companies was owned in foreign countries. In other words 
control was held through the ownership of the common stock while 
United States capital was associated in the enterprises to a greater 
degree through the ownership of preferred stocks and bonds than of 
common stock. The total foreign investment in the 37 companies 
with assets of over $10,000,000 amounted to $985,000,000, or 73 per- 

" Hearings before the Temporary National Economic Committee, Part G, Liquor Indus- 
try, p. 2537. 

" Slost of the larger foreign-controlled units were affiliated with foreign corporations 
which were in their own countries considered among the bigger organizations. 

" Capitalization included common and preferred stock, surplus or drflcit, and bonds but 
excluded advances and intercompany accounts and other current liabilities. 



CONCENTRATION OF BCON'OMIO POWER 



109 



cent of the investment in the 651 companies, and 64 percent of the 
total foreign direct investments in the United States, excluding the 
insurance companies. 

Table VI. — Financial structure of foreign direct investments ' in the United 
States, by industrial groups and by Geographic areas, end of 19S7 

[In millions of dollars] 



Industry and geographic area 


Common 
stock 


Surplus 
account 


Preferred 
stock 


Bonds 
and notes 


Advances 
and inter- 
company 
accounts 


Total 


Industrial groups: 

Manufacturing. . _. 


346 

41 

73 

3 

217 

5 

19 
1 
18 


202 
11 

(54) 

1 

35 

4 

12 
(1) 
3 


57 
12 
44 

1 
15 

1 

1 

i' 


32 
3 

91 

3 

2 


50 
20 
67 


687 


Distribution 


87 


Transportation 


221 


Public utilities 


6 


Petroleum 


271 


Mining. 




U 


Finance 




33 


Agriculture 


4 


7 


Miscellaneous 


24 








Total 


723 


213 


132 


138 


141 


1,347 






Geographic areas: 

United Kingdom 


289 
130 
304 


118 

7 
88 


30 
61 
41 


14 
16 

8 


53 
71 
17 


504 


Canada ... . 


385 


All other areas 


458 






Total .. 


723 


213 


132 


138 


141 


1,347 







' Covering 651 companies and 88 percent of the total foreign direct investments in the United States. 

The financial structure of foreign direct investments in the United 
States in 1937 differed greatly from that of United States corpora- 
tions generally. Over 53 percent of the foreign interest took the form 
of common stock. An additional 16 percent was surplus, while pre- 
ferred stocks, bonds, and advances and intercompany accounts each 
comprised close to 10 percent. On the average, corporate structures 
in the United States in 1937 were about as follows : common, 25 per- 
cent; surplus, 15 percent; preferred stocks, 6 percent; bonds, notes, 
and mortgages, 20 percent ; and accounts payable and other liabilities 
the remainder, or 34 percent.^* 

Such a financial structure cannot be considered unusual in a group 
of companies such as these ; that is, companies that are controlled by 
other companies rather than by individuals. It is not greatly dif- 
ferent from the financial structure of United States direct investments 
in foreign countries. The distribution in the latter case in 1936 was 
common stock, 47.1 percent; surplus, 13.6 percent; preferred stock, 
7 percent; bonds, 18.2 percent; and advances and intercompany ac- 
counts, 14.1 percent.^^ The principal difference between this distribu- 
tion and that relating to foreign direct investments in the United 
States may be explained very largely by the industrial character of 
ihe two sets of data. The principal explanation is that public utility 
and transportation enterprises, which were a larger part of direct 
investments in foreign countries than of direct investments in the 
United States, are normally financed more largely by bonds, pre- 
ferred stocks, and advances than are other industries. 

^* Based on data compiled by the Bureau of Internal Revenue from the reports of 
•corporations submitting balance sheets. 

1^ Department of Commerce, Economic Series No. 1, American Direct Investments in 
Foreign Countries — 1936, by Paul D. Dickens, pp. 22-24. 



CONCLUSION 

The data herein presented show that, on the whole, foreign cartels 
and foreign corporations exerted only a minor influence on production 
in this country in 1937. Cartel members, rather than the cartel or- 
ganizations themselves, were the sources of the only part of such 
control that was found to exist. They did not dominate any strategic 
industry and did not give rise to any serious problems. In general, 
it may be said that foreign control of United States industry, which 
was so extensive during much of the nineteenth century, has by 
the gradual and natural process of repatriation, been effectively 
eliminated. 
110 



PART III 

REPORT OF THE FEDERAL TRADE COMMISSION ON THE 

OPERATION OF THE EXPORT TRADE ACT 

(WEBB-POMERENE LAW) 1918-1940 

Submitted by 
THE FEDERAL TRADE COMMISSION 



111 



REPORT OF THE FEDERAL TRADE COMMISSION ON THE 

OPERATION OF THE EXPORT TRADE ACT (WEBB- 

POMERENE LAW— 1918-40) 

BACKGROUND 

REPORT OF THE FEDERAL TRADE COMMISSION ON COOPERATION IN 
AMERICAN EXPORT TRADE, 1910 

The Federal Trade Commission Act was passed on September 26. 
1914, and the Commissioners took the oath of office on March 16, 1915. 
In May of 1915 an inquiry was begun under section 6 (h) of the act 
on trade conditions in and with foreign countries which might affect 
the foreign trade of this country. Informal hearings were held in 
Boston and New York in June of that year. Arrangements were 
made with the Department of State for assistance of the United 
States consuls, and with the Department of Commerce, for cooper- 
ation of the connnercial attaches stationed abroad.^ 

During the following year the hearings were extended to other 
parts of the country — Chicago, Detroit, Cincinnati, Indianapolis, 
St. Paul, Spokane, Seattle, Tacoma, Portland (Oreg.), San Fran- 
cisco, Los Angeles, San Diego, and other cities. Questionnaires were 
sent to several thcMisand corporations, firms, associations, and indi- 
viduals interested in the subject, and field inquiries were made. Re- 
ports were received from American consuls and commercial attaches, 
and a Connnission investigator was sent to South America. A study 
was made of cartels, syndicates, and combinations in foreign coun- 
tries, including i)rice and export agreements of foreign combines. 
Results of this inquiry were described by the Commission as "the 
most comprehensive presentation of facts relating to the questioi' 
of combination and cooperation as it affects international trade that 
is anywhere available." ^ 

The Commission's report on "Cooperation in American Export 
Trade'' in two volumes was presented to Congress on June 30, 1916.* 
It recommended the passage of a law to permit cooperation in export 
trade, iri order that American exporters should be enabled to compete 
in foreign markets on more nearly equal terms with foreign com- 
petitors. Since the report is now out of print, excerpts will be 
quoted therefrom : 

The importance of our foreigu commerce and the need of understanding the 
conditions American exporters must meet in competing for the trade of the 
world was recognized by Congress when it gave the Federal Trade Commission 
wide power to investigate and to report its recommendations regarding hose 
conditions * * * (p. 11, vol. 1). 



1 A'Rnaal report of the Federal Trade Commission, 1915, pp. 1, 2. 
' Annual report of the Federal Trade Commission, 1916, p. 20. 

'Report on "Cooperation in American Export Trade," two volumes, 1916 (now out of 
print). 

113 



j]^4 CONCENTRATION OF ECONOMIC POWER 

In view of the convulsive effect of the present war on the commerce of the 
world and of the difficulty of foreseeing the economic and business conditions that 
will result after the treaties of peace, the Commission has deemed it its duty to 
complete, with all possible dispatch, an investigation of the obstacles which have 
heretofore confronted American manufacturers and producers in world markets, 
and recommend such legislation by Congress as will best enable them to at least 
hold their ground in the fierce commercial struggle that seems imminent after 
the war is over. 

The economic map of the world is being remade. The businessmen of the 
world are seeking to forecast conditions and to readjust affairs to the greatest 
advantage. The next few years contain possibilities of as far-reaching and 
enduring consequence to American industry, commerce, and finance as perhaps 
any years in the history of the country (p. 11, vol. 1). 

One of the facts that stands out sharply as the result of the Commission's 
inquiry is the strength and character of the demand for cooperation among 
manufacturers and producers in export business. Four-fifths of all replies 
received were in favor of such joint action. These replies represented all interests 
and sections of business and professional men in the country, manufacturers, 
wholesalers, jobbers, retailers, export commission houses, manufacturers' exiwrt 
agents, importers, lawyers, economists, publicists, engineers, contractors, etc. 
They furnish a striking expression of the convictions of these men whose knowl- 
edge and experience of competitive conditions in international markets dictated 
their answers (pp. 199, 200, vol. 1). 

Another noteworthy fact in connection with this demand is the attitude of 
the smaller manufacturers and producers. They have felt keenly their disad- 
vantage in attempting to enter foreign marketa single-handed in the face of the 
powerful, united, and long-established competitors of other nations. They realize 
that for them export trade must be done largely through the medium of export 
commission houses and export merchants. But they realize the advantages — in 
some cases the necessity — of their own direct representation and their own 
foreign organizations if they are to build up an enduring export trade. At present 
cooperation with the other small manufacturers is the best solution of the dif- 
ficulty before them. 

They desire in some instances to combine with noncompeting but complemen- 
tary manufacturers to conduct joint foreign selling campaigns and establish 
foreign selling agencies * * *. 

In other cases small producers of competing products desire to form joint 
exporting agencies, where such concerted action is manifestly to their mutual 
advantage in the promotion of export business. 

At this point it is well to call attention to the fact that in many lines there is 
need of direct representation of manufacturers in foreign business. In some 
cases the export commission houses are well fitted to introduce and develop 
foreign trade, but in many line.s of manufacture they are inferior for this pur- 
pose to the manufacturers own agents. This is especially true of products such 
as many kinds of machinery, electrical supplies, and equipment, etc., .which 
require special demonstration and installation. In general it isi to be expected 
that a manufacturer, who has capital invested in plants and equipment and must 
market his output, will push the sales of his goods more vigorously than any 
outside party who has no such investment and whose business includes the sale 
of many other wares. In one case energy and effort and purpose are divided ; 
in the other they are concentrated. 

While much of the export business of smaller manufacturers will continue to 
be done by export houses, nevertheless direct representation will in many cases 
have a decided advantage. The smaller American businessmen frequently em- 
phasize the fact that the most efficient American exporting organizations are 
those of a few of the great corporations, whose resources permit the maintenance 
of direct representation. They complain that their lack of concerted action 
prevents them from developing similar effective joint exporting organizations of 
their own and results in giving the larger American companies an undue share 
of the export trade. 

The Commission has been strongly impressed with the effect that the doubt 
as to the application of the antitrust law has had in the formation of cooperative 
export organizations among Amoiican manufacturers and producers. There are 
a few such organizations, but they are nearly all among noncompetitors. Most 
manufacturers decline to join any sucli ai^s'irfation or cooperative organization so 
long as there is any doubt as to its legality. This is true even of those who believe 
such organizations legal for export trade. It thus results that this doubt acts as 



CONCENTRATION OF ECONOMIC POWER 115 

an effective preventive of the formation of cooperative export organizations 
among manufacturers and producers, and particularly keeps tlie smaller business 
concerns from participating in foreign trade as freely as they should (pp. 200, 
201, vol. 1). 

The Commission called attention to the fact that in foreign coun- 
tries combinations or cartels of producers and dealers were well estab- 
lished; and American exporters must meet the competition of these 
groups : 

In seeking business abroad American manufacturers and producers must meet 
aggressive competition from jjovperful foreign combinations, often interna- 
tional in character. In Germany, Italy, Switzerland, Holland, Sweden, Belgium, 
Japan, and certain other countries where policies concerning industrial com- 
binations are quite diverse from that of the United States, businessmen are 
much freer to cooperate and combine than in this country. They have de- 
veloped numerous comprehensive combinations, sometimes aided by their Gov- 
ernments, which effectually unite their activities both in domestic and foreign 
trade. In England and Austria-Hungary, though freedom to combine is con- 
siderably abridged under the law, important combinations have also been 
formed. 

In Germany prior to the war there were 600 important cartels, i. e., com- 
binations to control the market, embracing practically every industry in the 
Empire. Many dominated the export trade of their industries and carried 
on vigorous campaigns to extend their foreign business, to prevent competition 
among German producers in foreign markets, and to secure profitable prices. 
Thus the German dye-color industry operated as a unit in foreign trade under 
the leadership of two great groups of allied producers, the Badische group and 
the Hochst-Cassella, which were working under a 50-year agreement to avoid 
competition between themselves. The manufacture and exportation of electrical 
equipment has been made one of the bulwarks of German foreign trade by two 
great companies, the Allgemeine Elektricitats-Gesellschaft and the Siemens- 
Schuckert, working in harmony with each other, with numerous subsidiaries at 
home and abroad. Half of the $150,000,000 worth of coal and coke exported an- 
nually was sold by one central selling agency maintained by the great RheinLsch- 
Westfalische coal syndicate, of which some of the Prussian Government mines 
are members, and which controlled the bulk of all the coal and coke produced 
in the Empire. Practically all the rapidly increasing iron and steel export busi- 
ness was handled respectively by the single selling agencies of the Roheisen- 
Verband and the Stahlwerks-Verband, the aggressive and closely connected unions 
of German iron and steel manufacturers. The coal and iron and steel com- 
binations have fostered foreign business through export bounties and other 
means. 

In France and Belgium, syndicates of iron and steel, glass, and other industries 
were strong factors in domestic and foreign trade. Silk-ribbon manufacturers 
of France and Germany conducted their export trade in accordance with a 
joint agreement. In Italy, Russia, Austria-Hungary, Switzerland, Sweden, 
Greece, Argentina. Chile, and Ecuador, central organizations unite the interests 
of producers in the industries characteristic of those countries, such as coal, 
iron and steel, agricultural machinery, oil, sulfur, superphosphates, cement, 
matches, chocolate, embroidery, silk goods, watches, cotton goods, condensed 
milk, canned fish, currants, quebracho, iodine, cacao, etc. 

In Japan an export organization of textile nianufaturers is rapidly obtaining 
the extensive cotton goods trade of North China. The trade in tea is con- 
trolled by a nation-wide "tea council." One great Japanese firm, which in itself 
combines manufacturing, mining, shipping, and merchandising enterprises, is 
rapidly extending Japanese trade in all lines throughout the Far East, and the 
Japanese Government is directly assisting the development of shipping, banking, 
and trading for foreign business. 

The long-established trade in British products in many markets of the world, 
due to their pioneer position, the excellent representation afforded by British 
export houses, and the advantages of British shipping and banking facilities, 
have enabled their manufacturers to hold their foreign markets in many lines 
without such a large degree of combination as characterizes German industry. 
But in various important industries combinations have grown up. Thus most of 
the great coal export business is done by powerful organizations, combining 

2.57760 — 41 — No. 6 



216 OONCBNTRATION OF ECONOMIC POWER 

mine operators, marketing companies, coal shipping lines, and foreign dis- 
tributing companies. This gives British coal its grip on the important South 
American market. British cement manufacturers are united in a strong and 
successful union for the extension of their overseas trade. Recently a number 
of large British manufacturers of machinery of all sorts have formed the Rep- 
resentation for British Manufacturers, Ltd., an organization to handle their 
business in certain important foreign markets and to carry on an aggressive 
campaign for its extension. Similar organizations for foreign trade are in 
process of formation among other British manufacturers. In the electrical, cot- 
ton textile, pottery, tobacco, wallpaper, iron and steel, and various other in- 
dustries strong associations and combinations are important factors in foreign 
and domestic business. 

It is against such organizations as these, uniting powerful groups of foreign 
concerns, backed by great banks, aided by railway and ship lines, and assisted 
by foreign governments, that hundreds of comparatively small American manu- 
facturers and producers must compete if they engage in export trade. More- 
over, in some industries such smaller manufacturers must also compete abroad 
with great American companies having most efficient world-wide selling organi- 
zations. 

In varioiis manufacturing industries high manufacturing costs and com- 
parative inexperience in export trade make it extremely difficult at best for 
Americans to compete with foreigners for trade abroad. Therefore, meeting 
severe competition from powerful foreign combinations, and through dependence 
on foreign cables, telegraphs, banks, and ships forced to risk exposure of the 
secrets of their overseas business to their foreign competitors and to risk effective 
discrimination against their trade, American manufacturers, and especially the 
smaller producers, are frequently at a decisive disadvantage in export trade 
(pp. 4 to 7, vol. 1). 

The Commission's report also stated that American exporters were 
in many countries selling to buying combinations or cartels: 

In various markets American manufacturers and producers must deal with 
highly effective combinations of foreign buyers. Thus exporters of lumber 
find such combinations in Australia and on the continent of Europe. Cotton- 
seed products are handled by combinations of buyers in Holland, Denmark, and 
Germany ; and Austrian cotton-textile manufacturers have a buying combina- 
tion to import their raw cotton. The Cooperative Wholesale Society, Ltd., an 
astonishingly comprehensive wholesale buying organization maintained by 
1,400 cooperative societies in Great Britain, has one buyer in New York who 
annually purchases millions of dollars' worth of American products. Four 
London firms, known as the Fixing Board, daily set the price of silver for the 
world, and American mining companies must sell their silver for either the 
English or the great Indian market to one of these four houses. For years 
the copper trade "of the world has been ruled by a vast German metal-buying 
organization centering in the Metallbank und Metallurgische Gesellschaft A. G. 
of Frankfort-on-the-Main. This combination has subsidiary and affiliated 
companies in Germany, England, France, Spain, Switzerland, Belgium, Africa, 
and Australia, contrcds copper and lead mines and smelters in the United States, 
Mexico, and other countries, and works in agreement with other German metal- 
buying concerns. 

These combinations naturally make individual American producers bid against 
each other, and are thus able to buy at comparatively low prices. Accord- 
ing to the president of one of the largest American copper companies, the 
German metal-buying combination, by such tactics as these and by the manipu- 
lation of the foreign future markets, has bought millions of tons of American 
copper at prices averaging, over a series of years, nearly a cent a pound below 
the prices paid by American consumers (p. 7, vol. 1). 

The advantages of cooperation in American export trade were 
stated : 

If Americans are to enter the markets of the world on more nearly equal 
terms with their organized competitors and their organized customers, and if 
small American producers and manufacturers are to engage in export trade on 
profitable terms, they must be free to unite their efforts. 

"Vyithout any export organization, foodstuffs and raw materials can readily be 
sold at some price, but to avoid needless expense in distribution, to meet 



CJONCENTRATION OF ECONOMIC POWER 117 

formidable foreign buying orgianizations, and to insure profitable export prices, 
cooperation among American producers of such commodities is desirable. 

In the sale of factory products, cooperation is even more desirable. Such 
goods must be advertised, demonstrated, and a market created abroad, often in 
the face of the keenest competition from great combinations of foreign manu- 
facturers. Obviously only strong organizations can undertake this contest. If 
groups of American manufacturers and producers, either of competing or of 
noncompeting goods, can combine their efforts, they can share the cost of 
developing new markets, establish themselves firmly, extend credit more readily 
to foreign customers, and compete more successfully with foreign syndicates 
and cartels (p. 8, vol. 1). 

There ar" relatively few manufacturing corporations in the United States 
whose foreign trade is more than a small fraction of their domestic trade. 
By securing a broader market for his output the American manufacturer 
should not only, through enlarging the capacity of his works, be enabled, to 
produce at a lower cost per unit, but there would also be an increased employ- 
ment of labor. Furthermore, greater stability would be promoted in many of 
the industries. With a broader market, periods of local industrial depression' 
have less effect on the business of the manufacturer. In some industries there- 
are wide differences between the different countries in the seasonal character 
of their demand. For example, in the United States in the wintertime the 
use of Portland cement falls off, and as a result the manufacture is curtailed 
during those months. This, however, is summertime in Argentina and Chile, 
when building activity is at its height. Could those markets be secured for 
American cement the cement producers would have a better opportunity to 
steady their production, keep their workmen more regularly employed, and 
lower their operating costs by manufacturing and exporting their product 
during the dull domestic season. At the time when summer is coming on in 
the United States, and the demand for coal is declining, the South American 
winter is just beginning. What is true of the seasonal fluctuation of demand 
in cement and coal also applies to various other commodities (pp. 23, 24, 
vol. 1). 

The Commission's recommendations to Congress are summarized 
on the last pages of the 1916 report : 

Section 3. — Recommendations of the Commission. — The Commission believes 
that American exporters should be enabled to compete in foreign markets on 
more nearly equal terms with foreign competitors. It also believes that the 
smaller manufacturers and producers, so far as they desire, should be enabled 
to share in such foreign business. It is convinced that for these purposes 
cooperation in export trade should be permitted. It knows that doubt as to 
the application of the antitrust laws now prevents any marked developmejit of 
such cooi)eration. It does not believe that Congress intended by the anti- 
trust laws to prevent Americans from cooperating in export trade for the- 
purpose of competing effectively with foreigners where such cooperation does 
not restrain trade within the United States and where no effort is made to 
hinder American competitors from freely engaging in export trade. It is 
not reasonable to suppose that Congress meant to obstruct the development 
of foreign commerce by forbidding the use in export trade of methods of 
organization which do not operate to the prejudice of the American public, 
which are lawful in the countries where the trade is to be carried on, and 
which are necessary if greater equality of opportunity is to be afforded 
Americans in meeting foreign competitors. The Commission, therefore, re- 
spectfully recommends that Congress enact declaratory and permissive legis- 
lation to remove the present doubt as to the law and to establish clearly 
the legality of such cooperation. 

The Commission is aware that certain dangers may arise from the devel- 
opment of cooperative export organizations. As has been pointed out, there 
are two chief dangers: First, they may be used to exploit consumers in the 
home market; and, second, they may be used unfairly against individual 
American concerns in export trade that are not members of the organiza- 
tions. These dangers must be provided against fully, and the Commission 
is confident that this can be done without sacrificing any of; the essential 
advantages of concerted action and without altering the fundamental policy 
of the antitrust laws or interfering with their enforcement. 

As safeguards against the dangers of such organizations it is recommended 



118 OONCBNTRATION OF ECONOMIC POWER 

specifically that the kind of cooperative associations or organizations permit- 
ted be clearly defined; that they be restricted solely to export business as 
■distinguished from domestic business; that they be limited to the activities 
of selling goods as distinguished from their production or manufacture; and 
that the term "export trade" be defined to mean solely trade or commerce 
in goods, wares, or merchandise exported and be specifically stated not to include 
the production or manufacture of such goods, wares, or merchandise or any 
act in their production or manufacture. It is also recommended that as a 
condition precedent to enjoying the benefit of such legislation every such 
cooperative organization be required, under penalty, to file promptly with 
the Federal ' Trade Commission a written statement setting forth the essen- 
tial facts concerning its organization, such as name, location of its ofiices and 
places of business, names and addresses of its ofticers and stockholders or 
members, and a copy of its articles of incorporation and bylaws, if incor- 
porated, or a copy of its articles of contract or association, if unincorporated. 
The Commission has the authority now to require such reports, but it should 
not be burdened with the work of discovering such organizations and request- 
ing information from them. The burden of furnishing the required facts as 
to their organization should rest upon those who expect to enjoy the benefit of 
this law. Having these facts before it, the Commission could then use the 
power it already has to require other reports in such detail as may be neces- 
sary to inform it fully of the activities of such cooperative bodies and to place 
it in a position to take such action as the public interest might require. 

It is also recommended, in order that there may be no possible doubt about 
the law, that the prohibitions concerning the use of unfair methods of compe- 
tition contained in the Federal Trade Commission Act be si)ecifically extended 
to apply to export trade, even tliough the acts constituting such unfair meth- 
ods be done outside of the territorial jurisdiction of the United States. 

Restrictions and safeguards of these kinds have been suggested and advised 
by the great majority of the thousands of businessmen reached by the Com- 
mission in its study. Manufacturers generally express no wish to attempt 
to use such organizations to exploit the market at home, but indicate their de- 
sire to see any such attempt guarded against. Moreover, numerous manufac- 
turers state that, owing to the nature of their products, or to the fact that they 
are already well established in foreign markets, they themselves would not 
care to join cooperative export organizations but that they realize their value 
for many other lines and are in favor of them. They merely ask that they 
themselves be assured against unfair methods of competition from such or- 
ganizations. The businessmen who have expressed opposition to such restrictive 
safeguards are relatively few. 

In making these recommendations the Commission does not intend to intimate 
that there should be any change in the present policy of this Government to 
prevent combinations in restraint of trade in domestic business and to insist 
upon fair competition in such business. 

The Commission is confident that the enactment of such legislation as that out- 
lined above will permit the development of the cooperative organization which 
must take place if the manufacturers and producers of the United States are to 
compete with foreigners on more equal terms in export trade. It is also confi- 
dent that this essential development can be obtained without haimful effects on 
the domestic market and without prejudice to the interests of American concerns 
which conduct their exjxjrt business outside of any combination (pp. 379 381, 
vol. 1). 

DEBATES IN CONGRESS, HEARINGS, AND COMMITTEE REPORTS 

Bills were introduced in Congress by Senator Atlee Pomerene and 
Congressman Edwin Y. Webb (the act is therefore referred to as the 
Webb-Pomerene law), and were considered by congressional commit- 
tees and debates in Congress in 1916, 1917, and 1918, finally becoming 
a law in April 1918. They were endorsed, not only by the Federal 
Trade Commission but also by President Wilson, Secretary of Com- 
merce Redfield, numerous trade organizations such as the National 
Foreign Trade Council, American Manufacturers Export Association, 



OONCBNTRATION OF ECONOMIC POWER J 19 

and the chambers of commerce; and also by representatives of the 
various industries.* 

THE LAW AS PASSED ON APRIL 10,1918 

The law as passed on April 10, 1918,'' is entitled "An Act to Pro- 
mote Export Trade and for Other Purposes." 

Section 1 defines the words "export trade," "trade within the 
United States," and "association" wherever used in the act. Especial 
care was taken in defining export trade : 

the words "export trade" wherever used in this act mean solely trade or com- 
merce in goods, wares, or merchandise exported, or in the course of being ex- 
ported, from the United States or any Territory thereof to any foreign nation ; 
but the words "export trade" shall not be deemed to include the production, 
manufacture, or selling for consumption or for resale, within the United States 
or any Territory thereof, of such goods, wares, or merchandise, or any act in 
the course of such production, manufacture, or selling for consumption or for 
resale. 

The bill H. R. 17350, as first drafted, and as recommended by the 
House Committee on the Judiciary in 1916, provided that — 

the words "export trade" shall not be deemed to include the production or man- 
ufacture within the United States or any Territory thereof of such goods, wares^ 
or merchandise, or any act in the course of such production or manufacture. 

To this was added by amendment the words "trading in or mar- 
keting" so that the bill as passed by the House on September 2, 1916, 
read : 

the words "export trade" shall not be deemed to include the production, manu- 
facture, trading in, or marketing within the United States or any Territory 
thereof of such goods, wares, or merchandise, or any act in the course of such 
production or manufacture. 

This was objected to by the Federal Trade Commission and others. 
In its annual report to Congress in 1916 the Commission said : 

In order to permit cooperation only with respect to esport trade, the term 
"export trade" was originally carefully defined to exclude the production or 
manufacture of goods within the United States, but the amendment made it 
also exclude "trading in or marketing" such good? within the United States. 
• * * Obviously a successful cooperative export organiaztion would, in most 
cases, be obliged to purchase goods in the United States and therefore to trade 
in them.* 

This clause "trading in or marketing" was therefore deleted from 
the bill, and the clause "or selling for consumption or for resale" was 



* H. R. 16707, Congressman Webb, 64th Cong., 1st sess., 1916. H. R. 17350, Congress- 
man Webb, 64th Cong., 2d sess., 1916. H. R. 2316, Congressman Webb, 65th Cong, (same 
as S. 634, Senator Pomerene), passed both Houses, signed in 1918. Hearings before House 
Committee on the Judiciary on H. R. 16707 and copy of bill and report, serial 48, 64th 
Cong., 1st sess., July 1916, 85 pp. Hearings before Senate Committee on Interstate Com- 
merce, 64th Cong., 2d sess., on H. R. 17350, January 1917, 156 pp. Rept. No. 1118, 64th 
Cong., 1st sess.. House Committee on the Judiciary, to accompany H. R. 17.S50, August 15, 
1916, 4 pp. Rept. No. 1056, 64th Cong., 2d sess.. Senate Committee on Interstate Com- 
merce, to accompany H. R. 17350-, February 14, 1917, 4 pp. Rept. No. 9, 65th Cong., 1st 
sess., to accompany S. 634, Senate Committee on Interstate Commerce, April 16, l9l7, 4 
pp. Rept. No. 50, 65th Cong., 1st sess., to accompany H. R. 2316, House Committee on 
the Judiciary, May 11. 1917, 10 pp. Rept. No. 109, 65th Cong., 1st sess.. Senate Com- 
mittee on Interstate Commerce, to accompany H. R. 2316, August 15, 1917, 4 pp. House 
of Representatives Rept. No. 468, 65th Cong. 2d sess., conference report to accompany 
H. R. 2316, April 5, 1918. Debates, 64th Cong., June, August, and September 1916 ; 65tb 
Cong., May, June, September, and December 1917, January and April 1918. 

" 40 Stat. 516, text in appendix 1 herewith. 

• Annual Rept. of the Federal Trade Commission, 1916, pp. 35, 36. 



120 CONCENTRATION OF ECONOMIC POWER 

substituted therefor. This is explained by the Senate Committee on 
Interstate Commerce, in its report on February 14, 1917 : ^ 

All seem to agree that export trade should not include production and manu- 
facture. The words "trading in or marketing" would permit these associa- 
tions to compete in the home markets where combinations in restraint of trade 
are forbidden. We substitute for this phrase the words "selling for consump- 
tion," so that this part of the text will read "The words 'export trade' shall not 
be deemed to include the production, manufacture, or selling for consumption 
within the United States," etc. We desire, of course, to authorize associations 
for the sole purpose of selling abroad. In order to do this, they must have the 
right to acquire or buy within the United States and the right to sell within the 
United States for the foreign market, but in view of the settled domestic policy 
of the United States under the Sherman law, clearly these associations should 
not be permitted to organize for the purpose of making sales abroad and use 
their organizations to sell for consumption within the United States. 

The Avord "association" is specifically defined in section 1 of the 
act as: 

any corporation or combination, by contract or otherwise, of two or more per- 
sons, partnerships, or corporations. 

Section 2 of the act provides that nothing contained in the 
Sherman Act: 

shall be construed as declaring to be illegal an association entered into for the 
sole purpose of engaging in export trade and actually engaged solely in such 
export trade, or an agreement made or act done in the course of export trade 
by such association, provided such association, agreement, or act is not in re- 
straint of trade within the United States, and is not in restraint of the export 
trade of any domestic competitor of such association : And provided further, 
That such association does not, either in the United States or elsewhere, enter 
into any agreement, understanding, or conspiracy, or do any act which arti- 
ficially or intentionally enhances or depresses prices within the United States 
of commodities of the class exported by such association, or which substantially 
lessens competition within the United States or otherwise restrains trade 
therein. 

This section, too, was changed somewhat before the law was passed. 
The proviso clause as originally drafted was : 

provided such association, agreement, or act is not in restraint of trade within 
the United States. 

To this was added by amendment in the House in 1916 : 

and does not restrain the export trade of the United States. 

But this amendment was objected to. The Commission said, in 
its annual report to Congress in 1916: ^ 

two amendments were made to the bill during the debate which seem to give a 
basis for legal construction which might entirely nullify this purpose. 

The first amendment referred to was made in the first section of the 
bill. * * * 

The second amendment referred to is found in the second section. This 
originally granted the right of cooperative association for export trade, pro- 
vided such association did not involve "restraint of trade within the United 
States." But the amendment added a further proviso, namely, "and does not 
restrain the ex]x»rt trade of the United States." * * * The Commission is 
of the opinion that these provisions of the bill would not change the present 
law. But the very purpose of the bill was to clarify the law, while this 
amendment presents the same question of construction as the existing law. 
The law, therefore, would be neiiher changed nor clarified if the bill were 
enacted in the form in which it was passed by the House. Therefore the busi- 
nessman who is deterred from engaging in cooperative action in export trade 
by fear and doubt concerning antitrust laws would be left in exactly the same 
position as before. 



' Senate Rept. No. 1*056, 64th Cong., 2d se.'^s.. February 14, 1917. p. 2. 
* Annual Rept. of the l^ederal Trade Commission, 1916, pp. 35, 36. 



CONCENTRATION OF ECONOMIC POWER 121 

The Senate Committee on Interstate Commerce, in its report on 
February 14, 1917, recommended deletion of the words "and does not 
restrain the export trade of the United States," and insertion of the 
clause "and is not in restraint of the export trade of any domestic 
competitor of such association: And provided further * * *" as 
the law was finally passed. The committee's report stated : 

As presented to us, this section provides that the Sherman law shall not be 
construed so as to make illegal an association entered into for the sole purpose 
of engaging in export trade, and actively engaged solely in export trade or any 
agreement made or act done in the course of export trade by such association. 
This section then provides that "these associations or agents shall not be in 
restraint of trade within the United States, and shall not restrain the export 
trade of the United States." Of course, we do not want to restrain trade within 
the United States as the first clause of the language quoted provides. 

Reduced to its final analysis, this section attempts to give the right to enter 
into associations, make agreements, and do acts in restraint of export trade, 
while the second clause quoted takes away this right. To avoid the effect of 
the last clause, and at the same time to secure the purpose of this act in the 
interests of our foreign trade, the committee suggests the striking out of the 
last clause and inserting after the words "United States" on line 19, page 2, 
the amendment as written above. By this change the committee aims to place 
three limitations upon these associations, their acts and agreements : 

(«) The authority hereby conferred should not result in the restraint of 
trade within the United States which is clearly prohibited by the Sherman law. 

(&) While the purpose of the bill is to increase our foreign trade, it should 
not result in destroying the business of other companies, associatious, or indi- 
viduals who may be engaged in the foreign trade. The purpose is to increase 
and improve this trade, not to injure it. 

(c) While we realize that any sales in foreign commerce may incidentally 
and temporarily result in the increase in prices of the same articles to home 
consumers, these associations ought not to be permitted to so conduct their 
affairs as to artificially or intentionally and unduly enhance prices of the com- 
modities in which they are dealing to the home consumer." 

Section 3 of the act states that nothing in the Clayton Act — 

shall be construed to forbid the acquisition or ownership by any corporation 
of the whole or any part of the stock or other capital of any corporation or- 
ganized solely for the purpose of engaging in export trade, and actually engaged 
solely in such export trade, unless the effect of such acquisition or ownership 
may be to restrain trade or substantially lessen competition within the United 
States. 

Section 4 provides that the Federal Trade Commission Act shall 
be construed as — 

extending to unfair methods of competition used in export trade against com- 
petitors engaged in export trade, even though the acts constituting such unfair 
methods are done without the territorial jurisdiction of the United States. 

Section 4 cases have been brought under section 5 of the Federal 
Trade Commission Act, as extended by section 4 of the Export Trade 
Act, and have not involved operation of the Webb law associations.^" 

Section 5 provides for the filing of papers with the Federal Trade 
Commission, including copies of the organization papers, a first re- 
port " setting forth the location of its offices or places of business and 
the names and addresses of all its officers and of all its stockholders or 
members; an annual report ^2; and also — 

such information as the Commission may require as to its organization, business, 
conduct, practices, management, and i-elation to other associations, corporations, 
partnerships, and individuals. 



'Senate Rept. No. 1056, 64th Cong., 2d seSs., February 14, 1917, pp. 2, 3. 
'"Docket Nos. 274, 792, 820, 1044, 1203, 1216, 1238, 1276, 1481, 1878, 1969, 2484. 
" See exhibit 4 herewith. 
^' See exhibit 5 herewith. 



122 CONCENTRATION OF ECONOMIC POWER 

The bill as first drafted provided for the filinsr of "all contracts, 
agreements, and understandings had with any foreign or domestic 
association in regard to the conduct of or practices in foreign trade." 
This was deleted and the clause quoted above as to "such information 
as the Commission may require" was substituted therefor. 

Section 5 provides further for procedure by the Commission when- 
ever it shall have reason to believe that the law has been violated. 
The Commission shall summon the association, its oflScers, and agents 
to appear before it, and thereafter conduct an investigation into the 
alleged violations of law. Upon investigation, if it shall conclude 
that the law has been violated, it may make to such association rec- 
ommendations for the readjustment of its business, in order that it 
may thereafter maintain its organization and management and con- 
duct its business in accordance with law. If the association fails to 
comply with the recommendations, the Commission shall refer its 
findings and recommendations to the Attorney General of the United 
States for such action thereon as he may deem proper. For the 
purpose of enforcing these provisionSj the Commission has all the 
powers, so far as applicable, given to it in the Federal Trade Com- 
mission Act. 

Under section 5, the Commission has required reports and data ; it 
has made field calls at association offices; and it has conducted a 
number of inquiries into the operation of the Webb law groups. In- 
formal advice has been g" /en on numerous questions. The only 
formal summons and recom lendations issued are those in the case of 
the Pacific Forest Industries, on January 27, 1940, which will be 
hereinafter discussed. 



ADMINISTRATION OF THE LAW 

1918-2 7 THE EXPORT TRADE DIVISION FOREIGN TRADE SERIES NO. 1 IN 

1919 — PROPOSED AMENDMENT TO THE LAW IN 1921 — THE SILVER LETTER 
IN 1924 PROPOSED AMENDMENT TO PERMIT IMPORT COMBINES, INTRO- 
DUCED IN 1924 (REJECTTED IN 1928) 

The Export Trade Division was created within the Commission 
in 1918 to handle the foreign-trade work. 

In 1919 the Commission published a 13-page pamphlet entitled 
^'Foreign Trade Series No. 1 — Discussion of Practice and Procedure 
under the Export Trade Act (Webb-Pomerene law" ^) which included 
text of the law, a brief discussion of practice, and a list of associations 
at that time filing papers (some of these companies were soon there- 
after stricken from the list because it was found that they were not 
solely engaged in exporting). Some excerpts from this pamphlet 
may be of interest: 

The very numerous requests for copies of the Export Trade Act (Webb- 
Pomerene law) and the large number of inquiries about it call for the publica- 
tion of a separate pamphlet by this Commission for the information of those 
desiring to cooperate in the development of our foreign trade through associa- 
tions formed under that act. 

In several instances suggestions have been made as to modifications of pro- 
posed articles of incorporation, already filed, in order that these associations 
may clearly come within the provisions of the act. The Commission is author- 
ized by this law to make recommendations as to how export associations may 
conform their business to the law, and, within its powers, it proposes to advance 
step by step in aid of the export needs of the country. It desires to constantly 
work in cooperation with those who form export associations and also with 
those who may consider themselves or the public in any way injuriously affected 
by the methods and practices of such associations. 

Where doubt exists as to whether a given method or practice is proper or not, 
it would seem advisable that the matter be voluntarily presented to the Com- 
mission in the early stages, without awaiting its later discovery and possible 
correction. The second paragraph of section 5 of the Webb Act describes the 
few formalities as to such procedure. 

« * * * « * • 

Numerous requests have been received by the Commission for rulings upon the 
construction of the Export Trade Act. It has been deemed inadvisable to attempt 
at this time to officially construe any of the provisions of the law upon informal 
applications. This is especially true, as the penalty for the violation of section 5 
of the act is enforcible by the district attorneys of the United States under the 
direction of the Attorney General, and not by the Federal Trade Commission, 
and the enforcement of the Sherman law is a duty of the Federal courts upon 
proceedings instituted by the Department of Justice. 

It is exceedingly important that export associations in process of formation 
should give careful consideration to the wording of sections 2 and 3 of the Ex- 
port Trade Act. As to the statements which have been filed with the Export Trade 
Division under section 5 of this act, it has been noted that practically every cor- 
poration formed has been organized for the transaction of some business other 
than that of solely engaging in exporting from the United States to foreign 
nations as defined in the act. 



* This pampblet la out of print, but one copy is herewith transmitted as exhibit 6. 

123 



224 OONCBNTRATION OF ECONOMIC POWER 

Most of the articles of association filed have also contemplated the transaction 
of business other than that of exporting to foreign nations. It is apparent under 
the law that the provisions of the Sherman law and section 1 of the Clayton law 
remain applicable as to all combinations which are not organized solely for the 
business of exporting to foreign nations. The business of exporting to the Phil- 
ippine Islands, to Puerto Rico, or to Hawaii seems clearly to be domestic and not 
foreign trade, and the provisions of the Sherman law and section 7 of the Clayton 
law seem to continue in force as to any association or export corporation which 
engages in such business. 

One of the difficulties which exporting houses seem to find with the law is that 
export companies usually both export and import, while the law provides that its 
protection is given to associations entered into for the sole purpose of engaging 
in export trade and actually engaged solely in such export trade. 

Due to the facts that the business of the country is devoting its thought to war 
production, and that there is a lack of shipping facilities, general plans for cooper- 
ation in export trade are probably now in suspense or only in a formative state. 
This is indicated by the very small number of association papers which have been 
filed with the Commission since the passage of the act on April 10, 1918. 
******* 

The Commission is keeping informed as to the export needs of the country in 
order to be of assistance so that American producers may cooperate to the fullest 
extent in export fields, without injuriously affecting domestic commerce, or the 
foreign commerce of those exporters who are associated with export-trade asso- 
ciations. 

Progress has been made in the preparation of an additional report on foreign- 
trade conditions under section 6, clause H, of the Federal Trade Commission act, 
reading as follows : 

Sec. 6. That the Commission shall also have power — 

(h) To investigate, from time to time, trade conditions in and with foreign 
countries where associations, combinations, or practices of manufacturers, mer- 
chants, or traders, or other conditions, may affect the foreign trade of the United 
States, and to report to Congress thereon, with such recommendations as it deems 
advisable. 

The world-wide dislocation of trade and industry incident to the war is creating 
new conditions which may vitally affect American business in the futuro. The 
Commission is closely following new developments in international trade, as they 
arise, with a view to ascertaining the bearing they may have on the foreign trade 
of the United States. 

In 1921 a bill was offered in Congress which would have amended 
the law.2 The text was as follows : 

To amend an Act entitled "An Act to promote export trade, and for other pur- 
poses," approved April 10, 1918. 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled, That the Act entitled "An Act to promote exiwrt 
trade, and for other purposes," approved April 10, 1918, be, and the same is hereby, 
amended by adding at the end of section 5 of said Act the following : "An associa- 
tion shall be deemed to be engaged in export trade for the purpose of this Act if it 
shall promote agreements among its members as to the prices and terms which 
shall govern the sale of their products to. foreign customers, engage in trade pro- 
motion abroad, transmit to its members inquiries or orders received from foreign 
customers for the purchase of their products, agree as to terms of credit and as to 
the allowance or refusal of credit or of sales to foreign customers, and generally 
promote such agreements and understandings among its members as are necessary 
to protect them from hurtful combinations and practices of foreign competitors 
or customers." 

This bill was referred to the Senate Committee on Interstate Com- 
merce, but was never acted upon by the Senate, 

A history of Webb-Pomerene law operation would be incomplete 
without mention of the Silver letter because this announced a change 
in the operation of some of the export groups. During the first years 
of operation, the associations formed were selling agencies, actually 

' S. 2683, 67th Cong., 1st sess., introduced by Senator Fletcher, November 4, 1921. 



OONCBNTRATION OF ECONOMIC POWER 125 

taking orders and negotiating export sales for their members. After 
issuance of the Silver letter, some associations were formed under 
which the member companies retained their own sales offices and 
agents under association direction. This new type of organization 
was attractive to a group in which the members had already estab- 
lished export departments or companies and did not wish to abolish 
them and substitute a central sales bureau. 

On November 22, 1923, the silver producers addressed an inquiry 
to the Secretary of Conunerce presenting a number of hypothetical 
questions. This was referred to the Federal Trade Commission and 
on July 31, 1924, the Commission replied to the silver producers in a 
letter which was published in a news release dated August 6, 1924 : 

Fedebat. Trade Commission 

washington 

For release in morning newspapers of Wednesday, August 6, 1924. 

The Federal Trade Commission today published the following letter to a 
committee of silver producers of the United States in which the Commission 
interprets the Webb-Pomerene Export Trade Act in response to certain queries 
propounded by the silver producers. The questions of the silver producers were 
prompted by the contemplated formation by them of an export association. 
Commissioners Thompson and Nugent are not in accordiWith the Commission's 
action. 

July 31, 1924. 

My Deab Mb. Kkt.t-Ry : In the Federal Trade Commission's letter of April 18, 
1924, a committee of silver producers of the United States was informed that 
the Commission by reason of a then existing vacancy in its membership was 
unable to act by a majority upon certain questions propounded by the silver 
producers' committee in their communication of November 22, 1923, to the Secre- 
tary of Commerce in regard to the proposed formation of an association under 
the Export Trade Act (Webb-Pomerene Act) and the rights and powers of such 
an association. As the administration of this act is lodged with the Federal 
Trade Commission, the committee's communication was referred here by the 
Secretary of Commerce on December 13, 1923. 

The vacancy on the Commission having been filled, and representations having 
recently been made to the Commission from which it appears that an emergency 
situation exists in the industry by x-eason of the meeting of the American Silver 
Producers Association to be held in Salt Lake City on August 6 next, and the 
desire of that association and of Senators who are members of the Senate 
Gold and Silver Commission, who will attend this meeting, that the decision of 
the Federal Trade Commission upon the queries submitted by the silver producers 
be available prior to the meeting, it is the view of the members of the Commission 
now sitting, which members constitute a majority, that it is not only proper but 
highly desirable that the Commission act in this matter. 

Therefore, in view of an emergency situation a majority of the Commission, 
consisting of Commissioners Van Fleet, Gaskill, and Hunt, have acted and have 
agreed upon a reply to the communication of November 22, 1923, from the Com- 
mittee of Silver Producers of the United States. Commissioners Thompson and 
Nugent, who are absent from the city at this time, have heretofore considered 
the matter and do not agree with the majority. The reply of the majority 
follows : 

It seems to be open under the terms of the act, for those who desire to form 
an association under its provisions, to file with the Federal Trade Commission 
the declarations referred to in section 5 of the Webb-Pomerene Act. The prelimi 
nary assent of the Commission to export association existence and activity under 
the act is not required. Effort was made at the time the act was passed to 
include in it the following amendment : 

"Before any association shall engage in business under this act it shall 
secure from the Federal Trade Commission a permit to engage in such business, 
and said Commission is authorized to issue such i)ermits and may, in its dis- 
cretion, refuse a permit to any/ association, and may, after hearing, cancel any 
permit issued." 



126 OONCENTRATION OF ECONOMIC POWER 

The omission of this amendment, together with the clear import of the act 
as passed, indicates that the action of the Commission toward export associa- 
tions is corrective of action taken rather than a limitation upon the entry into 
action. 

The Federal Trade Commission is, however, given control over the action 
of export trade associations, as will appear by section 5 of the act. 

"Se3c. 5. Whenever the Federal Trade Commission shall have reason to 
believe that an association or any agreement made or act done by such associa- 
tion is in restraint of trade within the United States, or in restraint of the 
export trade of any domestic competitor of such association, or that an asso- 
ciation either in the United States or elsewhere has entered into any agree- 
ment, understanding, or conspiracy, or done any act which artificially or inten- 
tionally enhances or depresses prices within the United States of commodities 
of the class exported by such association, or which substantially lessens com- 
petition within the United States or otherwise restrains trade therein, it shall 
summon sikch association, its oflScers, and agents to appear before it, and 
thereafter conduct an investigation into the alleged violations of law. Upon 
investigation, if it shall conclude that the law has been violated, it may make 
to such association recommendations for the readjustment of its business, in 
order that it may thereafter maintain its organization and management and 
conduct its 1 business in accordance with law. If such association fails to com- 
ply with the recommendations of the Federal Trade Commission, said Commis- 
sion shall refer its findings and recommendations to the Attorney General of 
the United States for such action thereon as he may deem proper." 

It is entirely proper, therefore, that the Commission should, when called upon 
in advance of the formation of an export trade association, indicate that pro- 
posed lines of conduct would in its opinion, when carried int<\ actual operation, 
invite the corrective attention of the Commission. But the \>i;,inmission cannot 
assume the results of an indicated course of conduct. As appears from the 
statute itself, the test of legality lies in result in most instances rather than 
in the form or method pursued. The Commission cannot always make a precise 
statement under these circumstances. 

You will understand, therefore, that any preliminary expression is advisory 
only and that the committee which you represent is tlierebj' in no way pre- 
cluded from asserting any method of coordinate action which you believe to be 
within the intent and spirit of the act. If your views should differ from those 
of the Commission and the results accomplished should in its judgment fall 
within the scope of the prohibitions of the act, it would become the duty of the 
Commission to proceed to a determination of the issues involved in the manner 
provided by the act itself. 

You ask : 

"1. Do provisions of the Webb-Pomerene Act limit persons (natural or cor- 
porate) who may enter into such an association, to citizens of the United States 
or corporations formed under the laws of the United States or some State 
thereof?" 

It seems that this question should be answered in the affirmative, with pos- 
sibly certain explanations. The Congress of the United States legislates with 
reference to the citizens of the United States and its sovereignty. Within the 
sovereignty of the United States are many who are not its citizens, but who are 
governed by its laws. The laws of the United States, therefore, are applicable 
to citizens of the United States, to those who are not citizens of the United 
States but are residents thereof, and to corporations formed under the laws of 
the United States or of some State within the United States. 

It might be added that there is nothing in the act which prevents an asso- 
ciation formed under it from entering into any cooperative relationship with 
a foreign corporation for the sole purpose of operation in a foreign market. 
The only test of legality in such an arrangement would be the effect upon 
domestic conditions within the United States. 

You ask : 

"2. Is the export product that may be disposed of by such an association 
limited to productions originating in and exported directly from ports of the 
United States, or does it also include products originating outside the United 
States, but thereafter imported into the United States and from thence exported 
to foreign markets directly from ports of the United States?" 

The act is silent on this subject. In the absence of an indication to the con- 
trary expressed in the act, the word "export" is assumed -to include only domes- 
tic products and not the objects of import which form the basis of a subsequent 
export movement. 



CONCENTRATION OF ECONOMIC POWER 127 

"2-a. Is the export product that may be disposed of by such an association 
limited to a product which is shipped from the United States, or may it also 
embrace a product of a member of the association produced outside of the 
United States, and shipped direct to a foreign port, without first entering the 
United States?" 

It is difficult to see how shipment from a foreign- port to a foreign port 
could be regarded as export from the United States. The first impression would 
be tliat such conduct would not come within the scope of thei act. 

You ask : 

"3. Can a valid trade agreement be entered into between such export asso- 
ciation (c) between nationals engaged in the production and exporting of 
commodities of commerce outside the Uittfced States, but whose product would 
reach the same foreign marliet as the pr(5chict of the exi>ort association export- 
ing such product direct from the United States; and (&) nonnationals engaged 
in the production and exporting of commodities outside the United States, but 
whose product would reach the same foreign market as the product of the 
export association exporting such product direct from the United States?" 

The purpose of the act seems to have been to provide a method for elimi- 
nating competition in foreign markets among domestic producers. As stated 
above, tiiere seems to be no reason why a Webb-Pomerene association comjwsed 
of nationals or residents of the United States and actually exporting from the 
United States, might not adopt a trade arrangement with nonnationals reaching 
the same market, providing this market was not the domestic market of the 
United States and the action of this organization did not reflect unlawfully 
upon domestic conditions. It does not seem, however, that nationals and 
nonnationals who are also nonresidents, might unite within the Webb-Pomerene 
association itself. 

You ask : 

"4. Must an export association under the act perform all the operations 
of selling its members' product to the foreign buyer, or does the word 'com- 
merce' in the act mean that an exjMJrt association complies with the act if 
it is solely engaged in allotting export orders among its members, or in fixing 
the prices at which its individual members shall sell any export trade, or in 
performing any one or moi'e of the other operations comprised in the complete 
chain of operations that constitute selling and export trade under the general 
trade agreement that deals solely with export trade and as filed with the Federal 
Trade Commission, in accordance with the terms of the act?" 

The act does not require that the association shall perform all the operations 
of selling its members' product to a foreign buyer. The limitation upon the 
methods of operation is to be found in the words: "in the course of export." 
The Commission has recently passed upon the conduct of an association which 
does not itself export, but which performs a price-fixing function and an alloca- 
tion of business, and sells at the wharf to others than the association, who 
conduct the export movement from that point. The position which the Com- 
mission takes is that the consummation of a sale within the United States 
if the product sold is intended for and actually is marked for and enters into 
export trade, is in the course of export within the meaning of the act. I'ti 
would seem, therefore, that an association may without necessarily involving 
conflict with the act, engage in allotting export orders among its members and 
in fixing prices at which the individual members shall sell in export trade. 

The law provides two tests : One, that the conduct shall be in export or in 
the course of export. The second, that the conduct shall not be in restraint of 
trade within the United States, shall not restrain the export trade of any 
domestic comi)etitor, and shall not artificially enhance prices or lessen compe- 
tition within the United States, or otherwise restrain trade therein. The 
application of the second group of tests, of course, is dependent upon the results 
of conduct which cannot be forecast, at least by the Commission. 

It may be noted that the pajjcrs filed by several associations show that the 
actual export and sale in foreign markets is conducted by the individual 
members. 
You ask : 

"5. Does the prohibition of the above act against affecting domestic commerce, 
extend to and include a consequential rise in price in the domestic markeit 
through the better organized control of the foreign markets and the broadening 
of export trade ; or is such prohibition limited to acts which intentionally or 
directly are committed to advance the domestic price or restrain trade through 
an operation conducted merely in the guise of an export association?" 



228 CONCENTRATION OF ECONOMIC POWER 

It was not within the purview of this act that the operations of a Webb- 
Pomerene association should become a device for betterment of a domestic 
market. Its sole purpose was the lessening of competition between domestic 
exporters in the foreign markets. It is exceedingly difficult to distinguish 
between a betterment of the domestic market expressed in a rising domestic 
price which is the result of the proper coordination of export to domestic con- 
sumption and a similar movement directed to the domestic market in which 
this result is directly and primarily intended through an adjustment of com- 
petitive relations in a foreign market. The law prohibits monopolistic effort 
of interference with competition by concerted action in the guise of a produc- 
tion of benefit to the public. It has been repeatedly stated that a beneficent 
purpose will not legalize conduct otherwise unlawful. The mere fact that there 
was a rising price in the domestic market would not be a controlling element. 
It is perfectly apparent that the proper adjustment of distribution may result 
in an increase in price in- a glutted market and a decrease in price in one which 
is insuflaciently supplied. Manifestly the arrangement must be devoid of any 
concerted curtailment of production or withdrawal from the domestic market 
■of any part of its normal supply. It is well understood that an incidental or 
inconsequential effect upon domestic prices is not unlawful. If a merely con- 
sequential rise in price should bar American exporters from using this statute, 
the statute might become a nullity. The statute provides for a lawful course 
of procedure, and if this procedure is followed and the statute complied with, 
merely indirect or consequential results cannot be held to be against the law. 
It is well settled, under the Shermkn Act, that a contract which "only inciden- 
tally or indirectly restricts competition is not denounced by the act." 

By direction of the Commission : 

Vebnon W. Van Fleet, 

Acting Ohadrman. 
Mr. C. F. Kelley, 

Silver ProeLucers' Committee, 

Room 1801, 25 Broadway, New York City. 

In 1924 a bill was introduced in the Senate ^ that would have 
permitted the formation of import combines to engage in cooper- 
ative purchasing of "raw commodities which are produced prin- 
cipally in foreign countries." The Webb-Pomerene law was not 
mentioned, but administration was to be given to the Federal Trade 
Commission. The same bill was introduced by Senator Capper 
in 1925,* In December 1925 a House resolution introduced by 
Congressman Tilson ^ recommended an investigation by the House 
Committee on Interstate and Foreign Commerce, as to the "means 
and methods of the control of production and exportation of crude 
rubber, coffee, silk, nitrates, potash, quinine, iodine, tin, sisal, quick- 
silver, and other important raw materials ;" this was favorably rec- 
ommended by the House Committee on Rules.^ Hearings on the 
resolution were conducted by the House Committee on Interstate 
and Foreign Commerce in January 1926.^ The committee's prelimi- 
nary report was issued in March 1926.^ 

As a result of this inquiry^ two bills were introduced in Congress in 
1928,^ which would have amended the Webb-Pomerene law to permit 

» S. 2843, 68th Cong., 1st sess.. Introduced by Senator Capper on March 14, 1924, and 
referred to the Committee on Commerce. 

* S. 1T99, 69th Cong., Ist sess., introduced by Senator Capper on December 17, 1925, and 
referred to the Committee on Commerce. 

» H. Res. 58, 69th Cong., 1st sess., Introduced by Congressman Tilson, December 18, 1925, 
referred to the Committee on Rules. 

* Rept. No. 24, House of Representatives, 69th Cong^ 1st sess., December 19, 1925, 1 p. 

' Hearings before the Committee on Interstate and Foreign Commerce, House of Repre- 
sentatives, 69th Cong., Ist sess., on H. Res. 59, January 6, 7, 8, 11, 12, 13, 14, 15, 18, 19, 
and 22, 1926, published in 1926, 373 pp. 

* Rept. No. 555, House of Representatives, 69th Cong., 1st sess., March 13, 1926, 23 pp. 
S. 2312, 70th Cong., 1st sess., introduced by Senator Jones, January 9, 1928, and 

referred to the Senate Committee on Commerce ; and H. R. 8927, 70th Cong., 1st sess., 
introduced by Congressman Newton on the same date, referred to the House Committee on 
the Judiciary. 



(X)NCENTRATION OF ElOONOMIO POWER 129 

combines for importation of crude rubber, potash, sisal, or "other raw 
materials, or products of nature in a crude or unfinished state which 
are certified by the Secretary of Commerce to be of a character not 
made, produced, or grown in substantial quantities within the United 
States, or to be controlled by any foreign government, combination, or 
monopoly." Such import combines would have been required to file 
papers with the Federal Trade Commission and to operate under the 
Commission's supervision on terms similar to those in effect for export 
combines. The Export Trade Act was completely redrafted in the 
bill, to include the new provisions. Hearings were held on H. R. 8927 
by the House Committee on the Judiciary in January 1928.^° The 
committee submitted a report in February 1928 ^^ to the effect — 

that the bill do not pass at this time. The sponsors of the bill -should give the 
problem further study so as to write into the law the conditions of resale of 
such material, specifying such factors and charges which may properly be added 
to the original cost of the raw material involved. 

An amended bill was then submitted by Congressman Newton, still 
numbered H. R. 8927, and in March 1928 a House resolution ^^ brought 
the bill up for debate. The Committee on Rules approved the resolu- 
tion." The bill was debated in the House in April 1928.^* On April 
4, however, the day before the debates began, the British Prime Min- 
ister stated in the House of Commons that the British rubber restric- 
tions would be removed on November 1 of that year. This eliminated 
one of the principal reasons for passage of the bill, since without 
restriction the price of crude rubber would be lowered. The bill was 
therefore rejected by the House on April 6, 1928; it was not acted 
upon in the Senate. 

llt2"-40 — THE EXPORT TRADE SECTION — FOREIGN TRADE SERIES NO. 2, 1935 — 
PACIFIC FOREST INDUSTRIES, RECOMMENDATIONS, 1940 

On July 1, 1927, the Export Trade Division became the Export 
Trade Section under the chief counsel's office of the Commission.^^ 

In October 1935 the Commission issued a 23-page pamphlet en- 
titled "Foreign Trade Series No. 2 — Practice and Procedure Under 
the Export Trade Act (Webb-Pomerene law)" ^* which discussed pur- 
pose of tlie law, provisions of the act, filing of papers with the Com- 
mission, Webb law organization and operation, advantages obtained 
by Webb law groups, products exported, and a list of associations 
formed during tlie period 1918-35. This pamphlet is still in active 
use by associations organizing and operating under the law; the text 
is available, and need not be repeated here. 

On January 27, 1940, the Commission issued recommendations for 
the readjustment of tlie business of Pacific Forest Industries, an 
export trade association, under section 5 of the act. A hearing was 
lield on this case on September 12, 1939, investigation was made, briefs 

'" Hearings before the Committee on the Judiciary, House of Representatives, 70th 
Conp., 1st sess., on H. R. 8927. January 19, 1928, serial 3. published in 1928. 

" Rept. No. 689 House of Representatives, 70th Cong., 1st sess.. presented by Congr ss- 
"hian Dyer from the Committee on the Judiciary. February 15, 1928, 9 pp. 

" H. Res. 140. 70th Cong., 1st sess., introduced bv Congressman Michener, March 17, 
1928. 

13 Rept. No. 1058, House of Representatives, 70th Cong., 1st sess., March 27, 1928. 

^* Congressional Record, debates on April 5 and G, 1928, the bill rejected on April 6, and 
further speeches and data presented with the issues of April 9, 12, and 19, 1928. 

'^ News release issued by the Federal Trade Commission, May 31, 1927. 

" See exhibit 7 herewith 



230 OONCBNTRATION OF ECONOMIC POWER 

and other data were filed. This was the first formal action taken 
under section 5 of the law. Text of the recommendation follows : 

UNITED STATES OF AMERICA BEFORE FEDERAL TRADE COMMISSION 

At a regular session of the Federal Trade Commission, held at its office in the 
city of Washington, D. C, on the 27th day of January, A. D. 1940 

Commissioners: Ewin L. Davis, Chairman; Garland S. Ferguson; Charles K. 
March ; William A. Ayres ; Robert E. Freer. Ap. 1 13889 

RECOMMENDATIONS FOR THE READJUSTMENT OF THE BUSINESS 
OF PACIFIC FOREST INDUSTRIES, AN EXPORT TRADE ASSOCIATION 

To : Pacific Forest Industries, a cooperative association organized under the laws*^ 

of the State of Washington, with principal office and place of business at 

Tacoma, Wash., and its several members : 

The Federal Trade Commission, having reason to believe that Pacific Forest 
Industries, an association engaged in export trade (as "association" and "export 
trade" are defined in the act of Congress known as the Export Trade Act, approved 
April 10, 1918), and certain of its agreements and acts were in restraint of the 
export trade of domestic competitors of said association, summoned said associa- 
tion, its officers and agents, to appear before it on the 12th day of September 1939 
as provided by section 5 of said Export Trade Act. Said association having duly 
appeared before the Commission pursuant to said summons and a hearing and 
investigation into the alleged violations of law having been conducted by the 
Commission, and oral and written statements and arguments and briefs having 
been presented by said association, and the Commission having concluded upon 
such investigation that the antitrust laws have been violated by said association 
in that said association and certain agreements made and acts done by it have 
been and are in restraint of the export trade of its domestic competitors, to wit, 
other American exporters engaged in purchasing, transporting, and selling Douglas 
fir plywood in export trade. 

Now, THEREFORE, pursuant to the provisions of said Export Trade Act and Ly 
virtue of the authority conferred upon it by said act, the Federal Trade Commis- 
sion hereby makes to said Pacific Forest Industries and its several members the 
following recommendations for the readjustment of its business in order that it 
may hereafter maintain its organization and management and conduct its 
business in accordance with law : 

1. That Pacific Forest Industries shall not, by its bylaws, contracts with 
members or associate members, or otherwise, prohibit its members or 
associate members from selling plywood directly to American exporters. 

it Section XVI of the present bylaws of Pacific Forest Industries provides 
that "the several members agree to * ♦ * turn over to the associa- 
tion, as and when received, all future orders for export ; * ♦ *. The 
members agree not to accept any future export orders, but to transmit 
and turn the same over to the association." Contracts between Pacific 
Forest Industries and associate member plywood mills provide that the 
associate member "will not sell or offer for sale directly or indirectly any 
plywood for export, except through said association." Said bylaws and 
contracts, and any other existing bylaws, contracts, or agreements to the 
same effect, should be rescinded or amended so as to permit members and 
associate members of said association to accept and fill orders for ply- 
wood for export received by them, respectively, from American exporters 
without reference to or approval by the association. 

3. That Pacific Forest Industries shall not impose any penalties, forfeitures, 

or charges upon sales of plywood by its members or associate members 
to American exporters, or fix or prescribe prices, terms, or conditions of 
sales to or by American exporters of plywood produced by its members, 
or take any other action designed to prevent or restrict such sales. 

4. That Pacific Forest Industries cease and desist from advertising in foreign 

countries that it is the sole export representative of the plywood mills 
in the United States Pacific Northwest and from making any similar 
advertising claims to the effect that United States Douglas fir plywood 
can be purchased in foreign countries only through Pacific Forest 
Industries or its agents. 



CONCENTRATION OF ECONOMIC POWER 13]^. 

The term "American exporter" is defined, for the purpose of these recommenda- 
tions, as a citizen of the United States, a partnership in which the partner or 
partners owning the principal beneficial interest is or are citizens of the United 
States, or a corporation domiciled in the United States the majority of the stock 
of which is owned by citizens of the United States, desiring to purchase plywood 
for his, their, or its own account for resale in export trade. 

By the Commission. 

[se:al] a. N. Ross, Acting Secretary. 

ANNUAL REPORTS OF THE COMMISSION, 1916-.39 — PUBLICITY STATEMENTS 
ISSUED BY THE COMMISSION CONCERNING THE LAW 

The Commission's annual reports have given, each year, a statement 
of Webb law activities during that period, beginning in 1915 with 
a report on the foreign-trade inquiry instituted in May of that year, 
and in 1916 a report on the bill at that time before Congress, con- 
tinuing after the law was passed with a summary each year of current 
information. 

These reports give the volume of business by the groups, a list of 
associations at that time filing papers, and a discussion of current 
trade conditions, advantages obtained and obstacles met by the Webb 
law associations. Excerpts from the annual reports, 1937 to 1939J are 
herewith transmitted as exhibits." When a new association is formed^ 
the Commission issues a brief statement announcing .the filing or 
papers. Other publicity statements have been issued from time to 
time, and several articles have been prepared for publication in Com- 
merce Reports published by the Department of Commerce. 



" See exhibits 8. 9, and 10 herewith, excerpts from the Commission's reports for 1937. 
1938, and 1939. 



257769— 41~Xo. 6 10 



PKOCEDURE UNDER THE ACT 

The Commission's procedure under the act has been simple. Organi- 
zation papers are received and acted upon by the full Commission. 
These papers include the first report, for which blanks are supplied 
by the Commission/ the certificate of incorporation, if it is incor- 
porated, bylaws, membership agreement, contract forms, working 
rules or regulations, or any other documents covering the organization 
plan. 

Annual reports filed in January of each year ^ keep the organization 
material to date. Other information is required from time to time, 
and field calls are made at the association offices. In case of an inquiry, 
a more extended search is made of the association records and opera- 
tion. As a rule inquiries have resulted in informal advice to the 
association in question. The only formal summons and recommenda- 
tion was issued in the case of the Pacific Forest Industries, herehi- 
before quoted. 

1 See exhibit 4 herewltli, first report form. 
' See exhibit 5 herewith, annual report form. 

132 



PRODUCTS EXPORTED— VALUE OF EXPORTS, 1920-38 

The first associations to be formed were the lumber exporters, the 
copper and steel associations, exporters of machinery, pipe fittings, 
and valves, railway equipment, phosphate rock, chemicals, paper, 
furniture, buttons, elastic webbing, and a number of exporters of food- 
stuffs. Some of the groups were organized for the purpose of selling 
goods to the Allies during the World War. 

The sulfur and rubber groups were formed in 1922, and in 1923 
abrasives, railway tires and springs, naval stores, and corn products 
were added to the list. In 1924 associations were formed to ship cot- 
ton linters and flour, and in 1925, California dried fruit, barrel staves, 
and railway brake beams. In 1926 the second copper association was 
formed, also groups to ship salmon and screws. In 1927 the second 
dried-fruit association was added, and groups to sell plywood, doors, 
zinc, and flour. In 1928 the second steel association was organized (the 
first steel group withdrew in 1923, but some of the same members 
joined the second), also associations to ship fresh fruit, rice, and sar- 
dines. In 1929 the petroleum associations were added, as well as the 
, metal lath, abrasives, rice, and two lumber associations. In 1930 the 
textile groups were formed, two lumber associations, the carbon-black 
association, and a group to ship grapefruit; in 1931 another lumber 
group, an electrical association, and a railway signal association. In 

1932 the shook exporters were organized. No groups were formed in 

1933 or 1934. In 1935 associations were formed to ship carbon black, 
plywood, fruit, and wood naval stores. In 1936 box shooks, plate 
glass, alkali (California), and dried prunes were added to the list; 
in 1937 fresh friiit, rice from the Southern States, and the iron and steel 
scrap association which operated only a few months. In 1939 the 
potash association was formed, and in 1939 a wood naval stores associa- 
tion containing some of the same members as the first wood naval stores 
group, also associations to export pencils and California rice. The 
last group to be formed was the electrical export corporation, papers 
filed in January 1940. 

Generally speaking, semimanufactured products have lent them- 
selves more readily to Export Trade Act organization, since they may 
be standardized and sold under general rules as to quality and quan- 
tity. Some specialized products, however, liave been sold to advantage, 
with due regard for trade-marks and brands developed by individual 
members. Agricultural products may be exported by such associations, 
although in some cases exporters of farm prodii,cts have organized 
under the sister cooperative acts instead. 

The products exported are in some cases of the same kind and grade 
us are sold in the domestic market, with perhaps different packaging 
and marking. Goods exported must be more securely packed for 
stowage and transshipment. In some products, however, different 
markets require different specifications and classifications (i. e., lum- 

133 



134 



CONCENTRATION OF ECONOMIC POWER 



ber), and at times the buyer cannot afford the prices prevailing in this 
country and prefers to buy a cheaper grade within his mfans. 

In reporting to Congress each year the value of exports oy the Webb 
law associations, they have been divided roughly into five groups, in 
order that the statistics of the individual companies need not be pub- 
lished. Total exports during the years 1920 to 1938, inclusive, as pub- 
lished in the reports for 1921 to 1939, are as follows : 



Year 


Metals and 

metal 
products 1 


Products of 

mines and 

wells « 


Lumber and 

wood 

products ' 


Foodstuffs * 


other manu- 
factured 
products * 


Total 


1920 


$152,000,000 
67,557,000 


$8, 000, 000 
5, 556, 000 


$17, 000, 000 
9, 894, 000 


$8,000,000 
5, 839, 000 


$36,000,000 
2, 334, 000 


$221,000,000 


1921 


91,180,000 


1922 « - . - 




1923 


68, 227, 000 
43,992,000 
43, 287, 000 
56, 500, 000 
180, 000, 000 
267,600,000 
271,000,000 
208, 000, 000 
100,000,000 
21,000,000 
29, 000, 000 
27,000.000 
20,250.000 
40, 507, 335 
93, 958, 850 
67,000,000 


10,500,000 
9, 885, 000 

14, 279. 000 
14.300.000 

15, 200, 000 
17, 500, 000 

270. 000, 000 
315,000,000 
73. 000, 000 
56, 000, 000 
44,000,000 
53, 000. 000 
55. 875, 000 
40, 780, 283 
32, 580, 219 
20, 920, 491 


26,000,000 

32, 700, 000 

38 000, 000 

35,700.000 

35,400.000 

28, 200, 000 

26,000.000 

22, 500, 000 

35, 400, 000 

8,000,000 

8,000.000 

8, .500. 000 

9. 450, 000 

8, 533. 374 

7. 456, 922 

5,881.028 


32, 400, 000 
35, 300, 000 
42,000,000 
35, 000. 000 
53, 000, 000 
80, 400, 000 
67,100,000 
40, 500, 000 
32, 500, 000 
24,000,000 
28,000,000 
21,300,000 
16,500.000 
21, 250, 433 
19, 921, 343 
21, 487, 274 


16, 373, 000 
18,123,000 
27,934,000 
59,000,000 
87, 900, 000 
82, 500, 000 
90,000,000 
75, 000, 000 
70, 100, 000 
35, 000, 000 
34.000.000 
36, 000, 000 
35,610,000 
38, 225, 100 
43, 958, 498 
45,956,027 


153,500,000 


1924 


140,000,000 


1925 


165. 500, 000 


1926 - 


200,500,000 


1927 


371,500,000 


1928 


476, 200, 000 


1929 


724, 100. 000 


1930 


661,000,000 


1931 


311,000,000 


1932 . 


144, 000, 000 


1933 --- 


143, 000, 000 


1934 


145.800,000 


1935 


137,685,000 


1936 


149, 296, 525 


1937 


197, 875, 832 


1938 


151, 244, 820 







< r^opper, iron and steel, scrap, metal lath, zinc, machinery and implements, foundry equipment, locomo- 
tives and railway equipment, electrical apparatus, signal apparatus, tools, pipes, valves, and screws. 
> Phosphate rock, cnal and coke, sulfur, petroleum and products, carbon black, potash. 

* Pine, fir, hardwood, red gum, redwood, walnut, naval stores, plywood, doors, furniture and office equip- 
ment, wood pipe, barrel and box shocks, wooden tool handles, clothespins, pencils (pencil association newly 
organized, exports not yet included in totals). 

* Canned milk, meat products, sugar, flour, corn, and other grain products, rice, sardines, canned salmon, 
peas and other canned vegetables, fruit (canned, fresh and dried). 

' Paper, rubber products, abrasives, cement, glass,, cotton linters, webbing and other textiles, clothing, 
buttons, fertilizer, paint and varnish, insecticides, alcohol, tanning materials, soda pulp, soda ash, alkali, and 
other chemicals, and general merchandise. 

' Figures not compiled in 1922. 

The value of the Webb law, however, cannot be measured in dollars 
and cents. The most successful years were not those in which the 
exports reached the highest figures. The real measure of success was 
achieved in the period of depression when totals were smaller but 
exporters, beset by trade restrictions and unsettled markets abroad, 
.were still able to continue their organization and ship to foreign coun- 
tries through their cooperative agreements. 



NUMBER OF ASSOCIATIONS AND OF MEMBER 
COMPANIES 

The association lists show some changes each year. The number has 
varied from 43 in 1920 to 57 in the peak years, 1929 to 1931. There are 
now, in February 1940, 44 associations on file with the Commission.^ 

The Commission's list, published in the annual reports, as of June 
30 of each year, has been as follows : 

1920, 43 associations. 1930, 57 associations. 

1921, 48 " 1931, 57 

1922, 56 " 1932, 51 " 

1923, 55 " 1933, 50 

1924, 50 " 1934, 45 " 

1925, 50 " 1935, 43 " 

1926, 51 " 1936, 45 

1927, 55 " 1937, 45 

1928, 56 " 1938, 44 " 

1929, 57 " 1939, 43 " 

Four associations have been in operation since the first year the law 
was passed, 1918. These and 7 others have been in active operation 
for 20 years ; and 25 associations have been in continuous operation for 
the past 10 years, 

A total of 2,074 producers, mills, mines, and factories, scattered 
throughout the United States, from coast to coast, and shipping to all 
parts of the world, have operated under the act during its operation, 
1918 to Januarjr 1940.* 

The present list of 44 associations represents 434 member companies. 



1 See exhibit 2 herewith, list of associations filing napers with the Federal Trade Com- 
mission on Feb. 29, 1940. These include three new groups formed since the last annual 
report of the Commission, as of June 30, 1939 (Pencil Industry Export Association, 
California Rice Exporters, and Electrical Export Corporation) ; and exclude two that have 
withdrawn since that date (Grapefruit Distributors, Inc., and U. S. Handle Export Co.). 

' See exhibit 3 herewith, list of associations that have filed papers, 1918-39, with names 
of members and the years in which they held membership — also notes on operation of each 
association, and if dissolved, rea'sons for dissolution. 

135 



TYPES OF ORGANIZATION 

In view of the wide variety of products that have been exported 
under the act, the association agreements have varied considerably, 
each drafted to meet the needs of the particular industry to be 
served. The three general types that have been used are: 

(1) The association that serves as a central agent for the 
members, taking orders, negotiating sales, and handling ship- 
ment of the goods to foreign countries. 

(2) The association that directs the exportation of the mem- 
bers and retains certain functions in export trade, but permits 
the members to take the orders through their already established 
agents abroad ; and 

(3) The export company formed for the purpose of buying 
the members' products and reselling them in foreign markets. 

The first and second methods of operation may be combined, the 
members using their established agents for some markets and the 
association sales office, for new markets or those in which the trade 
is not of sufficient volume to warrant the expense of individual 
agents. 

Most of the associations have become incorporated, under State 
laws, for their own convenience, although the Export Trade Act does 
not require it. An office that is actually negotiating sales and in- 
curring financial obligations finds incorporation of advantage. Cap- 
ital stock is held by the exporting members and is therefore not sold 
in the open market. 

Usually the Webb law group is formed by producers or manu- 
facturers of the same or similar products, and there may be more 
than one group in the same industry. Several associations have been 
formed to sell miscellaneous pr6ducts, but this has not been success- 
ful ; ordinarily an agent is not equipped to sell more than one line of 
goods. A Webb law group is a voluntary organization and may or 
.may not include a large percentage of the industry. One of the 
lumber export associations ships redwood, another walnut, but sev- 
eral have shipped pine. On the Pacific coast one group sells dried 
fruit packed in California and another the same products packed in 
Oregon. A third group sells only one kind of dried fruit (prunes) 
and comprises some of the same members as are in the California 
dried fruit association. A petroleum company at one time filed 
papers under the act and was at the same time a member of a larger 
petroleum association also filing papers. The two phosphate asso- 
ciations at one time combined to form a third group. In some cases 
two associations operating independently have had a cooperative 
relationship. 

Some of the association agreements are limited to specified prod- 
ucts or certain named markets; others provide for shipment to any 
136 



CONCENTRATION OF ECONOMIC POWER 137 

or all foreign countries. Most of the groups are formed for the 
purpose of developing a regular export business, year in and year 
out; although in special instances an association may be organized 
to meet a special need or a temporary purpose. In a few cases, the 
association operates only when there is a surplus to be disposed of 
in export markets. The membership agreements may be of perma- 
nent duration, or they may be drafted for a limited period with 
provision for extension, in which case they are usually extended for 
longer periods. 

An association may have more than one class of members, de- 
pendent upon the services that it contracts to perform for them. 
One association has a "full" membership and a "limited" member- 
ship; another has a "packers" division and a "merchants" division; 
some have members that are stockholders and others that do not 
hold stock. In addition to the products of the members, an asso- 
ciation may obtain and sell the products of other manufacturers to 
complete its foreign orders. 

The main office of the association may be at seaport in order to 
handle the shipping details, or it may be in the locality of the 
member mills in order to serve as a convenient meeting place for 
agreement upon export policies. Branch offices and agencies are 
maintained in this country and abroad. 

Provision may be made for dividends or distribution of profits on 
the basis of stock holdings or on actual tonnage shipped. In most 
cases, however, the associations operate on an expense basis, the 
profits accruing to the individual members. Expenses may be pro- 
rated in accordance with the amount of stock held, or they may be 
covered by commissions on sales, with provision for assessments in 
case of deficit. If the members' exports are of approximately equal 
volume, expenses may be borne equally. Some associations deduct 
the expense from current receipts for sales before distribution to 
the, members; others make periodical assessments to cover expenses 
actually incurred. In some cases a minimum price agreed upon is 
paid to the membej* when the sale is made, and an additional sum, 
representing the difference between the minimum price and the actual 
price obtained from the foreign buyer, is later divided among the 
membership. The association funds may include a small membership 
fee payable when a company joins, or there may be a substantial 
initiation fee which is held to cover losses or penalties in case of 
breach of the agreement. 



FUNCTIONS OF THE GROUPS 

SEl^t^ING AS EXPORT SALES AGENT FOR THE MEMBERS 

This was the primary function contemplated when the law was 
passed. The Commission reported to Congress in 1916 that — 

The principal form of cooperation in the mind of those proposing any form of 
cooperative organization was the joint selling agency. (Federal Trade Commis- 
sion Report on Cooperation in American Export Trade, 1916, vol. 1, p. 244.) 

The House Committee on the Judiciary in favorably reporting the 
bill to Congress stated that — 

The object of this bill is to aid and encourage our manufacturers and producers 
to extend our foreign trade. 

The bill seeks to do this by permitting the organization of cooperative selling 
agencies or associations among American exporters in order that they may meet 
foreign competition on equal terms in international commerce. (Rept. No. 118, 
€4th Cong., 1st sess., August 15, 1916, to accompany H. R. 17350. ) 

During the first few years of Webb law operation all of the groups 
were formed on this basis. A her the Silver letter in 1924 other types 
of organizations were develoj ^d. The effect of the Commission's rec- 
ommendations in the Pacific Forest Industries case in January 1940 
(hereinbefore set forth) will be to limit the exclusive selling agency 
plan of operation to sales in foreign markets and to prohibit combina- 
tion for the purpose of selling to domestic competitors of the associa- 
tions. 

The association that actually negotiates export sales has a more 
extensive office, usually at seaport, and employs agents abroad to take 
orders and introduce the products in new markets. It must be in con- 
stant touch with the members by telephone and through committee 
meetings. It may also maintain foreign offices and traveling agents to 
cover a number of countries and direct the sales of regional agents. 
This is the most economical method of operation. By centralizing 
the sales offices and activities of the members, the association may effect 
substantial savings in cost. For the smaller company or the producer 
who has not developed an export business, this method is invaluable ; 
in many cases it spells the difference between exporting and not export- 
ing, because the member company cannot afford to establish foreign 
contacts and sell individually. 

PURCHASING THE MEMBERS' PRODUCTS FOR RESALE IN FOREIGN MARKETS 

Some associations are export companies that buy the members' prod- 
ucts and resell them abroad at whatever profit can be made. In such 
a case the members may sell at an agreed price, f . a. s. United States 
ports, and the association then negotiates sales to foreign purchasers 
at a delivered price fixed by the management, varying with foreign 
market conditions, ocean freights, insurance, handling, and ware- 
house costs. 
138 



CONCENTRATION OF E<X)NOMIC POWER 139 

The corporation may guarantee to take from each member a cer- 
tain amount available for export within a given period. One such 
corporation sells to distributors, delivered at foreign ports, the dis- 
tributors having their own agents in the various foreign markets. 
Stocks abroad are held by the distributors or their agents. The ship- 
ments are consolidated and the association effects economy in arrang- 
ing for freight, cargo space, and insurance. 

EMPLOYING AGENTS AND DIRECTING AGENTS OF THE MEMBERS PROMOTING 

CONFERENCES AND AGREEMENTS IN EXPORT TRADE 

If the members have well-established export departments or corpo- 
rations, they may not wish to relinquish them and sell entirely through 
a central sales office or corporation. In that case the members agree 
upon export policies, and the association may direct the activities of 
the members' sales offices. The extent of this direction depends upon 
agreement ; in some cases the members' foreign agents are under con- 
tract with the association. 

This sort of an organization is also available for the development 
of new markets ; and in the depression period, when it was necessary 
to release individual agents in markets where the trade had lessened, 
a joint agent for the members under association direction was utilized 
to advantage. 

There are many export functions, hereinafter covered, that may be 
;»dopted by an association of this sort, but the principle of such a 

Cup is a cooperative relationship and exchange of export informa- 
i. Prices on foreign sales may or may not be fixed. There is 
usually an adoption of uniform contract forms. There may be a 
division of business or each member may sell what it can abroad. If 
the association is at seaport, it may act as a forwarder, negotiating 
for freight and insurance. An important function of such a group 
is an exchange of information as to special sales or unusual condi- 
tions. If, for instance, the goods are such as will deteriorate with age, 
it may be necessary at times to unload certain quantities at special 
prices. Upon notice of such sales the other members of the group 
may stay out of the market, instead of trying to meet the cut prices 
and thereby sustaining loss. Trade practices may be agreed upon 
and abuses eliminated, and foreign-market information exchanged for 
the benefit of all of the members. 

EXPLOITATION OF MEMBERS' PRODUCTS ABROAD 

The export association is in a position to effect a substantial saving 
in exploitation expense. For instance, a group formed by 10, 20, or 
50 mills may divide the expense of an agent among them and can 
therefore afford to send representatives all over the world to introduce 
their products and to study the needs of each market. 

A system of joint advertising may be devised, an association mark 
may be used (such as "Wesco" for the Walnut Export Sales Co., or 
"Apec" for the American Provisions Export C5o.) or the members' 
Jbrands and patented articles may be promoted by the association 
agents. 



140 OONCBNTBATION OF BOONOMIC POWER 

AGREEMENT UPON TERMS AND SALES POLICIES IN EXPORT TRADE 

Most associations have adopted a uniform sales contract, which 
eliminates as far as possible trade abuses and terms that have been 
proven impracticable. In some cases this has been the greatest advan- 
tage derived under the act. 

Price agreements vary considerably. Some associations do not fix 
export prices, but the members agree to exchange price information ; 
this, as stated before, is especially useful in case of special sales for 
limited periods. The common practice of foreign buyers to play oi» 
exporter out against another in an attempt to beat the price down, may 
be eliminated if each knows exactly the quotations made by the others 
for export sales. 

In some cases a minimum export price is agreed upon, below which 
the members will not sell. If the association negotiates the sales, more 
often the price is fixed by the agent abroad, varying in different mar- 
kets to meet the local conditions. On some commodities the final price 
is a matter of dicker over the telephone by the association office with 
the foreign purchasing agents. 

Price, credit, and operation under foreign-exchange regulations have 
presented serious problems to the Webb law groups. In this connec- 
tion we may quote from a report received from an association which 
has been in active operation for a number of years and has success- 
fully weathered the storm of the depression. 

The establishment of prices is a distinct function of the association. It has to 
be under our form of operation. Prices are established and maintained by re- 
sponsible foreign agents over whom supervision is exercised by an association offi- 
cial who travels abroad. Prices must depend upon economic conditions in each 
market versus maximum consuming power of that market under normal con- 
ditions. In other words, purchasing power is an important factor to be considered 
with respect to maximum sales. -Another factor is competition ; still another is 
quality and a study of the needs of important consumers in accordance with 
their processes of manufacturing. Prices necessarily fluctuate in different parts 
of the world, being controlled by innumerable conditions, both political and eco- 
nomic. In some instances the return exceeds domestic levels here ; in others it 
is about the same ; and in others it will occasionally dip lower. Consequently we 
work on a final average annual price for export, which in turn is distributed equi- 
tably in proportion to each factory's shipments. 

Credits range according to market practices and the standing of customers. 
Exchange is a chapter in itself. There is the problem of covering future exchange, 
spot exchange, and operating with no exchange whatsoever. We have a free 
movement of exchange, semi-embargoes, and complete embargoes. This involves 
much in the way of difficult financing. 

In one country we have operated at a maximum of 1 year without securing 
one dollar of exchange, allowing our funds; to accumulate and eventually liqui- 
dating them through an easement in exchange regulations over a period of a year 
thereafter. These adversities cause much in the loss of interest, and at times 
much more in depreciated exchange, when available, as compared to the rate when 
sales were made. Where possible we cover exchange futures as far in advance 
as 6 months ; in other cases local trends indicate spot coverage over different 
periods ; again customers have been permitted to hedge exchange and provide 
necessary guaranties against loss in our acceptance of local currency. Sales 
are made in sterling to markets with a different standard of currency. 

Constant changes in foreign tariffs come to us telegi-aphically and in ample 
time for us to adopt necessary safeguards by advance shipments in order to save 
large sums of money. 

At the very least, a maintained price level t^an return from 20 to 30 percent less 
than circumstances seem to warrant, and even reach a point where exports are 
blocked completely over certain periods. This involves heavy stocking of ware- 



CONCENTRATION UF ECONOMIC POWER 141 

houses abroad in advance, increased expenses and uncertainty regarding even 
an approximated price return. 

This fact alone illustrates the tremendous advantage of associated activity in 
contrast to individual effort. 

Some associations report that export prices are fixed by the council 
or board of directors, or by a special committee for that purpose, "all 
factors considered." 

In some cases sales are made cash against documents, and in some 
countries quotations are in American dollars, the buyer paying the 
tariffs. The usual practices obtain in quoting c. i. f., f . a. s., or f. o. b. 
vessel at loading point for the convenience of the foreign purchaser. 

ALLOCATION OF THE EXPORT BUSINESS 

The association's business may be divided among the member com- 
panies in predetermined proportions or quotas. Various bases are 
adopted; in some cases the stock holding of a member decides his 
proportion; in others the tonnage is divided on the basis of past 
exports over a period a^eed upon, or upon reports covering amounts 
available for export within a future period. Some quota plans are 
more complicated, including consideration of quality as well as quan- 
tity, loading and shipping facilities, and other export factors. Provi- 
sion is usually made for readjustment of quotas to meet changing 
conditions. 

In order to maintain a quota system, the association must have de- 
tailed records of the members' sales, with copies of invoices and other 
documents. 

Some associations have no quota plan, each member taking whatever 
orders it can obtain. In that case the association need not keep such 
detailed records. 

STANDARDIZATION OF PRODUCTS EXPORTED INSPECTION AND CLAIMS 

SERVICE 

Much has been accomplished by the Webb law groups toward stand- 
ardization of the goods exported, and improvement of their quality. 
If an association mark is adopted, all goods bearing that mark must 
meet a certain quality test. For this purpose the smaller members 
may have the benefit of the technical research of the larger companies. 

Reduction in the number of sizes and shapes of the products sold 
in export has tended to lessen manufacturing cost, and the associa- 
tions' efforts to learn the needs of foreign buyers as to specification 
or grade have made for increased export sales. If cheaper goods are 
sold, to meet the lower purchasing power of foreign buyers, these 
grades are established without deception in order to protect the repu- 
tation of tlie association products. 

Inspection service before shipment has reduced the claims of for- 
eign buyers. Provision has also been made for the handling and 
settlement of disputes through association agents. 

Eules are adopted for packing and shipment. These must conform 
to the requirements of the markets in which the goods are sold. The 
association is in a position to obtain information as to these require- 
ments and to advise the members with a minimum of expense. 



142 OONCBNTRATION OF ECONOMIC POWER 

ARRANGING FOR INSURANCE, FREIGHT RATES, CARGO SPACE, SHIPPING DATES, 

AND OTORAOE 

The association that negotiates sales usually has forwarding func- 
tions, and in some cases where the sales are conducted by the members, 
the association offices are used for the purpose of obtaining advan- 
tageous freight rates, cargo space and shipping dates. Consolidation 
of shipments and arrangement for space over a longer period make 
for better rates on freight and insurance. Some of the associations 
have handled negotiations with conferences which no one member was 
in a position to do. 

Storage in this country or abroad is at times to the advantage of the 
producers. This is especially true of a seasonal product which would 
otherwise come upon the market at one time of the year. If the 
goods can be disposed of with regularity, depression of price may be 
avoided. 

It has also been found that transportation lines are more crowded 
at some seasons. The association may therefore arrange to have its 
goods transported at dull seasons and stored at port for future ship- 
ment ; this is especially true of heavy cargo. 

COLLECTING AND DISSEMINATINQ, TRADE INFORMATION AS TO MARKET CON- 
DITIONS ABROAD, CREDITS, EXCHANGE, SHIPPING REGULATIONS, AND 
FOREIGN LAWS 

The association is in a position to obtain information concerning 
trade conditions in foreign markets that is not available to individual 
members without considerable expense. Changes in regulations are 
reported by the association agents by cable or telegraph, and relayed 
to the members in time for the adoption of necessary safeguards and 
the saving of large sums of money. This has been of especial value 
during the past rew years when war conditions have upset the mem- 
bers' markets. One association reported in 1938 that : 

With war clouds on the horizon, we were enabled to keep careful track of 
shipments en route, divert them to diflEerent ports, or hold them in warehouses 
at European ports until the situation cleared and we could complete delivery. 
Thus no credit losses were sustained from territories which M'ere taken over 
by Germany. 

Foreign-exchange regulations abroad have been numerous, and 
other import restrictions such as tariffs, import quotas, and blocked 
accounts, have complicated the export procedure, and made cooperative 
effort of value to individual exporters. 



ADVANTAGES DEKIVED BY COOPERATIVE EFFORT 

Advantages obtained from the various functions discussed above 
are obvious. The more functions the association adopts the greater 
economy may be effected by cooperative action. 

A centralized agency may save large sums in sales cost. The asso- 
ciation can obtain better freight rates and insurance policies by con- 
solidating shipments, or by negotiating with conferences and steam- 
ship lines. It is also in a position to represent the members before 
governmental boards and trade officials — that is, in connection with 
reciprocal tariff hearings in this country, or exchange-commission 
officials abroad. 

Pooling the members' products or storing them in warehouses makes 
it possible to feed them into foreign markets throughout the year at 
advantageous prices. In some cases the association may fill an order 
by drawing uj)oh the supplies of a number of members, whereas one 
could not furnish the entire cargo. There is also an advantage to the 
foreign buyer if he can make his selection from a varied assortment 
of products not available in one mill, but representing the production 
of all of the members of such a group. 

Agreements upon price and terms of sale, and adoption of uniform 
contracts, are of advantage to the American seller and also to the 
foreign buyer who prefers a price and terms that do not fluctuate 
daily. Trade abuses have been eliminated and service improved by 
agreement on terms. The association that acts as a clearing house for 
the members' export sales serves a useful purpose with a minimum 
expense. 

Standardization and improvement of quality have raised the stand- 
ard of American exports; the association inspection service reduces 
claims of buyers and offers an efficient method of handling disputes. 

The association may riot only effect an orderly merchandising of 
the goods, butr it may provide by united action financial support for 
trade development. The expense of such service divided among a 
number of members can well be afforded by each. 

To meet centralized buying by centralized selling, and to stand up 
against the competition of well-established foreign combines or cartels, 
are very important advantages. One association has reported that: 

Only by combination under the Webb law and actingas a unit, can the American 
producers in this industry successfully meet the competition of foreign producers. 
There is little doubt, we think, that if the American producers had not been able 
or had neglected to take full advantage of the provisions of the Webb-Pomerene 
law, to combine and make joint effort, this American product would have been 
driven out of foreign markets many years ago. 

In combining under the Webb law, however, these producers have 
not had undue advantage in foreign markets. They have merely been 
placed on an equal footing with foreigners in countries where coml>ina- 
tion in trade is permitteu and encouraged. 

143 



■[44 OUiSCENTRATlON OF KCO^\JMIC POWER 

Some associations have reported that they were "formed to meet 
chaos in prices, terms, and conditions of sale in all foreign markets" 
at the time of their organization. Asked to what they attribute their 
success, one group said : 

Success of this conjpany, as a Webb-Pomerene organization, is due chiefly to 
the fact that we have gone into the business of foreign trade in what we feel 
is an intelligent manner and have followed a consistent policy year in and 
year out, in good times and in poor times, of maintaining a foreign field organ- 
ization. Through such organization we have been enabled to build up and 
maintain a recognition of the quality of our brand. This quality reputation, 
tpgether with the goodwill created by the maintenance of a continued foreign 
sales force, has enabled us to continue to secure business even in the face 
of foreign price competition of a very serious type. 

The associations' reports to the Commission state these advantages 
as applied to each year's operation. A typical report may be quoted* 

In connection with advantages normally accruing to operation as an asso- 
ciation, we experienced all the usual ones due to cooperative effort and might 
mention three general and two specific instances. 

Specifically. — (1) Due to fairly large individual shipments enabling purchase 
of considerable cargo space at a time, little inconvenience was suffered during 
the maritime strike because of the tie-up of some lines. Unaffected lines were 
glad of the opportunity to obtain a portion of our business. 

(2) Advantage of sales and price control were particularly valuable this year 
in view of impending and actual devaluation of certain European currencies. 
The association was enabled to act for the industry as a unit in determining 
proper action in these matters. ,!^ 

Oenerally. — (1) The establishment -etf recognition of our house mark, especially 
created for the export field on the formation of the association, so that within 
5 years it has beconae known as the standard quality brand wherever our products 
are sold. 

(2) Adoption of a standard export packing method used by all members and 
governed by the association, the effect of which has been to practically eliminate 
all complaints of damage in transit. Corollary to this, any improvement in and 
savings in packing costs originated by any one member, when approved by the 
association is incorporated into the method and made available to all members. 

(3) Reduction of product complaints has been consistent as files have been 
built into case histories so that the association has a broad picture enabling 
it to determine quickly whether complaints are justified, and if so, to make 
quick corrections and adjustments. The moral effect has been toward fewer and 
fewer unfair claims from the trade, as the latter have come to realize the 
advantage the association has in determining such. 

Obstacles encountered are similar to those obtaining luring the past couple 
of years, the main ones being limited to quotas for import of American mer- 
chandise under a permit system, one of the varieties of which requires the 
deposit of the importer's currency at the time of application for his permit. 
He is then required to get the merchandise in within a limited period of time, 
i. e., before expiration of his permit. The exporter then receives dollar exchange 
when released by the Exchange Control Board and this may be fairly prompt 
or several months, depending upon the amount of exchange available at the 
time. I might also mention that the revaluation of certain -gold-block currencies 
at lower levels gave foreign competitors an immediate advantage, but this 
situation tended to right itself with rises in prices in the foreign markets where 
the local manufacturers are dependent upon imported raw material supplies. 

Other reasons for the success of the Webb law groups are covered 
in exhibit 3 herewith, which gives information concerning each asso- 
ciation individually. 



OBSTACLES MET BY EXPORT ASSOCIATIONS— REASONS 
FOR DISSOLUTION OF SOME OF THE GROUPS 

The Commission is sometimes asked why some of the Webb-law 
groups have become dissolved. 

The chief reasons, of course, have been connected with depression 
conditions during the past 10 years: Difficulty in meeting exchange 
requirements, in financing shipments, and in operating under uncer- 
tain credit conditions. Prices abroad have been consistently lower 
than in this country, on most products ; some companies were unwilling 
or unable to sell at such low prices, and went out of the export business 
for that reason. Some groups had customers abroad who were willing 
to paj^ the price but the goods could not pass under import quota regu- 
lations, or it was impossible to get American dollars abroad, to pay 
for the exports. Blocked accounts have caused serious inconvenience 
and loss. 

In some cases associations organized to meet special conditions went 
out of business when their objectives were accomplished. This was 
true of groups formed to sell to the Allies during the World War; and 
some that served the purpose of disposing of war stocks after the war 
closed. It has also been true of a few associations, such as the Nogales 
Garbanzo Association which disposed of a certain accumulation of 
chick peas and then discontinued its operation. Some of the lumber 
groups went out of business because the source of supply was ex- 
hausted. 

Some associations dissolved in order to effect new organization with 
anotlier alinement or a different method of operation. In a number 
of instances after an association became dissolved some of its members 
were loath to lose the benefits of cooperation and therefore joined or 
formed another group. 

In some cases the association was not successful in developing a 
foreign market, due to lack of demand or the competition of cheaper 
foreign goods. This was true of the button associations which found 
they could Jiot compete with the Japanese product. 

If sales were made to foreign governments, after the World War, 
tliere was at times difficulty in obtaining cash in payment. Some 
associations were unwilHng to accept bonds or other Government secur- 
ities in lieu of cash, and therefore did not make sales. Others accepted 
securities and suffered loss upon default in payment. 

In the case of some foodstuffs, the post-war policy of foreign govern- 
ments to develop production to the point of self-sufficiency resulted in 
tariffs and other import restrictions, with a consequent lessening of 
purchases from this country. In some instances this led to the build- 
ing of American plants abroad, which compensated for loss on exports. 

Reasons for dissolution are mentioned in exhibit No. 3 in connection 
with the operation of the individual associations therein listed. 

145 



FUTURE OF THE WEBB-POMERENE LAW 

The operation of the Webb-law groups has been vitally affected by 
war conditions. The act came into effect during the closing chapter 
of the World War. It was used to some advantage in furnishing 
products for the use of the Allies, and also for the disposition of sur- 
plus war stocks after the armistice. 

During the reconstruction period, there was great demand for 
American products abroad, and large orders were placed to complete 
rebuilding plans. The slight recession felt in 1921 and 1922 was 
followed by the boom period, leading up to the peak years of 1928 and 
1929. In the latter year the Webb-law groups shipped to foreign 
countries goods valued at $724,100,000. 

The necessity for self-sufficiency in case of future wars led to im- 
portant changes in European production and trade. Certain indus- 
tries have been built up during the past 20 years through subsidies and 
regulation, tariffs have been imposed, and imports of these products 
from the United States were lessened. The Webb-law groups felt 
these changes and readjusted their markets to meet them. 

The depression period, as an aftermath of war, appeared first in 
foreign countries and was met by the governments with regulations 
looking toward a lowering of prices and a decrease in imports, in 
order to prevent violent fluctuations in exchange. Exchange control, 
import quota plans, barter systems, and other measures abroad had 
serious effects upon American exports. In some cases Webb-law mem- 
bers were unwilling to sell at the lower prices prevailing abroad, and 
in others they found it impossible to await paj'ment under the restric- 
tive measures. It was difficult to meet the competition of lower- 
Ericed goods manufactured in foreign countries, at times subsidized 
y foreign governments for the purpose of encouraging trade. 

Under these conditions it is surprising that so many Webb-law 
groups continued in operation, and that each year found new associa- 
tions forming for the development of exportation. It appeared, how- 
ever, that the difficulties encountered emphasized the necessity for co- 
operation and brought the exporters more closely together in their 
effort to continue on at least a small scale, an export movement that 
was necessary to balance the productive system and keep the local 
mills and mines in operation. It is significant that although the value 
of exports dropped to $137,685,000 in 1935, the number of associations 
has at no time been less than 43. Some of the groups continued their 
organization year after year, with, small shipments, in the hope that 
the depression would lift and foreign trade would again be profitable. 
It was in these years that the real measure of success was achieved for 
Webb-law operation ; in many instances associations reported that 
they would have been unable to export without cooperative effort. 

Internal disturbances in the South and Central American coun- 
tries, and the Sino-Jaj)anese conflict in tlie Orient, necessitated fur- 
146 



CONCENTRATION OF EICONOMIC POWER 147 

ther shifts in American exports. This was especially true of export 
associations on the west coast that had built up a profitable business 
in China and now find that market closed. On the other hand, war 
clouds gathering in Europe increased the demand for some classes of 
American goods, and again there were shifts in exports across the At- 
lantic. 

The present conflict in Europe, begun in September 1939, has pre- 
sented further problems. It is too early to predict just what the 
effecr will be, and reports on the sales of the associations for 1939 are 
not yet in.^ Doubtless there are some products which are now in de- 
mand by belligerent countries vvliich may be shipped under the terms 
of the Neutrality Act, but many adjustments will be necessary. Some 
products that have been exported to the countries at war are not in- 
cluded in the lists of essentials that may now be purchased. Trans- 
portation facilities are in a state of reorganization ; new financing and 
credit plans must be devised. In the meantime there is an oppor- 
tunity for development of trade with our "good neighbors" on the 
south to replace products that they have heretofore purchased from 
Europe and cannot now obtain from that source. 

There is, therefore, a renewed interest in the Export Trade. Act 
today. The association type of organization is uppermost in the 
minds of exporters because no one company, however well equipped, 
can solve the problems that now confront our industries and exporters. 
The establishment of joint purchasing offices representing foreign 
countries suggests some form of joint selling to supply their needs. 
A number of new export associations are, therefore, under considera- 
tion. 

In reviewing the past 22 years of operation, we may perhaps fore- 
see the future, since export trade today is in much the same position 
as when this law was passed in 1918 : Before it lies a period of Euro- 
pean conflict and a further period of reconstruction. Again the prob- 
lems of shifting markets, uncertain credit, and foreign-trade restric- 
tions must be met in the years to come. Transportation facilities will 
again be changed when the Neutrality Act and other war conditions 
are at an end. Not only in Europe, but in the Orient there will be 
important changes and tremendous opportunities for the development 
of trade. It is to be hoped that the experience of the past will be of 
advantage to the export associations in meeting the problems of today 
and tomorrow through cooperative effort. 



* This report prepared In February 1940. 



257769 — 41— No. 



APPENDIX 

EXHIBIT 1 

EXPORT TRADE ACT (WEBB-POMERENE LAW, 
40 STAT. 516) 

[Public — No. 126 — 65th Congress] 

[H. R. 2316] 
AN ACT To promote exjJort trade, and for other purposes 

Be it ena ' i by the Senate ana House of Representatives of the 
United States of America in Congress assembled^ That the words 
"export trade" wherever used in this Act mean solely trade or com- 
merce in goods, wares, or merchandise exported, or in the course 
of being exported from the United States or any Territory thereof 
to any foreign nation; but the words "export trade" shall not be 
deemed to include the production, manufacture, or selling for con- 
sumption or for resale, within the United States or any. Territory 
thereof, of such goods, wares, or merchandise, or any act in the 
course of such production, manufacture, or selling for consumption 
or for resale. 

That the words "trade within the United States" wherever used 
in this Act mean trade or commerce among the several States or in 
any Territory of the United States, or in the District of Columbia, 
or between anj' such Territory and another, or between any such 
Territory or Territories and any State or States or the District of 
Columbia, or between the District of Columbia and any State or 
States. 

That the word "association" wherever used in this Act means any 
corporation or combination, by contract or otherwise, of two or more 
persons, partnerships, or corporations. 

Sec. 2. That nothing contained in the Act entitled "An Act to 
protect trade and commerce against unlawful restraints and monopo- 
lies," approved July second, eighteen hundred and ninety, shall be 
construed as declaring to be illegal an association entered into for 
the sole purpose of engaging in export trade and actually engaged 
solely in such export trade, or an agreement made or act done in the 
course of export trade by such association, provided such association, 
agreement, or act is not in restraint of trade within the United States, 
and is not in restraint of the export trade of any domestic com-. 
])etitor of such association: And provided further^ That such asso- 
ciation does not, either in the United States or elsewhere, enter into 
any agreement, understanding, or conspiracy, or do any act which 
artificially or intentionally enhances or depresses prices within the 

149 



150 CONCENTRATION OF ECONOMIC POWER 

United States of commodities of the class expyorted by such associa- 
tion, or which substantially lessens competition within the United 
States or otherwise restrains trade therein. 

Sec. 3. That nothing contained in section seven of the Act entitled 
"An Act to supplement existinfr laws against unlawful restraints and 
monopolies, and for other purposes," approved October fifteenth, 
nineteen hundred and fourteen, shall be construed to forbid the 
acquisition or ownership by any corporation of the whole or any part 
of the stock' or other capital of any corporation organized solely for 
the purpose of engaging in export trade, and actually engaged solely 
in such export trade, unless the effect of such acquisition or owner- 
ship rnay be to restrain trade or substantially lessen competition 
within the United States. 

Seo. 4. That the prohibition against "unfair methods of compe- 
tition" and the remedies provided for enforcing said prohibition 
contained in the Act entitled "An Act to create a Federal Trade 
Commission, to define its powers and duties, and for other purposes," 
approved September twenty-sixth, nineteen hundred and fourteen, 
shall be construed as extending to unfair methods of competiftion 
used in export trade against competitors engaged in export trade, 
even though the acts constituting such unfair methods are done 
without the territorial jurisdiction of the United States. 

Sec. 5. That every association now engaged solely in export trade, 
within sixty days after the passage of this Act, and every associa- 
tion entered into hereafter which engages solely in export trade, 
within thirty days after its creation, shall file with the Federal Trade 
Commission a verified written statement setting forth th^ location 
of its offices or places of business and the names and addresses of 
all its officers and of all its stockholders or members, and if a cor- 
poration, a copy of its certificate or articles of incorporation and 
bylaAvs, and if unincorporated, a copy of its articles or contract of 
association, and on the first day of January of each year thereafter 
it shall make a like statement of the location of its officers or places 
of business and the names and addresses of all its officers and of all 
its stockholders or members and of all amendments to and changes 
in its articles or certificate of incorporation or in its articles or con- 
tract of association. It shall also furnish to the commission suah 
information as the commission may require as to its organization, 
business, conduct, practices, management, and relation to other asso- 
ciations, corporations, partnerships, and individuals. Any associa- 
tion which shall fail so to do shall not have the benefit of the provi- 
sions of section two and section three of this Act, and it shall also 
forfeit to the United States the sum of $100 for each and every day 
of the continuance of such failure, which forfeiture shall be payable 
into the Treasury of the United States, and shall be recoverable in a 
civil suit in the name of the United States brought in the district 
where the association has its principal office, or in any district in 
which it shall do business. It shall be the duty of the various dis- 
trict attorneys, under the direction of the Attorney General of the 
United States to prosecute for the recovery of the forfeiture. The 
costs and expenses of such prosecution shall be paid out of the ap- 
propriation for the expenses of the courts of the United States. 

Wlienever the Federal Trade Commission shall have reason to 
believe that an association or any agreement made or act done by 



CONCENTRATION OF EJOONOMIC POWER 151 

such association is in restraint of trade within the United States or 
in restraint of the export trade of any domestic competitor of such 
association, or that an association either in the United States or 
elsewhere has entered into any agreement, understanding, or con- 
spiracy, or done any act which artificially or intentionally enhances 
or depresses prices within the United States of commodities of the 
class exported by such association, or which substantially lessens 
competition within the United States or otherwise restrains trade 
therein, it shall summon such association, its officers, and agents to 
appear before it, and thereafter conduct an investigation into the 
alleged violations of law. Upon investigation, if it shall conclude 
that the law has been violated, it may make to such association 
recommendations for the readjustment of its business, in order that 
it may thereafter maintain its organization and management and 
conduct its business in accordance with law. If such association 
fails to comply with the recommendations of the Federal Trade 
Commission, said commission shall refer its findings and recommen- 
dations to the Attorney General of the United States for such action 
thereon as he may deem proper. 

For the purpose of enforcing these provisions the Federal Trade 
Commission shall have all the powers, so far as applicable, given it 
in "An Act to create a Federal Trade Commission, to define its 
powers and duties, and for other purposes." 

Approved, April 10, 1918. 



EXHIBIT 2 



44 ASSOCIATIONS REPRESENTING 434 MEMBER COM- 
PANIES FILING PAPERS UNDER THE EXPORT TRADE 
ACT, FEBRUARY 1940 



American Box Shook Export Association, Barr Bldg., 

Washington, D. C. 
American Hardwood Exporters, Inc., Carondelet Bldg., 

New Orleans, La. 

American Paper Exports, Inc., 75 West St., New York 

American Provisions Export Co., 80 East Jackson Blvd., 

Chicago, 111. 
American Soda Pulp Export Association, 230 Park Ave., 

New York. 
American Spring Manufacturers Export Association, 30 

Church St., New York. 
American Tire Manufacturers Export Association, 30 

Church St., New York. 
California Alkali Export Association, 530 West 6th St., 

Los Angeles, Calif. 
California Dried Fruit Export Ass^iciation, 1 Drumm St., 

San Francisco, Calif. 
California Prune Export Association, 1 Drumm St., San 

Francisco, Calif. 
California Rice Exporters, 351 California St., San Fran- 
cisco, Calif. 

Carbon Black Export, Inc., 500 5th Ave., New York 

Cement Export Co., Inc., The, 150 Broadway, New York. 

Copper Exporters, Inc., 50 Broadway, New York 

Dbuglas Fir Export Co., Henry Bldg., Seattle, Wash 

Durex Abrasives Corporation, 63 Wall St., New York 

Electrical Apparatus Export Association, 70 Pine St., 

New York. 
Electrical Export Corporation, 100 West 10th St., Wil- 
mington, Del. 
Export Screw Association of the United States, 23 Acorn 

St., Providence, R. I. 
Florida Hard Rock Phosphate Export Association, 

Savannah Bank & Trust Bldg., Savannah, Ga. 

General Milk Co., Inc., 19 Rector St., New York 

Goodyear Tire & Rubber Export Co., The, 1144 East 

Market St., Akron, Ohio. 
International Wood Naval Stores Export Corporation, 

Gulfport, Miss. 
Metal Lath Export Association, The, 47 West 34th St., 

New York. 
Northwest Dried Fruit Export Association, Title and 

Trust Bldg., Portland, Oreg. 
Pacific Forest Industries, Tacoma Bldg., Tacoma, Wash.. 
Pacific Fresh Fruit Export Association, 333 Pine St., San 

Francisco, Calif. 
Pencil Industry Export Association 703 East 13th St., 

New York. 
Phosphate Export Association, 393 7th Ave., New York.. 

152 



ProducU 
Wooden box shooks. 

Hardwood lumber. • 

Paper products. 
Meat products. 

Soda pulp. 

Railway springs. 

Railway tires. 

AlkaH. 

Dried fruit. 

Dried prunes. 

Rice. 

Carbon black. 

Cement. 

Copper. 

Lumber, fir, etc. 

Abrasives. 

Electrical apparatus 

Do. 

Screws. 

Phosphate, hard rock. 

Milk, condensed. 
Rubber products. 

Wood naval stores. 

Metal lath. 

Dried fruit. 

Plywood. 
Fresh fruit. 

Pencils, pens, etc. 

Phosphate, pebble. 



CONCENTRATION OF ECONOMIC POWER 153 

Products 

Pipe Fittings and Valve Export Association, The, 1421 Pipe fittings, etc. 

Chestnut St., Philadelphia, Pa. 
Plate Glass Export Corporation, Grant Bldg., Pittsburgh, Plate glass. 

Pa. 
Potash Export Association, Inc., 21 East 40th St., New Potash, 

York. 
Redwood Export Co., 405 Montgomery St., San Fran- Lumber, redwood. 

Cisco, Calif. 
Rice Export Association, Queen and Crescent Bldg., New Rice. 

Orleans, La. 
Rubber Export Association, The, 19 Goodyear Ave., Rubber products. 

Akron, Ohio. 
Shook Exporters Association, 2718 Pershing Drive, Barrel shooks. 

Memphis, Tenn. 
Signal Export Association, 420 Lexington Ave., New Railway signals. 

York. 
Steel Export Association of America, The, 75 West St., Steel products. 

New York. 

Sugar Export Corporation, 120 Wall St., New York Sugar. 

Sulphur Export Corporation, 420 Lexington Ave., New Sulfur. 

York. 
Textile Export Association of the United States, 40 Worth Textiles. 

St., New York. 
United States Alkali Export Association, Inc., 11 Broad- Alkali. 

way. New York. 
Walnut Export Sales Co., Inc., 12th St. and Kaw River, Walnut lumber. 

Kansas City, Kans. 
Walworth International Co., 60 East 42d St., New York.. Pipe fittings, etc. 



EXHIBIT 3 

120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 ^ TO DECEMBER 1939,^ REPRESENTING 
2,074 MEMBER COMPANIES - 



Years 



Total num- 
ber of 
members 



Perlodif 
associ- 
ation 
opera- 
tion* 



Alabama-Florida Pitch Pine Export Association, 
New Orleans . 

Shipped pitch-pine lumber and timber to Latin- 
American markets, doing a substantial busi 
ness when first in operation. In 1932 it 
reported a lessening of exports but "despite 
depression we believe the advantages of our 
organization are many, enabling all the mills 
in our association to obtain a fair share of the 
business being oflFered." In 1933 conditions 
in South American countries made operation 
impossible and the association was dissolved. 

Members 

Alger-Sullivan Lumber Co., Century, Fla 

Brown-Florida Lumber Co., Cary ville, Fla 

Jackson Lumber Co., Lockhart, Ala 

Pensacola Lumber & Timber Co., Pensacola, 

Fla 

St. Andrews Bay Lumber Co., Millville, Fla... 
Swift Hunter Lumber Co., Atmore, Fla 

American Box Shook Export Association, Wash- 
ington, D. C 

Exports wooden shooks to foreign countries. 
The chief advantage reported by the associa- 
tion is the pooling of information and elim- 
ination of unnecessary expense in exporting. 

Members 

American Box Corporation, San Francisco 

Barnes, E. H., Co., New York 

Bloedel-Donovan Lumber Mills, Seattle 

Clover Valley Lumber Co., Loyalton, Calif 

General Box Co., Chicago 

Lea, David M., & Co., Richmond, Va 

Lewis-Bean Co. , Seattle 

McNeill, Lauff & McNeill, Thomson, Ga 

Miller Mfg. Co., Richmond, Va 



1929-33 
1929-33 
1929-33 

1929-33 
192^31 
1929-33 



1935-39 
1935-39 
1935-36 
1935-39 
1935-36 
1935-39 
1935-37 
1935-36 
1935-36 



1929-33 



13 



1935-39 



> This list does not Include a number of companies that filed paiwrs under misapprehension during the 
first year of operation; they were found to be engaged in business other than exporting, and were dropped 
from the Commission's list. 

* Includes also the Electrical Export Corporation formed in January 1940, and some changes shown In 
amiuaJ reports, January 1840. 

» The period of operation noted here dates from filing of papers by the Commission, and not from organiza- 
tion date. 

154 



CONCENTRATION OF ECONOMIC POWER 



155 



120 ASSOCIATIONS' FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



American Box Shook Export Association — Con. 

Neils, J., Lumber Co., Klickitat, Wash 

New England Box Co., Greenfield, Mass 

New Mexico Box & Lumber Co., Bernalillo, 

N. Mex 

Weyerhaeuser Sales (^., Chicago 



Years 



American Brake Beam Manufacturers Export 



Shipped brake beams for railway equipment to 
foreign countries. The association reported 
that "foreign business in any volume would 
be impossible without operating as an asso- 
ciation." In 1929, however, it was found 
that foreign car builders bought beams made 
in their own country, and replacement orders 
on American equipment usually went to the 
company that originally supplied the cars. 
The two member companies therefore de- 
cided to sell individually, and dissolved the 
association. 

Members 

American Steel Foundries, Chicago 

Chicago Railway Equipment Co., Chicago 



American Corn Products Export Association, New 

York 

Formed to export surplus of corn sirup, sugar, 
and starch, production of which was in- 
creased during the war. The association 
was a member of Grain Products Export 
Association, also formed under the act. It 
operated successfully for several years, re- 
porting that "the centralization of statis- 
tical and other information makes possible 
an intelligent distribution of stocks, accord- 
ing to the varying needs of foreign markets. 
The quality of American products in this in- 
dustry has been raised to a uniformly higher 
level as the result of the necessity of regard- 
ing the best quality of goods made by any 
member as the standard quality to be pro- 
duced by all. The facilities provided under 
the Webb-Pomerene Act place us in a posi- 
tion to combat foreign competition in a way 
that would not otherwise be possible." 
However, the association was seriously af- 
fected by increased production abroad and 
tariff barriers, and became dissolved in 1927. 

Members 

American Maize Products Co., New York 

American Maize Sales Corporation, New York. 
Anheuser-Busch, Inc., St. Louis. _: 



1935-36 
1935-39* 

1935-36 
1935-39 



Total num- 
ber of 
members 



1925-29 
1925-29 



1922-24 
1924-27 
1923-27 



Period of 
associ- 
ation 
opera- 
tion 



2 1925-29 



12 



1922-27 



156 



CX)NCE1NTRATI0N OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



American Cotn Products Export Association — 
Continued. 

Clinton Corn Syrup Refining Co., Clinton, Iowa 

Hubinger, J. C, Bros. Co., Keokuk, Iowa 

Huron Milling Co., Harbor Beach, Mich 

Keever Starch Co., Columbus, Ohio 

Penick & Ford Sales Co., Inc., New York 

Piel Bros. Starch Co., Indianapolis 

Staley, A. E., Manufacturing Co., Decatur, Ill- 
Union Sales Corporation, Columbus, Ind 

Union Starch & Refining Co., Edinburg, Ind__. 

American Export Door Corporation, Tacoma, Wash. 
Formed to ship doors to foreign markets, the 
association reported successful business, an 
increase in export demand for the members' 
products, and "a better spirit of cooperation 
amongst our several ma^ufar^turers, together 
with a keener appreciation ( f export trade." 
However, it became invol ed in litigation 
with one of its members {American Export 
Door Corp. v. John A. Ganger Co., 283 Pac. 
462) and was dissolved in 1930. 

Members (stockholders) 

Buflfelen Lumber & Manufacturing Co., Ta- 
coma, Wash 

Clear Fir Lumber Co., Tacoma, Wash 

Knox & Toombs, Hoquiam, Wash 

McCleary, Henry, Timber Co., McCleary, 
Wash 

Nicolai Door Manufacturing Co., Portland, 
Oreg -. 

Peterman Manufacturing Co., Tacoma, Wash.. 

Robinson Manufacturing Co., Everett, Wash.. 

Tregoning Manufacturing Co., Seattle, Wash.. 

Washington Door Co., Tacoma, Wash 

Wheeler-Osgood Co., The, Tacoma, Wash 

American Export Lumber Corporation, Philadelphia 
Formed in 1919 by members of the National 
Bureau of Wholesale Lumber Distributors, 
Inc., to ship lumber to the Allies for recon- 
struction of areas devastated by the World 
War. After some preliminary work, the 
corporation canceled its charter and became 
dissolved in 1920. 

Members (stockholders) 

Aberdeen Lumber Co., Pittsburgh 

Allied Sales Corporation, Tuscaloosa, Ala 

American Lumber & Manufacturing Co., Pitts- 
burgh 

Anguera Lumber & Tie Co., Chicago 

Blanchard Lumber Co., Boston 



1922-27 
1922-27 
1922-27 
1922-27 
1922-27 
1922-27 
1922-25 
1924-27 
1922-24 



1927-30 
1927-30 
1927-30 

1927-30 

1927-30 
1927-30 
1928-30 
1927-29 
1927-30 
1927-30 



10 



1927-30 



51 



1919-20 



I 



CONCENTRATION OF ECONOMIC POWER J 57 

120 ASSOCIATIONS' FORMED UNDER THE EXPORT 's RADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total nuni' 

berof 
members 



Period of 
associ- 
ation 
opera- 
tion 



American Export Lumber Corporation^ContiDued 

Bruner, Owen M., Co., Philadelphia 

Cain Hurley Lumber Co., St. Louis, Mo 

Chickasaw Lumber Co., Demopolis, Ala 

Coale, Thos. E., Lumber Co., Philadelphia. _. 

Colby & Dickinson, Inc., Seattle 

Coppock, S. & P., & Sons Co., Ft. Wayne, Ind. 

Craig Huff Lumber Co., Philadelphia 

Cross, B. W., Lumber Co., Pittsburgh. 

Currie & Campbell, Philadelphia 

Daley, E. H., Lumber Co., New York 

Danges, J. C, Lumber Co., Pittsburgh 

Davis, Henry D., Lumber Co., Portland, Oreg 

Dougherty McKay & Co., Valdosta, Ga 

Driver, L. F., & Co., Thomasville, Ga 

Duncan Lumber Co., Portland, Oreg 

Eitzen Touart Co., Pensacola, Fla 

Erie Lumber Co., Erie, Pa 

Germain Co., The, Pittsburgh 

Godfrey, L. N., & Co., New York 

Hallowell & Souder, Philadelphia 

Hammer, Thomas B., Philadelphia 

Herron, Lawton, Parks Co., Seattle 

Hettler, H. H., Chicago 

Hirsch Lumber Co., New York 

Houston Lumber Co., Thomasville, Ga 

Jemison, J. B., & Co., Thomasville, Ga 

Kreamer Lumber Co., Philadelphia 

Levy, A. J., Lumber Co., Philadelphia 

Mackintosh & Truman Lumber Co., Seattle 

Marsh & Truman Lumber Co., Chicago 

McLeod Lumber Co., Hattiesburg, Miss 

McWiUiams Lumber Co., Mobile, Ala 

Mickle, Geo. T., Chicago 

Rayner & Parker, Philadelphia 

Ryland & Brooks Lumber Co., Baltimore 

Saari-Tully Lumber Co., Portland, Oreg 

Sizer, R. B., & Co., New York 

Stitzinger, G. G., & Co., New Castle, Pa 

Stoner, E. H., Pittsburgh 

Truman, M. G., Chicago 

Turnbull, J. W., Lumber Co., Philadelphia 

Walker Johnston Lumber Co., Mobile, Ala 

Western Lumber Sales Co., Seattle 

Wilson, W. A., & Son, Wheehng, W. Va _. 

Wistar, Underhill & Nixon, Philadelphia 

Wyatt Prock Lumber Co., Philadelphia 



American Hardwood Exporters, Inc., New Orleans. 
Ships hardwood lumber to foreign countries. 

Members (stockholders) 



Anderson-Tully Co., Memphis, Tenn. 
Atlantic Lumber Co., Boston, Mass.. 
Bruce, E. L., Co., Memphis, Tenn 



1930-39 
1937-39 
1930-39 



1930-39 



158 



OONCBNTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS' FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total niun 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



American Hardwood Exporters, Inc. — Continued. 

Chicago Mill & Lumber Co., Chicago 

Frost Lumber Industries, Inc., Shreveport, La. 

Gayoso Lumber Co., Memphis, Tenn 

Hillyer Deutsch Edwards, Inc., Oakdale, La- 
Mobile River Saw Mill Co., Mt. Vernon, Ala- 
Pearl River Valley Co., Hammond, La 

American Locomotive Sales Corporation, New York 
Sold locomotives and spare parts; was a mem- 
ber of the Locomotive Export Association, 
cooperating with Baldwin Locomotive Works 
on export sales. In 1939, the Sales Corpo- 
ration advised that it was selling only for the 
American Locomotive Co., and was therefore 
not an association; withdrawing from opera- 
tion under the act. 

Members 



All stock held by the American Locomotive Co. 

American Maize Products Export Association, 
Chicago 

Name changed to United States Maize Prod- 
ucts Export Corporation in 1920. (See 
United States Maize.) 

American Milk Products Corporation, New York-. 

Name changed to General Milk Co. in 1930. 

(See General Milk.) 

American Paper Exports, Inc. , New York 

Exports paper and paper boards to all parts of 
world; in successful operation since 1918. 



1930-39 

1939 

1930-32 

1939 

1939 

1934-37 



1919-39 



Members {stockholders) 

Alpaugh, E. R., Jersey City, N. J 

American Realty Co., New York 

American Writing Paper Co., Holyoke, Mass.. 

Appleton Coated Paper Co., Appleton, Wis 

Berkshire Loan & Trust Co., Pittsfield, Mass-. 

Beveridge Paper Co., Indianapolis, Ind 

Bond, D. W., Philadelphia .-. 

Brown, L. L., Paper Co., Adams, Mass 

Brownville Paper Co., Brownville, N. Y 

Capelle, Geo. S., Jr., Philadelphia 

Caplin, S., Brooklyn, N. Y 

Carmichael & Co., Ltd., Sydney, Australia 

Chable, Louis, Ridgewood, N. J 

Chable, Marcelina, Trustee, Ridgewood, N. J.. 
Champion Coated Paper Co., Hamilton, Ohio-. 
Chemical Paper Manufacturing Co.,- Holyoke, 

Mass 

Collins, Grellet, Philadelphia 

Continental Paper & Bag Co., New York 



1920-22 
193&-39 
1918-24 
1918-39 
1923-25 
1919-24 
1922-24 
1918-39 
1918-24 
1918-39 
1918-26 
1918-26 
1918-35 
1918-26 
1919-25 

1918-29 
1918-24 
1933-37 



1919-39 



61 



1919 

1920-26 
1919-30 

1930-39 
1918-39 



I 



J 



CONCENTRATION OF ECONOMIC POWER 



159 



120 ASSOCIATIONS' FORMED UNDEE THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



AmericRD Paper Exports, Inc. — Continued. 

Crane & Co., Dalton, Mass 

Crane, Z. & W. M., Dalton, Mass 

Crocker- McElwain Co., Holyoke, Mass 

Detroit Sulpiiite Pulp & Paper Co., Detroit 

Dexter Sulphite Pulp & Paper Co., Dexter, 

N. Y 

Dill & Collins Co., Philadelphia. 

Franklin, Benj. A., Bridgeport, Conn 

Hammermill Paper Co., Erie, Pa 

Hastings, Arthur C, New York -. 

Hastings, Helen M., Devon, Pa 

Holyoke Card & Paper Co., Springfield, Mass.. 

Ideal Coated Paper Co., Broolffiold, Mass 

International Paper Co., New York 

Kimberly-Clark Corporation, Neenah, Wis 

LaBree, Benj., Jr., New York 

LaMonte, Geo., & Sons, New York 

Maratlion Paper Mills Co., Rothschild, Wis 

Marquardt, O. F., Philadelphia 

Martin-Cantine Co., Saugerties, N. Y 

Mcintosh, D. F., Jersey City, N. J 

Mt'I.auren-Jones Co., Brookfield, Mass 

Missisquoi Pulp & Paper Co., Sheldon Springs, 

Vt 

Monroe Binder Board Co., Monroe, Mich 

Moses, Horace A., Mittineague, Mass 

Mountain Mill Paper Co 

Muniford Paper Mills, Inc., Mumford, N. Y... 
Nashua Gummed & Coated Paper Co., Nashua, 

N. H 

Neuhauser, E. B. D., Philadelphia 

New York & Penn. Co., New York 

Parsons Paper Co., Holyoke, Mass 

Richmond Paper Manufacturing Co., Rich- 
mond, Va 

Rising, B. D., Paper Co., Housatonic, Mass 

Robertson, E. C, Hinsdale, N. H 

Robertson, W. F., Hinsdale, N. H 

Sanburn, W. H., Mittineague, Mass 

Stevenson, Louis T., Lee, Mass 

Strathmore Paper Co.. Mittineague, Mass 

Taylor, H. W., Philadelphia 

Ticonderoga Pulp & Paper Co., Ticonderoga, 

N. Y -._ 

United Paperboard Co., New York 

Ware Paper Co., Ware, Mass _. 

West Virginia Pulp & Paper Co., New York 

York Haven Paper Co., Philadelphia. _ _ 



American Pitch Pine Export Co., New Orleans. 

Sold pitch pine lumber and timber, as export 
agent for its stockholders and other lumber 
mills; also bought and sold on its own ac- 
count; developed a hardwood department 
in 1927, selling for a number of hardwood 



1918-39 
1919-26 
1918-35 
1919-24 

1918-23 
1918-19 
1918-26 
1918-34 
1918-26 
1922-25 
1918-24 
1919-22 
1918-39 
1918-39 
1919-24 
1920-29 
1919-24 
1922-24 
1918-35 
1918-39 
1922-25 

1919-27 

1919-24 

1918-26 

1918 

1920-35 

1919-24 
1922-24 
1918-26 
1918-39 

1918-35 
1918-39 
1919-25 
1919-25 
1918-26 
1920-26 
1918-26 
1922-26 

1918-35 
1918-39 
1919-22 
1918-39 
1919-33 



15 



1919-35 



160 



OONCENTRATION OF BOONOMIC POWER 



120 ASSOCIATIONS' FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
members 


Period of 
associ- 
ation 
opera- 
tion 


American Pitch Pine Export Co. — Continued. 

mills; and also in 1927 established export 
connections for manufacturers of boxes and 
box shooks. Operated successfully for a num- 
ber of years, reporting that through the ex- 
port association "both mill and buyer, lilce- 
wise agent and carrier, enjoy decided 
advantages." However, the supply of long 
leaf pine, the preferred export species, be- 
came depleted, and some of the member 
mills stopped cutting; exchange restrictions 
and other unfavorable conditions in Latin 
American markets made exportation diffi- 
cult; and the association became dissolved in 
1935. 








Members (stockholders) 








Bentley & Emery 


1919-29 
1919-35 
1919-30 
191&-35 
1921-25 
1928-35 
191&-21 
1919-29 
1919-21 
1919-35 
191&-35 
191S-22 
1919-20 
1921-27 
1919-31 






Eastman, Gardiner & Co 




Finkbine Lumber Co 




Great Southern Lumber Co 




Green Lumber Co 




Kirby Lumber Co - - 




Lamar Lumber Co 




Major-Sowers Sawmill Co 




Marathon Lumber Co __ 




Natalbany Lumber Co .- 




Newman J J Lumber Co 




Robinson Land & Lumber Co 




Wausau-Southern Lumber Co _ 




White Helen, Lumber Co - 




White, J. J., Lumber Co 




American Producers Export Corporation of Dela- 
ware, New York 




2 


1921-22 


Formed in 1921 to represent groups of pro- 
ducers in various lines, and to hold the stock 
of the American Producers Export Corpora- 
tion of New York. The plan was not suc- 
cessfully developed, and became abandoned 
in 1922. 






Members (stockholders) 








Samuels, Harold C, New York 








Guggenheimer, Newton, N. Y. 




American Producers Export Corporation of N. Y., 
New York ___ 




1 


1921-22 


Formed in 1921 to take over the business of the 
Seaboard Raw Products Co., and to repre- 
sent groups of producers in various lines. 
The plan was not successfully developed and 
became abandoned in 1922. All stock held 
by: 

American Producers Export Corporation of 
Delaware, New York 













CONCENTRATION OF ECONOMIC POWER 



161 



120 ASSOCIATIONS' FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
members 


Period of 
assod* 
ation 
opera- 
tion 


American Provisions Export Co., Chicago.- -_ 




20 

16 


1919-39 


Exports packing house products, incUiding 
meats, lard, cured pork products, oleos, and 
white grease, reporting a saving in operating 
expense due to combination of export depart- 
ments of members in one association export 
office. 

Members (stockholders) 

Armour & Co., Chicago 


1927-39 

1919-26 

1919-31 

1924-27 

1919-39 

1919-39 

1919-39 

1932-34 

1919-25 

1919-24 

1919-25 

1927-34 

1919 

1919-25 

1928-39 

1934-39 

1919-31 

1919-31 

1927-39 

1927-39 




Boyd Lunham & Co., Chicago 




Cleveland Provision Co., The, Cleveland 

Decker, Jacob E., & Sons, Mason City, lowa.. 

Dold, Jacob, Packing Co., Buffalo, N. Y 

Hammond Standish & Co., Detroit 




Hormel, Geo. A. & Co., Austin, Minn 




Hygrade Food Products Co., Chicago 




Indianapolis Abattoir Co., Indianapolis 

Iowa Packing Co., Des Moines, Iowa .. 




Miller & Hart, Chicago.. . 




North Packing & Provision Co., Boston.. 

Parker Webb & Co., Detroit 




Roberts & Cake, Chicago 




Sinclair, T. M., & Co., Ltd., Cedar Rapids, Iowa 
Squire, John P., Co., Chicago 




St. Louis Independent Packing Co., St. Louis.. 

Sullivan Packing Co., Detroit 

Swift & Co., Chicago 

Wilson & Co., Chicago 




American Rice Export Corporation, Crowley, La 


1927-33 


Formed in 1927 to purchase rice from mills and 
farmers in Louisiana and Texas, and export 
to foreign countries; became dormant, but 
filed papers for several years, reporting that 
"during our active period, we found great 
advantage would accrue from the consoli- 
dation of export sales through the medium 
of one organization." 

Members (stockholders) 

Boyt, A. H., Beaumont, Tex 


1927-31 
1927-31 
1927-31 
1927-31 
1927-31 
1927-31 
1927-33 
1927-31 
1927-31 
1927-31 
1927-31 
1927-31 
1931-33 




Erwin, M. P., Lake Charles, La. . . _ .. 




Farmers Land & Canal Co., Inc., Lake Charles.. 

Gardiner Plantation Co., Inc., Lake Charles 

Hollins, A., Lake Charles. .. . _ 




Houston River Canal Co., Lake Charles 

Kaplan, A., Crowley, La 




King, Geo. M., Lake Charles 

Lacassine Irrigation Co., Jennings, La 

La. Irrigation & Mill Co., Crowley, La 

Prairie Land & Canal Co., Inc., Lake Charles. . 

Sabine Canal Co., Lake Charles 

Simon, L. M., Houston, Tex ' 





162 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
members 


Period of 
associ- 
ation 
opera- 
ation 


American Rice Export Corporation — Continued. 
Southwest Louisiana Farm Mortgage Co., 
Lake Charles. 


1927-31 
1927-31 
1927-31 






Sweetlake Land & Oil Co., Inc., Lake Charles. . 
Todd, 0. J., Beaumont, Tex 




American Soda Pulp Export Association, New York. 
The association handles exports of bleached 
soda pulp for the member companies; quota- 
tions made on the individual brands. The 
principal advantage reported is that the 
members can sell and the foreign purchasers 
can buy througli one central office. 




11 


1919-39 






Members 








Champion Coated Paper Co., Hamilton, Ohio.. 
Champion Fibre Co., Hamilton, Ohio 


1919 

1920-22 

1919-29 

1921-23 

1919-27 

1919-22 

1922-25 

1919-39 

1919-39 

1919-22 

1919-23 






Columbian Paper Co., Philadelphia . 




Dill & Collins, Philadelphia 




Jessup & Moore Paper Co., Philadelphia 

Kingsport Pulp Corporation, Kingsport, Tenn.. 
Mead Fibre Co., Dayton, Ohio 




New York & Pennsylvania Co., New York 

Penobscot Chemical Fibre Co., Boston 

Ticonderoga Pulp & Paper Co., Ticonderoga. . 
Warren S. D., Co., Boston 




American Soft Wheat Millers Export Corp., Wash- 
ington, D. C 




41 


1927-34 


Organized in 1927 to sell flour for export to 
foreign markets through a sales manager in 
New York, the association reported that it 
"furnished an outlet for a lot of the soft 
wheat flour in Maryland and Pennsylvania 
that they would not have had otherwise." 
It prospered until 1929 when it began to feel 
the effects of increased production of wheat 
and flour abroad, under governmental en- 
couragement and restrictions placed on im- 
ports, as well as requirements for certain 
proportions of local grain to be used in mil- 
ling. Foreign demand for American flour 
lessened to such an extent that the cor- 
poration abandoned its business in 1934. 






Members (stockholders) 








Baruitz, William B., Carlisle, Pa 


1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-34 
1927-34 
1927-33 






Beam, W. B., Camp Hill, Pa 




Bowman Bros., Gaithersburg, Md 




City Flouring Mills, Muncy, Pa 

Derwood Mill, Derwood, Md 

Ecker, A. W., & Son, Thurmont, Md 

Felix & Lindsav, Newville, Pa 




Felton & Kelly, Frederick, Md 





i 



CONCENTRATION OF ECONOMIC POWER 



163 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




American Soft Wheat Millers Export Corp. — Con. 

Flory Bros., Lancaster, Pa 

Franklin Milling Co., Middleburg, Pa 

Frey Bros., Salunge, Pa 

Girvin, W. B., Leola, Pa 

Hefty Milling Co., Watsontown, Pa 

Heishman, B. F., Carlisle, Pa 

Hershey, S. W., Flouring Mills, York, Pa 

Hess, A. S., & Son, Kinzers, Pa 

Hickerson Bros., Rockville, Md 

Hoffman, W. A., Chadds Ford, Pa 

Hunsecker, H. S., Willow Street, Pa 

Huntingdon Milling Co., Huntingdon, Pa 

Jefferson Milling Co., Charles Town, W. Va... 

Kline Bros., Boonsboro, Md 

Lakeview Milling Co., Chambersburg, Pa 

Lancaster Milling Co., Lancaster, Pa 

Lansdale, R. H., Sandy Spring, Md ' .-.. 

Liberty Milling Co., Germantown, Md 

Patterson Milling Co., Saltsburg, Pa 

Pennock, J. L., & Co., Avondale, Pa 

Pleasant Valley Roller Mills, W. Leesport, Pa. 

Pottstown Roller Mills, Pottstown. Pa 

Red Bank Mills, New Bethlehem, Pa 

Rohrer, Ross H., Quarrvville, Pa 

Round Hill Milling Co..' Round Hill, Va 

Routzahn, C. E., BreathedsviUe, Md 

Sees Milling Co., Williamsport, Pa 

Summit Milling Co., Gaithersburg, Md 

Tyrone Milling Co., Tyrone, Pa 

Wentzel, H. R., Landisburg, Pa 

Wilkins-Rogers Milling Co., Washington, D. C. 

Willis, C. S., Leraovne, Pa 

Willow Bank Roller Mills, Lititz, Pa 



American Spring Manufacturers Export Associa- 
tion, New York 

Sells its members' products, railway steel 
springs, in foreign markets. It reports that 
"cooperation between the various members 
enables the cost of marketing our products 
abroad to be distributed among all of the 
compai 'es, and likewise enables us to obtain 
and have available at one centralized point 
a great deal of foreign-trade information 
that is quite necessary in the successful 
handling of an export business sucli as this." 

Members 

American Locomotive Co. (Railway Steel 
Spring Division), New York 

American Spiral Spring & Manufacturing Co., 
Pittsburgh 

American Steel Foundries, Chicago 

2.".7760— 41— No. 6 12 



1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-34 
1927-33 
1927-33 
1927-33 
1927-34 
1937-33 
1927-34 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1 927-33 
1927-33 
1927-33 
1927-33 
1927-33 
1927-33 



1934-39 

1924-39 
1923-39 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



1923-39 



164 



CONCENTRATION OP ECONOMIC POWER 



120 ASSOCIATIONS FOKMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



American Spring Manufacturers Export Associa- 
tion — Continued. 

Crucible Steel Co. of America, New York 

Fort Pitt Spring & Manufacturing Co., Pitts- 
burgh 

Railway Steel Spring Co., New York.. 

Standard Steel Works Co., Philadelphia 

Union Spring & Manufacturing Co., Pitts- 
burgh -. 

American Surface Abrasives Export Corporation, 
New York . 

Exported abrasives produced by the member 
companies from 1923 to 1931, reporting 
"successful promotion of foreign business 
of American manufacturers, and more or- 
derly and economical distribution of the 
export product." In 1930, its members 
formed the Durex Abrasives Corporation, 
which is still in operation (see Durex.) 

Members {stockholders) 

American Glue Co., Boston 

Armour & Co., Chicago . 

Armour Sand Paper Works, Chicago 

Baeder Adamson Co., Philadelphia 

Barton, H. H., & Son Co., Philadelphia 

Behr, Herman, & Co., Inc., Brooklyn 

Behr-Manning Corporation, Troy, N. Y 

Carborundum Co., The,. Niagara Falls, N. Y... 

Manning Abrasives Co., Troy, N. Y , 

Minnesota Mining & Manufacturing Co., St. 

Paul, Minn 

U. S. Sand Paper Co., Williamsport, Pa 

Wausau Abrasives Co., Wausau, Wise 



American Tanning Materials Corporation, New 
York 

Organized in 1919, the association operated 
successfully, disposing of surplus tanning 
and dyeing extracts, abroad, until a lessen- 
ing of foreign demand led to dissolution of 
the corporation in 1923. 

Members (stockholders) 

Andrews Tanning Extract Co., Andrews, N. C. 

Brevard Tannin Co., Pisgah Forest, N. C 

Chapipion Fibre Co., Canton, N. C 

Gardner Extract Co., Basic City, Va 

Grant Leather Co., Kingsport, Tenn 

Heald, J. H., & Co., Lynchburg, Va 

Kingsport Extract Corporation, Kingsport, 

Tenn 

Marion Extract Co., Marion, Va 



1924-39 

1923-29 
1923-34 
1923-39 

1924-29 



1923-31 
1928-31 
1923-28 
1923-31 
1923-31 
1923-28 
1928-31 
1923-31 
1923-28 

1923-31 
1923-31 
1923-31 



1919-23 
1919-20 
1919-23 
1919-23 
1922-23 
1919-20 

1919-22 
1919-23 



12 



1923-31 



13 



1919-23 



CONCENTRATION OF ECONOMIC POWER 



165 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



American Tanning Materials Corporation — Con. 

Smethport Extract Co., Damascus, Va 

Smoot, C. C, & Sons, Alexandria, Va 

Southern Extract Co., Knoxville, Tenn 

Watauga Extract Co., Eliza bethton, Tenn.. 
Young, H. E., & Co., Charlottesville, Va... 



1919-23 
1919-23 
1919-23 
1919-23 
1919-23 



American Textile Machinery Corporation, Boston.. 
Organized in 1919 to handle export sales of tex- 
tile machinery, in the European market, the 
association operated successfully reporting 
in 1922 a saving of one- third in expenses 
through consolidation of export arrange- 
ments. Market conditions abroad, how- 
ever, led to withdrawal from the export field 
of some of the members, and those remain- 
ing decided to sell individually. The asso- 
ciation was therefore dissolved in 1925. 

Members (stockholders) 

Crompton & Knowles Loom Works, Worces- 
cester, Mass 

Draper Corporation, Hopedale, Mass.. 

Ketchum, Phillips, Boston 

Lockwood, Greene & Co., Boston 

Saco-Lowell Shops, Boston 

Whitin Machine Works, Whitinsville, Mass 

American Textile Trading Co., New York 

Organized in 1930 to export cotton yarns and 
goods, the association operated successfully 
until affected by the depression and political 
situation in Latin-American markets, and by 
depreciated currency in Europe, which les- 
sened the volume of exports and led to dis- 
solution of the company in 1934. 

Members 

Aberfoyle Mfg. Co., Philadelphia 

American Yarn & Processing Co., Mount Holly, 
N. C 

Dixie Mercerizing Co., Chattanooga, Tenn 

Hampton Co., The, Easthampton, Mass 

Spinners Processing Co., Charlotte, N. C 

Standard-Coosa-Thatcher Co., Chattanooga, 
Tenn... 



1919-22 
1919-22 
1922-23 
1919-25 
1919-23 
1919-22 



1930-34 

1930-34 
1930-34 
1930-31 
1930-34 

1930-34 



American Tire Manufacturers Export Association, 
New York 

Exports railway steel tires, reporting that: 
The association makes for economy in work- 
ing as a single unit instead of having a sep- 
arate sales organization for each company 
and has been an advantage to the members 
in handling of shipping documents and the 



1919-25 



1930-34 



1923-39 



166 



OONCBNTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



American Tire Manufacturers Export Association — 
Continued. 

centralization of inquiries and orders. It not 
only provides for dealing more effectively 
with foreign competition, but makes possible 
better service to the customers, splitting 
large orders among two or three members of 
the association to obtain quicker completion 
than would be the case if one company re- 
ceived the entire order." 

Members 

Chrome Steel Works, Carteret, N. J 

Edgewater Steel Co., Pittsburgh 

Midvale Co., The, Philadelphia 

Midvale Steel & Ordnance Co., Philadelphia 

Railway Steel Spring Co., New York 

Railway Steel Spring Division of American 

Locomotive Co., New York 

Standard Steel Works Co., Burnham, Pa 



Years 



American Webbing Manufacturers Export Assoc, 
New York 

Formed in 1919 to export elastic and non- 
elastic webbing manufactured by the mem- 
ber companies, the association developed a 
profitable business abroad. It reported 
that: "Perhaps the principal advantage in 
the export company is found in the fact 
that it relieves the members of the multi- 
tude of details peculiar to export business, 
which would not be easy for them to handle 
owing to the fact that the factories are all 
in the interior. There is a great advantage 
to the customer whereby he is enabled to 
purchase the most of his wants or require- 
ments in this line from one source * * * 
he has been able to see either at the offices 
of our agents in the several countries, or at 
our offices in New York if he came here, a 
very complete line of elastic webbing and 
other articles, whereas he would have to 
visit many places to see the same merchan- 
dise in our members' offices." In 1932 the 
association reported losses due to depression 
conditions, the exchange situation, and the 
fact that lower costs abroad made it impos- • 
sible to compete with products of foreign 
competitors. It was therefore dissolved in 
1932. 

Members 

American Mills Co., Waterbury, Conn 

Ansonia O. & C. Co., Ansonia, Conn 

Colton, Geo. S., Elastic Web Co., Easthampton, 
Mass _- 



1923-28 

1923-39 

1923-39 

1923 

1923-34 

1934-39 
1923-39 



Total nuni' 

bcr of 
members 



Period of 
associ- 
ation 
opera- 
tion 



1919 
1919 

1919-28 



1919-32 



CONCENTRATION OF ECONOMIC POWER 



167 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



American Webbing Manufacturers Export Assoc. — 
Continued. 

Conant, Houghton & Co., Inc., Littleton, 

Mass --. 

Everlastik, Inc., Chelsea, Mass 

Rhode Island Textile Co., ,Pawtucket, R. I_.. 

Sanford Narrow Fabric Co., New York 

Waterbury Buckle Co., Waterbury, Conn 



Associated Button Exporters of America, Inc., New 
York 

Formed in 1921 to include a number of button 
companies, some of which were filing sep- 
arately under the act; the association estab- 
lished agencies abroad but met with keen 
competition from foreign manufacturers 
whose production costs were lower, espe- 
cially the Japanese selling in Latin- American 
markets. Sales were made for several years, 
but the association finally became dis- 
solved in 1933. 

Members (stockholders) 

American Pearl Button Co., Washington, Iowa 
Automatic Pearl Button Export Co., Musca- 
tine, Iowa 

Clandere Export Corporation, New York . 

Davenport Pearl Button Export Co., Daven- 
port, Iowa 

Hampshire Pearl Button Co., Amsterdam, N. Y. 
Hawkeye Pearl Button Export Co., Inc., Musca- 
tine, Iowa 

Howell, Charles M., Waltham, Mass 

McKee-Bliven Button Co., Muscatine, Iowa._- 
Mississippi Pearl Button Co., Burlington, Iowa. 
Nord-Buffum Pearl Button Co., Louisiana, Mo. 
Pioneer Pearl Button Export Co., Pough- 

keepsie, N. Y 

U. S. Button Co., Muscatine, Iowa 

Wisconsin Pearl Button Co., La Crosse, Wis 

Atlantic & Gulf Export Co., Jacksonville, Fla 

This association filed papers in 1921, with in- 
tention of exporting naval stores; but never 
came into operation. Its president, W. B. 
Gillican, joined the Naval Stores Export 
Corporation, formed under the act in 1923. 

Members (stockholders) 

Aycock, Thos. J., Turpentine Co., Loughridge, 
Fla 



Baldwin-Lewis Co., Jacksonville 

Brooks-Scanlon Corporation, Biloxi, Miss.. 
Bullard, A. F., De Funiak Springs, Fla 



Years 



1919-28 

1919-28 

1919 

1919-28 

1919 



Total num 

ber of 
members 



1921-33 

1921-33 
1921-33 

1921-33 
1921-33 

1921-33 
1921-33 
1921-33 
1921-33 
1921-33 

1921-33 
1921-33 
1921-33 



13 



38 



Period of 
associ- 
ation 
opera- 
tion 



1921-33 



1921 



168 



OONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total nam' 

berof 
members 



Period of 
associ- 
ation 
opera- 
tion 



Atlantic & Gulf Export Co. — Continued. 

Coachman, W. F., Jacksonville 

Columbia Naval Stores Co., Savannah 

Consolidated Naval Stores Co., Jacksonville. .. 

Cranford, J. A., Jacksonville 

Darling, A. C, Andalusia, Ala --. 

Davis, J. B., & Co., De Funiak Springs, Flal.. 

Downing Co., Brunswick, Ga 

Fendig, A., Brunswick, Ga 

Fleishel, M. L., Jacksonville 

Flynn, D. M., Jacksonville 

Flynn-Harria-BuUard Co., Jacksonville 

Foley, J. S., Eastport, Fla .. 

Gay, D. J., Biloxi, Miss 

Gillican, W. B., New Orleans 

Gillican, W. B., agent. New Orleans 

Green, Charle?, Laurel, Miss 

Guild, W. E., Jackson, Miss 

Kelly, W. J., Jacksonville 

Knox, L. J., Mobile, Ala 

Lewis, J. G., Jacksonville 

Mcintosh, 0. T., Savannah 

Medlin, J. L., Jacksonville 

Nash, J. C, Savannah 

Operators Naval Stores Co., Jacksonville 

Peninsular Naval Stores Co., Jacksonville 

Powell, John H., Jacksonville 

Putnam Lumber Co., Jacksonville 

Rose and Dasher, Valdosta, Ga 

Rose, E. P., Valdosta, Ga 

Southern States Naval Stores Co., Savannah-. 

Taylor, J. A., New Orleans _- 

Wade, N. G., Jacksonville 

Weibert, H., Jacksonville-. — .- 

Williams & Rose, Valdosta, Ga 

Automatic Pearl Button Export Co., Inc., Musca- 
tine, Iowa 

Organized to handle export business of the 
Automatic Button Co.; was also a member 
of the Associated Button Exporters of 
America, Inc., filing under the act. Op- 
erated on a small scale for several years, but 
found it impossible to compete with foreign 
producers, and therefore dissolved the ex- 
port company in 1929. 

Member^ (stockholders) 

Automatic Pearl Button Co., Muscatine, Iowa 

Coates, J. H., Rowayton, Conn — 

Fack, H. H., Muscatine, Iowa 

Unlandt, A. M., Muscatine, Iowa 

Unlandt, Carl H., Muscatine, Iowa 

Unlandt, Wm., Muscatine, Iowa 



1921-29 



1921-29 
1921-25 
1921-29 
1927-29 
1925-29 
1921-29 



I 



CONCENTRATION OF ECONOMIC POWER 



169 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
members 


Period of 
associ- 
ation 
opera- 
tion 


California Alkali Export Association, Los Angeles. _ 




3 

54 


1936-39 


Ships soda ash and products thereof to foreign 
countries, cooperating with the U. S. Alkali 
Export Association, an older group operating 
under the act. Among other advantages, the 
association reports that export shipments are 
so distributed "that foreign markets are not 
periodically glutted with our soda ash by 
too much tonnage at one time." 

Members (stockholders) 

American Potash & Chemical Corporation, Los 
Angeles _- 


1936-39 
1936-39 
1936-39 




Pacific Alkali Co., Los Angeles 




West End Chemical Co., Oakland, Calif 

California Dried Fruit Export Association, San 
Francisco 


1925-39 


Ships dried fruits to foreign markets, reporting 
as the outstanding advantages of association 
operation "uniform sales terms and sound 
trade customs" in export trade, the associa- 
tion providing for inspection and certifica- 
tion of goods exported. Its membership is 
divided into 2 parts, including packers and 
merchants: 

Packers' Division 

Balfour-Guthrie & Co., Ltd., San Francisco 

Barron-Gray Packing Co., San Jose 


1932-39 
1925-29 
1928-39 
1925-39 

1925-39 
1933-39 
1925-29 
1934-39 
1929-39 
1925-30 
1925-39 
1925-32 
1925-37 
1928-39 
1928-35 
1929-34 
1925-27 
1925-39 
1926-28 
1925-39 
1925-39 
1925-27 
1937-39 

1930-39 
1933-38 




Bonner Packing Co. , Fresno .. 




California Packing Corporation, San Francisco. 
California Prune & Apricot Growers' Associa- 
tion, San Jose .. _____ 




ConsoUdated Packing Co., San 1?rancisco 

Coykendall, Inc., Berkeley, Calif.' 




Dick, C. L., & Co., San. Jose . 

El Solyo Ranch, Vernalis, Calif 




Garcia & Maggini Co., San Francisco 




Guggenhime & Co., San Francisco 




Harlan, 0. A., & Co., San Jose 




Herbert, Geo. N., Inc., San Jose. 




Horst, E. Clemens, Co., San Francisco 

Inderrieden, J. B., Co., San Francisco 

Jenks, W. T., Co., Inc., San Jose 




Malaga Packing Co., Fresno 




Napa Fruit Co., Napa, Calif __ 




Pacific Coast Canners, Inc., Oakland 




Richmond-Chase Co., San Jose . _ ._ 




Rosenberg Bros. & Co., San Francisco __ 

Smith-Frank Packing Co., Sacramento 

Turlock Dehydrating & Packing Gp., Inc., 

Turlock, Calif. 
Warren Dried Fruit Co., San Jose 




Wilbur-Ellis Co., San Francisco 





170 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
memben 


Period of 
associ- 
ation 
opera- 
tion 


California Dried Fruit Export Association — Con, 
Merchants Division 
Abeling, Geo. , Co. , San Francisco 


1929-39 

1939 

1928-39 

1925-32 

1926-27 

1938-39 

1925-38 

1926-27 

1925-33 

1929-34 

1929-39 

1925-39 

1925-30 

1939 

1935-39 

1925-39 

1925-32 

1927-29 

1926-32 

1925-39 

1928-39 

1928-32 

1925-37 

1939 

1925-29 

1926-32 

1927-33 

1930-33 

1939 


7 




Andersen, F. E., Co., San Francisco 




Atkins Kroll & Co., Inc., San Francisco 

Balfour-Guthrie & Co., San Francisco 




Beesemyer- Waggoner, Inc., Los Angeles 

Berelson, D. B., & Co., San Francisco 

California Fruit Selling Co., San Franci.sco 

California Pacific Mer. Co., San Francisco 

Catz American Co., San Francisco 




Eyre, Edward L., & Co., San Francisco 

Feibusch, M., San Francisco 




Field, Walter M., & Co., San Francisco 

General Commercial Co., Ltd., San Francisco. 
Geron, Geo. A., San Francisco. 




Gomperts, Jack, & Co., San Francisco 

Hall, Harry, & Co., Inc., San Francisco 

Newhall, H. M., & Co., San Francisco 

O'Malley- Abeling Co., San Francisco 




O'Neill, Eugene M., San Francisco 




Otis, McAllister & Co., San Francisco 




Parrott & Co. , San Francisco 




Peabody, Henry W., & Co., San Francisco 

Schuckl & Co., San Francisco. 




Sievers, Paul F. L., San Francisco 




Smillie, Chas. F., & Co., San Francisco 

Stahlbaum, Rolf, San Francisco - 




Waggoner, Norman L., Inc., San Francisco 

Wilbur-Ellis Co., San Francisco.. 




Wileman Bros. & Elliott, San Francisco 

California Prune Export Association, San Francisco. 


1936-39 


Organized in 1936, to meet special conditions 
in the prune export trade, the first agreement 
was limited to a 3-month period, but was 
thereafter extended to 20 years; and the 
association has served when needed. Its 
members are, with one exception, members of 
the California Dried Fruit Export Associa- 
tion, and the two associations have the same 
secretary. 

Members 

California Packing Corp., San Francisco 

California Prune & Apricot Growers Assoc, 
San Jose 


1936-39 

1936-39 
1936-39 
1936-39 
1936-39 
1936-39 

1938-39 




Guggenheim & Co., San Francisco 




Libby, McNeil & Libby, San Francisco 

Richmond-Chase Co., San Jose 




Rosenberg Bros. & Co., San Francisco 




Warren Dried Fruit Co. (associate member) 
San Jose 





CONCENTRATION OF ECONOMIC POWER 



171 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



California Rice Exportets, San FraftciBco. _. 

Organized in 1939 to export rice and rice prod- 
ucts to foreign markets. 

Members 

Capital Rice Mills, San Francisco 

Grosjean, C. E., Rice Milling Co., San Fran- 
cisco 

Rice Growers Assoc, of Cal., Sacramento 

Rosenberg Bros. & Co., San Francisco 

Woodland Rice Co., Woodland, Calif 



1939 



California Sardine Export Association, San Fran- 
cisco 

Organized in 1928, the association did some 
work toward development of export trade, 
placing members in contact with new mar- 
kets and buyers, furnishing information on 
export markets, and entering into agree- 
ments for standardization of the pack. But 
thefe was a serious break in price in 1929, 
some members were unwilling to sell at lower 
prices, and the association became inopera- 
tive, filing no reports after 1930. 

Members 

Booth, F. E., Co., Inc., San Francisco 

California Packing Corporation, San Francisco. 

Carmel Canning Co., San Francisco. 

Coast Fishing Co., Wilmington, Calif 

Del Mar Canning Corporation, Monterey, 

Calif 

Fran CO- Italian Packing Co., Terminal Island, 

Calif... 

French Sardine Co., Inc., Terminal Island, 

Calif 

General Fisheries Corporation, San Pedro, Calif. 

Gross, E. B., Canning Co., Monterey, Calif 

Hovden, K., Co., Monterey, Calif 

Italian Food Products Co., Long Beach, Calif.. 
Kittle-Joerissen Canning Co., Terminal Island. 
Linde Packing Corporation, Terminal Island, 

Calif.. 

L. A. Sea Food Packing Co., Terminal Island, 

Calif 

Monterey Canning Co., Monterey, Calif 

San Carlos Canning Co., Monterey, Calif 

San Xavier Fish Packing Co., San Francisco... 

Sea Pride Canning Co., Monterey, Calif 

Southern California Fish Cor^ioration, Terminal 

Island, Calif 

Stafford Packing Co., Wilmington, Calif 

Toyo Fisheries Co., Inc., Wilmington, Calif 

Van Camp Sea Food Co., Inc., Terminal 

Island, Calif 

Wedum Packing Co., Wilmington, Calif... 



23 



1928-30 



1928-30 
1928-29 
1928-30 
1928-29 

1929-30 

1928-30 

1928-30 
1929-30 
1928-30 
1928-30 
1928-30 
1928 

1929-30 

1928 

1928-30 

1928-29 

1928-29 

1928-30 

1928-30 

1928 

1928 

1928-30 
1928-29 



172 



C?ONCBNTBATION OF ECONOMIC POWER 



120 ASSOCIATIONS FOKMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period c{ 
associ- 
ation 
opera- 
tion 



Canned Foods Export Corporation, Washington, 
D. C 

Organized in 1919 to export canned foods, the 
corporation maintained an oflSce with the 
National Canners Association, and invited 
members of the canners association to join 
and subscribe to stock. Not suflBcient 
interest was shown, and no business was 
transacted. The corporation filed papers 
until 1923, then became dissolved. 

Organizers were — 

Baines, John R., Baltimore, Md. 
Polk, Ralph B., Greenwood, Ind. 
. Shriver, Jos. N., Westminster, Md. 

Stock was issued to — 

Nardin, Wm. T., St. Louis, Mo., (Mr. Nardin 
became vice president of uhe American Milk 
Products Corporation, now operating under 
the act as the General Milk Co., Inc.). 

Carbon Black Export Association, Inc., New York.. 
Operating from 1929 to 1933 under depression 
conditions, the association reported that 
"by acting in concert, members were able to 
( stablish safeguards in connection with trade 
in such foreign countries where currencies 
were unstable and exchange transactions 
extremely difficult." In 1933 the associa- 
tion became dissolved, and in 1934 four of 
the member companies joined with others to 
form the Carbon Black Export, Inc., under 
the act. 



Members (stockholders) 

Binney & Smith Co., New- York 

Cabot, Godfrey L., Inc., Boston 

GreeflF, R. W., & Co., Inc., New York.. 

Huber, J. M., Inc., New York 

Palmer Gas Products Corporation, 

Chicago 

United Carbon Co., Charleston, W. Va.. 
Wishnick-Tumpeer, Inc., New York 



The, 



Carbon Black Export, Inc., New York 

Ships carbon black to foreign countries. Among 
other advantages, it is reported that cen- 
tralized operation of the association has 
enabled the members to share the risks in 
exportation during the depression period. 
Membership includes some of the companies 
that held stock in the Carbon Black Export 
Association, Inc., as well as others. 



1929-33 
1929-32 
1929-33 
1929-33 

1929-33 
1929-33 
1932-33 



4 1919-23 



1929-33 



1935-39 



CONCENTRATION OP ECONOMIC POWER 



173 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total nuni' 

berof 
members 



Period of 
associ- 
ation 
opera- 
tion 



Carbon Black Export, Inc. — Continued. 

Members (stockholders) 

Cabut, Godfrey L., Inc., Boston 

Century Carbon Co., New York 

Columbia Carbon Co., New York 

Huber, J. M., Corporation, New York ^... 

Johnson, Chas. Eneu. & Co., Philadelphia 

Palmer Carbon Co., The, Chicago 

Panhandle Carbon Co., New York 

Texas Carbon Industries, Inc., Sayre, Okla... 
United Carbon Co., Inc., Charleston, W. Va._. 

Carolina Wood Export Corporation, Norfolk, Va._. 
Organized in 1919 to ship lumber and wood 
products to foreign countries; the association 
reported in 1920 that- it was unable to carry 
on business due to the prevailing rates of ex- 
change and depressed conditions in foreign 
lumber markets. The business was liqui- 
dated in 1923. 

Members (stockholders) 

Adams & Graham, Hamlet, N. C 

Burton, E. P., Lumber Co., Charleston, S. C. 

Camp Manufacturing Co., Franklin, Va 

Eureka Lumber Co., Washington, N. C 

Fosburgh Lumber Co., Norfolk, Va 

Home Building & Material Co., The, Asheboro, 

N. C 

Jennings, J. F., Bamberg, S. C 

Marion County Lumber Corporation, Frank- 
lin, Va 

Montgomery Lumber Co., Suffolk, Va 

Nichols, W. S., South Boston, Va 

Roper, John L., Lumber Co., Norfolk, Va 

Rowland Lumber Co., Norfolk, Va 

South Atlantic Lumber Co., Greensboro, N. C. 
Tuxbury, A. C, Lumber Co., Charleston, S. C. 

Cement Export Co., The, Philadelphia and New 
York 

Organized in 1919 to ship cement to foreign 
countries, the company operated for about 2 
years, then reported inactivity due to the 
fact that export business could not be carried 
on profitably, and that the increasing de- 
mand for cement in this country had made 
export sales unattractive. The company has 
not become dissolved, and continues to file 
reports with the Commission. 



1935-39 

1935-36 

1935-39 

1935-39 

1936-39 

1935 

1935-39 

1935-36 

1935-39 



1919-23 
1919-23 
1919-23 
1919-23 
1919-23 

1919-23 
1919-23 

1919-23 
1919-23 
1919-23 
1919-23 
1919-23 
1919-23 
1919-23 



14 



15 



1919-23 



1919-39 



274 CONCENTRATION OF ECONOMIC POWER 

120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Cement Export Co., The — Continued. 

Members (stockholders) 

Allentown Portland Cement Co., Allentown, 
Pa . 

Dexter Portland Cement Co., Nazareth, Pa 

Giant Portland Cement Co., Philadelphia 

Glens Falls Portland Cement Co., Glens Falls, 

N. Y 

Helderberg Cement Co., Albany, N. Y 

Hercules Cement Corporation, Philadelphia 

Knickerbocker Portland Cement Co., New 

York 

Lawrence Portland Cement Co., New York 

Lone Star Cement Co. of New York, New York. 
Lone Star Cement Co. of Pennsylvania, New 

York 

Nazareth Cement Co., Nazareth, Pa - 

North Americafl.. Cement Co., AlUany, N. Y — 

Pennsylvania Cement Co.,''New York 

Pennsylvania Dixie Cement Co., New York 

Phoenix Portland Cement Co., Philadelphia — 

Chalmers, Harvey, & Son Export Corporation, 
Amsterdam, N. Y 

Organized in 1919 to export buttons and button 
materials manufactured by Harvey Chalmers 
& Son and by the Hampshire Pearl Button 
Co., the association found that competition 
of foreign producers, especially Japanese, 
made it impossible to export profitably. It 
filed papers under the act until 1931, then 
become dissolved. 

All stock held by — 

Hampshire Pearl Button Co., Amsterdam, 
N. Y., which was also a member of Asso- 
ciated Button Exporters of America, Inc. 
(operating under the act) . 

Clandere Export Corporation, New York 

Organized in 1921 to take over the export 
business of Leo H. Hirsch & Co., the corpor- 
ation was also a member of Associated 
Button Exporters of America (operating 
under the act). In 1923 it reported that the 
condition of the European markets was such 
as to make it impossible to do export busi- 
ness; the corporation was therefore dis- 
solved. 

Members (stockholders) 

Goldfrank, Lionel, New York 

Hirsch, Leo H., New York 

Joseph, J. S., New York 



1919-39 
1919-33 
1919-39 

1919-39 
1919-33 
1919-39 

1919-33 
1919-39 
1933-39 

1933-39 
1919-39 
1933-39 
1919-33 
1933-39 
1919-33 



1921-23 
1921-23 
1921-23 



1921-31 



1921-23 



I 



CONCENTRATION OF ECONOMIC POWER 



175 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Period of 
Total num- associ- 
ber of ation 

members opera- 
tion 



Consolidated Steel Corporation, New York 

Organized in 1919 to export iron and steel 
products, the corporation established agen- 
cies abroad and did a substantial business 
for several years, reporting in 1922 that "We 
consider that we have achieved a more dis- 
tinct success by acting under the Webb- 
Pomerene law, than our member companies 
could have had individually * * * tiiere 
can be no doubt that ea'^h of the companies 
that we represent has, by selling through us, 
done so at a lower cost than it could have by 
selling independently. Selhng to export 
comprises a number of operations which do 
not always obtain in domestic selling, such 
as the problems of ocean transportation and 
insurance, foreign credits and collections, 
special invoicing, packing and marking. 
Certainly no one of our member companies 
could maintain foreign agencies individually, 
as economically as we maintain them, acting 
for all." The association became dissolved 
in 1923, but some of its members joined the 
Steel Export Association of America, which 
was organized under the act in 1928. 

Members (stockholders) 

Bethlehem Steel Co., South Bethlehem, Pa 

Brier Hill Steel Co., The, Youngstown, Ohio 

Cambria Steel Co., Philadelphia 

Lackawanna Steel Co., Buffalo, N. Y 

Lukens Steel Co., Coatesville, Pa 

Midvale Steel & Ordnance Co., New York 

Republic Iron & Steel Co., New York 

Sharon Steel Hoop Co., Sharon, Pa 

Trumbull Steel Co., The, Warren, Ohio 

Whitaker-GIessner Co., Wheeling, W. Va 

Youngstown Sheet & Tube Co., Youngstown, 
Ohio 



Copper Export Association, New York 

Organized in 1919 to export copper (all unman- 
ufactured metallic copper) the association 
served as selling agent for its members and 
did a substantial business. In 1924 a num- 
ber of its members resigned. In 1926 some 
of its members joined the newly formed Cop- 
per Exporters, Inc. (under the act), but re- 
tained also their membership in Copper Ex- 
port Association. In 1933 the certificate 
of incorporation was amended to include 
business other than export, and the associa- 
tion therefore withdrew from operation under 
the Export Trade Act. 



1919-23 
1919-23 
1919-21 
1919-23 
1919-23 
1919-23 
1919-23 
1919-23 
1919-23 
1919-23 

1919-23 



11 



1919-23 



27 



1919-33 



176 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FOKMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
members 


Period of 
associ- 
ation 
opera- 
tion 


Copper Export Association — Continued. 

Members (stockholders) 

American Smelting & Refining Co., New York. 

Anaconda Copper Mining Co., New York 

Arizona Copper Co., Clifton, Ariz 

Calumet & Arizona Mining Co., Calumet, Mich. 
Calumet & Hecla Mining Co., Boston 


1919-24 
1919-33 
1919-24 
1919-24 
1919-32 
1919-26 
1919-26 
1919-33 
1922-24 

1919-33 
1919-33 
1919-24 
1919-21 
1919-20 
1922-24 
1919-24 
1919-31 
1919-22 
1919-26 
1919-24 
1919-26 
1919-20 
1919-33 
1919-32 

1919-32 
1919-24 
1919-26 


19 




Chino Copper Co., New York 

Consolidated Coppermines Co., New York 

Greene Cananea Copper Co., New York 

Guggenheim Bros., New York 

Inspiration ConsoHdated Copper Co., New 
York 




International Smelting Co., New York 

Kennecott Copper Corporation, New York 

Lewisohn, Adolph, & Sons, New York 

Miami Copper Co., New York 

Mother Lode Coalition Mines, New York 

Nevada Consolidated Copper Co., New York.. 

New Cornelia Copper Co., Calumet, Mich 

Nichols Copper Co., New York . . . . 




North Butte Mining Co., New York _ . . 




Phelps Dodge Corporation, New York 

Ray Consolidated Copper Co., New York 

Tennessee Copper Co., New York 




United Metals Selling Co., New York 




United Verde Copper Co., New York _ _. 




United States Smelting, Refining & Mining Co., 
New York.. __ . 




Utah Copper Co., New York 




Utah Consolidated Mining Co., New York 

Copper Exporters, Inc., New York . 


1926-39 


Organized in 1926, for exportation of copper 
and copper products to foreign markets, the 
company included some members of the 
Copper Export Association. The company 
had a substantial business until 1933, when 
a number of members withdrew. Reports 
are still sent to the Commission, but the com- 
pany is at present inactive. 

Members (stockholders) 

American Metal Co., Ltd., The, New York 

American Smelting & Refining Co., New York.. 

Anaconda Copper Mining Co., New York 

Cajumet & Arizona Mining Co., Calumet, Mich. 
Calumet & Hecla Consolidated Copper Co., 
Boston _. . 


1926-33 
1926-33 
1926-39 
1926-31 

1926-33 
1926-33 

] 926-39 
1926-33 




Copper Range Co., New York 

Inspiration Consolidated Copper Co., New 
York 

International Metal Co.. New York 





CONCENTRATION OF ECONOMIC POWER 



177 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Copper Exporters, Inc. — Continued. 

International Minerals & Metals Corporation, 

New York 

Kennecott Copper Corporation, New York 

Mother Lode Coalition Mines Co., New York. 
Nevada Consolidated Copper Co., New York_ 

New Cornelia Copper Co., Calumet, Mich 

Nichols Copper Co., New York 

Old Dominion Co., Boston 

Phelps Dodge Corporation, New York 

Todd, W. Parsons, Inc., New York 

United Verde Copper Co., New York 

Utah Copper Co., New York 



Davenport Pearl Button Export Co., Davenport, 
Iowa 

Organized in 1921 to take over the export busi- 
ness of the Davenport Pearl Button Co., the 
export company was also a member of the 
Associated Button Exporters of America, 
Inc. (operating under the act). Exportation 
was found to be unprofitable, due to foreign 
competition, especially Japanese. Papers 
were filed for a number of years, until the 
company was dissolved in 1931. 

All stock held by — 

Davenport Pearl Button Co., Davenport, Iowa. 

Delta Export Lumber Corporation, Memphis, 
Tenn 

Organized in 1922 to export red-gum forest 
products (lumber and logs), the company 
operated successfully for several years. It 
reported that "we are thoroughly convinced 
that an association such as our own is 
equipped to handle foreign business more 
efficiently than could possibly be done by 
any individual or firm. In our opinion, the 
outstanding advantages obtained by the 
operation of this corporation are the ability 
to collectively maintain offices in the foreign 
markets, and securing a sufficient volume of 
business to hold the percentage of operating 
cogf to a reasonable figure, and such a plan 
would be impossible for the small individual 
operator; to push sales of products for ex- 
port, through a joint foreign-selling office; to 
standardize grades and quality under regis- 
tered brands; to fix definite and reasonable 
terms of payment; to provide for the prompt 
and fair adjustment of claims on shipments; 
to deal effectively with the railroad and 
steamship lines, freight rates, and on matters 
of port and dock facilities; and the loading 
and discharging of cargo. Practically all of 



1926-32 
1926-33 
1926-33 
1926-33 
1926-29 
1926-39 
1926-33 
1926-33 
1927-33 
1926-33 
1926-33 



1 1921-31 



31 



1922-26 



178 OONCBNTRATION OF EX^ON'OMIO POWER 

120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Delta Export Lumber Corporation — Continued. 

these features can be handled more effec- 
tively by a large organization, with a large 
volume, than they could possibly be handled 
with small individual operators, unorganized 
and each with small volume. By having a 
direct representative and office in the foreign 
markets, we have been able to develop an in- 
creased consumption of certain species of our 
forest products, showing the consumer that 
certain of the products which we manufacture 
are better suited to his needs than foreign 
woods that he has been using; and this has 
resulted in an increased demand for our 
woods. * * * Collectively we are enabled 
to keep a representative in the foreign market 
to promptly, fairly, and equitably adjust 
claims and settle disputes whejQ they arise. 
We find that by having our representative 
available, the percentage of claims made and 
the cost of adjusting them is very small. 
Fuither, we are able to make firm sales and 
arrange terms of payment for full amount 
of our invoices when goods go forward, 
because the reliable and reputable foreign 
broker and foreign importers know they are 
dealing with a responsible organization, with 
a local representative available, and that if 
goods arrive not fully up to specifications or 
damaged in transit, that any legitimate and 
proper claim will be promptly and equitably 
adjusted." 

In 1926 low prices abroad and keen com- 
petition from mills, with shorter and less ex- 
pensive freight haul, made exportation un- 
profitable; the corporation was, therefore, 
dissolved. 

Members (stockholders) 

Anderson Tully Co., Memphis, Tenn 

Archer Lumber Co., Helena, Ark 

Barr Holaday Lumber Co., Greenfield, Ohio.. 
Bayou Land & Lumber Co., Memphis, Tenn.. 

Brown, Geo. C, & Co., Memphis, Tenn 

Brown, Mark H., Lumber Co., Lake Providence 

La 

Brown, W. P., & Sons Lumber Co., Louisville, 

Ky 

Brown & Hackney, Memphis, Tenn 

Carrier Lumber & Manufacturing Co., Sardis, 

Miss 

Chapman & Dewey Lumber Co., Memphis, 

Tenn 

Chess & Wymond Co., Louisville, Ky 

Chicago Mill & Lumber Co., Chicago 



1922-26 
1922-25 
1922-26 
1922-26 
1922-26 

1922-26 

1922-26 
1922 

1922-26 

1922-26 
1924-26 
1925-26 



CONCENTRATION OF ECONOMIC POWER 



179 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Delta Export Lumber Corporation — Continued. 

Delta Hardwood Lumber Co., Rayville, La 

Gayoso Lumber Co., Memphis, Tenn 

Hackney, R. J., Lumber Co., Memphis, Tenn.. 

Holly Ridge Lumber Co., Louisville, Ky 

Howe Lumber Co., Helena, Ark 

Howe Neely Lumber Co., Helena, Ark 

Hyde Lumber Co., South Bend, Ind 

Lamb Gary Lumber Co., Vicksburg, Miss 

May Bros., Mem.phis, Tenn 

Memphis Band Mill. Co., Memphis, Tenn 

Miller Lumber Co., Mariana, Ark 

Mclntyre, J. F., & Sons, Pine Bluff, Ark 

Nickey Bros., Memphis, Tenn 

Norman, E. B., & Co., Louisville, Ky 

Paepcke Leicht Lumber Co., Chicago, 111 

Penrod Jurden Co., Mem_phis, Tenn 

Stark, Jas. E., & Co., Memphis, Tenn 

Stim.son, J. V., Hardwood Co., Mem.phis, Tenn. 

Stimson- Veneer & Lumber Co., Memphis, 

Tenn 



Douglas Fir Exploitation & Export Co., San 
Francisco. Name changed in 1937 to Douglas 
Fir Export Co. , Seattle 

Formed in 1918 to sell lumber and logs (fir, 
hemlock, cedar) for export to foreign coun- 
tries; has been in continuous operation to 
present date. The association reports the 
following advantages: Economic sales cost 
through centralized office? and through 
agencies and correspondents not accessible 
to individual firms; establishing uniform 
sales terms, grades, and practices, in export 
trade; obtaining and disseminating foreign- 
trade information from and to the members; 
and carrying on trade-promotion work 
which could not be done by individual firms 
owing to cost involved. 

Members (stockholders) 

Aberdeen Lumber & Shingle Co., Aberdeen, 
Wash 

Alexander, F. W., stock trustee, Seattle. 

American Mill Co. (f;alled Hulbert Mill Co.), 

Aberdeen, Wash 

Ames, E. G., Seattle, Wash 

Anacortes Lumber & Box Co., Anacortes, 

Wash 

Anderson & Middleton Lumber Co., Aber- 
deen , Wash 

Astoria Box & Paper Co., Astoria, Greg 

Astoria Box Co., Astoria, Ores 

Atlas Lumber & Shingle Co., Seattle 

Atlas Lumber Co., Seattle 

Baboock, Thorpe, Hoquiam, Wash 

2577()il — 41 — No. G i:i 



1922-26 

1922 

1922-26 

1922-24 

1922-26 

1922-26 

1922-25 

1923-26 

1922-26 

1922-26 

1922-26 

1922-26 

1922-26 

1923-26 

1922-25 

1922-26 

1922-26 

1922-26 

1922-26 



1918-21 
1919-39 

1922-26 
1918-26 

1931-37 

1918-27 
1931-35 
1920-21 
1921-22 
1921-24 
1926-29 



Period of 
Total num- associ- 



ber of 
members 



277 



ation 
opera- 
tion 



1918-39 



180 



oonCentration of economic power 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT. APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2.074 MEMBER COMPANIES— Continued 



Douglas Fir Exploitation & Export Co. — Con. 

Baxter, A. A., Seattle 

Bay City Lumber Co., Aberdeen, Wash 

Bay Park Lumber Co., North Bend, Greg 

Beaver Linnton Lumber Co., Portland, Oreg-- 

Beaver Linnton Mills, Portland, Greg 

Beaver Lumber Co., Prescott, Greg 

Bishop, E. K., Lumber Co., Aberdeen, Wash. 

Bissell Lumber Co., Seattle, Waih- 

Bloedel Donovan Lumber Mills, BeUingham, 

Bloedel.'j. H., Seattle 

Bolcom-Caiial Lumber Co., Seattle 

Boner, W. H., Everett, Wash 

Booth-Kelly Lumber Co., Eugene and Port- 
land, Greg 

Brace & Herget Mill Co., Seattle 

Bridal Veil Timber Co., Bridal Veil, Greg 

Brighton Mills Co., Brighton and Portland, 

Greg 

Brix, P. J., Portland, Greg 

Bryant Lumber Co., Seattle 

Buchanan Lumber Co., Glympia, Wash 

Buehner Lumber Co., North Beiid, Greg 

Burhside, R. H., Raymond and Portland, Oreg. 

Cahill, A. B,, San Francisco 

Campbell Mill Co.. Seattle 

Canyon Lumber Co., Everett, Wash 

Carlisle Lumber Co., Onalaska, Wash 

Carhsle Pennell Lumber Co., Onalaska, Wash _ 

Carnation Lumber Co., Forest Grove, Greg 

Cascade Lumber & Shingle Co., Snohom.ish, 

Wash 

Cascade Lumber Co., Snohomish, Wash 

Chambers, J. H., & Son, Cottage Grove, Greg.- 
Chehalis Mill Co. , Salkum, Wash 

Chipman, L. L., Loiigview, Wash 

Christenson, E. A., San Francisco 

Clackamas Fir Lumber Co., Portland, Greg 

Clark & Wilson Lumber Co., Portland, Greg 

Clark-Nickerson Lumber Co., Everett, Wash__ 

Clark, G. M., Linnton, Greg 

Clark, W. W., Portland, Greg 

Clear Fir Lumber Co., Tacoma, Wash 

Clear Lake Lumber Co., Clear Lake, Wash 

Clough, H. J., Everett, Wash 

Clough Lumber Co., Stanwood, Wash 

Cobbs & Mitchell Co., Portland, Greg 

Columbia Box & Lumber Co., South Bend, 
Wash 




1923-28 
1918-22 
1920-24 
1927-28 
1924-27 
191&-27 
1923-38 
1931-33 

1918-39 
1918-39 
1920-21 
1918-25 

1921-39 
1920-21 
1930-37 

1921-27 
1920-27 
1920-27 
1920-36 
1918-22 
1918-32 
1922-28 
1920-24 
1918-35 
1931-36 
1921-24 
1931-39 

1922-27 

1927-29 

1931-39 

1934-39 

/ 1925-27 

11931-32 

1918-22 

1934-39 

J1918-19 

11931-32 

1918-32 

1918-19 

1931-32 

1918-35 

1921-27 

1922-25 

/ 1922-23 

11927-33 

(1921-24 

11931-39 

/1919-22 
11925-28 



OONCENTRATION OF ECONOMIC POWER 



181 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 









Period of 






Total num- 


associ- 




Years 


ber of 


ation 






members 


opera- 
tion 


Douglas Fir Exploitation & Export Co. — Con. 








Columbia County Lumber Co., St. Helens, 








Greg 


1919-23 






Columbia River Lumber Co., Kalama, Wash-_ 


1919-22 






Columbia River Paper Mills, Portland, Oreg-.- 


1931-32 






Condon, R. W., Seattle, Wash 


1927-28 






Connell, Sam, Lumber Co., Portland, Greg 


1919-21 






Cook, A. W., Jr., Portland, Greg 


1930-31 






Cooney, Xeil, Cosm.opolis, Wash 


1927-29 




Coos Ba}^ Logging Co., North Bend, Greg . 


1924-32 




Coos Bav Lumber Co., Marshfield, Greg 


1925-27 




Corvallis Lumber Co., CorvaUis, Greg 


1930-39 


i 


Cram, W. S., Raymond, Wash 


1922-28 


1 


Crossett Western Co., Wauna, Greg 


1924-39 


1 


Crossett Western Lumber Co., Wauna, Greg-.. 


1918-24 


1 


Crown Lumber Co., Mukilteo, Wash 


1918-38 


1 


Danaher Lumber Co., Tacoma, Wash 


1918-22 


1 


Defiance Lumber Co., Tacoma, Wash 


1918-39 
/ 1922-33 
11935-39 




Demarest, E. W., Tacoma, Wash . . 






' 


Dempsev Lumber Co., Tacoma, Wash 


1918-38 




DesChutes River Sawmills, Glvmpia, Wash 


1931-35 


' 


Dichter, Theo., Warrentoii, Greg 


1933-39 


1 


Dickman Lumber Co., Tacoma, Wash 


1922-39 


1 


Dole, W. H., Hoquiam, Wash 


1929-34 




Dolge, Ernest, Tacoma, Wash 


/ 1922-23 
\1936-39 


' 


Dolge, Ernest, Inc., Tacoma, Wash 


1919-39 




Dollar Portland Lumber Co., Tacoma, Wash 


1924-28 




Donovan, J. .J., Bellingham, Wash 


1918-19 




Donovan Lumber Co., Aberdeen, Wash 


1918-39 




Donovan Lumber Co., MiU No. 2, Aberdeen, 




1 


Wash 


1925-39 


1 


Donovan, Wm., Aberdeen, Wash 


1918-38 
1924-39 


1 


Doud, L. L., Tacoma, Wash 




DuBois Lumber Co., Vancouver, Wash 


1920-39 




DuBois, W. B., Vancouver, Wash 


1923-39 




Duwamish Lumber Co., Seattle, Wash 


1921-25 


1 


Eagle Lumber Co., Portland, Greg 


1921-39 




East Side Mill Co., Tacoma, Wash 


1931-38 




East Side Mill & Timber Co., Portland, Greg 


1931-35 




Eatonville Lumber Co., Eatonville, Wash 


1921-39 




Eclipse Mill Co., Everett, Wash . ..- 


1931-33 




Ellis Mvlroie Lumber Co., Seattle, Wash 


1920-22 


1 


Eureka Cedar Lumber & Shingle' Co., Ho- 




1 


quiam, Wash 


1918-24 




Ferry Baker Lumber Co., Everett, Wash 


1918-26 




Fidalgo Mill & Lumber Co., Portland, Greg 


1920-21 




Fir Products Co., Montesano, Wash 


1920-22 


, 


Fir Tree Lumber Co., Tacoma, Wash 


1921-27 




Force. L. E., Seattle, Wash 


1935-39 


i 


Gauge Lumber Co., Tacoma, Wash 


1930-39 




Gerlinger, Geo. T., Portland, Greg 


1922-39 




Grays Harbor Commercial Co., Cosmopolis, 






Wash 


1918-30 


• 





182 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




1 Period of 
Total num- associ- 

ber of 
members 



Douglas Fir Exploitation & Export Co. — Con. 

Grays Harbor Lumber Co., Hoquiam, Wash_- 

Gregory, J. T., Tacoma, Wash 

Griggs, E. G., Tacoma, Wash 

Gruber-Docherty Lumber Co.,Yelm, Wash 

Guerrier, J. P., Lumber Co., Portland, Greg 

Guistina Bros., Eugene, Greg 

Hambidge, R., Everett, Wash 

Hammond, A. B., San Francisco 

Hammond Lumber Co., Astoria, Greg 

Hanify Lumber Co., Raymond, Wash 

Hart-Wood Lumber Co., Raymond, Wash 

Hauptman, S. M., San Francisco 

Helms, C. E., San Francisco 

Henry Mill & Timber Co., Tacoma, Wash 

Henry, W. Yale, Tacoma, Wash 

Hill, Charles E., Seattle 

Hoquiam Lumber & Shingle Co., Hoquiam, 

Wash 

Hulbert Mill Co., Aberdeen, Wash 

Island Lumber Co., St. Helens, Greg 

Johnson, E. E., Lumber Co., Coquille, Greg 

Jones Lumber Co., Portland, Greg 

Kalama Lumber & Shingle Co., Kalama, Wash 

Kingsley, E. D., Linnton, Greg 

Kingsley, G. Arch, Linnton, Greg 

Kingsley Lumber Co., Linnton, Greg 

Kirk, H., Portland, Greg 

Kleeb Lumber Co., South Bend, Wash 

Knapp, F. C, Portland, Greg 

Knappton Mills & Lumber Co., Knappton, 

Wash 

Kreienbaum, C. H., Shelton, Wash 

Lewis, Charles L., Raymond, Wash . 

Lewis Lumber Co., Pengra and Dexter, Greg- - 
Lewis Mill.s & Timber Co , South Bend, Wash_- 

Long Bell Lumber Co., Longview, Wash 

Long Bell Lumber Sales Corporation, Long- 
view, Wash 

Manlcy Moore Lumber Co., Tacoma, Wash__ 

Marine Lumber Co., Tacoma, Wash 

McCleary, Henry, Timber Co., McCleary, 

Wash _■ 

McCormick, Chas. R., Lumber Co., San Fran- 
cisco 

McCready, Fred H., Aberdeen, Wash 

McKenna Lumber Co., McKenna, Wash 

Mickle Mills, Portland, Greg 

Middleton, A. W., Aberdeen, Wash 

Mineral Lake Lumber Co., Tacoma, Wash 

Moore Mill & Lumber Co., Bandon, Greg 

Morris, J. E., Tacoma, Wash 

Morrison Mill Co., Anacortes, Wash 



1919-22 
1921-22 
1918-38 
1931-39 
1924-31 
1931-39 
1927-28 
1919-24 
1919-24 
1918-27 
1924-32 
1918-33 
1933-35 
1923-39 
1920-25 
1918-20 

1918-29 
1918-22 
1919-26 
1925-28 
1921-26 
1918-19 
1922-38 
1938-39 
1937-39 
1918-23 
1919-21 
1922-28 

1918-32 
1933-39 
1918-22 
1930-31 
1935-39 
1924-31 
1925-27 

1931-32 
1921-33 
1920-22 

1931-39 

1926-38 
1933-35 
1938-39 
1921-32 
1924-26 
1918-27 
1921-23 
1931-39 
1933-34 
1920-21 



CONCENTRATION OF ECONOMIC POWER 



183 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total num 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Douglas Fir Exploitation & Export Co. — Con. 

Mountain Lumber Co., Tacoma, Wash 

Multnomah Lumber & Box Co., Portland, Oreg_ 
Mumby Lumber & Shingle Co., Bordeaux and 

Mumby, Wash 

Mutual Lumber Co., Bucoda, Wash 

National Lumber & Manufacturing Co., Ho- 

quiam, Wash 

Nelson, Chas., Co., San Francisco 

Nettleton Lumber Co., Seattle 

Nettleton, W. B., Seattle 

Ninemire Lumber Co., Port Angeles, Wash 

North Bend Mills & Lumber Co., North Bend, 

Greg 

North End Lumber Co., Tacoma, Wash 

North Western Lumber Co., Hoquiam, Wash 

Olympia Harbor Lumber Co., Olympia, Wash.. 
Olympic Forest Products Co., Port Angeles, 

Wash - 

Oregon-American Lumber Corporation, Port- 
land, Oreg 

Oregon Box & Manufacturing Co., Portland, 

Oregon Lumber Co., Dee, Oreg 

Oregon Ship Timber Mills, Portland, Oreg 

Oregon Timber Mills, Linnton, Oreg 

Ostrander Ry. & Timber Co., Ostrander, Wash. 

Pacific Box Co., Tacoma, Wash 

Pacific National Lumber Co., Tacoma, Wash.. 

Pacific Spruce Corporation, Portland, Oreg 

Pacific States Lumber Co., Tacoma, Wash 

Page Lumber Co., Seattle, Wash 

Paine, A. L., Hoquiam, Wash 

P. & G. Lumber Co., Tacoma, Wash 

Parker Lumber <fe Box Co., Everett, Wash 

Parker-Poyneer Lumber Co., Everett, Wash 

Peabody, W. H., Everett, Wash 

Peninsula Lumber Co., Portland, Oreg 

Penn Lumber Co., McGlynn, Oreg 

Peterman Manufacturing Co., Tacoma, Wash.. 

Pope & Talbot Lumber Co., San Francisco 

Port Blakely Mill Co., Port Blakely, Wash 

Portland Lumber Co., Portland, Oreg 

Prouty Lumber & Box Co., Warrenton, Greg.. 

Puget Mill Co., Port Gamble, Wash 

Puget Sound Lumber Co., Tacoma, Wash 

Puget Sound Lumber Manufacturing Co., 

Renton, Wash 

Puget Sound Mills & Timber Co., Port Angeles, 

Wash -- 

Puget Sound Pulp & Timber Co., Clear Lake, 

Wash 

Puget Sound Sawmills & Shingle Co., Belling- 

ham, Wash 

Quinault Lumber Co., Raymond, Wash 

Raymond Lumber Co., Raymond, Wash 



1925-39 
1931-33 

1921-39 
1931-32 

1918-26 
1925-38 
1921-39 
1924-39 
1925-26 

1918-22 
1920-38 
1918-34 
1931-39 

1931-37 

1925-39 
1920-21 
1933-39 
1920-21 
1921-23 
1931-39 
1919-21 
1921-39 
1925-29 
1921-39 
1921-23 
1918-26 
1920-22 
1925-27 
1927-31 
1927-33 
1918-28 
1931-37 
1931-33 
1938-39 
1918-24 
1918-24 
1931-39 
1918-26 
1918-31 

1931-37 

1918-25 

1931-32 

1919-30 
1918-27 
1918-31 



184 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Douglas Fir Exploitation & Export Co. — Con. 

Raymond Veneer Co., Raymond, Wash 

Rayonier, Inc., Port Angeles, Wash 

Reed, Mark, Shelton, Wash 

Reed Mill Co., Shelton, Wash 

Ribenack, W. C, San Francisco 

Robinson Manufacturing Co., Everett, Wash.. 

Ryan, J. A., Portland, Oreg 

St. Helens Lumber Co., St. Helens, Oree 

St. Helens Tie & Timber Co., St. HelenSj^^Oreg.. 
St. Paul & Tacoma Lumber Co., Tacoma, Wash. 

Sammamish Lumber Co., Issaquah, Wash 

Schwager Nettleton Lumber Co., Seattle 

Seattle Mill & Logging Co., Seattle 

Shaffer Box Co., Tacoma, Wash 

Sharp, R. J., Tacoma, Waslx 

Ship Lumber Mill Co., Tacoma, Wash 

Siler Mill Co., Raymond, Wash 

Silver Falls Timber Co., Silverton, Oreg 

Silverton Lumber Co., Silverton, Oreg 

Simpson Logging Co., Shelton, Wash 




Skookum Lumber Co., Tenino, Wash 

Snellstrom Bros., Inc., Vaughan, Oreg 

Snellstrom Lumber Co., Eugene, Oreg 

Snoqualmie Falls Lumber Co., Snoqualmie 

Falls Wash __ 
South Bend MUls & T[mber"Co","South'Bend, 

WTash 

South SeattleMilf Co., Seattle 

South Side Lumber Co., Montesano, Wash 

Southeast Portland Lumber Co., Lents, Oreg-. 
Spaulding, Chas. K., Logging Co., Portland, 

Oreg 

Springer Mill Co., Olympia, Wash 

Standard Box & Lumber Co., Buxton and 

Portland, Oreg 

Stimson Mill Co., Ballard, and Seattle, Wash.. 

Stimson Timber Co., Seattle 



Stone, E. C, Seattle 

Stout Lumber Co., North Bend, Oreg 

Tacoma Harbor Lumber Co., Tacoma, Wash. 

Tacoma Mill Co., Tacoma, Wash 

Talbot, F. C, San Francisco 

Talbot, W. H., San Francisco 

Thane, A. F., San Francisco 

Thayer, C. A., San Francisco 

ThorapsoiJ, J. W., Port Gamble, Wash 

Tidewater Mill Co., Tacoma, Wash 

Titcomb, F. R., San Francisco 



Tumwater Lumber Mills Co., Olympia, Wash. 
Turner Creek Lumber Co., Yamhill, Oreg 



1920-21 
1937-39 
1931-33 
1931-36 
1924-28 
1931-32 
1925-27 
1918-26 
1922-23 
1918-39 
1937-38 
1918-20 
1920-31 
1931-34 
1933-36 
1921-31 
1918-28 
1920-39 
1921-25 
1936-39 
1921-22 
1924-27 
1931-38 
1938-39 

1921-34 

1918-21 
1924-25 
1921-23 
1931-39 

1921-39 
1931-39 

1921-28 

1918 

1931-39 

1921-26 

1931-32 

1938-39 

1924-29 

1924-39 

1920-23 

1935-36 

1918-26 

1924-25 

1918-24 

1928-31 

1918-29 

1926-27 

1931-33 

1931-39 

1934-38 



Total num- 
ber of 
members 



CONCENTRATION OF ECONOMIC POWER 



185 



120 ASSOCIATIONS FOKMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Period of 
associ- 
ation 
opera- 
tion 



Douglas Fir Exploitation & Export Co. — Con. 

Tyson, James, San Francisco 

Van Vleet Lumber Co., Rainier, Greg 

Vincent, H. F., San Francisco 

Wagner, Corydon, Tacoma, Wash 

Walton, Clyde, Everett, Wash 

Walton Lumber Co., Everett, Wash 

Warrenton Lumber Co., Warrenton, Greg 

Washington Veneer«Co., Glympia, Wash 

Watzek, C. H., Wauna, Greg 

Wentworth, Geo. K., Jr., Portland, Greg 

Wentworth, L. J., Portland, Greg 

West, A. J., Lumber Co., Aberdeen, Wash 

West Oregon Lumber Co., Linnton and Port- 
land, Greg 

West Waterway Lumber Co., Seattle 

Western Fir Lumber Co., Tacoma, Wash 

Western Lumber Co., Aberdeen, Wash., and 

Westfir, Greg 

Western Mill Co. of Aberdeen, Aberdeen, 

Wash 

Westport Lumber Co., Westport, Greg 

Westwood Lumber Co., Wheeler, Greg 

Weyerhaeuser Timber Co., Everett and Ta- 
coma, Wash 

Wheeler, Chas. L., San Francisco 

Wheeler, C. H., Lumber Co., Portland, Greg.-. 

Whitman, W. A., Seattle 

Whitney Co., The, Tillamook and Garibaldi, 

Greg 

Wight, E. B., Everett, Wash 

Willamette River Lumber Co., Oregon City 

and Portland, Greg 

Willamette Valley Lumber Co., Dallas and 

Portland, Greg 

Willapa Harbor Lumber Mills, Raymond, 

Wash 

Willapa Lumber Co., Raymond, Wash 

Wilson Bros. & Co., Aberdeen, Wash 

Wilson, J. H., Aberdeen, Wash 

Wood & Iverson, Inc., Hobart, Wash 

Wood, E. K., Lumber Co., Aberdeen, Belling- 

ham, Hoquiam, and Anacortes, Wash 

Woodard, M. C, Westport and Portland, Greg.. 
Woodard, W. A., Lumber Co., Cottage Grove, 

Greg 

ii'oemans Lumber Co.. Pe Ell, Wash 



Durex Abrasives Corporation, New York 

Organized in 1929 by some of the companies 
formerly exporting through the American 
Surface Abrasives Export Corporation, the 
association sells its members' products in 
foreign countries. It reports that "Ability 
to represent the members in foreign markets 
through shipments to distributors and con- 



1918-38 

1938-39 

1924-39 

1938-39 

1932-39 

1919-39 

1920-25 

1931-39 

1928-39 

1918-22 

1918 

1918-28 

1918-39 
1920-39 
1921-35 

1918-37 

1922-23 
1918-39 
1925-28 

1918-34 
1936-39 
1921-23 
1928-39 

1920-27 
1925-27 

1921-24 

1921-39 

1931-32 
1918-31 
1918-39 
1929-39 
1921-26 

1919-39 
1918-39 

1931-39 
1921-26 



1929-39 



186 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Durex Abrasives Corporation — Continued. 

sumers in those markets, with the corollary 
function of central credit control, agreement 
upon price for export, plus economies of op- 
eration obtained through group shipments, 
give us advantages not possessed by indi- 
vidual exporters." 

Members (stockholders) 

American Glue Co., Boston 

Armour & Co., Chicago 

Baeder Adamson Co., Philadelphia 

Barton, H. H., & Son, Philadelphia 

Behr-Manning Corporation, Troy, N. Y 

Carborundum Co., The, Niagara Falls, N. Y.. 
Minnesota Mining & Ma; afacturing Co., St. 

Paul, Minn 

U. S. Sandpaper Co., Will amsport, Pa 

Wausau Abrasives Co., Wausau, Wis 



Electrical Apparatus Export Association, New York. 
Organized in 1931, for exportation of electrical 
and other apparatus and materials to foreign 
markets. 

Members 

Allis Chalmers Manufacturing Co., Milwaukee 

Allis, Louis, Co., The 

Anaconda Wire & Cable Co., New York 

Canadian Porcelain Co., Hamilton, Canada 

Duncan Electric Manufacturing Co., Lafayette, 

Ind 

Electric Furnace Co., Salem, Ohio 

Electric Service Supply Co., Philadelphia 

Elliott Co., New York 

Fretz-Moon Tube Co., Butler, Pa 

General Motors Corporation, Export Division, 

New York 

Goodman Manufacturing Co., Chicago 

International General Electric Co., New York.. 

Jeffrey Manufacturing Co., Columbus, Ohio 

Kelvinator, Detroit 

Line Material Co., South Milwaukee 

Nash Kelvinator Corporation, Detroit 

National Electric Products Corporation, Pitts- 
burgh 

Norge Division, Borg-Warner Corporation, 

Detroit 

Ohio Brass Co., New York 

Okonite Co., The, Passaic, N. J 

Phelps Dodge Copper Pioducts Corporation, 

New York 

Reliance Electric & Engineering Co., New 

York 

Sangamo Electric Co., Springfield, 111 




192&-31 
1929-39 
1929-31 
1929-31 
1929-39 
1929-39 

1929-39 
1929-31 
1929 



1937-39 
1937-39 
1937-39 
1934-39 

1936-39 
1937-39 
1936-39 
1938-39 
1939 

1938-39 
1934-39 
1931-39 
1934-39 
1938-39 
1936-39 
1939 

1939 

193&-39 
1934-39 
1937-39 

1937-39 

1938-39 
1936-39 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



28 



1931-39 



CONCENTRATION OF ECONOMIC POWER 



187 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Electrical Apparatus Export Association — Con. 
Sperrv Gyroscope Co., Inc., Brooklyn, N. Y. 

U. S. "Rubber Export Co., Ltd., New York 

Walker Bros., New York 

Westinghouse Electric & International Co., 

New York 

Youngstown Sheet & Tube Co., New York 

Electrical Export Corporation, Wilmington, DeL. 
Organized in January 1940, to ship electrical 
apparatus and materials to foreign coun- 
tries. 

Members (stockholders) 

International General Electric Co., Inc., N. Y.. 
Westinghouse Electric International Co., N. Y_. 

Export Clothes Pin Association of America, Inc., 
New York 

Organized in 1919 to ship wooden clothespins 
to foreign markets, the association operated 
successfully for several years. It reported 
as an outstanding advantage, ability of the 
members, through association action, to 
"present a solid front to foreign competi- 
tion * * * acting independently the 
factories would be competing against each 
other and thus dissipating their strength." 
In 1929 their exports were considerably less 
due to foreign competition — German and 
Swedish producers undersold the American 
group from 5 to 10 percent. Members 
Mere unwilling to sell at the lower prices, 
and association exports were abandoned in 
1930. 

Members (stockholders) 

Ber.st, Forster, Dixfield Co., Dixfield, Maine 

Cane, Wm., & Sons Co., Ltd., Newmarket, 
Ontario 

Clarke Bros., Ltd., Bear River, Nova Scotia 

Escanaba Manufacturing Co., Escanaba, Mich. 
Fulton Manufacturing Co., Richwood, W.Va-- 
Indiana Wood Products Co., Martinsville, 

Ind 

Northern Woodenware Co., Island Falls, 

Maine 

Oval Wood Dish Co., Tupper Lake, N. Y 

Richmond Cedar Works, Richmond, Va 

Steele- Wallace Corporation, Richwood, W. Va- 
Summit Lumber Co., Davidson, Maine 



Export Petroleum Association, Inc., New York 

Formed in 1929 for exportation of petroleum 
and petroleum products, the association in- 
cluded the Standard Oil Export Corporation 
(also filing papers under the act) and other 



Years 



1939 

1937-39 

1939 

1931-39 
1939 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



1940 



11 1919-30 



1920-30 

1919-30 
1920-21 
1919-23 
1919-24 

1919-30 

1919-30 
1919-30 
1919-30 
1924-30 
1919-30 



17 1929-36 



188 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Export Petroleum Association, Inc. — Continued. 

companies. Substantial business was trans- 
acted prior to 1931, when conditions in for- 
eign markets led to suspension of the asso- 
ciation agreements; thereafter members sold 
individually. The association continued to 
file reports until formal dissolution in 1936. 

Members (stockholders) 

Atlantic Refining Co., Philadelphia 

Cities Service Co., New York 

Continental Oil Co., Ponca City, Okla 

Gulf Refining Co., Pittsburgh 

Marland Oil Co., Ponca City, Okla 

Pure Oil Co., Chicago 

Richfield Oil Co. of California, Los Angeles 

Shell-Union Oil Corporation, New York 

Sinclair Consolidated Oil Co., New York 

Standard Oil Co. of California, San Francisco 

Standard Oil Co. (Indiana), Chicago 

Standard Oil Co. of New York, New York 

Standard Oil Export Corporation, New York 

Texas Corporation, The, New York 

Tidewater- Associated Oil Co., New York 

Union Oil Co. of California, Los Angeles 

Vacuum Oil Co., New York 



Export Screw Association of the United States, 
Providence, R.I 

The association was formed in 1926 for exporta- 
tion of screws to foreign countries. During 
the past few years, its activities have been 
restricted by depressed conditions abroad, 
and by keen competition of continental and 
Japanese manufacturers; but the association 
is still filing papers under the act. 

Members 

American Hardware Corporation, New Britain, 

Conn 

American Screw Co., Providence, R. I 

Bridgeport Screw Co., Bridgeport, Conn 

Continental Wood Screw Co., New Bedford, 

Mass.- 

Corbin Screw Corporation, The, New Britain, 

Conn 

Eagle Lock Co., New York 

Parker, Charles, Co., The, New York 

Reed & Prince Manufacturing Co., Worcester, 

Mass 



Exporters of Wood Products, Inc., New York 

Organized in 1924 to ship barrel staves used 
for wine casks in Argentina, the association 
operated successfully in years when the grape 



Years 



1929-36 
1929-36 
1930-32 
1929-36 
1929-30 
1929-36 
1929-36 
1929-36 
1929-36 
1929-36 
1929-32 
1929-36 
1929-36 
1929-36 
1929-36 
1929-36 
1929-36 



1926-27 
1926-39 
1926-39 

1930-39 

1927--39 
1926-39 
1926-39 

1930-39 



Total num- 
ber of 
members 



CONCENTRATION OF ECONOMIC POWER 



189 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Exporters of Wood Products, Inc. — Continued. 

crop in that country was good. In 1929 the 
members voted to dissolve, but several of 
them were still interested in export trade and 
therefore formed the Shook Exporters Asso- 
ciation, which has been in operation since 
1932 (see Shook Exporters Association.) 

Members (stockholders) 

Chickasaw Wood Products Co., Memphis, 
Tenn 

Export Cooperage Co., Memphis, Tenn 

Gulf Cooperage Co . , Pittsburgh 

Hamlen, J. H., & Son, Portland, Maine 

Moore, Lucas E., Stave Co., New York 

Paducah Cooperage Co., Paducah, Ky 

Pekin Cooperage Co., New York__.^ 



Exporting Rye MiUers Association, Minneapolis, 

Minn 

Formed in 1920 for the primary purpose of 
selling rye flour and meal to the Norwegian 
Government Food Commission, the associ- 
ation became dissolved when the Norwegian 
Government discontinued its purchases. 

Members 



Blodgett-Holmes Co., Janesville, Wis 

Eckhart Milling Co., Chicago 

Kern, J. B. A., & Sons, Inc., Milwaukee. 
PiUsbury Flour Mills Co., Minneapolis... 
Shane Bros. & Wilson Co., Minneapolis.. 

Stern, Bernhard, & Sons, Milwaukee 

Stratton-Ladish Milling Co., Milwaukee . 
Voight Milling Co., Grand Rapids, Mich. 
Washburn-Crosby Co., Minneapolis 



Florida Hard Rock Phosphate Export Association, 

Savannah, Ga • 

In operation since 1919, exporting phosphate 
hard rock to foreign countries. Members are 
in Florida and Georgia; the rock is therefore 
shipped to Fernandina, washed, crushed, 
and stored in warehouses at the port, from 
which it is loaded on steamers for foreign 
shipment. (The association has at times 
cooperated with the Florida Pebble Phos- 
phate Export Association, and with the 
Phosphate Export Association, which ships 
pebble phosphate rock.) It reports that 
"Operating as an association is essential to 
reap greatest benefits in the export market." 



Years 



1924-29 
1924-29 
1924-29 
1924-29 
1924-26 
1925-29 
1924-29 



Total num- 
ber of 
members 



Periodcrf 
assocl-^ 
ation 
opera- 
tion 



1920 



1919-39 



190 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Florida Hard Rock Phosphate Export Association — 
Continued. 

Members 

Buttgenbach & Co., Dunnellon, Fla., and Lake- 
land, Fla 

Camp, C. & J., Ocala, Fla 

Cummer Lumber Co., Jacksonville, Fla 

Dunnellon Phosphate Co., Savannah, Ga 

Dunnellon Phosphate Mining 'Co., Savannah, 

Ga 

Mutual Mining Co., Savannah, Ga 

Norfleet, P. J. & J. H., Newberrv, Fla 

Thompson, T. A., Fort White, Fla 

Florida Pebble Phosphate Export Association, New 
York 

Formed in 1919 to export pebble phosphate 
rock, the association had some of the same 
members as the Phosphate Export Associa- 
tion, organized in the same j'car, to ship the 
same product. The two groups used the 
same office and had some of the same officers. 
In 1933 the Ore & Chemical Co., a member 
of Phosphate Export Association, resigned, 
leaving the membership of that group iden- 
tical with that of the Florida Pebble group. 
It was therefore decided to consolidate the 
two under the name of the Phosphate Ex- 
port Association, which is still in successful 
operation. Cooperative agreements have 
been entered into by these groups with the 
Florida Hard Rock Phosphate Export As- 
sociation, also operating under the act. The 
association reported that "the exploitation 
of foreign markets can be better handled by 
a large, single, and well-working organization 
than by a number of smaller organizations 
all working against each other. Concentra- 
tion of effort, standardization of grades, 
lower selling costs, are a benefit not only to 
the American exporter but also to the for- 
eign consumer, and are important factors in 
the endeavor to increase export sales." 

Members 

American Agricultural Chemical Co., Nev. 

York 

American Cyanamid Co., New York 

Coronet Phosphate Co., New York 

International Agricultural Corporation, New 

York 




1920-22 
1933-39 
1919-27 
1933-39 
1919-27 
1919-28 

1927-39 
1919-33 
1921 
1921-27 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



1919-33 
1919-33 
1922-26 

1919-33 



1919-33 



CONCENTRATION OF ECONOMIC POWER 



191 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period o 
associ- 
ation 
opera- 
tion 



Florida Pebble PhoBphate Export Association — Con. 
Morris Fertilizer Co., Chicago (branch, Armour 

Fertilizer Works) 

Phosphate Mining Co., New York 

Southern Phosphate Corporation, Baltimore 

Florida Pine Export Association, Jacksonville, Fla_. 
Organized in 1930 to export yellow pine lumber 
and timber to South America, through the 
Pensacola Lumber & Timber Co. (one of the 
member companies) as sales manager, the 
association reported in 1931 that it had been 
unable to operate due to the "general depres- 
sion in the export lumber market"; it was 
therefore dissolved. (Two of the member 
companies, the Pensacola Lumber & Timber 
Co. and the St. Andrews Bay Lumber Co., 
were members of the Alabama-Florida Pitch 
Pine Export Association, which operated 
under the act from 1929 to 1933.) 

Members 

Foshee Manufacturing Co., Melbourne, Fla 

Griffin, J. M., Lumber Co., Holopaw, Fla 

Pensacola Lumber & Timber Co,, Pensacola, Fla. 

Putnam Lumber Co., Shamrock, Fla 

Sherman, W. C, Co., Hicoria, Fla 

St. Andrews Bay Lumber Co., Millville, Fla 

Foundry Equipment Export Corporation, Phila- 
delphia 

Organized in November 1919, to export foundry 
equipment and allied products; some pre- 
liminary work was done; a representative 
made a survej' of foreign markets in 1920, 
but the plans did not materialize and the 
members agreed to dissolve the corporation 
early in 1921. 

Members (stockholders) 

American Foundry Equipment Co., New York- . 
American Molding Machine Co., Terre Haute, 
Ind 

Arcade Manufacturing Co., Freeport, 111 

Buch Foundry Equipment Co., York, Pa 

Grimes Molding Machine Co., Detroit 

National Engineering Works, Chicago 

Obermayer, S. Co., The, Chicago 

Paxson, J. W., Co., Philadelphia 

Whiting Foundry Equipment Co., Harvey, 111.. 

Woodison, E. J., Co., Detroit 

Wonham, Bates & Goode, New York 



1922-24 
1919-26 
1930-33 



1930-31 



11 



1919-21 



192 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS' FOKMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



(jieneral Alcohol Export Corporation, New York 

Organized in 1919 to ship spirits and alcohol, 
the company did substantial business until 
the prohibition amendment was passed. 
There were then compHcations since regula- 
tions required assurance from the foreign 
buyer that the alcohol shipped would not be 
used for beverages purposes; and there were 
long delays in obtaining export permits, re- 
sulting in cancelations by foreign buyers. 
The corporation was finally dissolved in 
1924. The principal advantage reported 
was "the opportunity and ability to execute 
larger orders or a larger volume of orders 
than could be done individually. The asso- 
ciation had the combined facilities of many 
individual operating plants, and by aggre- 
gating orders and apportioning same accord- 
ing to relative individual capacity, ship- 
ments were expedited and efficiency was 
promoted." 

Members (stockholders) 



Bacharach, Charles, New Orleans. 

Delany, Frank J., Chicago 

Harrison, Frederic M., New York. 

K^ssler, Julius, New York 

Publicker, Harry, Philadelphia 

Publicker, Philip, Philadelphia 

WUson, Everett W., Pekin, 111 

Wolfner, Wm. F., Peoria, 111 



Years 



General Milk Company, Inc., New York 

Organized in 1919 as American Milk Products 
Corporation (name changed in 1931) the 
company was very successful in developing 
exports of canned milk, reheving the do- 
mestic market of surplus production (as a 
result of expansion to meet war needs) and 
supplying a substantial demand in Europe. 
In later years, the canned milk industry 
abroad has expanded, in line with efforts 
toward becoming self-sustaining in food- 
stuffs, and exports to that market have 
lessened. Some members of the export com- 
pany met this situation by establishing 
branch factories abroad; and sales of the ex- 
port company have now been shifted to 
tropical countries where there is no domestic 
production. It is reported that "the out- 
standing advantage obtained by this cor- 
poration operating under the Webb-Pomer- 
ene Act is the large source of supplies avail- 
able from the member companies; and these 
sources extending as they do to all of the 



Total num- 
ber of 
members 



1919-24 
1919-24 
1919-24 
1919-24 
1919-24 
1919-24 
1919-24 
1919-24 



Period of 
associ- 
ation 
opera- 
tion 



1919-24 



I 

39 

J 



CONCENTRATION OF ECONOMIC POWER 



193 



120 ASSOCIATIONS' FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



General Milk Company, Inc.-^Continued. 

principal dairying States of tbe United States, 
enable our corporation to have the goods 
shipped to the most convenient ports nearest 
the foreign country to which they are to be 
exported, and to secure the lowest inland 
freight rates from factories to ports," 

Members (stockholders) 

Carnation Milk Products Co., Chicago, Ocon- 

omowoc. Wis., and Milwaukee 

Helvetia Milk Condensing Co., Highland, 111.. 
Highland Milk Condensing Co., Elkland, Pa... 
Pet Milk Co., St. Louis 



Goodyear Tire & Rubber Export Co., Akron, Ohio.. 
The company exports rubber products (tires, 
tubes, belting, hose, etc.) purchased from 
the Goodyear Tire & Rubber Co., which 
owns all stock of the export company. It 
also cooperates with other rubber exporters 
as a member of the Rubber Export Associa- 
tion, another group operating under the act. 

Grain Products Export Association, New York _. 

Formed in 1922 by the American Corn Prod- 
ucts Export Association (also filing as an 
export group under the act) and the Corn 
Products Refining Co., to ship corn sirup, 
corn sugar and cornstarch, a substantial 
business was developed, successfully dis- 
posing of the surplus production built up 
during the war. It was reported that "the 
facilities allowed us under the Webb-Pome- 
rene Act place us in a -position to combat 
foreign competition in a way that woujd not 
otherwise be possible." After several years, 
however, exports were affected by increased 
production abroad and tariff barriers, and 
the association became dissolved in 1927. 

Members 

American Corn Products Export Association, 
N. Y 

Corn Products Refining Co., N. Y 



Grand Rapids Furniture Export Association, Grand 
Rapids, Mich 

Organized in 1920 to ship furniture and to pro- 
tect the name "Grand Rapids Furniture" in 
foreign markets, the association did some 
preliminary work, obtaining trade statistics 
and foreign market information, but after an 
investigation of foreign freights and ex- 
change, the members decided that export 



191^39 
191^23 
1919-20 
1923-39 



1922-39 



1922-2 



1922-27 
1922-27 



)'c 



1920-27 



194 



CONCENTRATION OF ECONOMIC POWER 



J20 ASSOCIATIONS' FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEI^IBER COMPANIES— Continued 



Grand Rapids Furniture Export Association — 
Continued. 

business in so bulky and so expensive a 
product as cabinet furniture was impossible. 
They therefore became dissolved in 1927. 

Members 

Berkey & Gay Furniture Co., Grand Rapids... 

Century Furniture Co., Grand Rapids 

Criswell Furniture Co., Grand Rapids 

Furniture Studios, Inc., Grand Rapids 

Grand Rapids Chair Co., Grand Rapids 

Grand Rapids Refrigerator Co., Grand Rapids. 

Imperial Furniture Co., Grand Rapids 

Luce Furniture Co., The, Grand Rapids 

Michigan Chair Co., Grand Rapids 

Stickley Bros. Co., Grand Rapids 

Widdicombe Furniture Co., The, Grand Rapids. 
Widdicombe, John C, Grand Rapids 



Grapefruit Distributors, Inc., Davenport, Fla 

Organized in 1930 to export fresh and canned 
citrus fruits, especially grapefruit, for ac- 
count of growers and shippers, the company 
was handicapped by high tariffs abroad and 
became dissolved in 1939. 

Members (stockholders) 

Bates, F. S., Davenport, Fla 

Dewson, E. H., Davenport, Fla 

DiCristina, Harry E., Davenport, Fla 

Gulf Pitch Pine Export Association, New Orleans, 
La 



Organized in 1920 to represent the member 
companies in sales of yellow pitch pine lum- 
ber and timber, in foreign markets, operated 
successfully for several years using the 
oflBces of the Standard Export Lumber Co. 
of New Orleans, and doing substantial 
business (chiefly with Latin-American coun- 
tries). This association had cooperative 
agreements with the Alabama-Florida Pitch 
Pine Export Association, . also operating 
under the act. Beginning about 1931, busi- 
ness was affected by revolutions and political 
unrest in South America, reduced sales and 
prices due to the depression, and keen com- 
petition by Russian lumber. Some of the 
mills in the group resigned because they had 
cut all the lumber available to them; others 
curtailed production by reason of lessening 
demand. These conditions led to dissolution 
of the association in 1933. 



Years 



1920-27 
1920-27 
1920-27 
1920-27 
1920-27 
1920-27 
1920-27 
1920-27 
1920-27 
1920-27 
1920-27 
1920-27 



1930-39 
1930-39 
1930-39 



Total num 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



1930-39 



1920-33 



I 



CONCENTRATION OF ECONOMIC POWER 



195 



120 ASSOCIATIONS' FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Gulf Pitch Pine Export Association — Continued. 

Members 

Batson-Hatten Lumber Co., Lyman, Miss 

C. & R. Lumber Co., Blodgett, Miss 

Dantzler, L. N., Lumber Co., Moss Point, Miss 
Hines, Edward, Yellow Pine Trustees, Lumber- 
ton, Miss 

Jordan River Lumber Co., Kiln, Miss 

Virgin Pine Lumber Co., Piave, Miss 

Weston, H., Lumber Co., Logtown, Miss 



Hawkeye Pearl Button Export Co., Muscatine, 
Iowa 

Organized in 1921 to sell in export trade the 
buttons manufactured by the Hawkeye Pearl 
Button Co., and to cooperate with the 
Associated Button Exporters of America 
(another Webb lavt^ group) the company 
operated until 1931, but was then seriously 
affected by Japanese competition in the 
Latin-American countries, and finally be- 
came dissolved in 1936. 

Members (stockholders) 

Hagermann, C. C, Muscatine, Iowa 

Hawkeye Pearl Button Co., Muscatine, Iowa.. 

Hermann, F. W., Muscatine, Iowa _. 

Vetter, F. C, Muscatine, Iowa 



Years 



Inter-America Exporters, Inc., New York 

Organized in 1935 to export fruit to Latin- 
American countries, the association met with 
difficulties, especially restrictions placed on 
fruit imports by South American countries. 
The business was not successfully developed 
and the association became dissolved in 1937. 

Members (stockholders) 



Incorporated, but no stock issued. 
Directors were: 

Harkness, A. C, New York City... 

Lee, Florence, New York City 

Lehrer, Milton H., New York City. 

Marder, Helen, New York City 



International Steel Corporation, New York 

Organized in 1918 (as American International 
Steel Corporation, name changed in 1919) 
to act as export agent for a number of steel 
companies, including the Allied Machinery 
Co. of America, and G. Amsinck & Co., the 
corporation became involved in litigation, 
and was --iissolved in 1923. 
2.-T7fiJ)— tl— No. 6 14 



1924-33 
1926-30 
1920-33 

1920-31 
1920-21 
1926-33 
1920-33 



Total num- 
ber of 
membars 



1921-36 
1921-36 
1921-36 
1921-36 



1935-37 
1935-37 
1935-37 
1935-37 



Period of 
associ- 
ation 
opera- 
tion 



1921-36 



1935-37 



1918-23 



196 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



International Steel Corporation — Continued. 
Member, all stock held by — 



American International Corp., New York 

Internatioxial Wood Naval -Stores Export Corpora- 
tion, Gulfport, Miss 

Organized in 1939, the corporation exports tur- 
pentine and rosin (manufactured by wood 
distillation). Some of the members of this 
group were members of the Wood Naval 
Stores Export Corporation, which operated 
under the act from 1935 to 1938. 

Members (stockholders) 

Alabama Naval Stores Co., Mobile, Ala 

Chemical Products Co., Laurel, Miss 

Continental Turpentine & Rosin Corporation, 
Laurel, Mies . 

Crosby Naval Stores, Inc., Picayune, Miss 

Dixie Pine Products Co., Hattiesburg, Miss 

Mackie Pine Products Co., Covington, La ' 

Phoenix Naval Stores Co., Gulfport, Miss 

Southern Naval Stores Co., Columbia, Miss — 



1918-23 



1939 



1939 
1939 

1939 
1939 
1939 
1939 
1939 
1939 



Locomotive Export Association, New York _. 

Organized in 1920 for the purpose of procur- 
ing foreign business for its members and aid- 
ing them in the performance of contracts 
for export shipment, the as.sociation oper- 
ated successfully until 1928 in spite of keen 
competition of European builders. Early 
in 1930, it reported dissolution by mutual 
agreement. One member, the American 
Locomotive Sales Corporation, continued 
to f?le papers under the Export Trade Act 
until 1939. 

Members 

American Locomotive Co., New York.. 

American Locomotive Sales Corp., New York. 

Baldwin Locomotive Works, Philadelphia 

Montreal Locomotive Works, Ltd., New York: 

McKee Button Export Co., Muscatine, Iowa 

Organized in 1921 to sell buttons in foreign 
markets, the company found it difficult to 
meet Japanese competition; and was unable 
to establish an export business. It became 
dissolved in 1925. The company was a 
member of the Associated Button Exporters 
of America, Inc., which filed papers under 
the a6t from 1921 to 1933. 



1920-29 



1920-29 
1920-29 
1920-29 
1920-29 



1921 25 



CONCENTRATION OF ECONOMIC POWER 



197 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES-Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



McKee Button Export Co. — Continued. 

Members (stockholders) 

McKee, Albert S., Muscatine, Iowa 

McKee, James S., Muscatine, Iowa 

McKee, J. Harold, Muscatine,. Iowa.. 

Metal Lath Export Association, The, New York... 
This association has been in active operation 
for the past 10 years, developing export 
trade in metal lath, for its member com- 
panies. It reports that operation under the 
Export Trade Act "provides an organiza- 
tion through which the members are better 
able to meet foreign competition in foreign 
markets." 

Members 

Berger Manufacturing Co., The, Canton, Ohio.. 

Bostwick Steel Lath Co., The, Niles, Ohio 

Consolidated Expanded Metal Companies, 

The, New York 

Expanded Metal Engineering Co., New York.. 

Kalman Steel Co., Inc., New York 

North Western Expanded Metal Co., The, 

Chicago 

Penn Metal Co., Cambridge, Mass., and New 

York 

Republic Steel Corp. (Berger Mfg. Div.), New 

York . 

Truscon Steel Co., New York 

U. S. Gypsum Co., Chicago 



Millers Export Association, Inc., The, Chicago 

Formed in 1919 to promote sales of wheat flour 
to foreign Governments, through the U. S. 
Grain Corporation, the association ceased 
operation in 1920, and became dissolved in 
1922. 

Members (stockholders) 

Acme-Evans Co., Indianapolis, Ind 

Acme Milling Co., Oklahoma City, Okla 

Acme Mills, Inc., The, Hopkinsville, Ky 

Akin-Erskine MiUing Co., Evansville, Ind 

Allen & Wheeler Co., The, Troy, Ohio 

Amendt Milling Co., Monroe, Mich 

Arkansas City Milling Co., Arkansas City, 

Kans 

Atkinson Milling Co., Minneapolis -.. 

Attica Mills, Attica, Kans — 

Baldwin, D. N., Minneapolis 



1921-25 
1921-25 
1921-25 



/ 1929-31 

11937-38 

1929-39 

1929-39 
192^39 
1929-31 

1929-30 

1929-39 

1938-39 
1929-39 
1932-39 



1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-20 

1919-22 
1919-22 
1919-22 
1920-21 



10 



160 



1929-39 



1919-22 



198 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 









Period of 






Total num- 


associ- 




Years 


ber of 


ation 






members 


opera- 
tion 


Millers Export Association, Inc., The — Continued. 








Baldwin, Dwight M., Minneapolis 


1921-22 






Baldwin Flour Mills, Minneapolis _- .- 


1919-20 






Ballard & Ballard Co., Louisville, Ky 


1919-22 






Barber Milling Co., Minneapolis - - 


1919-20 






Bausman, Richard F., New York 


1919 
1919-21 






Bay State Milling Co., Boston. . _ . 




Bay State Milling Co., Winona, Minn 


1919-22 






Bewley Mills, Fort Worth, Tex _ . 


1919-22 






Big Diamond Mills Co., Minneapolis 


1919-22 






Blake Milling Co., Edwardsville, III 


1919-22 






Blish Milling Co., Seymour, Ind- 


1919-22 






Brand-Dunwoody Milling Co., Joplin, Mo 


1919-22 






Campbell, A. Spottswood, Brooklyn, N. Y 


1919 






Canadian Mill & Elevator Co., El Reno, Okla.. 


1919-22 






Cannon Vallev Milling Co., Minneapolis 


1919-22 






Cape County IVIilling Co., Carthage, Mo 


1920-21 






Cape County Milling Co., Jackson. Mo 


1919-22 






Cataract City Milling Co., Niagara Falls, N. Y. 


1919-22 






Centurv Milling Co., Minneapolis, .. 


1919-22 






Chapman Milling Co., Sherman, Tex 


1919-22 






Cleveland Milling Co., Cleveland, Ohio 


1919-22 






Cole, H. C, Milling Co., "Chester, 111... 


1919-22 






Colton Bros. Co., Bellefontaine, Ohio - . 


1919-22 
1919-22 






Commander Mill Co., Minneapolis- 




Commercial Milling Co., Detroit 


1919-22 






Consohdated Flour Mills Co., Hutchinson, 








Kans 


1919-22 
1919-22 






Cowgill & Hill Milling Co., Carthage, Mo 




Davis, J. G., & Co., Rochester, N. Y 


1919-22 






Diamond Mill Co., Sherman, Tex 


1919-22 
1919-22 






Duluth Universal Milling Co., Duluth, Minn__ 




Dunwoodie, W. P., Joplin, Mo 


1920-21 






Eagle Roller Mills Co., New Ulm, Minn 


1919-22 






Eckhart, B. A., Milling Co., Chicago 


1919-22 






Empire Milling Co., Minneapolis 


1919-22 






Enid Milling Co., Enid, Okla 


1919-22 






Ervin, H. C, Co., St. Cloud, Minn 


1919 






Everett-Aughenbaugh & Co., Waseca, Minn 


1919-22 






Fant Milling Co., Sherman, Tex 


1921-22 






Federal Mill & Elevator Co., Inc., Lockport, 








N. Y. 


1921-22 
1919-21 






Federal Milling Co., Lockport, N. Y 




Frazee, James, Milling Co., Baldwinsville, N. Y. 


1919-20 






Gambrill, C. A., Manufacturing Co., Balti- 








more, Md 


1919-22 






Gladnev Milling Co., Sherman, Tex 


1919-21 






Gooch Milling & Elevator Co., Lincoln, Nebr__ 


1919-22 






Great Northern Flour Mills Co., Minneapolis. _ 


1919-22 






Hamilton, Wm., & Son, Caledonia, N. Y 


1919-22 


1 




Harrison, J. Herbert, Brooklvn, N. Y 


1919 






Hormel Milling Co., Austin, Minn 


1919-22 
1919-22 






Hubbard Milling Co., Mankato, Minn .... 




Hunter Milling Co., Wellington, Kans 


1919-22 






Igleheart Bros., Evansville, Ind 


1919-22 






Imbs, J. F., Milling Co., St. Louis, Mo 


1919-22 







CONCENTRATION OF ECONOMIC POWER 



199 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 









Period of 






Total num- 


associ- 




Years 


ber of 


ation 






members 


opera- 
tion 


Millers Export Association, Inc., The — :Continued. 








International Milling Co., New Prague, Minn.. 


1919-22 






Ismert-Hincke Milling Co., Kansas City, Mo.. 


1919-22 






Jennison, W. J., Co., Minneapolis, Minn 


1919-22 






Kalispell Flour Mill Co., Kalispell, Mont 


1919-20 






Kalispell Flour Mills Co., Great Falls, Mont__- 


1921-22 






Kalispell Milling Co., Great Falls, Mont 

Kansas Flour Mills Co., Kansas City, Mo 


1920-21 






1919-22 






Kansas Flour Mills Co., Wichita, Kans 


1920-21 






Kehlor Flour Mills Co., St. Louis, Mo 


1919-22 






Kell Milling Co., Vernon, Tex 


1919-22 






Kelly, WiUiam, Milling Co., Hutchinson, Kans. 


1919-22 






La Grange Mills, Red Wing, Minn 


1919-22 






Larabee Flour Mills Corporation, Kansas City, 








Mo 


1919-22 






Lawrenceburg Roller Mills Co., Lawrenceburg, 




Ind 


1919-22 
1919-20 






Lea Milling Co., Wilmington, Del 




Lee, H. D., Flour Mills Co., Salina, Kans 


1919-22 






Lee, H. D., Milling Co., Hutchinson, Kans 


1920-21 






Lexington Mill & Elevator Co., Lexington, 








Nebr - 


1919-22 
1920-21 






Lexington Milling Co., Lexington, Nebr 




Lexington Roller Mills Co., Lexington, Ky 


1919-22 






Liberty Mills, Nashville, Tenn 


1919-22 






Listman Mills, La Crosse, Wis 


1919-20 






Louisville Milling Co., Louisville, Ky 


1919-22 






Majestic Milling Co., Aurora, Mo 


1919-22 






Maney Milling Co., Omaha, Nebr 


1919-22 






Marshall MiUing Co., Marshall, Minn 


1919-22 






Mayflower Mills, Fort Wayne, Ind 


1919-22 






Mennel Milling Co., Toledo, Ohio 


1919-22 






Meyer, John F., & Sons Milling Co., St. Louis.. 


1919-20 






Midland Flour Milling Co., Kansas City, Mo.. 


1921-22 






Midland Milling Co., Kansas City, Mo 


1919-21 






Mid- West Flour Mills Co., Columbus, Ohio 


1919-21 






Mid- West Flour Mills Co., The, New York 


1921-22 






Model Mill Co., Johnson City, Tenn 


1919-22 






Monarch Milling Co., Hutchinson, Kans 


1919-22 






Montana Flour Mills Co., Lewistown, Mont-. 


1919-22 






Moon, Geo. Q., Co., Inc., Binghamton, N. Y.. 


1919-22 






Morristown Flour Mills Co., Morristown, 








Tenn 


1919-22 
1919-22 






Morten Milling Co., Dallas, Tex 




Moseley & Motley Milling Co., Rochester, 








NY 


1919-22 
1919-20 






Mountain City Mills Co., Chattanooga, Tenn. 




National Milling Co., Toledo, Ohio 


1919-22 






New Era Milling Co., The, Arkansas Citv, 








Ark-.^ 


1919-22 






Newton Milling & Elevator Co., Newton, 




Kans 


1919-20 
1919-22 






Niagara Falls Milling Co., Buffalo, N. Y 




North Platte Flour Mills, North Platte, Nebr.. 


1919-20 






Northwestern Elevator & Milling Co., The, 








Toledo.. Ohio . 


1919-22 







200 



CJONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FOKMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Millers Export Association, Inc., The — Continued. 
Oklahoma City Mill & Elevator Co., Oklahoma 
City 

Oklahoma Mill Co., Kingfisher, Okla 

Omaha Flour Mills Co., Omaha, Nebr 

Page, Thomas, Milling Co., Topeka, Kans 

Pillsbury Flour Mills Co., Minneapolis 

Plant, Geo. P., Milling Co., St. Louis, Mo 

Quaker City Flour Mills Co., Philadelphia 

Quaker Oats Co., Chicago 

Ravenna ^ills. Inc., The, Ravenna, Nebr 

Rea-Patterson Milling Co., Coffeyville, Kans-- 

Red Star Milling Co., Wichita, Kans 

Reno Flour Mills Co., Hutchinson, Kans 

Roanoke City Mills, Inc., Roanoke, Va 

Robinson Milling Co., Salina, Kans 

Royal Milling Co., Great Falls, Mont 

Russell-Miller Milling Co., Minneapolis 

Saxony Mills, St. Louis, Mo 

St. Paul Milling Co., St. Paul, Minn 

Schultz, Baujan & Co., Beardstown, 111 

Shane Bros. & Wilson Co., Philadelphia 

Sheffield-King Milling Cd., Minneapolis 

Smith, G. B. R., Milling Co., Sherman, Tex-__ 

Smith, J. Allen, & Co., Knoxville, Tenn 

Spaiks Milling Co., Alton, 111 

Sparks Milling Co., Terre Haute, Ind 

Stanard-Tilton Milling Co., Dallas, Tex 

Stanard-Tilton Milling Co., Indianapolis 

Stanard-Tilton Milling Co., St. Louis. Mo 

Star & Crescent Milling Co., Chicago 

Stern, Bernhard & Sons, Inc., Milwaukee 

Stickell, D. A., & Sons, Hagerstown, Md 

Stokes Milling Co., Watertown, S. Dak 

Stott, David, Flour Mills Co., Detroit 

Thatcher, T. C, Oklahoma City, Okla 

Thompson Milling Co., Lockport, N. Y 

Thornton & Chester Milling Co., Buffalo, N. Y. 

Toledo Grain & Milling Co., Toledo, Ohio 

Topeka Flour Mills Co., Topeka, Kans 

Updike Milling Co., Omaha, Nebr 

Urban, Geo., Milling Co., Buffalo, N. Y 

Valier & Spies Milling Co., St. Louie, Mo 

Wabasha Roller Mill Co., Wabasha, Minn 

Waco Mill & Elevator Co., Waco, Tex 

Walnut Creek Milling Co., Great Bend, Kans 

Washburn-Crosbv Co., Minneapolis 

Washburn-CrosbV Co., Buffalo, N. Y 

Weber Flour Mills Corporation, Salina, Kans._ 

Wells-Abbott-Nieman Co., Schuvler, Nebr 

Wichita Mill & Elevator Co., Wichita Falls, 

Tex 

Williamson Milling Co., Clay Center, Kans 

Wisconsin Milling Co., Menomonie, Wis 



1919-20 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-20 
1919-22 
1919-22 
1919-20 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-20 
1919-20 
1919-22 
1919-22 
1919-22 
1919-20 
1919-22 
1919-20 
1919-22 
1919-22 
1919-22 
1919-20 
1919-22 
1919-22 
1921-22 
1919-22 
1919-22 
1919-22 
1919-21 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-20 
1919-20 
1919-22 

1919-22 
1919-22 
1919-22 



CONCENTRATION OF ECONOMIC POWEiR 



201 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Mississippi Valley Trading & Navigation Co., St. 
Loui?, Mo 

This association was formed in 1920 with the 
intention of selling products of the Mississippi 
Valley in foreign markets, including steel, 
dry goods, shoes, paper, furniture, flour, rioe, 
and hardware. It was found, however, that 
Webb law groups can operate to better ad- 
vantage when formed to sell 1 commodity 
rather than an assortment of unrelated prod- 
ucts. The company was therefore not suc- 
cessful, and liquidation was finally completed 
in 1923. 

Members (stockholders) 

Blanke, C. F., Tea & Coffee Co., St. Louis, Mo.. 

Brown Shoe Co., St. Louis 

Conrades, J. H., St. Louis 

Conrades Manufacturing Co., St. Louis 

Cramer, E. F., St. Louis 

Cramer, F. Ernest, St. Louis 

Ely & Walker D. G. Co., St. Louis 

Faust, E. A.. St. Louis 

Fisher, Wm., St. Louis 

Folk, Jos. W., Washington, D. C, and St. Louis. 

Handlan, E. W., St. Louis 

Karbe, Otto F., St. Louis 



Koken Companies, St. Louis .. 

Lampkin, E. P., St. l/ouis 

Lueking, A. C, St. Louis 

Moloney Elec. Co., St. Louis 

Molonev, T. O., St. Louis 

O'Neil, John F., St. Louis 

Rand, Frank C, St. Louis 

St. Louis Boat & Engineering Co., St. Louis. 

Sharp, Chas. E., St. Louis 

Sutter, Charles, St. Louis 

Tarlton, Wm. E., St. Louis 

Van Schoiack, T. W., St. Louis 

Waltke, Louis H., St. Louis 



Namusa Corporation (at first called Namusa South 
American Corporation), New York 

Formed in 1919 by the National Association of 
Manufacturers of the United States of 
America (from the initials of which the asso- 
ciation derived its name "Namusa") its in- 
tention was to sell in foreign markets, prod- 
ucts of the manufacturers that were members 
of the trade association, serving as export 
agent on a commission basis. The plan was 
not successful, however, perhaps because so 
many unrelated products were inclut'.ed 
among the products of the members. As in 



1920-21 
1920-21 
1921-23 
1920-21 
1920-21 
1921-23 
1920-21 
1921-23 
1921-23 
1920-23 
1920-23 
1920-23 

/1920-21 

U923 
1920-23 
1921-23 
1920-21 
1921-23 
1920-23 
1920-23 
1920-21 
1920-23 
1920-23 
1921-23 
1921-22 
1920-23 



25 



1920-23 



56 



1919-22 



202 



CONCENTRATION OP ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Namusa Corporation — Continued. 

the case of the Mississippi Valley Trading 
Co., it was found better to organize Webb 
law groups on a commodity basis, to sell only 
related products. 

Members {stockholders} 

Albemarle Paper Manufacturing Co., The, 
Richmond, Va 

American Aniline Pi oducts, Inc., New York 

American Belting Companies, Texas, Md 

American Fork & Hoe Co., Cleveland 

Beck with Co., The, Dowagiac, Mich 

Benedict Manufacturing Co., The, East Syra- 
cuse, N. Y 

Bethlehem Fabricators, Inc., Bethlehem, Pa 

Blaw-Knox Co., Pittsburgh 

Blish Milling Co., Seymour, Ind 

Brown, Chas. H., Paint Co., The, Brooklyn, 

N. Y .- 

Carnes Artificial Limb C •., Kansas City, Mo 

Clover Leaf Milling Co., Wellington, Mo 

Dexter Yarn Co., Pawtucket, R. I 

Dicks-David Co., New York__ 

Dungan, Hood & Co., Inc., Philadelphia 

Economy Ink Co., Cincinnati 

Excelsior Hardware Co., The, Stamford, Conn_ . 

Fletcher Works, Inc., Philadelphia 

Hale, John M.-Boardman, Inc., New York 

Hays, Daniel, Co., The, Gloversville, N. Y 

Heiler Brothers Co., Newark, N. J 

Hill-Smith Metal Goods Co., The, Boston 

Hoggson & Pettis Manufacturing Co., The, New 

Haven, Conn 

Howlett & Hockmeyer Co., New York 

Hydraulic Steel Co., The, Cleveland 

Inland Motor Truck Co., Evansville, Ind 

Kalamazoo Motors Corporation, Kalamazoo, 

Mich 

Lowell Paper Tube Corporation, Lowell, Mass. 

Meese & Gottfried Co., San Francisco 

Miller Saw-Trimmer Co., Pittsburgh.' 

National Milling Co., Toledo, Ohio 

Niagara Machine & Tool Co., Buffalo, N. Y 

Northern Paper Mills, Green Bay, Wis 

Ogden, ,T. Edward, Co., Inc., New York 

Patton Paint Co., Milwaukee 

Pekin Cooperage Co., Pekin, IlL .. 

Piqua Hosiery Co.. The, Piqua, Ohio 

Plumb, Fayette R., Inc., Philadelphia 

Read Machinery Co., Inc., York, Pa 

Rice, A. H., Co!, Pittsfield, Mass 

Rowe Calk & Chain Co., The, Plantsville, Conn. 
Schmidt & Ault Paper Co., York, Pa 



1919-22 
1919-22 
1919-22 
1919-22 
1919-22 

1919-22 
1919-22 
1919-22 
1920-21 

1919 

1919-22 

1920-21 

1919-22 

1919-22 

1919-22 

1920-21 

1919-22 

1919-22 

1919 

1919-22 

1919-22 

1919-22 

1919-22 
1919-22 
1919-22 
1920-22 

1920-22 

1919-21 

1919-22 

1919-22 

1920-21 

1919-22 

1919-22 

1919-22 

1919 

1919-21 

1919-22 

1919-22 

1919-22 

1919-22 

1919-22 

1919-22 



Total num- 
ber of 
members 



CONCENTRATION OF ECONOMIC POWEH 



203 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Namusa Corporation — Continued. 

Severance, S., Manufacturing Co., Glassport, Pa. 
Smith & Hemenway Co., Inc., Irvington, N. J_.. 

Sowers Manufacturing Co., Buffalo, N. Y 

Standard Varnish Works, New York 

Tagliabue, C. J., Manufacturing Co., Brooklyn, 

N . Y '. : . . . 

Taylor & Fenn Co., The, Hartford, Conn 

Urschel-Bates Valve Bag Co., Toledo, Ohio 

Valve Bag Co., Toledo, Ohio 

West Haven Manufacturing Co., The, New 

Haven, Conn ^ 

Weston Electrical Instrument Co., Newark, 

N. J 

White & WycofT Manufacturing Co., Holyoke, 

Mass 1 

Will & Baumer Candle Co., Syracuse, N. Y 

Willey, C. A., Co., Long Island City, N. Y 

Wood Shovel & Tool Co., Piqua, Ohio 




Naval Stores Export Corporation, New Orleans, La.. 
Organized in 1923 to e.xport naval stores (rosins 
and turpentines of all kinds), the association 
operated successfully for several years. It 
reported that selling costs were reduced 
through cooperative action ; the central office 
was able to quote on larger orders; the agents 
abroad developed new markets. But the 
members' supply became depleted, several of 
the companies discontinued entirely, and the 
few remaining found exportation imprac- 
ticable. The association was therefore dis- 
solved in 1930. 

Members (stockholders) 

Avera Naval Stores Co., Biloxi, Miss,, and 
New Orleans 

Batson & Hatten Lumber Co., Lyman, Miss 

Batson-McGehee & Co., Millard, Miss 

Bcntley Naval Stores Co., New Orleans 

Betts Naval Stores Co., New Orleans 

Blodgett Naval Stores Co., New Orleans 

Bogalusa Turpentine Co., Bogalusa, La 

Bullard, Sellers & Co., De Funiack Springs and 

Crestview, Fla 

Cady Lumber Co., New Orleans 

Canal Bank & Trust Co. (Trustees), New- 
Orleans 

Chipley, Buckner (Gillican-Chipley), New 

Orleans . 

Eastman-Gardiner Naval Stores Co., Laurel, 

Miss., and New Orleans, La 

Finkbine Lumber Co., Jackson, Miss 



1919-22 
1919-22 
1919-22 
1919 

1919-22 
1919-22 
1919-20 
1920-22 

1919-22 

1919-22 

1919-22 
1920-22 
1919-22 
1919-22 



1923-26 
1928-30 
192&-30 

fl923 

11926-30 
1923 
1926-30 
1925-30 

1923-30 
1923-24 

1927-30 

1927-30 

1923-30 
1923-28 



39 



1923-30 



204 



COJSrOENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Naval Stores Export Corporation — Continued. 

FuUerton Naval Stores Co., New Orleans 

Gay-Hamill Co., Biloxi, Miss 

Gillican-Chipley Co., New Orleans 

Gillican, W. B., New Orleans 

Goodyear Lumber Co., Picayune, Miss 

Great Southern Lumber Co., Bogalusa, La 

Hines, Edw., Yellow Pine Co., Lumberton, 

Miss. 

Industrial Lumber Co., Elizabeth, La 

Jackson Lumber Co., Lockhart, La 

Kaul Lumber Co., Birmingham, La., and 

Biloxi, Miss 

Kirby Lumber Co., Houston, Tex 

Lake Charles Naval Stores Co., New Orleans.. 
Lake Wales Naval Stores Co., Jacksonville, 

Orlando, and Lake Wales, Fla., and New 

Orleans, La 

Natalbany Lumber Co., Hammond, La 

New Orleans Naval Stores Co., New Orleans.. 
Newman, J. J., Lumber Co., Brookhaven, Miss. 
Newton, J. B., Turpentine Co., Poplarville, 

Miss 

Newton Naval Stores Co., Poplarville, Miss — 

Phelps, R. R., New Orleans 

Pringle, E. M., Naval Stores Co., McNary, La- 
Producers Turpentine Co.. Elizabeth, La 

Quitman Naval Stores Co., New Orleans 

Reimers, F. W. (trustee), Haramond, La 

Rosa Turpentine Co., Picayune, Miss 

Vernon Parish Naval Stores Co., Kurthwood 

and New Orleans, La 

Western Naval Stores Co., Houston, Tex., and 

New Orleans, La 



Nogales Garbanzo Association, Nogales, Ariz 

Organized in 1921 to dispose of a supply of 
garbanzos (chick peas), it became dissolved 
when the stocks were exhausted, in 1922. 

Members 

First National Bank of Nogales, Nogales, Ariz. 

Grace, W. R., & Co., New York 

Nogales National Bank, Nogales, Ariz 

Ocharan, Oscar, Nogales, Ariz 

Salido, Ildefonso, Nogales, Ariz 

Sonora Bank & Trust Co., The, Nogales, Ariz. 

Northwest Dried Fruit Export Association, Port- 
land, Oreg 

Formed in 1927 to ship dried fruit from the 
Pacific Northwest, this association has oper- 
ated successfully, reporting as its outstand- 
ing advantages uniform export sales con- 
tracts, uniform rules for export, and ability 



1926-30 
1923-30 
1923-30 
1927-30 
1923-26 
1923-25 
1923-30 

1923 
1923-30 

1923-28 
1923-26 
1923-30 



1923-30 
1923-27 
1923-26 
1923-30 

1923-30 

1928-30 

1927-30 

1923 

1923-30 

1923-26 

1927-30 

1923 

1923-30 

1923, 
1926-30 



1921-22 

1921-22 

1922 

1921-22 

1921-22 

1922 



1921-22 



53 



1927-39 



CONCENTRATION OF ECONOMIC POWEiR 



205 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Northwest Dried Fruit Export Association — Con. 
to secure payment of the members' drafts 
drawn on foreign buyers who have become 
delinquent. 

Members 

Merchants' Division: 

AbelingGeo., Co., San Francisco 1928-39 

AUen, C. E., Seattle 1928-35 

Anderson & Miskin, Ltd., Seattle 1928-31 

Atkins, Kroll & Co., San Francisco 1934-39 

Balfour, Guthrie & Co., Ltd., Portland, 

Greg 1927-28 

1934^39 

Bocker European Trading Co., Seattle 1930-31 

California Fruit Selling Co., San Francisco. 1927-36 
Canadian International Corp., Vancouver, 

B. C 1929-30 

Cederwall, Tver H., Co., Seattle 1936-38 

Cleveland, Ira, Yakima, Wash 1936-39 

Cron & Dehn, Inc., Seattle ' 1927-30 

Davis & Wear, Inc. , Seattle 1 927-3 1 

Evaporated Fruits, Inc., Selah, Wash 1931-33 

Field, Walter M., & Co., San Francisco 1927-39 

General Commercial Co., Inc., The, San 

Francisco 1927-31 

Gomperts, Jack, & Co., San Francisco 1935-39 

Grell, E. F., & Co., Seattle 1931-35 

Grothe, Schmidt & Co., San Francisco 1935-39 

Hall, Harry, & Co., Inc., San Francisco 1927-39 

Kelly Bros. Co., Inc., Hood River, Oreg 1936-38 

Macdonald, Andrews Co., Portland, Greg- _ 1939 

North Pacific Sales Co., Seattle 1928-36 

O'Malley-Abeling Co., San Francisco 1927-28 

Otis, McAllister & Co., San Francisco 1928-39 

Peabody, Henry W., & Co. of London, 

Ltd., Seattle 1935-39 

Root, G. B., & Co., Portland, Oreg 1927-30 

Sievers, Paul F. L., San Francisco 1939 

Triton Co., The, Seattle 1927-28 

Wilbur-Ellis Co., San Francisco 1930-39 

Wilcox-Hayes Co., The, Portland, Oreg... 1927-38 
Packers' Division: 

Allen Fruit Co., Salem, Oreg 1927-39 

California Packing Corporation, San 

Francisco . 1927-39 

Catz American Co. of California, San 

Francisco 1934-35 

Consolidated Packing Co., San Francisco.. 1935-39 

Drager Fruit Co., Salem, Oreg 1927-29 

Dundee Fruit Growers & Packers Asso- 
ciation, Dundee, Oreg 1930-39 

Ehrman, Mason, & Co., Portland, Oreg... 1927-28 

Evaporated Fruits, Inc., Selah, Wash 1927-28 

Gile, H. S., & Co., Salem, Oreg. 1927-39 



206 



CONCENTRATION OF ECONOMIC POWEH 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 









Period of 






Total num- 


associ- 




Years 


ber of 


ation 






members 


opera- 
tion 


Northwest Dried Fruit Export Association — Con. 








Packer's Division — Continued. 








Hogue, F. H., Payette, Idaho 


1932-39 






North Pacific Cooperative Prune Ex- 








change, Portland, Greg 


1927-39 






Paulus Bros. Packing Co., Salem, Greg 


1927-39 






Paulus, Rob't C, & Co., Salem, Greg 


1927 






Radovan Dehydrating Fruit Co., Cash- 








mere, Wash 


1927-28 






Rosenberg Bros. & Co., San Francisco 


1927-39 






Ross Packing Co., Selah, Wash 


1933-39 






Scotts Mills Packing Co., Salem, Greg 


1931-34 






South Douglas Cooperative Prune Grow- 








ers' Pool, Myrtle Creek, Greg 


1927 






Tracy, J. G., & Co., Dallas, Greg 


1927-39 






Valley Evaporating Co., Yakima, Wash... 


1933-39 






Washington Dehydrated Food Co., Yak- 








ima, Wash 


1927-39 






Wa.shington Growers Packing Corpora- 




tion, Vancouver, Wash 


1927-39 






Willamette Valley Prune Association, 








Salem, Greg 


1927-39 






Northwest Lumber Exporters' Association, Seattle, 








Wash 




26 


1929-31 


Organized in 1929 to ship lumber to foreign 






countries, the association did some prelimi- 








nary work, but a number of its members 








decided to join the Douglas Fir Export Co., 








an older group operating under the act. The 








Northwest association therefore became dis- 








solved. 








Members 








Anacortes Lumber & Box Co., Anacortes, Wash. 


1929-30 






Anderson & Middleton Lumber Co., Aberdeen, 








Wash 


1929-31 






Bay City Lumber Co., Aberdeen, Wash 


1929-31 






Bissell Lumber Co., Seattle 


1929-31 
1929-31 






Bolcom Canal Lumber Co., Seattle 




Bryant Lumber Co., Seattle 


1929-31 






Buchanan Lumber Co., Glympia, Wash 


1930-31 






Canyon Lumber Co., Everett, Wash 


1929-31 






Clark & Wilson Lumber Co., Linnton, Greg 


1929-31 






Clark Nickerson Lumber Co., Everett, Wash.. 


1929-31 






Des Chutes River Sawmills, Glympia, Wash — 


1930-31 






Duwamish l.umj^er Co., Seattle 


1929-31 






Eclipse Mill Co., Everett, Wash 


1929-31 






Elliott Bay Mill Co., Seattle 


1929-31 






Grays Harbor Lumber Co., Hoquiam, Wash... 


1929-30 






Long Bell Lumber Co., Longview, Wash 


1929-31 






Glympia Harbor Lumber Co., Glympia, Wash. 


1930-31 






Reed Mill Co., Shelton, Wash 


1930-31 
1929-31 






Seattle Export Lumber Co., Seattle 




Sibley Mills Lumber Co., Portland, Greg 


1929-31 






Springer Mill Co., Glympia, Wash 


1930-31 







i 



CONCENTRATION OF ECONOMIC POWEK 



207 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES-^Continued 




Total num- 
ber of 
members 



Northwest Lumber Exporter's Association — Con. 

Stimson Mill Co., Seattle 

Stimson Timber Co., Seattle 

Tumwater Lumber Mills Co., Olympia, Wash._ 
Washington Lumber & Spar Co., Renton, Wash- 
Washington Veneer Co., Olympia, Wash 



1929-31 
1929-31 
1930-31 
1929-30 
1930-31 



Pacific Flour Export Co., Seattle, Wash 

The association was formed in 1924 to ship flour 
to foreign countrievS, especially the Orient. 
Competition from abroad was keen, and it 
was reported that except for operation of the 
group through one selling organization there 
would be loss to the mills. The association 
was at first prosperous; there seemed to be a 
demand abroad for low-grade flour. But 
exports were later affected by increased pro- 
duction of wheat in Canada and lower prices 
on the Canadian exports of flour. Increased 
capacity of flour mills in Japan and China 
also led to demand in those countries for 
wheat instead of flour. The association was 
inactive for several years, and was finally 
dissolved in 1938. 

Members (stockholders) 

Albers Bros. Milling Co., Portland, Oreg 

Alexander, A., Wilbur, Wash 

Allen, W. S., Seattle 

Baumann, L. P., Seattle 

Beer, Melvin D., The Dalles, Oreg 

Big Bend Milling Co., Davenport, Wash 

Burke, F. B., Portland, Oreg 

Centennial Flouring Mills Co., Seattle ^ 

Centennial Mill Co., Seattle 

Collins Flouring Mills, Pendleton, Oreg 

Columbia River Milling Co., Wilbur, Wash 

Crown Mills, Portland, Oreg . 

Fisher Flouring Mills Co., Seattle 

Fisher, O. D., Seattle 

Jackson, H. V., Tacoma, Wash 

Johnson, O. C, Portland, Oreg 

Konnewick Flour Mills Co., Kennewick, Wash_ 

Leonard, E. H., Waitsburg, Wash 

Lilly, Chas. H., Co., Seattle 

McCoy, E. O., The Dalles, Oreg 

Miller Flour Mills, Yakima, Wash 

Noveltv Mill Co., Seattle 

Pattullo, D. A., Portland, Oreg 

Peacock Mil! Co., The, Freewater, Oreg -_ 

Pendleton Flouring Mills, Pendleton, Oreg 

Pioneer Flouring Mills Co., Island City, Oreg 

Pomeroy Flouring Mills Co., Pomeroy, Wash 

Pomeroy Warehouse & Milling Co., Pomerov, 
Wash .'-. 



1924-38 
1924-38 
1983-38 
1924-38 
1933-38 
1925-38 
1924-33 
1933-38 
1924-33 
1924-38 
1924-38 
1924-38 
1924-38 
1924-33 
1933-38 
1933-38 
1924-38 
1924-38 
1924-38 
1924-33 
1924-38 
1924-38 
1924-33 
1924-38 
1925-30 
1 924-38 
1924-30 

1930-38 



37 



208 



CONCENTRATION OF ECONOMIC POWEH 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Pacific Flour Export Co. — Continued. 

Portland Flour Mills Co., Portland, Greg 

Preston-Shaffer Milling Co., Waitsburg, Wash. 

Rose City Flour Mills, Portland, Greg 

Shull, F. L., Portland, Greg 

Sperry Flour Co., Taconia, Wash 

Spokane Flour Mills, Spokane, Wash 

VoUmer Clearwater Co., Ltd., Lewiston, Idaho. 
Wasco Warehouse Milling Co., The Dalles, 

Greg 

Western Milling Co., Pendleton, Greg 



Pacific Forest Industries, Tacoma, Wash 

Organized in 1935 to sell plywood for shipment 
to foreign countries, the association includes 
two classes of members: 

Stockholders 

Aberdeen Plywood Co., Aberdeen, Wash 

Aircraft Plywood Corporation, Seattle, Wash.. 

Capitol Plywood Co., Olympia, Wash 

Elliott Bay Mill Co., Seattle, Wash 

Harbor Plywood Corporation,- Hoquiam, Wash. 
M and M Plywood Corporation, Portland, 

Greg 

Glympia Veneer Co., Glympia, Wash 

Oregon- Washington Plywood Co., Tacoma, 

Wash 

Plylock Corporation, The, Portland, Greg 

Robinson Mfg. Co., Everett, Wash _.. 

United States Plywood Corporation, Seattle, 

Wash 

Vancouver Plywood & Veneer Co., Vancouver, 

Wash 

Washington Veneer Co., Olympia, Wash 

Wheeler Osgood Sales Corporation, Tacoma, 

Wash 

Associate Members 

Buffelen Lumber Manufacturing Co., Tacoma, 
Wash 

Lyle, Donald W., Tacoma, Wash 

McCleary, Henry, Timber Co., McCIeary, 

Wash .. 

Northwest Door Co., Tacoma, Wash 

Peterman Manufacturing Co.. Tacoma, Wash.. 

Smith Wood Products, Inc., Portland, Greg 

West Coast Plywood Co., Aberdeen, Wash 

Pacific Fresh Fruit Export Association, San Fran- 
cisco 

Organized in 1937 to export fresh fruit to 
foreign countries, the association reports that 
it has improved the members' relations with 



Years 



1924-38 

1924-38 

1924-25 

1924 

1924-38 

1924-38 

1924-38 

1924-38 
1930-38 



1935-39 
1935-37 
1935-39 
1935-39 
1935-39 

1935-39 
1935-39 

1935-39 
1935-39 
1935-39 

1937-39 

1935-39 
1935-39 

1935-39 



1938-39 
1938-39 

1938-39 
1938-39 
1938-39 
1938-39 
1938-39 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



21 



13 



1935-39 



1937-39 



CONCENTRATION OF ECONOMIC POWEH 



209 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Pacific Fresh Fruit Export Association — Con. 

domestic suppliers and with foreign buyers; 
it has reduced credit losses, and effected a 
marked reduction in tb- number of claims 
received from foreign customei's. 

Members 

Battat Import & Export Co., San Francisco 

Connell Bros., Co., Ltd., San Francisco 

Demartinl, John, Co., Inc., San Francisco 

Fidelity Trading Co., San Francisco 

Getz Bros. & Co., San Francisco 

Levy, A., & J. Zentner Co., San Francisco 

Liberty Gold Fruit Co., San Francisco 

McXear, J. A., Co., San Francisco 

Otis, McAllister & Co., San Francisco 

Pacific Produce Co., San Francisco 

Seattle Pacific Products Co., Seattle 

Sunset Produce Co., San Francisco 

Wileman Bros. & Elliott, San Francisco 



Years 



Pan-American Trading Co., New York 

This was an export company selling miscel- 
laneous products in foreign countries, es- 
pecially in the South American trade. It 
filed papers with the Commission for several 
years, but was not really a combination, and 
for that reason withdrew from operation 
under the act in 1927. 

Members (stockholders) 

Isaacs, Henry, New York 

Isaacs, Herman, New York 

Lsaacs, Ruf us, New York 

Isaacs, Mrs. Ruf us, New York 

Kadane, Jos. C, New York 

Leavenworth, David, New York 



Pencil Industry Export Association, New York 

The association was formed in 1939 to ship to 
foreign countries: pencils, pens, including me- 
chanical pencils and pens, penholders, and 
all other forms of writing and marking in- 
struments and related stationery items. 

Members 

American Lead Pencil Co., The, Hoboken, N. J. 
Dixon, Joseph, Crucible Co., Jersey City, N. J. 

Eagle Pencil Co., Inc., New York 

Faber, Eberhard, Pencil Co., The, Brooklyn, 
NY 



1937-38 
1937-39 
1937-39 
1937-38 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 



1925-27 
1919-27 
1919-22 
1922-27 
1919-22 
1925-26 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



1919-27 



1939 



210 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS' F0RM5:D UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Pennsylvania Millers Export Association, Phila- 
delphia 

The association was formed in 1919 to meet 
conditions which arose during the period 
when the United States Grain Corporation 
was buying flour for export in large quanti- 
ties. It became dissolved when the work of 
the Grain Corporation was ended. 

Members (stockholders) 



Adler Bros., Altoona, Pa 

Barnitz, Wra. B., Barnitz, Pa 

Brackbill, ElHs B., Gap, Pa 

Cannonsburg Milling Co., Cannonsburg, Pa__ 

City Flour Co., Inc., Muncy, Pa 

Cochranton Milling Co., Cochran ton, Pa 

Curry, John B., Sons, Palmyra, Pa 

Dayton Milling Co., Towanda, Pa 

Ellis, David, & Sons, Indiana, Pa 

Fleming & Shollenberger, Hepburnville, Pa 

Lio, Antonio, & Sons, Hahfax, Pa 

McDonald Milling Co., McDonald, Pa 

Millersburg Milling Co., Millersburg, Pa 

Patterson Milling Co., Saltsburg, Pa 

Rachau, J. L., Clintondale, Pa 

Washington Milling Co. , Washington, Pa 

Weiss, Chas. Z., Avon, Pa — 

Williams Bros., Port Matilda, Pa 



Phosphate Export Association, New York 

Operating successfully since 1919, the associa- 
tion ships pebble phosphate rock to foreign 
markets. It had cooperative relationship 
with Florida Pebble Phosphate Export As- 
sociation, and became consolidated with 
that group in 1933 (see Florida Pebble Phos- 
phate Export Association) ; has also had co- 
operative agreements with Florida Hard Rock 
Phosphate Export Association. It reports 
the following advantages obtained by opera- 
tion as a Webb law group: Uniform sales 
terms, standardization of grades, reduction 
of selling expenses, saving on ocean freight 
and insurance, reduction of credit losses, 
elimination of unfair claims from buyers, 
stable export prices at profitable levels, and 
better abilitv to meet foreign competition in 
the export field; "only by combining under 
the Webb law and acting as a unit, can the 
members meet the competition cf foreign 
producers." The association adds that 
"This Law seems to adequately meet our 
nieeds in every respect." 



Years 



191^20 
1919-20 
191&-20 
1919-20 
1919-20 
1919-20 
191^20 
1919-20 
1919-20 
1919-20 
1919-20 
1919-20 
1919-20 
1919-20 
1919-20 
1919-20 
1919-20 
1919-20 



Total num- 
ber of 
members 



18 



10 



Period of 
associ- 
ation 
opera- 
tion 



1919-20 



1919-39 



CONCENTRATION OF ECONOMIC POWER 



211 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Phosphate Export Association — Continued. 
Members 



The, 



American Agricultural Chemical Co. 

New York 

American Cyanamid Co., New York 

Coronet Phosphate Co., New York 

International Agricultural Corporation, New 
York . 

Morris Fertilizer Co., branch of Armour Fer- 
tilizer Works, Chicago 

Ore & Chemical Corporation, The, New York.. 
Phosphate Mining Co., New York 



Southern Phosphate Corporation, Baltimore. 
Swift & Co., Chicago 

Swift & Co. Fertilizer Works, Chicago 



Pioneer Pearl Button Export Corporation, Pough- 
keepsie, N. Y 

Organized to export products of the Pioneer 
Pearl Button Co., the association operated 
for several years but found it impossible to 
compete in foreign markets with Japanese 
and European producers. It therefore be- 
came dissolved in 1929. 

Members (stockholders) 

Clark, R. H., Poughkeepsie, N. Y 

Ethal. Hazel A., Poughkeepsie, N. Y 

Ethal, H. J. W., Poughkeepsie, N. Y.... 

Huttig, H. W., Muscatine, Iowa 

Pioneer Pearl Button Co., Poughkeepsie, N. Y.. 

Pipe Fittings and Valve Export Association, The, 
Philadelphia 

Organized in 1919 to ship pipe fittings and 
valves to foreign markets, the association has 
operated successfully for over 20 years. 
Among advantages reported are standardi- 
zation of products and terms of sale in ex- 
port shipments, elimination of trade abuses 
in the export field, interchange of experience 
concerning conditions in foreign markets, 
and the benefits of cooperation in develop- 
new markets. 

Members (stockholders) 

Chapman Valve & Manufacturing Co., Indian 
Orchard, Mass 

Crane Export Corporation, Long Island City, 
N. Y 

Flagg, Stanley G.. & Co., Inc., Philadelphia ..- 
General Fire Extinguisher Co., Providence, R. I. 

257769— 41— No. 6 15 



1929-39 
1929-39 
1919-27 

1919-39 

1922-24 
1929-39 
1919-26 
1933-39 
1920-39 
1938-39 
I4933-37 



1923-26 
1926-29 
1923-29 
1923-29 
1922 



1935-37 

1933-39 
1919-39 
1923-34 



5 1922-29 



19 



191&-39 



212 



CONCENTRATION OF ECONOMIC POWEJl 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Pipe Fittings and Valve Export Association, The — 
Continued. 
Grabler Manufacturing. Co., Cleveland, Ohio.. 

Grinnell Co., Inc., New York . 

Jarecki Manufacturing Co., Erie, Pa 

Jenkins Bros., Bridgeport, Conn 

Kelly & Jones Co., New York 

Kennedy Valve Manufacturing Co., Elmira, 

NY 

Kuhns Bros. Co., Dayton, Ohio 

Lunkenheimer Co., Cincinnati, Ohio 

Malleable Iron Fittings Co., Branford, Conn._. 
McNab & Harlin Manufacturing Co., New 

York 

Nelson Valve Co., Chestnut Hill, Pa 

Pittsburgh Valve & Fittings Co., Barberton, 

Ohio 

Pratt & Cady Co., Inc., Hartford, Conn 

Ravena Iron Co., Ravena, N. Y 

Walworth Manufacturing Co , 

Walworth Co., Inc., and 

Walworth International Co. (organized to han- 
dle export business of the manufacturing 
conapany), Boston, Mass., and New York 

Plate Glass Export Corporation, Pittsburgh, Pa 

Organized in December 1935 to export plate 
glass to foreign markets, the association is 
operating successfully, reporting that its 
chief advantage has been cooperation in 
prices and trade customs for export ship- 
ment, thereby enabling the members to meet 
the competition of European manufacturers; 
and that "We continue in our belief that the 
organization under the Export Trade Act is 
beneficial to the industry." 

Members {stockholders) 

Franklin Glass Corporation, Butler, Pa 

Libbey-Owens-Ford Glass Co., Toledo, Ohio 

Pittsburgh Plate Glass Co., Pittsburgh 



Potash Export Association, Inc., New York 

Organized in 1938 for the purpose of exporting 
potash (potassium chloride, potassium sul- 
fate, sulfate of potash magnesia, kainit, and 
manure salts.) 

Members (stockholders) 

American Potash & Chemical Corporation, 

New York , 

Potash Co. of America, Denver, Colo 

United States Potash Co., New York 



1919-22 
1934-39 
1919-39 
1934-39 
1919-31 

1919-37 
1919-31 
1934-37 
1919-39 

1919-22 
1919-21 

1919-24 
1919-21 
1934-37 



1919-39 



1936-39 
1936-39 
1936-39 



1938-39 
1938-39 
1938-39 



1936-39 



1938-39 



CONCENTRATION OF ECONOMIC POWEiR 



213 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Producers Linter Export Co., New Orleans 

Organized in 1924 to ship cotton linters for 
account of mills in Louisiana, Texas, Arkan- 
sas, Mississippi, Georgia, North Carolina, 
and South Carolina, the company (com- 
mercial copartnership) operated for several 
years, but was affected by the depression, 
and went out of business in 1932. 

Members 



Burnett, Wylie B., Dallas Tex.. 

Kansas, Esther, New Orleans 

Kohl, H. Stephen, New Orleans. 
Taylor, Ralph F., New Orleans. 



Redwood Export Company, San Francisco 

Operating as an export company before the 
Webb law was passed, it was one of the first 
to file under the act in 1918, and has operated 
successfully since that date, shipping red- 
wood to foreign countries. It reports as an 
outstanding advantage, ability to supply the 
foreign markets promptly and satisfactorily 
by drawing upon the entire group of redwood 
mills through a central organization rather 
than depending upon each unit, most of 
which under normal conditions would not be 
able to furnish a full cargo of export lumber 
at one loading. The product is standardized, 
inspected as to grade and quantity, and all 
details of sale and shipment are handled by 
the association. 

Members (class A) (stockholders) 

Browne, J. H., San Francisco 

Caspar Lumber Co., San Francisco 

DeCamp, C. E., San Francisco 

Hammond, A. B., San Francisco 

Hammond, L. C, San Francisco 

Hammond Lumber Co., San Francisco 

Johnson, C. R., San Francisco , 

Murphy, A. S., San Francisco 

Nelson, Chas., Co., The, San Francisco.^ 

Pacific Lumber Co., San Francisco 

Tyson, James, San Francisco 

Tyson, James (estate), San Francisco 

Union Lumber Co., San Francisco 

Members (class B) 

Dolbeer & Carson Lumber Co., San Francisco 

Elk River Mill & Lumber Co., Eureka, Calf 

Hobbs, Wall Lumber Co., San Francisco 

Holmes Eureka Lumber Co., San Francisco 



Years 



1924 
1927-32 
1924-32 
1925-32 



Total num- 
ber of 
members 



19 



1918 

1927-39 

1939 

1918 

1939 

1918-39 

1918,39 

1939 

1918-39 

1918-39 

1918 

1939 

1918-39 



1939 
1939 
1939 
1939 



Period ol 
associ- 
ation 
opera- 
tion 



1924-32 



1918-39 



214 



CONOENTKATION OF ECONOMIC POWEH 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Redwood Export Company — Continued. 

Rockport Redwood Co., Rockport, Calif 

Santa Cruz Lumber Co., Santa Cruz, Calif 

Rice Export Association, New Orleans, La 

Formed in 1937 by rice mills in Louisiana, 
Texas, and Arkansas (including several com- 
panies that had held stock in the Rice Export 
Corporation, operating under the act from 
1929-31, and some that were members of the 
American Rice Export Corporation which 
operated under the act from 1927-33), the 
association shipped rice to Cuba in 1937, but 
was affected by an Increase in duty imposed 
by Cuba at the end of 1937, upon rice from 
the United States, and has not been active 



smce. 



Members 



Arkansas Rice Growers Cooperative Associa- 
tion, De Witt, Ark 

Arkansas Rice Growers. Cooperative Associa- 
tion, Stuttgart, Ark 

Baton Rouge Rice Mill, Inc., Baton Rouge, 
La. 



Beaumont Rice Mills, Inc., Beaumont, Tex 

Dore Rice Mill, Crowley, La 

Edmundson-Duhe Rice Mill Co., Inc., Rayne, 
La 



El Campo Rice Milling Co., El Campo, Tex 

Gulf Coast Rice Mills, Houston, Tex 

Imperial Rice Milling Co., Crowley, La 

Jonesboro Rice Mill Co., Jonesboro, Ark 

Kaplan Rice Mill, Inc., Kaplan, La 

Mermentau Rice Mill Co., Inc., Mermentau, 
La. 



Mouton Rice Milling Co., Harrisburg, Ark 

Noble-Trotter Rice Milling Co., Lake Charles, 
La 



Orange Rice Milling Co., Inc., Orange, Tex 

Republic Rice Mill, Inc., Gueydan, La 

Rickert Rice Mills, Inc., New Orleans, La 

Simon's Rice Mill, Crowley, La 

Smith Rice Mill, Inc., De Witt, Ark 

Steinhagen Rice Milling Co., Beaumont, Tex.. 

Tyrrell Rice Milling Co., Beaumont, Tex 

United Rice Milling Products Co., Inc., Nev/ 

Orleans, La 

Walton Rice Mill, Inc., Stuttgart, Ark 



1939 
1939 



Rice Export Corporation, Lake Charles, La 

Formed in 1929 by rice millers in Louisiana and 
Texas, the association operated successfully 
for about 2 years, but in 1931 the members 
agreed to liquidate and thereafter export 



1937-39 

1937-39 

1937-39 
1937-39 
1937-39 

1937-39 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 

1937-39 
1937-39 

1937-39 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 
1937-39 

1937-39 
1937-39 



23 



1937-39 



12 



1929-31 



CONCENTRATION OF ECONOMIC POWEiR 



215 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total nuiD' 

ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Rice Export Corporation — Continued. 

individually. (5 of these companies joined 
the Rice Export Association which was 
formed under the act in 1937.; 

Members {stockholders) 

Acadia Rice Mills, Rayne, La 

Beaumont Rice Mills, Beaumont, Tex 

El Campo Rice Milling Co., El Campo, Tex... 

Galveston Rice Milling Co., Galveston, Tex 

Gulf Coast Rice Milling Co., Houston, Tex 

Iota Rice Milling Co., Iota, La 

Kaplan Rice MiU, Kaplan, La .. 

Lake Charles Rice MiUing Co., Lake Charles, 
La 



Louisiana State Rice MiUing Co., Abbeville, La. 

Mutual Rice Co. of Louisiana, Inc., Crowley, 

La _'.. 

Pritchard Rice Milling Co., Inc., Houston, Tex. 
Republic Rice Mill, Inc., Gueydan, La 



Rubber Export Association, The, Akron, Ohio 

Formed late in 1922 by companies exporting 
rubber (including the Goodyear Tire & Rub- 
ber Export Co., which also files separately 
under the act), the a-ssociation has operated 
successfully to date, reporting that "it is 
believed that this has resulted in materially 
improving the position of American suppliers 
in their competition with foreign suppliers 
in foreign markets." 

Members 

Firestone Tire & Rubber Co., Akron, Ohio 

Firestone Tire & Rubber Export Co., Akron, 

Ohio 

Fisk Tire Export Co., Inc., Chicopee Falls, 

Mass 

General Tire & Rubber Export Co., Akron, 

Ohio 

Goodyear Tire & Rubber Export Co., Akron, 

Ohio 

International B. F. Goodrich Corporation, 

Akron, Ohio 

Kelly Springfield Tire Export Co., Inc., New 

York 

Lee Tire & Rubber Co. of New York, Inc., 

New York 

Miller Rubber Export Co., Ltd., Akron, Ohio.. 
United States Rubber Export Co., Ltd., New 

York 



192^30 
192^31 
1929-31 
1929-31 
1930-31 
1929-31 
1929-31 

1929-31 
1929-31 

1929-31 
1929-31 
1929-31 



1923-28 

1928-39 

1923-33 

1926-39 

1923-39 

1924-39 

1926-33 

1928-32 
1923-30 

1923-39 



10 



1923-39 



2J^6 CONCENTRATION OF ECONOMIC POWEH 

120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Salmon Export Corporation, Seattle, Wash 

Formed in 1926 to develop foreign markets for 
the purpose of disposing of surplus salmon 
packed in the Northwest, the association did 
some business in 1926, but in 1927 production 
fell far below normal, and thereafter there 
was no surplus to ship abroad. The corpo- 
ration became dissolved in 1930. 

Members (stockholders) 

Alaska Consolidated Canneries, Seattle, Wash. 

Alitak Packing Co., Seattle, Wash 

Astoria & Puget Sound Packing Co., South 

Bellingham , Wash 

Carlisle Packing Co., Seattle, Wash 

Copper River Packing Co., Seattle, Wash 

Deep Sea Salmon Co., Seattle, Wash 

Emel Packing Co., Seattle, Wash 

Hidden Inlet Canning Co., Seattle, Wash 

Kadiak Fisheries Co., Seattle, Wash 

Myers, Geo. T., & Co., Seattle, Wash 

North Pacific Trading & Packing Co., San 

Francisco 

Petersburg Packing Co., Seattle, Wash 

Pioneer Packing Co., Seattle, Wash 

Pioneer Sea Food Co., Seattle, Wash 

Pyramid Packing Co., Seattle, Wash 

Shepard Point Packing Co., Seattle, Wash 

Skinner, D. E., Seattle, Wash 

Stuart Corporation, Seattle, Wash 

Sunny Point Packing Co., Seattle, Wash 



Scrap Export Associates of Americ?, New York 

Formed in May 1937 to ship iron and steel 
scrap to foreign countries, the association 
was not successful in negotiating with for- 
eign buyers, and therefore in November of 
the same year agreed to dissolve and sell 
individually. 

Members 



Dreifus, Chas., Co., Philadelphia 

Joseph, Robert, New York 

Schiavone-Bonomo Corporation, New York 

Shook Exporters Association, Memphis, Tenn 

Formed late in 1931 to export wine-barrel 
shooks to foreign markets, the association 
has operated with offices in New York, 
Nashville, Tenn., Pekin, 111., and Memphis, 
Tenn. It was at times handicapped by fail- 
ure of the grape crop in Argentina (an im- 
portant market) and by depression conditions 
in Latin- American markets; and reported 



Years 



1926-29 
1926-30 

1926-30 
1926-30 
1926-30 
1926-30 
1926-30 
1926-30 
1926-30 
1926-30 

1926-29 
1926-30 
1926-30 
1926-30 
1926-30 
1926-30 
1929-30 
1926-30 
1926-30 



Total num- 
ber of 
members 



19 



Period of 
associ- 
ation 
opera- 
tion 



1926-30 



1937 



1932-39 



CONCENTRATION OF ECONOMIC POWER 



217 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
members 


Period of 
associ- 
ation 
opera- 
tion 


Shook Exporters Association — Continued. 

that "it is only by operating as an associa- 
tion that we are able to maintain prices in 
face of increasing costs and competition 
from foreign producers." 

Members 

Brooklyn Cooperage Co., New York.- 


1935-39 

1932-39 
1932-38 
1932-39 
1932-36 
1932-39 

1932-38 
1932-39 


2 

8 




Chickasaw Wood Products Co., Memphis, 
Tenn _ . 




Export Cooperage Co., Memphis, Tenn 

Hamlen, J. H., & Son, Portland, Maine 

Paducah Cooperage Co., Paducah, Ky 

Pekin Cooperage Co., Pekin, 111 . __ 




Rocky River Coal & Lumber Co., Nashville, 
Tenn _ _ 




Southport Corporation, Inc., New Orleans 

Signal Export Association, New York 


1931-39 


Formed to export railway signal equipment 
and other apparatus to such foreign coun- 
tries as the board of managers may deter- 
mine, some sales were made to the Soviet, 
but the association is now inactive. 

Members 

General Railway Signal Co., New York 

Union Switch & Signal Co., Swissville, Pa 

Southi American Fruit Exporters, Inc., New York. 


1931-39 
1931-39 


1927-31 


This association was formed by New York ex- 
port houses, to ship fruit to Latin-American 
markets, and operated successfully for sev- 
eral years. It was then affected by import 
restrictions in Argentina, which seriously 
curtailed the exportation of apples from this 
country. Some of the exporters in this group 
went out of business, and others discontin- 
ued their fruit exports. The association was, 
therefore, dissolved. During its operation it 
reported substantial savings through cooper- 
ative action, especially through negotiation 
of freight rates. 

Members (stockholders) 

Diedrichs & Co., New York 


1927-30 
1927-30 
1930-31 
1927-30 
1927-30 
1927-30 
1927-30 
1927-31 




Fernandes, P. D , Co , New York _ 




Holtorf & Lindner, Inc., New York 




Park, Holtorf & Guy, New York 




Sorenson & Co., Inc., New York . 




Steinhardt & Kelly, New York ._ 




Ultramares Corporation, New York 




Waterman, Edmund, & Co., New Yoi'k 





218 



CONCENTRATION OF ECONOMIC POWEB 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Standard Oil Export Corporation, New York. 

Formed in December 1928 to ship petroleum 
and petroleum products, the association did 
a substantial business and reported advan- 
tages derived by central control and coor- 
dination of export terms and policies. 
Some of the members imported crude oil, 
refined it, and exported the refined products. 
In 1933 and 1934, however, the association 
reported a substantial lessening of exports 
due to the fact that a tariff placed on im- 
ports of crude oil (United States Revenue 
Act of 1932) had greatly reduced importa- 
tion, with a consequent reduction in exports. 
Lower prices and keen competition of 
foreign producers also lessened export sales, 
The association was throughout its existence 
a member of the larger Webb-law group. 
Export Petroleum Association, Inc. Both 
associations became dissolved in 1936. 

Members (stockholders) 

Carter Oil Co., The, Tulsa, Okla 

Humble Oil & Refining Co., Houston, Tex 

Lago Petroleum Corporation, New York 

Standard Oil Co. of Louisiana, Baton Rouge, 
La 

Standard Oil Co. of New Jersey, New York 

Standard Oil Co. (New Jersey), New York 

Steel Export Association of America, The, New 
York 

Organized in 1928, the association is engaged 
in export trade in steel products shipped to 
foreign countries. It reports as chief ad- 
vantages under the act, ability to meet 
foreign competition through establishing 
uniform terms and contracts for export sales, 
standardizing weights and qualities, and the 
collection and exchange of information re- 
garding foreign markets. 

Members 

Armco International Corporation, The, Mid- 
dletown, Ohio- _" 

Bethlehem Steel Export Corporation, New 
York 

Central Tube Co., Pittsburgh 

Inland Steel Co., Chicago 

Jones & Laughlin Steel Co., Pittsburgh 

McKeesport Tin Plate Co., McKeesport, Pa.-. 
Newport RoUing Mill Co., The, Newport, Ky.. 

Pittsburgh Steel Co., Pittsburgh 

Pittsburgh Steel Products Co., Pittsburgh 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



1929-36 
1929-35 
1935-36 

1929-36 
1929-36 
1935-36 



1939 

1928-39 

1928-37 

1939 

1928-39 

1928-38 

1939 

1932-39 

1928-32 



17 



1929-36 



1928-39 



eONCENTEATION OF ECONOMIC POWER 



219 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Steel Export Association of America, The — Con. 
Republic Iron & Steel Co., Youngstown, Ohio-. 
Republic Steel Corporation, Youngstown and 

Cleveland, Ohio 

South Chester Tube Co., Chester, Pa 

Spang, Chalfarit & Co., Pittsburgh, Pa 

United States Steel Products Co., New York.. 

Weirton Steel Co., Weirton, W. Va 

Wheeling Steel Corporation, Wheeling, W. Va.. 
Youngstown Sheet & Tube Co., The, Youngs- 
town, Ohio ■ 



Sugar Export Corporation, New York 

Formed in 1922 to sell in export sugar and 
sugar products, for 2 large companies, the 
association reported a reduction of costs 
througfi centralization of the exports of 
member concerns in one common selling 
agency, a saving in cable and correspondence 
expense and economy in handling shipping 
papers and banking details. One of the 
members withdrew in 1933; the corporation 
has continued to export for the American 
Sugar Refining Co., and to file papers with 
the Commission, although it is no longer a 
combine. 

Members (stockholders) 

American Sugar Refinin,'? Co., The, New York. 
National Sugar Refining Co. of New Jersey, 
New York 



Sulphur Export Corporation, New York 

The association has been operating since 1922, 
selling crude sulfur in foreign markets. It 
reports success in building up an important 
foreign market for American sulfur. Ex- 
port terms of sale are agreed upon, and 
economy is effected by combining shipments 
and obtaining advantageous freight rates. 

Members (stockholders) 



Aldridge, Walter H., New York 

Freeport Sulphur Co., New York 

Freeport Texas Co., New York 

Holmes, Ralph C, New York 

Judson, Wilber, New York 

Kilbreth, James T., New York 

Norton, Eugene L., New York 

Snider, Clarence A., New York 

Swenson, Eric P., New York 

Swenson, S. Magnus, New York 

Texas Gulf Sulphur Co., New York.. 
Union Sulphur Co., The., New York. 
Whiton, Henry, New York 



Years 



1928-30 

1930-39 
1928-33 
1928-39 
1928-39 
1928-39 
1928-39 

1928-39 



1922-39 
1922-33 



1922-39 
1937-39 
1922-37 
1930-34 
1922-39 
1928-39 
1930-34 
1922-34 
1922-30 
1922-30 
1922-39 
1922-28 
1922-28 



Total num 

ber of 
members 



13 



Period of 
associ- 
ation 
opera- 
tion 



1922-39 



1922-39 



220 



CONOENTBATION OF ECONOMIC POWEH 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
members 


Period of 
associ- 
ation 
opera- 
tion 


Textile Export Association of the United States, 
New York . 




77 


1930-39 


The association has been in successful opera- 
tion since 1930 exporting textiles; the busi- 
ness is largely in cotton piece goods, cotton 
yarns, cotton and rayon and all rayon piece 
goods. It reports distinct advantage to the 
members through agreement upon selling 
terms, standardized service charges, negoti- 
ation of freight rates with steamship line 
conferences, and exchange of market infor- 
mation abroad, especially concerning ex- 
change restrictions in foreign countries. 

Members 

Aimone, A. F., New York _ 


1937-39 

1939 

1930-32 

1930-36 
1935-37 
1932-39 
1930-39 
1930-39 
1930-39 
1930-39 
1930-36 
1935-36 
1938-39 
1930-39 
1930-35 
1936-39 
1937-39 
1930-37 
1931-38 
1930-33 
1935-37 
1937-39 
1934-35 
1930-33 
1933-39 
1935-39 
1930-32 
1932-39 
1938-39 
1937-39 
1930-31 
1931-34 
1933-39 
1937-39 
1930-32 
1935-39 
1930-32 
1939 




American Enka Corporati n, New York 

Amory, Browne & Co., N w York 




Anderson, William, Textil Manufacturing Co., 
New York __ 




Arnold Sales Corporation, New York 




Baily, Joshua L., & Co., New York 




Barrell, WiUiam L., Co., Inc., New York 

Bear Mill Manufacturing Co., Inc., New York. 
Beir, Arthur, & Co., Inc., New York 




Berliner, Edwin E., & Co., New York 




Bernheimer, Jacob S., & Bro., New York 

Bernstein, Harold, & Co., New York 




Bliss, Fabyan & Co., Inc., New York. 




Borden, M. C. D., & Sons, Inc., New York 

Brand & Oppenheimer, Inc., New York 

Brune, Nadler & Cuffe, New York __ _. 




Brune, Pottberg & Co., New York 




Callaway Mills, Inc., New York 




Cannon Mills, Inc., New York.. . 




Carnac Cottons, Inc., New York .- 




Casas & Co., New York . . 




Castillo, Rafael del, & Co., New York 

Cohn-Hall-Marx Co., New York . _ . 




Cone Export & Commission Co., New York 

Consolidated SeUing Co., Inc., New York 

Crystal Springs Bleachery, Inc., New York 

du Pont, E. I., de Nemours & Co., New York_- 
Epstein, Leo J., New York . _ 




Erwin Yarn Agency, Inc., Philadelphia — 

Erwin Yarn Co., Inc., Philadelphia __ 




Federated Textiles, Inc., New York 




Fine Goods Sales Associates, Inc., New York__ 
Fluegelman, N., & Co., New York 




Franklin Manufacturing Co., Inc., New York.. 

Garner & Co., Inc., New York 

Getz Bros., New York 





CONCENTRATION OF ECONOMIC POWER 



221 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Textile Export Association of the United States — 
Continued. 

Glass, Henry, & Co., New York 

Griffin, Charles E., & Co., New York 

Hall, Louis F., & Co., Inc., New York 

Haywood, Mackay & Valentine, Inc., New 

York.. 

Haywood- Mackay Department, Bliss, Fabyan 

& Co., Inc., New York , 

Heaney, Everett, & Co., Inc., New York^ 

Heymann Mercantile Co., Inc., New York 

Hinck, Otto H., New York 

Iselin-Jeflferson Co., New York 



Johnson Arthur R., Co., New York 

Julliard, A. D., & Co., Inc., New York 

Lamport Manufacturers Supply Co., Inc., The, 
New York . 

Leveen, E. F., & Co., New York 

Lowenstein, M., & Sons, Inc., New York 



McKay, W. E., & Co., New York 

Manufacturers Textile Export Co., Inc., New 
York 

Minot, Hooper & Co., New York 

Mosheim, E., & Co., Inc., New York.. 

Munoz & Co., New York 

Nashua Manufacturing Co., Inc., New York... 

Neuss, Hesslein & Co., Inc., New York 

Noveltex, Inc., New York 

Pacific Mills, New York 

Paulson, Linkroum & Co., New York 

Pepperell Manufacturing Co., New York 

Pollack, Max, & Co., New York 

Prince, Lauten Corporation, New York 

Princely Mills Co., Inc., New York 

Simpson, William, Sons & Co., New York 

Smith, Kirkpatrick & Co., Inc., New York 

Southeastern Cottons, Inc., New York 

Stafford, G. A., & Co., New York 

Stettauer Harris & Raphael, New York.: 

Stevens, J. P., & Co., Inc., New York 

Taylor, Clapp & Beall, New York .. 

Til ton & Keeler, Inc., New York 

Trippe, Barker & Co., New York 

Turner, Halsey Co., New York 

United Merchants & Manufacturers Export 

Co., New York 

Wellington, Sears & Co., New York 

Woodward, Baldwin & Co., New York 

Textile Manufacturers Alliance, Inc., New York — 
This association was formed in 1919 as the Tex- 
tile Alliance Export Corporation, changing 
its name in the same year to the title listed 
above. Its purpose was to export cotton 



1930-39 
1930-32 
1930-32 

1935-36 

1937-38 
1932-34 
1933-39 
1930-39 
1930-33 
1938-39 
1937-39 
1935-39 

1930-39 
1930-33 
1930-32 
1935-39 
1935-39 

1931-39 
1930-39 
1930-37 
1933-39 
1930-39 
1930-39 
1930-31 
1930-39 
1930-32 
1930-31 
1935-39 
1930-39 
1932-35 
1937-39 
1930-36 
1934r-39 
1930-39 
1930r31 
1930-31 
1930-32 
1930-32 
1931-36 
1930-39 

19^30-32 
1930-31 
1930-39 



Period 0/ 
assod- 
ation 
opera- 
tion 



36 



1919-20 



222 



CONCENTRATION OF ECONOMIC POWEE 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Years 


Total num- 
ber of 
members 


Period of 
associ- 
ation 
opera- 
tion 


Textile Manufacturers Alliance, Inc. — Continued, 
and woolen fabrics, yarns, hosier}', under- 
wear, and blankets. It operated at first as 
agent for the members, then reorganized to 
purchase the goods from the producers and 
resell them abroad. It wished, however, to 
ship to the Philippines, and also to import 
products received in exchange for exports; 
since these were not export functions within 
the terms of the law, the association with- 
drew from operation under the act. 

Members {^stockholders) 

Aliierican Association of Woolen and Worsted 
Manufacturers, New York . 


1919 
1919-20 

1919 

1919-20 

191&-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919 

1919-20 

1919^20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

191^20 

1919 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919-20 

1919 

1919-20 

1919-20 

1919-20 






American Woolen Products Co., New York 

Association Cotton Textile Merchants, New 
York.. 




Baily, Joshua L., & Co., New York 




Baldwin, William H., New York 




Bates, W. C„ New York __. 




Bliss, Fabyan & Co., New York . 




Borden, M. C. D., & Sons, New York 

Cannon Mills, New York 




Catlin & Co., New York 




Cone Export & Commission Co., New York 

Converse & Co., New York _. 




Deering, Milliken & Co., New York 




Duval, W. H., & Co., New York.. 




Howe, Henry W., New York 




Iselin, Wm., & Co., New York 




Kunhardt, Geo. E., Corporation, New York 

Lawrence, John S. , Boston 




McKenney, H. P., & Co., New York 




Metcalf, Manton B., New York 




Munn, John R., New York 




National Association of Wool Manufacturers, 
Boston 




National Council of American Cotton Manu- 
facturers, Charlotte, N. C 




Nichols, Geo., New York 




Parker, Wilder & Co., New York 




Poor, J. Harper, New York 




Rupprecht, Frederick K., New York 




Smith, Hogg & Co., New York 




Stevens, J. P., & Co., New York 




Taubel, Wm. F., Inc., New York 




Turner, J. Spencer, Co., New York 




Turner, Halsey Co., New York 




Watta, Ridley, New York 




Watts, Stebbins & Co , New York 




Whitman, Wm., Co., Inc., New York 




Wood, Geo., Sons & Co., Philadelpia 





CONCENTRATION OF ECONOMIC POWKDR 223 

320 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total nam 

ber of 
members 



Period of 
assocl- 
atiOQ 
opera- 
tion 



United Export Lumber Association, Seattle, Wash.. 
Formed in 1931 to include the Douglas Fir 
Exploitation & Export Co. (operating as an 
export association under the act) and other 
export firms, representing 86 mills in the 
Northwest, the association was not a success 
and became dissolved in 1932. 

Members 

Dant & Russell Export Co., Portland, Greg. 
(representing 2 mills) 

Douglas Fir Exploitation & Export Co., Seattle, 
Wash, (representing 78 miUs) 

Grays Harbor Exportation Co., Aberdeen, 
Wash, (representing 6 mills) ^. 



1931-32 



1931-32 
1931-32 
1931-32 



United Paint & Varnish Export Co., The, Cleve- 
land, Ohio 

Formed in Decernber 1919 to sell the products 
of the Sherwin-Williams Co. and its sub- 
sidiaries in foreign markets, the association 
reported economy eflfected through con- 
solidation of packing, billing, and handling 
of the goods, and duplication of effort abroad, 
1 representative hajidling the several lines, 
until 1926 when it reported that sales were 
being handled individually by the member 
companies; and in 1929 the association was 
dissolved. 

Members {stockholders) 

Cottingham, W. H., Cleveland 

Douglas, H. J., Cleveland _ 

Fenn, S. P., Cleveland 

Gemberling, H. L., Newark, N. J__ 

Levenhagen, R. W., Cleveland 

Martin, George A., Cleveland , 

Schroeder, L. H., Cleveland 

Sherwin-Williams Co., The, Cleveland 

Whittlesey, H. D., Cleveland .._ 

United States Alkali Export Association, New York. 
Formed in 1919 to export caustic soda and 
soda ash, bicarbgnate of soda, and allied 
products (miscellaneous quantities of cal- 
cium chloride, sodium chloride, liquid 
chlorine, and modified sodas) this associa- 
tion has operated successfully to date. It 
reports economy effected in seUing cost at 
home and abroad, through establishment of 
a central bureau to handle export sales. 
This agency can secure definite and compre- 
hensive information from a wide variety of 



1920-23 

1927-29 

1920-27 

1920-29 

1920 

1920-29 

1923-29 

1920-29 

1920-29 



1920-29 



17 



1919-39 



224 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total num- 
ber of 
memtera 



Period of 
associ- 
ation 
opera- 
tion 



United States Alkali Export Association — Con. 

sources, relative to the status of foreign 
markets, in the matter of prices, shipping 
facilities, consular regulations, stocks on 
hand, and the credit situation. A compre- 
hensive study of certain foreign markets has 
been possible, and competition from abroad 
has been met through the efforts of the as- 
sociation more satisfactorily than if business 
had been secured individually by the mem- 
bers. In summary, the assoeiifttion reports 
that "we have become more convinced of the 
necessity for united effort in matters of for- 
eign trade due to the experience and knowl- 
,edge we have gained since operating under 
.the Webb law." The association cooperates 
with the California Alkali Export Associa- 
tion, formed under the Webb law in 1936. 

Members (stockholders) 



Church & D wight Co., Inc., New York 

Columbia Chemical Co., Cincinnati 

Columbia Development Corporation, Pitts- 
burgh 

Diamond Alkali Co., Pittsburgh 

Dow Chemical Co., Midland, Mich 

Hooker Electrochemical Co., New York 

Mathieson Alkali Works, Inc., New York 

Michigan Alkali Co., Detroit 

Niagara Alkali Co., New York 

Pennsylvania Salt Manufacturing Co., Phila- 
delphia 

Pittsburgh Plate Glass Co., Pittsburgh 

Republic Chemical Co., Pittsburgh 

Solvay Process Co., Syracuse, N. Y 

Southern Alkali Corporation, Pittsburgh 

Vulcan Detinning Co., Sewaren, N. J 

Wamer-Klipstein Chemical Co., New York 

Westvaco Chlorine Products, Inc., New York. 

United States Button Export Co., Muscatine, Iowa. 
Formed in 1921 to export the products of the 
United States Button Co., and to cooperate 
in export policies with other button ex- 
porters, through the Webb law group. 
Associated Button Exporters of America, 
Inc., the association found it impossible to 
compete in the European market with 
Czechoslovakian producers. It did some 
business in Latin-American countries, but 
there met with severe competition from 
Japanese buttons. It finally became dis- 
solved in 1928. 



1930-39 
1919-20 

1935-39 
1919-39 
1934-39 
1919-39 
1919-39 
1919-39 
1934-39 

1919-39 
1920-35 
191^20 
1919-39 
1935-39 
1920-21 
1919-22 
1922-39 



1921-28 



I 



(CONCENTRATION OF ECONOMIC POWEiR 



225 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period o 1 
associ- 
ation 
opera- 
tion 



United States Button Export Co — Continued. 

Members (stockholders) 

Adams, A. C, Muscatine, Iowa 

Hagermann, Edw., Muscatine, Iowa 

Steinmetz, Paul, Muscatine, Iowa 

United States Button Co., Muscatine, Iowa... 

United States Forest Products Co., Kansas City, 
Mo 



1922-23 
1922-23 
1922-23 
1921-28 



Formed in 1919 to export yellow pine lumber 
and wood products generally, the associa- 
tion never came into operation, and was 
finally dissolved. 

Members (stockholders) 

Bonner, B. F., Kirby Lumber Co., Houston, 
Tex 

Burgoyne, C. R., Bagdad Land & Lumber Co., 

Pensacola, Fla 

Carney, W. M., Mill Co., Atmore, Ala 

Clark, A. L., Standard Lumber Co., Dallas, 

Tex 

Hallowell, R. M., Industrial Lumber Co., 

Elizabeth, La 

Joyce, A. G., Tremont Lumber Co., Chicago. - 
Joyce, James S., Trinity County Lumber Co., 

Groveton, Tex 

Keith, Charles S., Delta Land & Timber Co., 

Kansas City, Mo 

McLane, J. R., Alabama & Florida Lumber 

Co., Noma, Fla 

Peavy, A. J., Peavy-Byrnes Lumber Co., 

Shreveport, La 

Rosasco, Peter, Bay Point Mill Co., Pensa- 
cola, Fla 

Wiener, Eli, Angelina County Lumber Co., 

Keltys, Tex 

Wier, R. W., Long Leaf Lumber Co., Houston, 

Tex. 

United States Handle Export Co., The Piqua, Ohio_ . 
Formed in 1919 to export wooden handles for 
tools, shovels, brooms, etc., also churns, 
woodenware, and hardwood flooring, the 
association operated successfully for several 
years, reporting economy through coopera- 
tive selling, elimination of separate export 
departments, distribution of orders among 
the members, standardization of grades, and 
saving in freight rates through consolidation 
of shipments. During the depression it re- 
ported difficulty in selling at profitable prices, 
due to reduced purchasing power in foreign 



1919-22 

1919-22 
1919-22 

1919-22 

1919-22 
1919-22 

1919-22 

1919-22 

1919-22 

1919-22 

1919-22 

1919-22 

1919-22 



13 



191^22 



15 



1919-39 



226 



CONCENTRATION OF EC50N0MIC POWEH 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



United States Handle Export Co. — Continued. 

markets: "This is particularly true, since our 
goods are used principally in agricultural 
areas and the prices of agricultural products 
are very low." In 1932 the association 
oflices were closed "due to depressed condi- 
tions and state of trade in foreign countries." 
Reports were filed with the Commission un- 
til 1939 in the hope that conditions would 
improve, but the name has now been re- 
moved from the Commission's list. 

Members (stockholders) 



Barnett, C. H., Piqua, Ohio 

Bassett, H. Lee, Cleveland, Ohio 

Bassett, Herbert W., and estate of Herbert W. 

Bassett, Columbus, Ind 

Bassett, Myra W., and estate of Myra W. 

Bassett, Columbus, Ind 

Bassett, William F., Columbus, Ind 

Crook, Son & Co., Hicksville, Ohio 

DurreJl, George B., Cleveland, Ohio 

Ferguson, A. W., Willoughby, Ohio 

Flesh, L. M., Piqua, Ohio 

LaFontaine Handle Co., Decatur, Ind 

Leonard, A. M., Piqua, Ohio 

May, J. E., Columbus, Ind 

Rogers, William Cook, Piqua, Ohio 

Ross, C. A., Piqua, Ohio 

Way, C. S., Columbus, Ind 



United States Maize Products Export Association, 

Inc., New York City and WiJkes-Barre, Pa 

Organized in 1919 as the American Maize 
Products Export Association, an unincor- 
porated group, the association was incorpo- 
rated in 1920, and the name was changed to 
United States Maize. Its purpose was to 
export "products of degerminated Indian 
corn or maize" as agent for the member 
mills. Some shipments were made, but the 
association was unable to develop a foreign 
market, reporting in 1924 that "there has 
been no demand for corn products, and we 
are merely holding the corporation intact in 
hopes there may be a favorable change and a 
chance to transact business." It was 
finally dissolved in 1926. 

Members (stockholders) 

Adams, W. N., Arkadelphia, Ark... 

American Hominy Co., Indianapolis 

Arkadelphia Mill Co., Arkadelphia, Ark. 



1919-39 
1919-39 

1919-29 

1919-23 
1919-39 
1928-39 
1927-39 
1927-39 
1919-20 
1927-39 
1919-24 
1920-23 
1919-39 
1924-39 
1920-23 



1922-25 
1919-22 

; 192 I -22 

11926 



18 



1919-26 



CONCENTRATION OF ECONOMIC POWEK 



227 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num 

ber of 
members 



Period of 
associ- 
at}on 
opera- 
tion 



United States Maize Products Export Association- 
Continued. 

Aunt Jemima Mill Co., St. Joseph, Mo 

Ballard & Ballard Co., Louisville, Ky 

Chivington, T. M., Chicago 

Clark, Rob't R., St. Joseph, Mo 

International Milling Co., New Prague, Minn. 

Kroupe, Chas. A., Mill Co., Milwaukee 

Lafayette Corn Flour Mills, Lafayette, Ind._. 

Licht, Louis J., Geneva, N. Y 

Louisville Cereal Mill Co., Louisville, Ky 

Miner, Asher, Wilkes-Barre, Pa 

Miner, Rob't C, Wilkes-Bari^, Pa 



Miner-Hillard Milling Co., Wilkes-Barre, Pa... 
Patent Cereals Co., Geneva, N. Y 



Standard Cereal Co., Chillicothe, Ohio. 
Wathen Mill Co., Louisville, Ky 



/1921-22 

11926 
1919-22 
1922-25 
1922-25 
1920-22 
1919-22 
1919-22 
1922-25 
191^22 
1922-25 
1922-25 

/ 1919-22 

11926 

/1919-22 

11926 
1919-22 
1919-22 



United States Office Equipment Export Association, 
New York. _ _ 

Organized for the purpose of exporting office 
desks, filing cabinets, bookcases, and other 
office equipment the association reported that 
"the fact that one concern is able to supply 
everything necessary for the equipinent of a 
modern office is an advantage in the handling 
of foreign sales." The New York office of 
the association was said to be of great con- 
venience to factories located inland. In 
1923, however, the members voted to sell 
separately, and the association was dis- 
solved. 

Members 

Commercial Furniture Co., Chicago 

Globe- Wernicke Co., The, Cincinnati 

Marble, B. L., Chair Co., The, Bedford, Ohio... 

United States Provision Export Corporation, Chi- 
cago. . 

Formed in 1919 to export food productsj prin- 
cipally packing-house, agricultural, and 
dairy products, the association operated 
until 1922, but reported obstacles in develop- 
ing business abroad, such as financial difficul- 
ties of buyers, dropping markets, and losses 
due to cancelation of contracts. It there- 
fore went out of business. 

Members {stockholders) 

Arnold Bros., Chicago 

Blumenstock & Reid, Cleveland 

Burkhardt, Henry, Packing Co., Dayton, Ohio.. 

257769— 41— No. 6 16 



1918-23 
1918-23 
1918-23 



1919-22 
1919-22 
1919-22 I 



1918-23 



21 



1919-22 



228 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 





Yews 


Total num- 
ber of 
members 


Period of 
associ- 
ation 
opera- 
.tion 


United States Provision Export Corporation — 
Continued. 

Columbus Packing Co., Columbus, Ohio 

Drovers Packing Co., Kansas City, Kans 

Dyer, W. H., Packing Co., Evansville, Ind 

East Side Packing Co., East St. Louis, 111 

Evansville Packing Co., Evansville, Ind 

Focke, Wm., Sons Co., Dayton, Ohio 

Home Packing & Ice Co., Terre Haute, Ind 

Interstate Packing Co., Winona, Minn 


1919-22 
1919-22 
191^22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22 
1919-22^ 
1919-22 
- 1919-22 
1919-22 
1919-22 
1919-22 
1919 
1919-22 
1919-22 
1919-22 
1^19 






Lake Erie Provision Co-, Cleveland, Ohio 

Louisville Provision Co., Louisville, Ky 

Mayer, Oscar F., & Bro., Chicago 




Nuckolls Packing Co. , Puebro, C olo 




Ogden Packing & Provision Co., Ogden, Utah___ 
Ohio Provision Co., Cleveland, Ohio 




Powers, Begg & Co., Jacksonville, 111 




Rath Packing Co. , Waterloo, Iowa 




Ruddy, Thos., Co., Kansas City, Kans 




Sucher, Chas., Packing Co., Dayton, Ohio 

Theurer Norton Provision Co., Cleveland, Ohio. 
Wilson Provision Co., Peoria, 111 




WolfiF, Chas., Packing Co., Topeka, Kans-_ 




Walnut Export Sales Co., Inc., Kansas City, Kans. 




19 


191^3 


(formerly in Chicago, 111.). 

Formed in 1919 to export walnut and walnut 
products (also Indiana white^ oak logs), the 
association has operated successfully to date, 
reporting that "by combining the resources 
of stocks, experience, etc., of several mills, 
we at one time reduce the costs of exporting 
as compared to individual operation, increase 
the ability to supply practically all items in 
our line, enjoy the effects of greater prestige 
in the foreign markets, and control in a 
greater measure the standards of measure- 
ment and quality." 






Members (stockholders) 








Amos Lumber Co., Edinburg, Ind 


1928-29 
1929-39 
1928-32 
1919-22 

1919 

191&-28 

1919-28 

1919-22 

1919-22 

1919-23 

1919-35 

1928-39 

1922-32 






Amos-Thompson Co., Edinburg, Ind 




Barnaby, Chas. H., Greencastle, Ind 

Central Timber Export Co., New York . 

Chillicothe Gunstock Manufacturing Co., Chil- 
licothe, Ohio__ . .-. 




Des Moines Sawmill Co., Des Moines, Iowa 

Hartzell, Geo. W., Piqua, Ohio 

Hoffman Bros. Co., Fort Wayne, Ind 




Hodsier Veneer Co., Indianapolis, Ind 

Langton Lumber Co., Pekin, 111 




Long Knight Lumber Co., Indianapolis, Ind.. 
Maley & Wertz Lumber Co., Evansville, Ind_. 
Mowbray & Robinson Lumber Co., Cincin- 
nati, Ohio 1 





i 



CONCENTRATION OF ECONOMIC POWEiR 



229 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Walnut Export Sales Co., Inc. — Continued. 

Penrod Walnut & Veneer Co., Kansas City, 
Mo 

Pickrel Walnut Co., St. Louis, Mo 

Pierson HoUowell Lumber Co., Indianapolis 

PurceU, Frank, Walnut Lumber Co., Kansas 
City, Kans 

Ransom, John B., & Co., Nashville, Tenn 

Wood-Mosaic Co., Inc., Louisville, Ky 



Walworth International Co., New York (formerly 

in Boston, Mass.) 

FoTjned in 1920 to act as selling agent for the 
Walworth (Manufacturing) Co. and several 
other producers of pipe fittings and valves, the 
association has operated successfully to date, 
reporting that "the success of the Walworth 
International Co. as a Webb-Pomerene or- 
ganization, we believe, is due chiefly (if not 
wholly) to the fact that we have gone into 
the business of foreign trade in what v/e feel 
is an intelligent manner and have followed a 
consistent policy year in and year out, in 
good times and in poor times, of maintaining 
a foreign field organization. Through such 
organization we have been enabled to build 
up and maintain a recognition of the quality 
of our brand. This quality reputation, to- 
gether with goodwill created by the main- 
tenance of a continued foreign sales force, 
has enabled us to continue to secure business 
even in the face of European and Japanese 
price competition of a very serious type." 

The company is a member of the Pipe 
Fittings and Valve Export Association, al^o 
filing papers under the act. 

All stock has been held by the Walworth 
Manufacturing Co.. now called the Wal- 
worth Co., of Boston and New York. 

Western Plywood Export Co., Tacoma, Wash 

Formed in 1927 to export veneers, plywood, 
and plywood products to foreign countries, 
the association reported better service to 
buyers, lower selling cost to the individual 
mills, and the opportunity^ to distribute 
specifications to individual member mills 
which best fit their operation. The asso- 
ciation undertook exploitation work at a low 
cost, which was not possible for the individ- 
ual mills. In 1935 another plywood export 
association was formed, and members of the 
western plywood group decided to dissolve 
the first and join the second. (See Pacific 
Fofest Industries.) 



1919-28 
1919-28 
1928-39 

1919-39 
1919-22 
1923-28 



1920-39 



27 



1926-36 



230 



CONOENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNi:)ER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Western Plywood Export Co. — Continued. 

Members (stockholders) 

Aircraft Plywood Corporation, Seattle, Wash. 

Autzen, Thomas, Portland, Greg 

Bailey, Wm., Seattle, Wash 

Bartells, G. L., Seattle, Wash 

Buffelen Lumber & Manufacturing Co., 

Tacoma, Wash 

Calloway, E. J., Tacoma, Wash 

Elliott Bay Mill Co., Seattle, Wash '.... 

Garland, Philip (trustee), Tacoma, Wash 

Harbor Plywood Co., Hoquiam, Wash 

Mackall-Paine Veneer Co., Vancouver, Wash. 

Nicolai, H. T., Tacoma, Wash 

Oregon- Washington Plywood Co., Tacoma, 

Wash 

Osgood, Geo. J., Tacoma, Wash 

Peterman Manufacturing Co., Tacoma, Wash.. 

Peterman, T. A., Tacoma, Wash 

Portland Manufacturing Co., Portland, Oreg_-. 

Robinson, Jack, Everett> Wash 

Robinson Manufacturing Co., Everett, Wash.. 

Simpson, Phillip, Tacoma, Wash 

Spencer, C. L., Seattle, Wash 

Tacoma Veneer Co., Tacoma, Wash 

Treasury of the Corporation (stock held by 

Philip Garland, trustee, transferred to 

Treasury of the Corporation in 1929) 

Walton, E. Q., Everett, Wash 

Walton Veneer Co., Everett, Wash 

Washington Veneer Co., Olympia, Wash 

Westman, E. E., Olympia, Wash 

Wheeler Osgood Sales Corporation, The, 

Tacoma, Wash 



Wisconsin Canners Export Association, Manitowoc, 
Wis 

Formed in 1919 by Wisconsin canners for the 
purpose of selling canned vegetables (es- 
pecially peas) under a common label, in for- 
eign markets, the association was not suc- 
cessful in developing an export business. It 
filed papers for several years in the hope that 
business might be obtained but finally be- 
came dissolved in 1929. 

Members 

Adell Canning Co., Adell, Wis 

Antigo Canning Co., Antigo, Wis ^ 

Badger Canning Co., Beaver Dam, Wis 

■ Beaver Canning Co., Beaver Dam, Wis.- 

Cambria Canning Co., Cambria, Wis 

Cedarburg Canning Co., Cedarburg, Wis 

Chilton Canning Co., Chilton, Wis 



1930-33 
1929-31 
1932-33 
1929-30 

1927-36 
1931-36 
1927-36 
1929-31 
1927-29 
1927-30 
1931-36 

1930-36 
1929-31 
1931-36 
1931-36 
1927-30 
1929-30 
1928-30 
1929-36 
1930-36 
1927-30 



1929-36 
1929-36 
1927-30 
1927-36 
1929-36 

1927-36 



Total num- 
ber of 
members 



1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 



Period of 
associ- 
ation 
opera- 
tion 



36 



1920-29 



CONCENTRATION OF ECONOMIC POWEB. 



231 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 




Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Wisconsin Canners Export Association — Con. 

Dutch Canning & Pickling Co., Cedar Grove, 
Wis.: 

Fairwater Canning Co., Markesan, Wis 

Fort Atkinson Canning Co., Fort Atkinson, 
Wis 

Fox Lake Canning Co., Fox Lake, Wis 

Fuhreman Canning Co., De Forest, Wis 

Hartford Canning Co., Hartford, Wis 

Herfort, Frank, Canning Co., Baraboo, Wis 

Holmen Canning Co., Holmen, Wis 

Iron Ridge Canning Co., Iron Ridge, Wis 

Krier Preserving Co., Belgium, Wis 

Lake Shore Canning Co., Sheboygan, Wis 

Lakeside Packing Co., Manitowoc, Wis 

Markesan Canning Co., Markesan, Wis 

Mayville Canning Co., Mayville, Wis 

Milwaukee River Canning Co., Thiensville, 

Wis 

New Holstein Canning Co., New Holstein, 

Wis 

Onalaska Canning Co., Onalaska, Wis 

Oostburg Canning Co., Oostburg, Wis 

Owen Canning Co., Qwen, Wis 

Prairie View Canning Co., Randolph, Wis 

Randolph Canning Co., Randolph, Wis 

Rockfield Canning Co., Rockfield, Wis 

Sauk City Canning Co., Sauk City, Wis 

Sun Prairie Canning Co., Sun Prairie, Wis 

Watertown Canning Co., Watertown, Wis 

Waupun Canning Co., Waupun, Wis 

West Bend Canning Co., West Bend, Wis 

West Salem Canning Co., West Salem, Wis 

Wisconsin Pea Canners Co., Manitowoc, Wis.. 

Wood Naval Stores Export Association, Wilming- 
ton, Del 

Formed in 1935 to export wood naval stores 
(rosin an)d pine oil produced by wood distil- 
lation) through the export offices of the Her- 
cules Powder Co., the association operated 
successfully until 1938, when another export 
association was formed to ship the same prod- 
ucts, and some of the members of the first 
group joined the second. (See International 
Wood Naval Stores Export Association.) 
The first group was, therefore, dissolved. It 
was reported that operation of the associa- 
tion "contributed a great deal to the orderly 
marketing of pine oil and F. F. wOod rosin 
in the export channels." 

Members 

Continental Turpentine & Rosin Corporation, 
Laurel, Miss - 



1920-29 
1920-29 

1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-24 
1920-29 
1920-29 
1920-29 
1923-29 
1920-29 
1920-29 

1920-29 

1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-29 
1920-23 



1935-38 



1936-37 



232 



CONCENTRATION OF ECONOMIC POWER 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Years 



Total num- 
ber of 
members 



Period of 
associ- 
ation 
opera- 
tion 



Wood Naval Stores Export Association — Con. 

Dixie Pine Products Co., Hattiesburg, Miss 

Hercules Powder Co., Wilmington, Del, 

Mackie Pine Products Co., Covington, La 

Phoenix Naval Stores Co., Gulfport, Miss 



1935-38 
1935-38 
1935-38 
1935-38 



Wood Pipe Export Co , Seattle, Wash 

Formed in 1920 to export wood pipe, wood 
tanks and silos, and accessories, to foreign 
countries, the association did some business 
in South America but was unable to develop 
enough^ trade to warrant continuing the or- 
ganization. It therefore became dissolved 
in 1923. 

Members {stockholders) 

American Wood Pipe Co., Tacoma, Wash 

Continental Pipe Manufacturing Co., Seattle.. 

Garrison, T. B. (trustee), Seattle 

Gerken, G. T., San Francisco 

Insinger, F. N., Tacoma, Wash 

Long, Joe L. (trustee) , Seattle 

Morrill, Vaughan (trustee), Tacoma, Wash 

Munroe, H. K., Seattle, Wash 

Pacific Tank & Pipe Co., San Francisco 

Pitcher, E. C. (trustee), San Francisco 

Redwood Manufacturers Co., San Friincisco 

Wood, C. J. (trustee), San Francisco 

Worden, H. B., San Francisco 



1920-23 

1920-23 

1920 

1920-23 

1920-23 

1920-23 

1920-23 

1920-23 

1920-23 

1920-23 

1920-23 

1920-23 

1920-23 



Zinc Export Association, Inc., New York 

Formed in 1925 to sell metallic zinc in slabs, in 
export trade, the association operated suc- 
cessfully for several years. One of the mem- 
bers acted as forwarding agent for all, thereby 
effecting a saving in expense. It was also 
reported that "by operating through this as- 
sociation our members had the advantage of 
dealing as a unit with foreign competition and 
were enabled to more readily view market 
conditions abroad, and by concentration of 
information and ideas were able to arrive at 
a constructive sales policy so far as their ex- 
port tonnage was concerned." During the 
depression, however, prices abroad were 
lower than those in the United States, and 
the members were unwilling to seU at the 
lower levels. The association was inactive 
for several years, for this reason, and was 
finally dissolved in 1934. 

Members (stockholders) 

American Metal Co., Ltd., The, New York 

American Zinc, Lead & Smelting Co., Boston, 
Mass., and St. Louis, Mo 



1925-34 
1925-34 



13 



1920-23 



13 



1925-34 



CONCENTRATION OF ECONOMIC POWEtR 



233 



120 ASSOCIATIONS FORMED UNDER THE EXPORT TRADE 
ACT, APRIL 1918 TO DECEMBER 1939, REPRESENTING 
2,074 MEMBER COMPANIES— Continued 



Zinc Export Association, Inc. — Cnntinued. 

Athletic Mining & Smelting Co., Joplin, Mo._ 
Eagle-Picher Lead Co., The, Chicago, 111., and 

Cincinnati, Ohio 

Fort Smith Spelter Co., The, Greencastle, Ind- 
Grasselli Chemical Co., The, Cleveland, Ohio- 

Hegeler Zinc Co., The, DanviUe, 111 

Illinois Zinc Co., Chicago, 111 

Kusa Spelter Co., Kansas City, Mo 

Matthiessen & Hegeler Zinc Co., La Salle, 111. 

Quinton Spelter Co., The, Joplin, Mo 

United Metals Selling Co., New York 

United Zinc Smelting Corporation, New York. 



Years 



1925-30 

1925-34 
1925-34 
1925-34 
1925-34 
1925-33 
1929-33 
1925-32 
1925-31 
1927-28 
1925-34 



Total nnin- 

ber of 
members 



Period of 
associ- 
ation 
oftera- 
tioo 



EXHIBIT 4 

[First Report Form] 

Federal Trade Commission 
washington, d. c. 

FIRST REPORT FROM EXPORT ASSOCIATIONS 

DUE WITHIN 30 DAYS AFTER CREATION 

1. Name 

Addreiss 

(Here Insert address of principal office) 

2. Statement. — This corporation or association was organized or 
entered into for the sole purpose of engaging in export trade and is 
now or about to be solely engaged in the export trade as defined in the 
Export Trade Act, approved April 10, 1918, viz : "Trade or commerce 
in goods, wares, or merchandise exported or in the course of being 
exported from the United States or any territory thereof, to any 
foreign nation." 

3. There is hereunto an^.exed and made a part hereof a schedule 
showing in paragraph "A" the location of its offices or places of busi- 
ness; in paragraph "B," the names and addresses of all its officers 
and directors; in paragraph "C," the names and addresses of all its 
stockholders or members; in paragraph "D," the products to be ex- 
ported; and in paragraph "E," the capital authorized and paid in. 

4. There is also annexed (F) a brief statement describing its 
methods and plan under which it is doing business, a statement of its 
relations with other associations, corporations, and individuals, and 
such other information as this company or association deems should 
be in the export files of the Federal Trade Commission. 

5. If a corporation, a copy of its certificate or articles of incorpora- 
tion and by-laws is annexed and filed, and if unincorporated, a copy of 
its articles or contract of association. 



By 

State or 

Cov/nty of ^ , ss: 

, being first duly sworn, on oath deposes and 

says that he is an officer, to wit, of the above- 
named corporation or association ; that he has read the foregoing re- 
port and schedules annexed, and that the same are in all respects true 
and correct. 



(Verlftfing officer sign here) 

Subscribed and sworn to before me this day of , 19__. 



Notary Public. 
234 



CONCENTRATION OF ECONOMIC POWER 235 

Schedule 1 

(A) The following are the locations of all offices and places of 
business : 









(B) The following were officers or directors, as of 

(Date) 


Names 


Office Held 


Addresses 
































(Date) 


Names 


Addresses 


Number of Shares 
































(D) It desires to be classified as engaged in exporting the follow- 
ing products, viz: 





(Please limit to products now or about to be exported and supplement by letter when 

others are taken on) 

(E) Capital: 

(1) Authorized preferred, $ ; par value, $ ; issued, $ — ; 

paid in, $ 

(2) Authorized common, $ ; par value, $ ; issued, $ — ; 

paid in, $ 



(F) The following briefly describes the methods and plan under 
which our business is done and states our relations with other asso- 
ciations, corporations, and individuals, with such other information 
as we deem should be in the export files of the Federal Trade 
Commission : 



Notes 

1. The information required by this report is to be furnished to 
the Federal Trade Commission under "An act to promote export 



236 CONCENTRATION OF ECONOMIC POWER 

trade, and for other purposes," approved April 10, 1918 (the Export 
Trade Act) , which provides in section 5 thereof as follows : 

Sec. 5. That every association now engaged solely in export trade, within 
sixty days after the passage of this Act, and every association entered into 
hereafter which engages solely in export trade, within thirty days after its 
creation, shall file with the Federal Trade Commission a verified written state- 
ment setting forth the location of its oflSces or places of business and the names 
and addresses of all its officers and of all its stockholders or members, and if 
a corporation, a copy of its certificate or articles of corporation and by-laws, and 
if unincorporated, a copy of its articles or contract of association, and on the 
first day of January of each year thereafter it shall make a like statement of 
the location of its offices or places of business and the names and addresses of 
all its officers and of all its stockholders or members and of all amendments to 
and changes in its articles or certificate of incorporation or in its articles or 
contract of association. It shall also furnish to the commission such informa- 
tion as the commission may require as to its organization, business, conduct, 
practices, management, and relation to other associations, corporations, partner- 
ships, and individuals. Any association which shall fail so to do shall not 
have the benefit of the provisions of section two and section three of this 
Act, and it shall also forfeit to the United States the sum of $100 for each and 
every day of the continuance of such failure, which forfeiture shall be payable 
into the Treasury of the United States, and shall be recoverable in a civil suit 
in the name of the United States brought in the district where the association 
has its principal office, or in any district in which it shall do business. It shall 
be the duty of the various district attorneys, under the direction of the Attorney 
Oeneral of the United States, to prosecute for the recovery of the forfeiture. 
The costs and expenses of such prosecution shall be paid out of the appropria- 
tion for the expenses of the courts of the United States. * * * 

2. The word "association" wherever used in the "export trade act" 
or in this report means "any corporation or combination, by contract 
or otherwise, of two or more persons, partnerships, or corporations." 



EXHIBIT 5 

[Annual Report Form] 

Federal Trade Commission 

washington, d. c. 

KEPORT FROM EXPORT ASSOCIATIONS 

DUE JANUARY 1, 194__, OF: 

1. Name 

Address 

(Here Insert address of principal oflBcer) 

2. Statement. — This corporation or association was organized or 
entered into for the sole purpose of engaging in export trade and is now 
solely engaged in the export trade as defined in the Export Trade Act, 
xipproved April 10, 1918, viz : "Trade or commerce«in goods, wares, or 
merchandise exported or in the course of being exported from the 
United States or any territory thereof, to any foreign nation." 

3. There is hereunto annexed and made a part hereof a schedule 
showing in paragraph "A" the location of its offices or places of busi- 
ness ,*inv. :)aragraph "B," the names and addresses of all its officers and 
directors ,« in paragraph "C," the names and addresses of all its stock- 
holders or members ; in paragraph "D," all amendments to and changes 
in its articles or certificate of incorporation, or articles or contract of 
association and bylaws, since its last report to the Federal Trade 
Commission 

4. There is also annexed (E) a brief statement describing its metliods 
and plan under which it is doing business, a statement of its relations 
with other associations, corporations, and individuals, and such other 
information as this company or association deems should be in the 
export files of the Federal Trade Commission. 



By 

State of ^ 

Cov/nty of , ss: 

, being first duly sworn, on oath deposes and 

says that he is an officer, to wit, of the above- 
named corporation or association ; that he has read the foregoing re- 
port and schedules annexed and that the same are in all respects true 
and correct. 



(Verifying officer sign here) 

Subscribed and sworn to before me this day of , 

19_-. 



Notary Public. 
F. T. C. 117. 

237 



238 CONCENTRATION OF ECONOMIC POWER 

Schedule 1 

(A) The following are the locations of all offices and places of 
business : 







(B) The following were officers or directors, as of January 1, 194 r 


Names 


Office held 


Addresses 


























(C) The following were stockholders or members, as of January 1, 
194 : 


Names 


Addresses 


Number of shares 

































(D) Since the last report to the Federal Trade Commission the 
articles of or certificate of incorporation, articles of association, and 
bylaws have been amended or changed as follows : 



(E) The following briefly describes the methods and plan under 
which our business is done and states our relations with other associa- 
tions, corporations, and individuals, with such other information as 
we deeaii should be in the export files of the Federal Trade Commission : 



Notes 

1. The information required by this report is to be furnished to 
the Federal Trade Commission under "•An act to promote export 
trade, and for other purposes," approved April 10, 1918 (the Export 
Trade Aci) which provides in section 5 thereof as follows: 

Sec. 5. Thai every association now engaged solely in export ti*ade, within sixty 
days after the passage of this Act, and every association entered into hereafter 
which engages soU 1y in export trade, within thirty days after its creation, shall 
file with the Federal Trade Commission a verified written statement setting 
forth the location of its offices or places of business and the names and addresses 



CONCENTRATION OF EXX)NOMIC POWEH 239 

of all its officers and of all its stockholders or members, and if a corporation, a 
copy of its certificate or articles of incorporation and bylaws, and if unincorpo- 
rated, a copy of its articles or contract of association, and on the first day of 
January of each year thereafter it Shall make a like statement of the location 
of its offices or places of business and the names and addresses of all its officers 
and of all its stockholders or members and of all amendments to and changes 
in its articles or certificate of incorporation or in its articles or contract of 
association. It shall also furnish to the commission such information as the 
commission may require as to its organization, business, conduct, practices, 
nanagement, and relation to other associations, corporations, partnerships, and 
ndividuals. Any association which shall fail so to do shall not have the benefit 
(f the provisions of section two and section three of this Act, and it shall also 
j'orfeit to the United States the sum of $100 for each and every day of the 
continuance of such failure, which forfeiture shall be payable into the Treasury 
of the United States, and shall be recoverable in a civil suit in the name of the 
United States brought in the district where the association has its principal oflice, 
orvin any district in which it shall do business. It shall be the duty of the 
various district attorneys, under the direction of tlie Attorney General of the 
United States, to prosecute for the recovery of the forfeiture. The costs and 
expenses of such prosecution shall be paid out of the aonropriation for the ex- 
penses of the courts of the United States. * * * 

2. The word "association" wherever used in the "export trade act" 
or in this report means "any corporation or combination, by contract 
or otherwise, of two or more persons, partnerships, or corporations." 



EXHIBIT 6 



[Federal Trade Commission, Foreign Trade Series No. 1] 

DISCUSSION OF AND PRACTICE AND PROCEDURE UN- 
DER THE EXPORT TRADE ACT (WEBB-POMERENE 

LAW), 1919 



1. Practice and Procedure. 

2. Discussion of the Export Trade 

Act. 

3. An Act to Promote Export Trade 

(Webb Law; Public, 126, 65th 
Cong.). 



4. Sections 73, 76, and 77, WUson Tariff 

Act (approved August 27, 1894, 
amended February 12, 1913). 

5. Section 6 (h) Federal Trade Com- 

mission Act (foreign investiga- 
tions). 



Practice and Procedure 

• The very numerous requests for copies of the Exf)ort Trade Act 
(Webb-Pomerene law) and the large number of inquiries about it call 
for the publication of a separate pamplilet by this Commission for the 
information of those desiring to cooperate in the development of our 
foreign trade through associations formed under that act. 

In several instances suggestions have been made as to modifications 
of proposed articles of incorporation, already filed, in order that 
these associations may clearly come witb.in the provisions of the act. 
The Commission is authorized by this law to make recommendations 
as to how export associations may conform their business to the law, 
and, within its powers, it proposes to advance step by step in aid of 
the export needs of the country. It desires to constantly work in 
cooperation with those who form export associations and also with 
those who may consider themselves or the public in any way injur- 
iously affected by the methods and practices of such associations. 

Where doubt exists as to whether a given method or practice is 
proper or not, it would seem advisable that the matter be voluntarily 
presented to the Commission in the early stages, without awaiting its 
later discovery and possible correction. The second paragi-aph of 
section 5 of the Webb Act describes the few formalities as to such 
procedure. 

The Commission has prepared blanks, available on request, for 
making the first and 1919 annual report which enables an easier 
compliance with section 5 of the Webb Act. 

Should it become necessary for an export association, or for others 
engaged in the export trade, to seek the enforcement of the Commis- 
sion's power to prevent unfair methods of competition under section 4 
of the Webb Act, the rules of practice do not require formalities in the 
filing of information or the lodging of complaints, but it is worth 
remembering that the fuller and more exact the information and 
references as to proof thereof, the speedier the results before the Com- 
mission. This is especially true where the charges come from foreign 
240 



CONCENTRATION OF ECONOMIC POWER 241 

countries where the time necessary for transmission might render the 
case academic through the sheer lapse of time. Wliere allegations 
come from abroad the procedure of the Conmiission can be more 
quickly set in motion if the papers are in such condition as to give the 
Commission "reason to believe" that alleged facts exist. Copies of 
letters, advertisements, exhibits, and affidavits are extremely helpful, 
as also the names of witnesses and sources of information both in this 
country and abroad. 

As the Commission can proceed on its own initiative, it is immate- 
rial from what source its information is derived, but it is desirable, 
wherever possible, that for its confidential use the informant be known. 

The Commission's investigation of foreign conditions, practices, 
and combinations in foreign -countries and its recommendations to 
Congress thereon will be greatly facilitated by American export- 
ers keeping the Commission informed of their experiences and in- 
stances where their export business is restrained or injuriously af- 
fected by any matter or in any manner. 

The Commission must depend largely for information and facts 
upon those who are interested in having the Commission correct any 
tendencies of export associations to artificially enhance or depress 
prices within the United States or otherwise burden the American 
public or restrain the commerce of independent competitors. 

All mail for the Export Division should be addressed to the Fed- 
eral Trade Commission, Washington, D. C, and marked "Export 
Division." 

DISCUSSION OF THE EXPORT TRADE ACT 

Swmmary of the law. — Under the Export Trade Act, approved 
April 10, 1918, the Federal Trade Commission is authorized to re- 
ceive, and "associations" now, or hereafter, solely engaged in export 
trade are required to file statements in the form specified by the act. 
The Commission is given authority to investigate all instances where 
it has reason to believe that an export trade "association" has com- 
mitted an act, or made an agreement, which is in restraint of trade 
within the United States, or which is in restraint of the export trade 
of any domestic competitor of such "association." This applies also 
where such an "association" has entered into any agreement, under- 
standing, conspiracy, or done any act in the United States or else- 
where, which artificially enhances or depresses prices within the 
United States of commodities exported by such association, or where 
the same substantially lessens competition within the United States, 
or otherwise restrains trade therein. In such event the offending 
"association," its officers, and agents may be summoned before the 
Commission, and it is thereupon required to conduct an investigation 
into the alleged violation of law. If upon investigation the Com- 
mission concludes that the law has been violated it may recommend 
to the "association" readjustment of its business in order that it may 
thereafter maintain its organization, management, and the conduct 
of its business in accordance with the law. 

Where an association fails to comply with the recommendation 
of the Commission, the Commission is required to refer its findings 
and recommendations to the Attorney General of tlie United States 
for such action thereon as he may deem proper. 



242 CONCENTRATION OF ECONOMIC POWER 

By section 4 of the Export Trade Act the prohibition in the Federal 
Trade Commission Act against unfair methods of competition, and 
the remedies provided for enforcing said prohibition, are directed 
to be construed as extending to unfair methods of competition used 
in export trade against competitors engaged in such trade, even 
thoigh the acts constituting such unfair methods are done without 
the territorial jurisdiction of the United States. 

The act defines the term "export trade" wherever used in the 
act as follows : 

The words "export tidde" wherever used in this act mean solely trade or 
commerce in goods, wares, or merchandise exported, or in the course of being 
exported from the United States or any Territory thereof, to any foreign nation ; 
but the words "export trade" shall not be deemed to include the production, 
manufacture, or selling for consumption or for resale, within the United States 
or any Territory thereof, of such goods, wares, or merchandise, or any act in 
the course of such production, manufacture, or selling for consumption or for 
resale. 

The words "trade within the United States" wherever used in the 
act are defined to mean trade or commerce among the several States 
or in any Territory of the United States, or in the District of Co- 
lumbia, or between any such Territory and another, or between any 
such Territory or Territories and any State or States or the District 
of Columbia, or between the District of Columbia and any State or 
States. 

The word "association" wherever used in the act is defined to mean : 

Any corporation or combination, by contract or otherwise, of two or more 
persons, partnerships, or corporat'ors. 

Under section 5 of the act a penalty is imposed upon any associa- 
tion which shall fail to make the statement and furnish the state- 
ments reqitired to be filed, and also furnish the Commission with such 
information as it may'require, as to the organization, business, con- 
duct,, practices, management, and relation to other associations, cor- 
porations, partnerships, and individuals of such associations. The 
penalty imposed for failure to comply with section 5 of this act is 
that the association shall not have the benefit of the provisions of 
sections 2 and 3 of the act, and shall forfeit to the United States $100 
per da}^ during the continuance of such failure to comply with its 
terms. This forfeiture is payable into the Treasury of the United 
States and is recoverable in a civil suit in the name of the United 
States, in the district where the association has its principal office, or 
in any district in which it shall do business, by the district attorney 
under the direction of the Attorney General of the United States, 
and the costs and expenses of such prosecutions are payable out of 
the appropriation for the expense of the courts of the United States. 

Under section 2 of the Export Trade Act, the provisions of the 
Sherman law, approved July 2, 1890, are directed to be construed in 
such a way that nothing therein contained shall declare to be illegal 
"associations" entered into for the sole purpose of engaging in export 
trade and actually engaged solely in such export trade, nor any agree- 
ment made, or act done in the course of such export trade by such 
an association, provided such agreement or act is not in restraint of 
trade within the United States, and is not in restraint of the export 
trade of any domestic competitor of such an association; provided. 



CONCENTKATION OF ECONOMIC POWEiR 243 

however, that such association does not, either in the United States 
or elsewhere, enter into any agreement, understanding, or conspiracy, 
or do any act which artificially or intentionally enhances or depresses 
prices within the United States of commodities of the class exported 
by such association, or which substantially lessens competition within 
the United States or otherwise restrains trade therein. 

By section 3 of the act it is directed that section 7 of the Clayton Act, 
approved October 15, 1914, shall not be cons! rued to forbid the acquisi- 
tion or ownership by any corporation of the whole or any part of the 
stock or other capital of any corporation organized solely for the pur- 
pose of engaging in export trade, and actually engaged solely in such 
export trade, unless the effect of such acquisition or ownership may 
be to restrain trade or substantially lessen com.petition within the 
United States. 

Form of statement. — For the convenience of those who desire to file 
the statement required by section 5 of the act there have been prepared 
and printed forms of statement, which are available upon application. 

Applications for coTistmetion of the act. — Numerous requests have 
been received by the Commission for rulings upon the construction of 
the Export Trade Act. It has been deemed inadvisable to attempt at 
this time to officially construe any of the provisions of the law upon 
informal applications. This is especially true, as the penalty for the 
violation of section 5 of the act is enforcible by the district attorneys 
of the United States under the direction of the Attorney General, and 
not by the Federal Trade Commission, and the enforcement of the 
Sherman law is a duty of the Federal courts upon proceedings 
instituted b}' the Department of Justice. 

It is exceedingly important that export associations in process of 
formation should give careful consideration to the wording of sections 
2 and 3 of the Export Trade Act. As to the statements which have 
been filed with the Export Trade Division under section 5 of this act, 
it has been noted that practically every corporation formed has been 
organized for the transaction of some business other than that of solely 
engaging in exporting from the United States to foreign nations as 
defined in the act. 

Most of tlie articles of association filed have also contemplated the 
transaction of business other than that of exporting to foreign nations. 
It is apparent under the law that the provisions of the Sherman law 
and section 7 of the Clayton law remani applicable as to all combina- 
tions which are not organized solely for the business of exporting to 
foreign nations. The business of exporthig to the Philippine Islands, 
to Puerto Rico, or to Hawaii seems clearly to be domestic and not 
foreign trade, and the provisions of the Sherman law and section 7 of 
tlie Clayton law seem to continue in force as to any association or 
export corporation which engages in such business. 

One of the difficulties wliich exporting houses seem to find with the 
law is that export companies usually both export and import, while 
the law provides that its protection is given to associations entered mto 
for the sole purpose of engaging in export trade and actually enga^>-ed 
solely in such export trade. 

Dae to the facts that the business of the country is devoting its 
thought to war production and that there is a lack of shipping facilities, 
general plans for cooperation in export trade are probably now in 

2." 7760 — il — No. G 1-7 



244 CONCENTRATION OF EXX)NOMIC POWER 

suspense or only in a formative state. This is indicated by the very 
small number of association papers which have been filed with the 
Commission since the passage of the act on April 10, 1918. 

Statements filed. — Below is a list of all organizations that have filed 
papers purporting to be under section 5 of the Export Trade Act 
(April 10, 1918, to June 30, 1918, inclusive). 

In listing them the Commission doe-s not indicate that those who 
have filed these papers are qualified under the act, or entitled to the 
benefits of sections 2 and 3 of the law. Undoubtedly many export 
houses have felt it was necessary to file statements to avoid any ques- 
tion as to the penalty imposed by section 5 for failure so to do. It is 
also probable that other export houses considered, without a thorough 
consideration of the law, that they could obtain some advantage 
thereby. 

The list follows : 

Allied Sugar Machinery Corporation, 120 Broadway, New York, N. Y. 

Allied Construction Machinery Corporation, 120'Broadway, New York, N. Y. 

Allied Machinery Co. of America, 120 Broadway, New York, N. Y. 

American International Steel Corporation, 120 Broadway, New York, N. Y. 

American Paper Exports (Inc.), 30 Broad Street, New York, N. Y. 

Amsinck & Co., S. of Mexico (Inc.), 120 Broadway, New York, N. Y. 

American Steel Export Co., Woolworth Building, New York, N. Y. 

American Steel Export Co.'s Brazilian Corporation, Woolworth Building, New 
York, N. Y. 

American Webbing Manufacturing Export Corporation, care Clark McKercher, 
Esq., New York, N. Y. 

Automotive Products Corporation, Woolworth Building, New York, N. Y. 

Cosmo "Trading Co., 133 West Washington Street, Chicago, 111. 

Cranz (Inc.), F., 2 Stone Street, New York, N. Y. 

Cranz Importing Co., F. E., 2 Stone Street, New York, N. Y, 

Deco Co., 51-53 White Street, New York, N. Y. 

Deister Miners' Supply Co., Fort Wayne, Ind. 

De Lima, Carrea & Cortissoz (Inc.), 8-10 Bridge Street, New York, N. Y. 

Dodge & Seymour, 12 Hudson Place, Hoboken, N. J., and 

Dodge & Seymour (China, Ltd.), 12 Hudson Place, Hoboken, N. J., a subsid- 
iary company. 

Douglas Fir Exploitation & Export Co., 260 California Street, San Francisco 
Calif. 

Dunnellon Phosphate Co. (The), 106 East Bay Street, Savannah, Ga. 

European & Far-Eastern Sales Co. (Inc.), 27 William Street, New York, N. Y. 

Export Trade Association vine), Borough of Manhattan, New York, N. Y. 

Factory Products Export Cbrporation, 61 Broadway, New York, N. Y. 

Fajardo Bros. & Co. (Inc.), 27 William Street, New York, N. Y. 

Franklyn International Corporation, 958 Hoe Avenue, New York, N. Y. 

Galban Noecker & Co. (Inc.), 82-92 Beaver Street, New York, N. Y. 

Galena Signal Oil Co. of Brazil, Franklin, Pa. 

Harper & Co., Locke T., MiUs Building, San Francisco, Calif. 

Herzberg & Son, B., 1119 Fillmore Street. San Francisco, Calif. 

Holsam Co. (Inc.), 18 Broadway, New York, N. Y. 

International Clearing House of New York (Inc.), 748 Broadway, New York, 
N. Y. 

Levy Co. (Inc.), A. A., 45 East Nineteenth Street, New York, N. Y. 

M. P. Trading Co. (Inc.), 60 Wall Street, New York, N. Y. 

Manufacturers Agents Co. (Inc.), Virginia Railway & Power Building, Rich- 
mond, Va. 

Markt & Hammacher Co., 193 West Street, New York, N. Y. 

Markt & Schafer Co.. 193 West Street, New York. N. Y. 

Mexican Importing & Exporting Corporation, 29 Broadway, New York, N. Y. 

Muller, Maclean & Co. (Inc.), 11 Broadway, New York. N. Y. 

Parsons & Whittemore (Inc.), 174 Fulton Street, New York, N. Y. 

Portuguese-American Exporters (Inc.), 120 Broadway, New York, N. Y. 

Pan American Exporters (Inc.), 517 (iodschaux'^ Building, New Orleans, La. 



. CONCENTRATION OF ECONOMIC POWER 245 

Pan American Trading Co., 45 Pearl Street, New York, N. Y. 
Pearson Elxport Corporation, 170 Broadway, New Yorl£, N. Y. 
Peek & Co., William E., 104 Pearl Street, New York, N. Y. 
Redwood Export Co., 260 California Street, San Francisco, Calif. 
Semtec (Ltd.), 90 West Street, New York, N. Y. 

Simmons Co., Thomas W., 240 California Street, San Francisco, Calif. 
Southern Products Co., Interurban Building, Dallas, Tex. 
Sparks & Co., W. J., 17 Battery Place, New York, N .Y. 
Strong & Trowbridge Co., 17 Battery Place, New York, N. Y. 
Sydney Ross Co., 147-153 Waverly Place, New York, N. Y. 
Texas Co. (South America) (Ltd.), The, 17 Battery Place, New York, N. Y. 
United States Paper Export Association, 30 Broad Street, New York, N. Y. 
United States Office Equipment Export Assn., care Globe Wernicke Co., Cin- 
cinnati, Ohio. 
Zaldo & Martinez Co. (Inc.), 66 Beaver Street, New York, N. Y. 
Zoccola Co. (Inc.), 60 South Street, Boston, Mass. 

Some fear has been expressed in South American countries that the 
effect of the Export Trade Act will be disadvantageous to the con 
suming public of foreign nations by strengthening the hands of 
American trusts, monopolies, and combinations of capital in these 
markets. The Commission has pointed out the fact that the law- 
permits the • cooperation of manufacturers who would perhaps not 
otherwise be able to compete in foreign fields and who, without the 
law, might hesitate to form cooperative export associations, which 
will in all probability increase the buying opportunities of the con- 
suming public in foreign countries. 

The Commission has been cooperating with the Bureau of Foreign 
and Domestic Commerce and has availed itself of the privilege of 
publishing in Commerce Reports statements from time to time. 

The Commission is keeping informed as to the export needs of the 
country in order to be of assistance so that American producers may 
cooperate to the fullest extent in export fields without injuriously 
affecting domestic commerce or the foreign commerce of those ex- 
porters who are associated with export trade associations. 

Progress has been made in the preparation of an additional report 
on foreign trade conditions under section 6, clause H, of the Federal 
Trade Commission Act, reading as follows : 

Seo. 6. That the Commission shall also have power — 

(h) To investigate, from time to time, trade conditions in and with foreign 

countries where associations, combinations, or practices of manufacturers, raer- 

' chants, or traders, or other conditions, may affect the foreign trade of the 

United States, and to report to Congress thereon, with such recommendations as 

it deems advisable. 

The werld-wide dislocation of trade and industry incident to the 
war is creating new conditions which may vitally affect American 
business in the future. The Connnission is closely following new 
developments in international trade, as they arise, with a view to 
ascertaining the bearing they may have on the foreign trade of the 
United States. 

[Public — No. 126 — 65th Congress] 

[H. R. 2316] 

AN ACT To promote export trade, and for other purposes 

Be it enacted hy the Senate and House of Representatives of the 
Umted States of America in Congress asseinhltd. Tliat the words ''fx- 



246 CONCENTRATION OF ECONOMIC POWER 

port trade" wherever used in this act mean solely trade or commerce 
in goods, wares, or merchandise exported, or in the course of being 
exported, from the United States or ^ny Territory thereof to any 
foreign nation ; but the words "export trade" shall not be deemed to 
include the production, manufacture, or selling for consumption or for 
resale, within the United States or any Territory thereof, of such 
goods, wares, or merchandise, or any act in the course of such produc- 
tion, manufacture, or selling for consumption or for resale. 

That thd words "trade within the United States" wherever used 
in this act mean trade or commerce among the several States or in 
any Territory of the United States, or in the District of Columbia, 
or between any such Territory and another, or between any such 
Territory or Territories and any State or States or the District of Co- 
lumbia, or between the District of Columbia and any State or States. 

That the word "association" wherever used in this act means any 
corporation or combination, by contract or otherwise, of two or more 
persons, partnerships, or corporations. 

Sec. 2. That nothing contained in the act entitled "An act to protect 
trade and commerce against unlawful restraints and monopolies," 
approved July second, eighteen hundred and ninety,^ shall be con- 
strued a^; declaring to be illegal an association entered into for the 
sole purpose of engaging in export trade and actually engaged solely 
in such export trade, or an agreement made or act done in the course of 
export trade by such association, provided such association, agreement, 
or act is not in restraint of trade within the United States, and is not in 
restraint of the export trade of any domestic competitor of such asseci- 
ation : Aiid provided further^ That such association does not, either in 
the United States or elsewhere, enter into any agreement, understand- 
ing, or conspiracy, or do any act which artificially or intentionally 
enhances or depresses prices within the United States of commodities 
of the class exported by such association, or which substantially lessens 
competition within the United States or otherwise restrains trade 
therein. 

Sec. 3. That nothing contained in section seven of the act entitled 
"An act to supplement existing laws against unlawful restraints and 
monopolies, and for other purposes," approved October fifteenth, 



1 Tlie Sherman Act provides in sections 1, 2, and 3 as follows : 

Section 1. Every contract, combination in the form of trust or otherwise, or con- 
spiracy, in I'cstraint of trade or commerce among the several States, or with foreign 
nations, is hereby declared to be illegal. Every person who shall make any such contract 
or engage in any such combination or conspiracy, shall be deemed guilty of a misde- 
meanor, and, on con\ iction thereof, shall be punished by fine not exceeding five thousand 
dollars, or by imprisonment not exceeding one year, or "by both said punishments, in the 
discietion of the court. 

Sec. 2. Every person who shall monopolize or attempc to monopolize, or combine or 
conspire with any other person or persons, to monopolize an.v part of the trade or com- 
merce among the several States, or with foreign nations, shall be deemed guilty of a 
misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five 
thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, 
in the discretion of the court. 

Sec. 3. Every contract, combination in form of trust or otherwise, or conspiracy, in 
restraint of trade or commerce in any Territory of the United States or of the District 
of Columbia, or in restraint of trade or commerce between any such Territory and 
another, or between any such Territory or Territories and any State or States or the 
District of Columbia, or with foreign nations, or between the District of Columbia and 
any State or States or foreign nations, is hereby declared illegal. Every person who 
shall make any such contract or engage in any such combination or conspiracy shall be 
deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine 
not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by 
both said punishments, in the discretion of the court. 



CONCENTRATION OF ECONOMIC POWEK 247 

nineteen hundred and fourteen,^ shall be construed to forbid the 
acquisition or ownership by any corporation of the whole or any 
part of the stock or other capital of any corporation organized solely 
for the purpose of engaging in export trade, and actually engaged 
solely in such export trade, unless the effect of such acquisition or 
ownership -may be to restrain trade or substantially lessen competition 
within the United States. 

Sec, 4. That the prohibition against "unfair methods of competi- 
tion" and the remedies provided for inforcing said prohibition con- 
tained in the act entitled "An act to create a Federal trade commission, 
to define its powers and duties, and for other purposes," approved 
September twenty-sixth, nineteen hundred and fourteen,^ shall be con- 



' Section 7 of the Clayton Act reads as follows : 

Sec. 7. That no corporation encaged in commerce shall acquire, directly or indirectly, 
the whole or any part of the stock or other share capital of another corporation engaged 
also in commerce, where the effect of such acquisition may be to substantially lessen 
competition between the corporation whose stock is so acquired and the corporation 
making the acquisition, or to restrain such commerce in any section or community, or 
tend to create a monopoly of any line of commerce. 

No corporation shall acquire, directly or indirectly, the whole or any part of the 
stock or other share capital of two or more corporations engaged in commerce where the 
effect of such acquisition, or the use of such stock by the voting or granting of proxies 
or otherwise, may be to substantially lessen competition between such corporations, or 
any of them, whose stock or other share capital is so acquired, or to restrain such com- 
merce in any section or community, or tend to create a monopoly of any line of commerce. 

This section shall not apply to corporations purchasing such stock solely for invest- 
ment and not using the same by voting or otherwise to bring about, or in attempting to 
bring about, the substantial lessening of competition. Nor shall anything contained in 
this section prevent a corporation engaged in commerce from causing the formation of 
subsidiary corporations for the actual carrying on of their immediate lawful business, 
or the natural and legitimate branches or extensions thereof, or from owning and holding 
all or a part of the stock of such subsidiary corporations, when the effect of such 
formation is not to substantially lessen competition. 

Nor shall anything herein contained be construed to prohibit any common carrier sub- 
ject to the laws to regulate commerce from aiding in the construction of branches or short 
lines so located as to become feeders to the main line of the company so aiding in such 
construction or from acquiring or owning all or any part of the stock of such branch 
lines, nor to prevent any such common carrier from acquiring and owning all or any 
part of the stock of a branch or short line constructed by an independent company where 
there is no substantial competition between the company owning the branch line so con- 
structed and the company owning the main line acquiring the property or an interest 
therein, nor to prevent such common carrier from extending any of its lines through th« 
medium of the acquisition of stock or otherwise of any other such common carrier where 
there is no substantial competition between the company extending its lines and the 
company whose stock, property, or an interest therein is so acquired. 

Nothing contained in this section shall be held to affect or impair any right hereto- 
fore legally acquired : Provided, That nothing in this section shall b^ held or construed 
to authorize or make lawful anything heretofore prohibited or made illegal by the anti- 
trust laws, nor to exempt any person from the penal provisions thereof or the civil 
remedies therein provided. 

^ Section .5 of the Federal Trade Commission Act reads as follows : 

Sec. 5. That unfair methods of competition in commerce are hereby declared unlawful. 

The commission is hereby empowered and directed to prevent persons, partnerships, or 
corporations, except banks, and common carriers subject to the acts to regulate commerce, 
from using uhfair methods of competition in commerce. 

Whenever the commission shall have reason to believe that any such person, partner- 
ship, or corporation has been or is u.<ing any unfair method of competition in commerce, 
and if it shall appear to the commission that a proceeding by it in respect thereof would 
be to the interest of the public, it shall issue and serve upon such person, partnership, or 
corporation a complaint stating its charge.^! in that respect and containing a notice of 
a hearing upon a day and at a place therein fixed at least thirty days after the service 
of said complaint. The person, partnership, or corporation so complained of shall have 
the right to appear at the place and time so fixed and show cause why an order should 
not be entered by the commission requiring such person, partnership, or corporation to 
cease and desist from tlie violation of the law so charged in said complaint. Any person, 
partnership, or corporation may make application, and upon good cause shown may be 
allowed by the commission to intervene and appear in said proceeding by counsel or in 
persoi.. The testimony in any such proceeding shall be reduced to writing and filed in 
the office of the commission. If upon such hearing the commission shall he of the 
opinion that the method of competition in question is prohibited by this act it shall 
make a report in writing in which it shall state its findings as to "the facts and shall 
issue and cause to he served on such person, partnership, or corporation an order requir- 
ing such person, partnership, or. corporation to cease and desist from using such method 
of competition. Until a transcript of the record in such hearing shall have been filed 
in a circuit court of appeals of the I'nited States, as hereinafter provided, the commission 
may at any time, upon such notice and in such manner as it shall deem proper, modify 



248 CONCENTRATION OF ECONOMIC POWEH 

strued as extending to unfair methods of competition used in export 
tpade against competitors engaged in export trade, even though the 
acts constituting such unfair methods are done without tlie territorial 
jurisdiction of the United States. 

Sec, 5. That every association now engaged solely in export trade, 
within sixty days after the passage of this act, and every association 
entered into hereafter which engages solely in export trade, within 
thirty days after its creation, shall file with the Federal Trade Com- 
mission a verified written statement setting forth the location of its 
offices or places of business and the names and addresses of all its 
officers and of all its stockholders or members, and if a corporation, 
a copy of its certificate or articles of incorporation and bylaws, and 
if unincorporated u copy of its articles or contract of association, and 
on the first day of January of each year thereafter it shall make a like 
statement of the location of its offices or places of business and the 
names and addresses of all its officers and of all its stockholders or 
members and of all amendments to and changes in its articles or 
certificate of incorporation or in its articles or contract of association. 
It shall also furnish to the commission such information as the com- 
mission may require as to its organization, business, conduct, practices, 

or set aside, in whole or in part, any report or any order made or issued by it under 
this section. 

If such person, partnership, or corporation fails or neglects to obey such order of the 
commission while the same is in effect, the commission may apply to the circuit court 
of appeals of the United States, within any circuit where the method of competition In 
question was used or where such person, partnership, or corporation resides or carries on 
business, for the enforcement of its order, and shall certify and file with its application 
a transcript of the entire record in the proceeding, including all the testimony taken and 
the report and order of the commission. Upon such filing of the application and tran- 
script tLe court shall cause notice thereof to be served upon such person, partnership, or 
corporation and thereupon shall have jurisdiction of the proceieding and of the question 
determined therein, and shall have power to make and enter upon the pleadings, testi- 
mony, and proceedings set forth in sucli transcript a decree afflrming, modifying, or 
setting aside the order of the commission. The findings of the commission as to the 
facts, if supported by testimony, shall be conclusive. If either party shall apply to the 
court for leave to adduce additional evidence, and shall show to the satisfaction of the 
court that such additional evidence is material and that there were reasonable grounds 
for the failure to adduce such evidence in the proceeding before the commission, the court 
may order such additional evidence to be taken before the commission and to be adduced 
upon the hearing in such manner and upon such terms and conditions as to the court may 
seem proper. The commission may modify its findings as to the facts, or make new 
findings, by reason of the additional evidence so taken, and it shall file such modified or 
new findings, which, if supported by testimony, shall be conclusive, and its recommenda- 
tion, if any, for the modification or setting aside of its original order, with the return of 
such additional evidence. The judgment and decree of the court shall be final, except 
that the same shall be subject to review by the Supreme Court upon certiorari as provided 
in section two hundred and forty of the Judicial Code. 

Any party required by such order of the commission to cease and desist from using such 
method of competition may obtain a review of such order in said circuit court of appeals 
. by filing in the court a written petition praying that the order of the commission be set 
aside. A copy of such petition shall be forthwith served upon the commission, and there- 
upon the commission forthwith shall certify and file in the court a transcript of the 
record as hereinbefore provided. Upon the filing of the transcript the court shall have 
the same jurisdiction to affirm, set aside, or modify the order of the commission as in the 
case of an application by the commission for the enforcement of its order, and the find- 
ings of the commission as to the facts, if supported by testimony, shall in like manner be 
conclusive. 

The jurisdiction of the circuit court of appeals of the United States to enforce, set 
aside, or modify orders of the commis.sion shall be exclusive. 

Such proceedings In the circuit court of appeals shall be given precedence over other 
cases pending therein, and shall be in every way expedited. No order of the commission 
or judgment of the court to enforce the same shall in anywise relieve or absolve any 
person, partnership, or corporation from any liability under the antitrust acts. 

Complaints, orders, and other processes of the commission under this section may be 
served by anyone duly authorized by the commis.«sion, either (a) by delivering a copy 
thereof to the person to be served, or to a member of the partnership to be served, or to 
the president, secretary, or other executive officer or a director of the corporation to be 
served; or (6) by leaving a copy thereof at the principal office or place of business of 
such person, partnership, or corporation; or (c) by registering and mailing a, copy thereof 
addressed to such person, partnership, or corporation at his or its principal oTice or p'oce 
of business. The verified return by the person so serving said complaint, order, or other 
process setting forth the manner of said service shall he proof of the same, und thn recurs 
post-office receipt for said complaint, order, or other process registered end iuai'ed as 
aforesaid shall be proof of the service of the same 



CONCENTRATION OF ECONOMIC POWEiR 249 

management, and relation to other associations, corporations, partner- 
ships, and individuals. Any association which shall fail so to do shall 
not have the benefit of the provisions of section two and section three 
of this act, and it shall also forfeit to the United States the sum of 
$100 for each and every day of the continuance of such failure, which 
forfeiture shall be payable into the Treasury of the United States, and 
shall be recoverable in a civil suit in the name of the United States 
brought in the district where the association has its principal office, or 
in any district in which it shall do business. It shall be the duty of the 
various district attorneys, under the direction of the Attorney. General 
of the United States, to prosecute for the recovery of the forfeiture. 
The costs and expenses of such prosecution shall be paid out of the 
appropriation for the expenses of the courts of the United States. 

Whenever the Federal Trade Commission shall have reason to believe 
that an association or any agreement made or act done by such associa- 
tion is in restraint of trade within the United States or in restraint of 
the export trade of any domestic competitor of such association, or that 
an association either in the United States or elsewhere has entered into 
any agreement, understanding, or conspiracy, or done any act which 
artifically or intentionally enhances or depresses prices within the 
United States of commodities of the class exported by such association, 
or which substantially lessens competition within the United States or 
otherwise restrains trade therein, it shall summon such association, its 
officers, and agents to appear before it, and thereafter conduct an 
investigation into the alleged violations of law. Upon investigation, 
if it shall conclude that the law has been violated, it may make to such 
association recommendations for the readjustment of its business, ill 
order that it may thereafter maintain its organization and manage- 
ment and conduct its business in accordance with law. If such asso- 
ciation fails to comply with the recormnendations of the Federal Trade 
Commission, said commission shall refer its findings and recommenda- 
tions to the Attorney General of the United States for such action 
thereon as he may deem proper. 

For the purpose of enforcing these provisions the Federal Trade 
Commission shall have all the powers, so far as applicable, given it in 
"An act to create a Federal Trade Commission, to define its powers and 
duties, and for other purposes." 

Approved, April 10, 1918. 

Wilson Tariff Act Antitrust Amendments Not Modified by thb 

Export Trade Act 

Sections 73, 76, and 77 of the Wilson Tariff Act, "An act to reduce 
taxation, to provide revenue for the Government, and for other pur- 
poses," of August 27, 1894, as amended February 12, 1913, reads as 
follows : 

Sec. 73. That every combination, conspiracy, trust, agreement, or contract 
is hereby declared to be contrary to public policy, illegal, and void when the 
same is made by or between two or more persons or corporations either of whom, 
as agent or principal, is engaged in importing any article from any foreign 
country into the United States, and when such combination, conspiracy, trust, 
agreement, or contract is intended to operate in restraint of lawful trade, or 
free competition in lawful trade or commerce, or to increase the market price 
in any part of the United States of any article or articles imported or intended 
to be imported into the United States, or of any manufacture into which such 



250 CONCENTRATION OF ECONOMIC POWEH 

imported article enters or is intended to enter. Every person who is or shall 
hereafter be engaged in the importation of goods or any commodity from any 
foreign country in violation of this section of this Act, or who shall combine or 
conspire with another to violate the same, is guilty of a misdemeanor, and on 
conviction thereof in any court of the United States such person shall be lined 
in a sum not less than one hundred dollars and not exceeding five thousand 
dollars, and shall be further punished by imprisonment, in the discretion of 
the court, for a term not less than three months nor exceeding twelve months. 

Sec. 76. That any property owned under any contract or by any combination, 
or pursuant to any conspiracy, and being the subject thereof mentioned in sec- 
tion seventy-three of this Act, imported into and being within the United States 
or being in the course of transportation from one State to another, or to or from 
a Territory or the District of Columbia, shall be forfeited to the United States, 
and may be seized and condemned by like proceedings as those provided by law 
for the forfeiture, seizure, and condemnation of property imported into the 
United States contrary to law. 

Sec. 77. That any person whO' shall be injured in his busiress or property by 
any other person or corporation by reason of anything forbidden or declared to 
be unlawful by this Act may sue therefor in any circuit court of the United 
States in the district in which the defendant resides or is found, without respect 
to the amount in controversy, and shall recover threefold the damages by him 
sustained, and the costs of suit, including a reasonable attorney's fee. 

Section 6 (h) of the Federal Trade Commission Act (Foreign 
Investigations) : 

Sec. 6. That the Commission shall also have power — 

(h) To investigate from time to time trade conditions in and with foreign 
countries where associations, combinations, or practices of manufacturers, mer- 
chants, or traders, or other conditions may. affect the foreign trade of the United 
States, and to report to Congress thereon, with such recommendations as it 
deems advisable. 



EXHIBIT 7 

[Federal Trade Commission, Washington, Foreign Trade Series No. 2] 

PRACTICE AND PROCEDURE UNDER THE EXPORT 
TRADE ACT (WEBB-POMERENE LAW), 1935 

Federal Trade Commission 

EwiN L. Davis, Chairman; Charles H. M^vech, Vice Chairman; William A. 
Ayres ; Garland S. Ferguson, Jr.; Robest E. Freer; Otis B. Johnson, 
Secretary. 

(This pamphlet is a revision of the Foreign Trade Series No. 1, 
published by the Federal Trade Commission in 1919. Prepared by the 
Export Trade Section of the Legal Division, Ellen L. Love, Chief, 
October 1935.) 



Index 



Purpose of the law. 

Provisions of the act. 

Filing of papers with the Commission. 

Webb law organization and operation. 

Advantages obtained by Webb law 

groups. 
Products exported. 
Associations formed under the law, 

1918-35. 



First-report form. 

The Export Trade Act. 

Sections 5 and 6 (h), Federal Trade 

Commission Act. 
Section 7 of the Clayton Act. 
Sections 1, 2, and 3 of the Sherman 

Act. 
Sections 73, 76, and 77 of the Wilson 

Tariff Act. 



(V) 
PUEPOSE or THE LAW 

The Export Trade Act, passed on April 10, 1918,^ is entitled "An 
act to promote export trade and for other purposes." It was the re- 
sult of an inquiry made by the Federal Trade Commission upon 
which report was made to Congress in 1916.^ Hearings were con- 
ducted by the Commission throughout the United States, attended by 
industrialists and exporters interested in the proposed legislation. 
The Commission recommended to Congress the passage of a law 
which should grant exemption from the antitrust laws to export com- 
bines, with proper safeguards to domestic business, in order to facili- 
tate the movement of American goods to foreign countries, to serve as 
an encouragement to exporters, and to enable them to compete suc- 
cessfully in foreign markets with selling combinations of other 
countries. 

Bills were introduced in Congress in 1916 and 1917 by Senator 
Atlee Pomerene and Congressman Edwin Y. Webb, and hearings 



1 40 Stat. 516. See p. 14 of this report. 

- Report on Corporation in American Export Trade, 1916, 2 vols, 
hausted). 



(supply now ex- 
251 



252 CONCENTRATION OF ECONOMIC POWEOR 

conducted by the Senate Committee on Interstate Commerce and the 
House Committee on the Judiciary.^ The act is therefore known 
as the Webb law or the Webb-Pomerene law. It was endorsed by 
President Wilson, Secretary of Commerce Redfield, the Federal 
Trade Commission, a number of trade associations in various in- 
dustries, the chambers of commerce, the National Foreign Trade 
Council, and the American Manufacturers Export Association. 

PROVISIONS OF THE ACT 

Section 1 defines the terms "export trade," "trade within the United 
States," and "association," wherever used within the law. Export 
trade means "solely trade or commerce in goods, wares, or merchandise 
exported, or in the course of being exported from the United States 
or any Territory thereof to any foreign nation" and shall not be 
deemed to include the production, manufacture, or selling for con- 
sumption or for resale, within the United States or any Territory 
thereof. Association means "any corporation or combination, by con- 
tract or otherwise, of two or more persons, partnerships, or cor- 
porations." 

Sections 2 and 3 provide exemption from the antitrust laws to "an 
association entered into for the sole purpose of engaging in export 
trade and actually engaged solely in such export trade, or an agree- 
ment made or act done in the course of export trade by such associa- 
tion," with the provision that uch association, agreement, or act shall 
not be in restraint of trade v .thin the United States, or in restraint 
of the export trade of any domestic competitor ; and with the further 
prohibition of any agreement, understanding, conspiracy, or act which 
shall artificially or intentionally enhance or depress prices within the 
United States, of commodities of the class exported by the association, 
substantially lessen competition, or otherwise restrain trade within 
the United States. 

Section 4 is an amendment to the Federal Trade Commission Act.* 
It extends the jurisdiction of the Commission to unfair methods of 
competition used in export trade against competitors engaged in ex- 
port trade, even though the acts constituting such unfair methods 
are done without the territorial jurisdiction of the United States. 
This section applies to any exporter from the United States, and not 
specifically to a Webb law group. Procedure under this section is 
in accordance with section 5 of the Federal Trade Commission Act. 

Section 6 of the Webb law provides for the filing of papers with 
the Federal Trade Commission by an export association, and covers 
procedure in case of violation of the act. Organization papers, which 

8 H. R. 16707, Congressman Webb, 64th Con?., 1st sess., 1916. H. R. 17350, Congress- 
man Webb, 64th Cong., 2d sess., 1916. H. R. 2316. Congressman Webb, 65th Cong, (same 
as S. 634, Senator Pomerene), passed both Houses, signed in 1918. Hearings before 
House Committee on the Judiciary, on H. R. 16707, and copy of bill and report, serial 48, 
64th Cong., 1st sess., July 1916, 85 pages. Hearings before Senate Committee on Inter- 
state Commerce, 64th Cong., 2d sess., on H. E. 17350, January 1917, 156 pages. Report 
No. 1118, 64th Cong., 1st sess.. House Committee on the Judiciary, to accompany H. R. 
17350, August 15, 1916, 4 pages. Report No. 1056. 64th Cong., 2d sess.. Senate Committee 
on Interstate Commerce, to accompany H. R. 17350, February 14, 1917, 4 pages. Report 
No. 9, 65th Cong., let sess., to accompany S. 634, Senate Committee on Interstate Com- 
merce, April 16, 1917, 4 pages. Report No.- 50, 65th Cong., 1st sess., to accompany H. R. 
2316, House Committee on the Judiciary, May 11, 1917, 10 pages. Report No, 109, 65th 
Cong., 1st sess., Senate Committee on Interstate Commerce, to accompany H. R. 2316, 
August 15, 1917, 4 pages. 

*38 Stat. 717, sees. 5 and 6 (h) on pp. 17-19 of this report. 



i 



CONCENTRATION OF EX30N0MIC POWEH 253 

shall be filed "within 30 days after its creation" include a verified first 
report, copies of the articles or contract of association, bylaws, and 
if the group is incorporated, a copy of its certificate of incorporation. 
An annual report is required, and the association shall also furnish 
"such information as the Commission may require as to its organiza- 
tion, business, conduct, practices, management, and relation to other 
associations, corporations, partnerships, and individuals." Penalties 
are prescribed for failure to comply with these provisions. If the 
Commission has reason to believe that the law has been violated, it 
shall conduct inquiries and make recommendations for readjustment 
of the association's business. Should an association fail to comply 
with the recommendations, the Commission shall refer its findings and 
recommendations to the Attorney General of the United States for 
such action as he may deem proper. 

For the purpose of enforcing these provisions, the Commission shall 
have all the powers, so far as applicable, that are given to it under 
the Federal Trade Commission Act. 

No amendments have been made to the act since its passage in 1918. 
In 1921 a bill was introduced to amend section 2,^ but little interest was 
shown and it was not voted upon. In 1928 a bill was introduced which 
would have extended the scope of the law to include import combines,^ 
but this was rejected by the House of Representatives and was not 
voted on in the Senate. 

No case has arisen in which an association has refused to comply 
with recommendations of the Commission; and no violations of law- 
have been referred by the Commission to the Attorney General. 

FILING OF PAPERS WITH THE COMMISSION 

The organization of a Webb law association, requiring, as it does, 
full cooperation and agreement of all of the member companies, 
more often consumes weeks or months of discussion and negotiation. 
During that period the Commission offers its services, informally, to 
the negotiators. The organization papers, when finally executed, are 
acted upon by the full Commission. These papers include the first 
report (for which the Commission supplies blanks ^), the certificate of 
incorporation if it is incorporated, bylaws, membership agreement, 
contract forms, w^orking rules or regulations, or other documents cover- 
ing the proposed operation. If there is any clause therein that seems 
to show an intent to operate in such a way as to violate the law, in- 
formal advice is given by the Commission to that effect, with an oppor- 
tunity to amend ; but there is no formal approval or disapproval, and 
the receipt or filing of the papers does not serve as a permit or license 
to operate under the law. Before the act was passed, an attempt was 
made to include an amendment which would have provided for per- 
mits to be issued by the Commission, and authority to revoke such a 
permit; but strong objection was voiced and this provision was not 
made a part of the law. When the Commission has received and filed 
the papers of a newly organized association, it issues a brief news 

'S. 2GS3, 67th Cong., 1st sess. (Senator Fletcher), Nov. 4, 1921; same bill Introduced 
as S. 812. 6Sth Cong., 1st sess., Dec. 10, 1923. 

<S. 2312 (Senator Wesley L. Jones) and H. R. 8927 (Congressman Walter H. Newton) 
70th Cong.. 1st sess. 

' Copy of the first report form on pp. 11-13 of this report. 



254 CONCENTRATION OF ECONOMIC POWER 

release, announcing the name and address, its officers and members, 
and the commodity to be exported. 

Annual reports as of January of each year, keep the Commission's 
records current; blanks for this purpose are mailed to each associa- 
tion.^ Other information may be required, and the association offices 
are visited from time to time. Association records in the Commission 
files are not open for public inspection ; but the Commission's annual 
report to Congress for each year, covers a general statement of opera- 
tion during that period, with a list of the association's filing papers and 
a summary of the business transacted by all of the groups. 

The Commission has received many inquiries from the associations 
and others, concerning their operation, to which reply has been made 
with informal advice. As yet none of the Commission's inquiries 
under section 5 have reached the stage of formal complaint and hear- 
ings, and no formal orders have been issued. 

WEBB LAW ORGANIZATION AND OPERATION 

In drafting organization papers, the first thing to bear in mind is 
that the association shall be engaged solely in export trade; and this 
does not include production, manufacture, or selling for consumption 
or for resale, within the United States. The Commission is sometimes 
asked if an association may operate mills to produce the goods for 
export; but the terms of the act would not seem to cover such opera- 
tion and the Commission has given informal advice to that effect. 

Under section 1 of the act, products may be exported to "any for- 
eign nation." A number of associations have asked if a Webb-law 
group may ship to Puerto Rico, or to the Philippines. To this the 
Commission has replied informally that under numerous court deci- 
sions the insular possessions have been held to be not foreign to this 
country ; they are therefore not markets to which a Webb-law group 
may ship. The status of the Philippine Islands may be changed by 
independence at some later date. 

The law does not prescribe incorporation, but a number of groups 
formed under the act have become incorporated under State laws 
for their own convenience. Nor does the act require that an asso- 
ciation shall be a nonprofit organization, although many of the asso- 
ciations have operated on an expense basis, the profits accruing to 
the individual members. 

Usually a Webb-law group is formed by producers or manufac- 
turers of the same products, and there may be several groups in the 
same industry. One of the lumber-export associations ships red- 
wood, and one walnut, but several have shipped pine. On the Pa- 
cific coast one group sells dried fruit packed in California, and an- 
other handles the same products packed in the Oregon district. In 
some cases a Webb-law association has been affiliated with more than 
one group. A petroleum company files as an association under the 
law and is also a member of a larger Webb-law group in the same 
industry; a similar plan was at one time used by two of the phos- 
phate associations that combined to form another group. 

The main office of the association may be at seaport in order to 
handle the shipping details, or it may be in the locality of the mem- 

■The annual report form is very similar to the first report form, on pp. 11-13 of this 
report. 



CONCENTRATION OF ECONOMIC POWEiR 255 

ber mills in order to serve as a convenient meeting place for agree- 
ment upon export policies. Branch offices and agencies may h& 
maintained in this country and abroad. 

In view of the wide variety of products that have been exported 
under the act, the association agreements have varied considerably,, 
each drafted to meet the needs of the particular industry to be 
served. The three general types that have been used are (1) that 
in which the association serves as a central selling agent for all of 
the members, taking orders, negotiating sales, and handling the ship- 
ment of the goods; (2) that in which the association directs the 
exportation of its members and retains certain functions in export 
trade, but the orders are placed by agents already established by the 
members abroad; in this case the export department of one member 
may handle foreign orders for several members; and (3) the export 
company formed for the purpose of buying the members' products 
and reselling them abroad at terms agreed upon by the members. 
The first and second methods of selling may be combined, the mem- 
bers using their established agents for some markets and the asso- 
ciation sales office for new markets or those in which the trade is 
not well developed. 

An association may have more than one class of members, depend- 
ent upon the service that it contracts to perform for them. One 
association has a full membership and a limited membership; 
another has a packers division and a merchants division. In 
addition to its sales of products of the member companies, some 
associations obtain and sell the products of other manufacturers in 
order to meot'the demands of their foreign customers; for this pur- 
pose a separate department of sales may be used. Some of the 
association agreements cover the entire export trade of the mem- 
bers, some are limited to specified product' ^r certain-named mar- 
kets. A Webb-law association is a voluntaiy organization and may 
or may not include a large percentage of the industry. 

Some of the functions that have been reported to the Commission 
by associations now in operation may be listed here : 

Serving as export sales agent for the member companies, in all 
foreign markets or in certain markets to be agreed upon, for all 
goods exported by the members or for only certain of their products. 

Purchasing the members' products for resale in foreign markets^ 
under terms and conditions agreed upon by the members. 

Employing agents and directing the agents of the member com- 
panies, maintaining offices, in this country and abroad, promoting 
conferences and agreements in export trade. 

Obtaining and selling goods of producers outside of the associa- 
tion, in order to fill the association's export orders. 

Exploitation of members' products abroad, especially introducing 
them in new markets. Joint advertising and use of joint trade-marks. 
Promoting sales for the members' brands and patented goods. 

Agreeing upon price for export, terms and sales policies in foreign 
markets, and adopting uniform forms of contracts. In some cases 
only a minimum price is agreed upon; in others members are free 
to quote price but agree to report to the association any change in 
price. 

Dividing the export business of the association among the mem- 
bers in predetermined proportions; for this purpose a quota system 



256 CONCENTRATION OF ECONOMIC POWER 

may be agreed upon and the orders allotted in accordance therewith. 

Recording sales of the members' products, in export trade, keep- 
ing copies of invoices and other documents; this is important when 
a quota plan is adopted. 

Standardizing products for export and improving the quality of 
the goods. Maintaining inspection service, employing claims agents, 
and settling disputes over export sales. 

Establishing rules and regulations for packing and shipping the 
goods in export. 

Arranging for freight rates, cargo space, and shipping dates; con- 
solidating the shipments of the members; taking out insurance and 
shipping documents. 

Providing for storage during transit and warehousing abroad. 

Collecting and disseminating trade information as to market con- 
ditions abroad, foreign credits, stocks available for export by the 
members, the exchange situation, tariif requirements, shipping rules 
and regulations, foreign laws that aifect our foreign trade, and other 
data of value to American exporters. 

ADVANTAGES OBTAINED BY WEBB LAW GROUPS 

Advantages obtained from the various functions listed above are 
obvious. A centralized agency may effect economy in sales cost; it 
may get better freight rates by consolidating shipments; and it may 
reduce the shipping expense by arranging for cargo space, insurance, 
and other details. Cooperation in storage during transit and ware- 
housing abroad are of especial advantage if the products are seasonal 
and better prices may be obtained when the goods are fed into foreign 
markets throughout the year. 

Agreements upon price and terms of sale are to the advantage of 
the American exporter and also to the foreign buyer who prefers a 
quotation that does not fluctuate daily. Orders may be placed several 
months in advance of shipment; credit may be arranged for longer 
periods to meet demands in foreign markets. An association may bid 
on and secure large orders for shipment over a long period, which no 
single member could handle. In many cases it is selling to combines 
or buyers in large quantities who prefer to deal with an organization 
with ample source of supply. 

In improving the service to buyers and the quality of the goods 
shipped, through standardization and inspection before shipment, 
the associations have reduced claims of buyers, and have offered an 
efficient service in handling disputes. 

The association is in a position to obtain and disseminate trade 
information, to handle advertisement, and to do exploitation work 
with minimum expense to the members. 

So far as it was in operation before the armistice, the law was of 
benefit in developing new markets in Sourh America, and some food- 
stuffs and raw materials were shipped to Europe for use of the Allies. 
During the period of readjustment after the World War, American 
exporters found advantages in cooperative effort, and in 1929 and 1930 
substantial sales were made. During the years of depression, a number 
of associations have reported to the Commission that |heir members 
would be unable to export without Webb law organization. 



CONCENTRATION OF ECONOMIC POWEiR 
PRODUCTS EXPORTED 



257 



Products exported by the Webb law groups have been divided by 
the Commission, in its annual reports, into five general classes: 

(1) Metal and metal products: Copper, iron and steel, met^l lath, 
zinc, machmery and implements, foundry equipment, locomotives and 
railway equipment, electrical apparatus, signal apparatus, tools, pipes, 
valves, and screws. 

(2) Products of mines and wells: Sulfur, phosphate rock, coal and 
coke, petroleum products, carbon black. 

(3) Lumber and wood products: Pine, fir, hardwood, redwood, 
walnut, naval stores, plywood, doors, furniture and ofiice equipment, 
wood pipe, shooks, wooden tool handles, clothespins. 

(4) Foodstuffs: Canned milk, meat products, sugar, flour and other 
grain products, rice, sardines, canned salmon, peas, canned vegetables, 
and fruit (fresh, dried, and canned). 

(5) Other manufactured products : Paper, textiles, rubber products, 
abrasives, cement, fertilizer, paint and varnish, insecticides, alcohol, 
tanning materials, soda pulp, soda ash, alkali, other chemicals, cotton 
linters, clothing, buttons, and general merchandise. 

These broad groupings were adopted in order to give to the public 
information as to the kinds of goods exported, and their value, with- 
out divulging statistics reported by any one company or association. 

Total exports^ during the years 1920 to 1934, inclusive, were as 
follows : 



Year 


Metals and 

metal 

products 


Products of 

mines and 

wells 


Lumber and 

wood 

products 


Foodstuffs 


other manu- 
factured 
products 


Totals 


1920 


$152,000,000 
67, 557, 000 


$8, 000, 000 
5, 556, 000 


$17,000,000 
9, 894, 000 


$8, 000, 000 
5, 839, 000 


$36,000,000 
2,334,000 


$221,000,000 
91,180,000 


1921 

1922' 


1923 


68, 227, 000 

43, 992, 000 

43, 287, 000 

56. 500. 000 

180, 000, 000 

267, 600. 000 

271.000.000 

208. 000, 000 

100, 000, 000 

21,000,000 

29, 000, 0(X> 

27, 000, 000 


10,500,000 

9, 885, 000 

14,279,000 

14,300,000 

15,200,000 

17, 50O, 000 

270. 000. 000 

31,5,T)00,000 

73. 009. 000 

56, 000, 000 

44, 000, 000 

53, 000, 000 


26, 000, 000 
32, 700, 000 
38. 000. 000 
35, 700, 000 
35, 400, 000 
28, 200, 000 
26, 000, 009 
22, 500. OW 


32, 400, 000 
35. 300. 000 
42, 000, 000 
35. 000. 000 
53, 000. 000 
80, 40n. 000 
67. 100, 000 
40. 500. 000 


16,373,000 
18, 123. 000 
27. 934. 000 
59.000,000 
87, 900, 000 
82. 500, 000 
90, 000, 000 
75, 000, 000 
70, 100, 000 
3 J. 000. 000 
34. 000. 000 
36, 000, 000 


153,500,000 
140, 000, 000 
165,500 000 


1924 


1925 


1926 - - 


200, 500, 000 
371 500 000 


1927 


1928 


476, 200, 000 


1929 . 


724 100 000 


1930... .- 


661,000,000 


1931 


35, 400. OiK) 32. 500. 000 


311,000,000 


1932 .- 


8. 000, 000 
8. 000, 000 
8, 500, 000 


24. 000. 000 
28, 0!)0, 000 
21,300,000 


144,000 000 


1933... 

1934 


143, 000, 000 
145, 800, 000 



' Figures for 1922 not co^lpiled. 

The decrease in the value of exports from 1931 to 1934 was due to 
depressed conditions in foreign markets, including the lack of pur- 
chasing power, uncertain credits, exchange control, import quota and 
license systems, increased duties, and, in some cases, total exclusion of 
products theretofore imported from this country. It was also due 
to tlie fact that by reason of the very low prices prevailing ir for- 
eign markets, some of \\\^ member companies were unwilling to ship 
and some of the ass«'cia£k»ns suspended price agreements, permitting 
members to sell at independent prices; the independent sales were 
not reported or included in the Webb-law totals for those years. 

• In round numbers. 



258 CONCENTRATION OF ECONOMIC POWER 

ASSOCIATIONS FORMED UNDER THE LAW, 1918-35 

The first groups to form under the law were the lumber exporters, 
the copper and steel associations, exporters of machinery, railway 
equipment, phosphate, chemicals, paper, furniture, elastic webbing, 
and a number of exporters of foodstuffs (some of these for the pur- 
pose of selling grain products to the Allies). Several groups were 
formed to handle miscellaneous exports to specific markets, but this 
plan was not a success. An exporter of lumber is not equipped to 
sell food products or unrelated goods ; and it was found a better plan 
to form the groups on the commodity basis rather than for regional- 
trade development. Passage of the Capper- Volstead Act, granting 
antitrust exemption to agricultural cooperatives, in 1922, precluded 
the formation of those groups under the Webb law. The sulfur 
and rubber groups were formed in 1922, the petroleum associations 
in 1929, the textile groups in 1930, and the electrical association in 
1931. Other important associations are noted in the list below. 

In 1920 there were 43 associations in operation. Several dropped 
out during the readjustment period, in 1921 and 1922; but others 
were formed, and in 1929, 1930, and 1931 there were 57 associations 
on the Commission's list. The number dropped to 45 in 1934, and 
44 in 1935. Although exportation has been exceedingly difficult dur- 
ing the depression, most of the associations have maintained their 
organization and continued to operate to some extent. 

The following list includes associations that have operated under 
the law during the years 1918 to 1935 : ^° 

Alabama-Florida Pitch Pine Export Association, New Orleans 1929-33 

American Brake Beam Manufacturers Export Association, West Nyack, 

N. Y 1925-29 

American Corn Products Export Association, New York City 1922-27 

American Export Door Corporation, Tacoma, Wash 1927-30 

American Export Lumber Corporation, Philadelphia 1919-20 

American Hardwood Exporters, Inc., New Orleans . 1930-35 

American Locomotive Sales Corporation, New York City 1919-35 

American Maize Products Export Association, Chicago 1919 

Name changed to U.^. Maize Products Export Association 1920-26 

American Milk Products Corporation, New York City 1919-30 

Name changed to General Milk Co. in 1930 1930-35 

American Paper Exports, Inc., New York City 1918-35 

American Pitch Pine Export Co., New Orleans 1919-35 

American Producers Export Corporation of Delaware, New York City 1921-22 

American Producers Export Corporation of New York, New York City 19^1-22 

American Provisions Export Co., Chicago 1919-35 

American Rice Export Corporation, Crowley, La 1927-33 

American Soda Pulp Export Association, New York City 1919-35 

American Soft Wheat Millers Export Corporation, Washington, D. C 1927-34 

American Spring Manufacturers Export Association, New York City 1923-35 

American Surface Abrasive Export Corporation, New York City 1923-31 

(Some of the members now in Durex Abrasive Corporation.) 

American Tanning Materials Corporation, New York City 1919-:*3 

American Textile Machinery Corporation, Boston 1919-2.> 

American Textile Trading Co., New York City 1930-34 

American Tire Ma:nufacturers Export Association, New York City 1923-35 

American Webbing Manufacturers Export Association, New York City 1919^32 

Association Button Exporters of America, Inc., New York City 1921-33 

"This list does not include a number of companies that filed p>ipers under misappre- 
hension during the first year of operation ; they were foufid to be engaged in business 
other than exporting, and were dropped from tlie Commission's register. 



CONCENTRATION OF ECONOMIC POWER 259 

Atlantic & Gulf Export Co., Jacksonville, Fla 1921 

Automatic Pearl Button Export Co., Inc., Muscatine, Iowa 1921-29 

California Dried Fruit Export Association, San Francisco 1925-35 

California Sardine Export Association, San Francisco 1928-30 

Canned Foods Export Corporation, Washington, D. C 1919-23 

Carbon Black Export Association, Inc., New York City 1929-33 

Some of the members now in the Carbon Black Export, Inc., New 

York City 1933-S5 

Carolina Wood Export Corporation, Norfolk, Va ; 1919-32 

Cement Export Co., The, Philadelphia and New York City 1919-35 

Chalmers (Harvey) & Son Export Corporation, Amsterdam, N. Y 1921-31 

Clandere Export Corporation. New York City 1921-23 

Consolidated Steel Corporation, New York City 1919-23 

( Some members now in Steel Export Association of U. S. ) 

Copper Export Association, New York City 1919-33 

Copper Exporters. Inc., New York City 1926-35 

Davenport Pearl Button Export Co., Davenport, Iowa 1921-31 

Delta Export Lumber Corporation, Memphis, Tenn 1922-26 

Douglas Fir Exploitation & Export Co., Seattle 1918-35 

Durex Abrasives Corporation, New York City 1920-35 

Electrical Apparatus Export Association. New York Citv 1931-35 

Export Clothes Pin Association of America, Inc.. New York City 1919-30 

Export Petroleum Association, Inc.. New York City 1929-35 

Export Screw Association of the United States., Providence. R. I 1926-35 

Exporters of Wood Products, Inc.. New York City l92f4-29 

( Some members now in Shook Exporters Association. ) 

Exporting Rye Millers Association, Minneapolis, Minn 1920 

Florida Hard Rock Phosphate Export Association, Savannah, 6a 1919-35 

Florida Pebble Phosphate Export Association, New York City 1919-33 

(Consolidated with Phosphate Export Association in 1933.) 

Florida Pine Export Association, Jacksonville. Fla 1930-31 

Foundry Equipment Export Coi'poration, Philadelphia 1919-21 

General Alcghol Export Corporation, New York City 1919-24 

General Milk Co., Inc.. New York Citv 1930-35 

(Was American Milk Products Corporation, 1919i-30.) 

Goodyear Tire & Rubber Export Co.. The. Akron, Ohio 1922-35 

Grain Products Export .\ssociation, New York City 1922-27 

Grand Rapids Furniture Expoi't Association, Grand Rapids, Mich 1920-27 

Grapefruit Distributors, Inc., Davenport, Fla 1930-35 

Gulf Pitch Pine Export Association. New Orleans 1920-33 

Hawkeye Pearl Button Export Co., Muscatine, Iowa 1921-35 

Inter-America Exporters, Inc., New York City 1935 

International Steel Corporation, New York City l'.>lS-23 

Locomotive Export Association, New York City 1920-29 

MfKee P>utton Export Co., Muscatine. Iowa 1921-25 

Mpfal L.itb Export Association, The, New York City 192fKS5 

Millers Export Association, Inc., Chicago, 111 1919-22 

Mississippi Valley Trading & Navigation Co., St. Louis, Mo 1920-23 

Namusa Corporation. New York City — 1919-22 

Naval Stores Export Corporation, Savannah, Ga 192.'>-30 

Nogales Garbanzo Association. Nogales, Ariz 1921-22 

Northwest Dried Fruit Export Association, Portland, Oreg 1927-.35 

Northwest Lumber Exporters A'^sociation, Seattle, Wash 1929-31 

(Some members joined Douglas Fir Association & Export Co.) 

Pacific Flour Export Co., Seattle. Wash 1924-35 

Pacific Forest Industx-ies, Tacoma. Wa.sh 1935 

Pan American Trading Co.. New York City 1919^27 

Pennsylvania Millers Export Association. Philadelphia 1919-20 

Phosphate Export Association, New York City 1919-35 

Pioneer Peari Button Export Corporation, Poughkeepsie, N. Y 1922-29 

PIl)o Fittinss & Valve Export A=;sociation, The, Philadelphia 1919-35 

Producers Linter Export Co.. New Orleans 1924-32 

Redwood Export Co.. San Francisco 1918-35 

Rice Export Co., Lake Charles, La 1929-31 

(Some members joined American Rice Export Corporation.) 
Rubber Export Association, The, Akron, Ohio 1922-35 

2.^7769— 41— No. 6 18 



2g0 CONCENTRATION OF ECONOMIC POWEK 

Salmon Export Corporation, Seattle 1926-30 

Shook Exporters Association, New York City 1932-35 

Signal Export Association, New York City 1931-35 

South American Fruit Exporters, Inc., New York City 1927-31 

Standard Oil Export Corporation, New York City 1929-35 

Steel Export Association of America, The, New York City 1928-35 

Sugar Export Corporation, New York City 1922-35 

Sulphur Export Corporation, New York City 1922-35 

Textile Alliance Export Corporation, New York City 1919 

(Name changed to Textile Manufacturers Alliance in 1919.) 

Textile Export AssQCiation of the U. S., New York City 1930-35 

Textile Manufacturers Alliance, Inc., New York City 1919-20 

United Export Lumber Association, Seattle 1931-32 

United Paint & Varnish Export Co., Cleveland 1920-29 

U. S. Alkali Export Association, Inc., New York City 1919-35 

U. S. Button Export Co., Muscatine, Iowa 1921-28 

U. S. Forest Products Co., Kansas City, Mo 1919-22 

U. S. Handle Export Co., The, Piqua. Ohio 1919-35 

U. S. Maize Products Export Association, Inc., Wilkes-Barre, Pa 1920-26 

(Operated as American Maize Products Export Association, 
1919-20. ) 

U. S. Office Equipment Export Association, New York City 1918-23 

U. S. Provision Export Corporation, Chicago 1919-22 

Walnut Export Sales Co., Inc., Kansas City, Kans 1918-35 

Walworth International Co., New York City 1920-35 

Western Plywood Export Co., Tacoma, Wash 1927-35 

Wisconin Canners Export Association, Manitowoc, Wis 1920-29 

Wood Naval" Stores Export Association, Wilmington, Del 1935 

Wood Pipe Export Co., Seattle 1920-23 

Zinc Export Association, New York City 1925-34 



EXHIBIT 8 

[Federal Trade Commission] 

FOREIGN TRADE WORK 

ExcraiPTS From Annual Report of the Federal I'rade Commission 
FOR THE Fiscal Year Ended June 30, 1937 

No\tjmbbr 24, 1937. 

FEDBaiAL Trade Commission 

William A. Atees, Chairman; Garland S. Ferguson, Jr., Vice Chairman; 
Chaeles H. March ; Ewin L. Davis; Robekt E. Freek; Otis B. Johnson, 
Secretary. 

Foreign trade work of the Commission includes administration of 
the Export Trade Act, commonly known as the Webb-Pomerene 
law, and inquiries made under section 6 (h) of the Federal Trade 
Commission Act, which empowers the Commission to investigate trade 
conditions in and with foreign countries. This work is handled by the 
export trade section of the Legal Division. 

THE EXPORT TRADE ACT 

The Export Trade Act, passed by Congress in 1918, grants exemp- 
tion from the antitrust laws to export combines or associations, which 
are required to file with the Commission copies of their organization 
papei"s, annual reports, and such other information as the Commis- 
sion may require as to their organization, business, conduct, practices, 
management, and relation to other associations, corporations, partner- 
ships, and individuals. In case of violation of the law, the Commis- 
sion may conduct inquiries and make recommendations for readjust- 
ment of a business. Should an association fail to comply with the 
recommendations, the matter may be referred to the Attorney General 
for further action. 

Such an association must be solely engaged in export trade; and the 
law provides that it shall not restrain the export trade of a domestic 
competitor; artificially or intentionally enhance or depress prices 
within the United States of commodities of the class exp-orted by the 
association; substantially lessen competition or otherwise restrain 
trade within the United States. 

EXPORTS increase IN 19 3G 

Reports of associations filing papers under tlie Export Trade Act 
show an upsvring in exports for the yeaf 1936, due to improved con- 
ditions abroad, a lessening of trade restrictions in foreign countries, 

261 



262 



CONCENTRATION OF ECONOMIC POWEJR 



and strong association effort to increase sales in spite of foreign com- 
petition. 

Total exports for that year amounted to $149,296,525, and exceeded 
by approximately $11,600,000 the associations' exports in 1935, in spite 
of the fact that two of the largest groups, exporting petroleum, were 
dissolved in 1936. 



Association exports for the years 1935 and 1936 



1935 



1936 



Metals and metal products, including iron and steel products, copper, metal 
lath, machinery, railway equipment, pipes and valves, and electrical 
equipment 

Products of mines and wells: Crude sulfur, phosphate rock, petroleum, and 
carbon black 

Lumber and wood products: Pine, fir, redwood, walnut, hardwood, plywood, 
barrel and box shooks, tool handles, and wood naval stores 

Foodstuffs, such as milk, meat, sugar, flour, and fruit 

Other manufactured goods: Rubber, paper, textiles, glass, cement, abrasives, 
and chemicals 

Total 



$20, 250, 000 

55, 875, 000 

9, 450, 000 
16, 500, 000 

35, 610, 000 



137, 085, 000 



$40, 507, 335 
40, 780, 283 



8, 533, 374 
21,250,433 



38, 225, lOO 



149, 296. 525 



FORTY-FIVE ASSOCIATIONS OPERATING UNDER THE EXPORT TRADE ACT 

New associations organized under the Export Trade Act during the 
fiscal year ended June 30, 1937, were : California Alkali Export Asso- 
ciation, comprising three member companies in California, with head- 
quarters in Los Angeles ; Pacific Fresh Fruit Export Association, com- 
prising nine member companies in California and Washington, with 
headquarters in San Francisco ; and Scrap Export Associates of Amer- 
ica, comprising three member companies in New York and Pennsyl- 
vania, with headquarters in New York City. 

At the end of the fiscal year, 45 export trade associations were on 
file with the Federal Trade Commission, as follows : 



American Box Shook Export Associa- 
tion, Barr Building, Washington, D. C. 

American Hardwood Exporters, Inc., 
Queen and Crescent Building, New 
Orleans. 

American Locomotive Sales Corpora- 
tion. 30 Church Street, New York. 

American Paper Exports, Inc., 75 West 
Street, New York. 

American Provisions Export Co., 80 East 
Jackson Boulevard, Chicago. 

American Soda Pulp Export Association, 
230 Park Avenue, New York. 

American Spring Manufacturers Export 
Association, 30 Church Street, New 
York. 

American Tire Manufacturers Export 
Association, 30 Church Street, New 
York. 

California Alkali Export Association, 
523 West Sixth Street, Los Angeles. 

California Dried Fruit Export Associa- 
tion, 1 Drumm Street, San Francisco. 

California Prune Export Association, 1 
Drumm Street, San Francisco. 

Carbon Black Export, Inc., 500 Fifth 
Avenue, New York. 



Cement Export Co., Inc., 150 Broadway, 
New York City. 

Copper Exporters, Inc., 50 Broadway, 
New York. 

Douglas Fir Export Co., Henry Build- 
ing, Seattle, Wash. 

Durex Abrasives Corporation, 63 Wall 
Street, New York. 

Electrical Apparatus Export Associa- 
tion, 70 Pine Street, New York. 

Export Screw Association of the United 
States, 23 Acorn Street, Providence, 
R. I. 

Florida Hard Rock Phosphate Export 
Association, Savannah Bank and 
Trust Building, Savannah, Ga. 

General Milk Co., Inc., 19 Rector Street, 
New York. 

Goodyear Tire & Rubber Export Co., 
1144 East Market Street, Akron, 
Ohio. 

Grapefruit Distributors. Inc., Daven- 
I)ort, Fla. 

Inter-America Exporters, Inc.; 11 Broad- 
way, New York. 

Metal Lath Export Association, 47 West 
Thirty-fourth Street, New York. 



CONCENTRATION OF ECONOMIC POWEH 263 

Northwest Dried Fruit Export Associa- Signal Export Association, 74 Trinity 

tion, Title and Trust Building, Port- Place, New York. 

land, Oreg. Steel Export Association of America, 75 

Pacific Flour Export Co., care of Fisher West Street, New York. 

Flouring Mills Co., Seattle, Wash. Sugar Export Corporation, 120 Wall 

Pacific Forest Industries, Tacoma Street, New York. 

Building, Tacoma, Wash. Sulphur Export Corporation, 420 Lex- 
Pacific Fresh Fruit Export Association, ington Avenue, New York. 

451 California Street, San Francisco. Textile Export Association of the 

Phosphate Export Association, 393 Sev- United States, 40 Worth Street, New 

enth Avenue, New York. York. 
Pipe Fittings & Valve Export Associa- United States Alkali Export Associa- 
tion, 1421 Chestnut Street, Philadel- tion. Inc., 11 Broad way,^ New York. 

phia. United States Handle Export Co., Piqua, 

Plate Glass Export Corporation, Grant Ohio. 

Building, Pittsburgh. Walnut Export Sales Co., Inc., Twelfth 

Redwood Export Co., 405 Montgomery Street and Kaw River, Kansas City, 

Street, San Francisco. Kans. 

Rubber Export Association, 19 Good- Walworth International Co., 60 East 

year Avenue, Akron, Ohio. Forty-second Street, New York. 

Scrap Export Associates of America, Wood Naval Stores Export Association, 

350 Fifth Avenue, New York. 1220 Delaware Trust Building, Wil- 

Shook Exporters Association, Stahlman mington, Del. 

Building, Nashville, Ten. 

ADVANTAGES OBTAINED BY EXPORTERS IN 1936 

Associations operating under the law represent mills, mines, fac- 
tories, and processing plants in all parts of the country. Shipments 
are made to all parts of the world. 

The export association presents a united front to foreign competi- 
tion; it concentrates and simplifies the problem of sales, makes for 
economy in operation, and generally builds up the prestige of Ameri- 
can goods abroad. An association may adopt uniform sales terms as to 
price, credit, shipping dates, packing requirements, and other details 
of shipment. Complaints of foreign buyers against American ship- 
pers may be reduced through a centralized inspection service and an 
adjustment department. An arbitration board lessens legal expense. 

Cooperative purchase of cargo space was especially helpful during 
the maritime strike tie-up of 1936. The pooling of orders makes it 
possible to complete large sales contracts over a longer period of ship- 
ment than could be handled by one company alone. Standardization 
of products and improvement in quality, have been effected through 
cooperative effort. Foreign buyers show more confidence in dealing 
with a large group of exporters than with a single company less 
known to the trade. The association is in a position to obtain current 
information for dissemination among the members as to market condi- 
tions abroad, tariffs, shipping requirements, tax regulations, and 
exchange restrictions. 

Exports were somewhat lessened in 1936 by labor disturbances, 
notably the maritime strike on the west coast which delayed shipments 
and resulted in some cancelation of orders. There are still high duties 
and import quota plans in some countries abroad, although associa- 
tions report that reciprocal-tariff agreements negotiated by the United 
States have served to lessen these restrictions. Revaluation of gold- 
block currencies at lower levels gave foreign competitors an ad- 
vantage. The policy of some countries to increase production to the 
point of becoming self-sustaining in time of war has led to changes 



264 CONCENTRATION OF ECONOMIC POWER 

in producing areas. Manufacturing plants have been built in the 
Orient, much effort has been spent in the development of substitute 
products in Europe, and the cultivation of grain and other foodstuffs 
has been eiMjouraged abroad. These changes must be met and new 
markets developed to take the place of old. The Webb-Pomerene law 
offers a method under which the expense and effort of developing new 
markets may be divided among a number of exporters, for the bene- 
fit of all. 

TRUST LAWS AND UNFAIR COMPETITION IN FOREIGN COUNTRIES 

In accordance with section 6 (h) of the Federal Trade Commission 
Act, directing inquiries as to trade conditions in and with foreign 
countries, the Commission notes the following measures involving 
trust laws and unfair competition abroad : 

Argentina. — Recent legislation authorized Government purchase 
and destruction of vineyards in order to reduce the production of wine 
grapes. An JExecutive decree of August 7, 1936, provided for appoint- 
ment of a commission to study plans and present recommendations for 
agricultural laws and policies. A national wool institute was created 
by decree of June 10, 1936, to promote production and regulate prices. 
Under an Executive decree on July 20, 1936, all imports and exports 
of petroleum must be handled by a Government-controlled agency with 
authority to allocate markets and to operate a monopoly for sale of 
petroleum in the federal capital. 

Australia. — Decision of the Privy Council at London in July 1936, 
invalidating the Dried Fruit Control Act, seriously affected the Com- 
monwealth plans for production control. Government aid to agri- 
culture had been effected for some years through bounties and market- 
ing schemes. Domestic prices were maintained above export prices, 
and the difference paid to exporters, control having been adminis- 
tered by Commonwealth export control boards working in cooperation 
with control boards in the producing states. The Privy Council held 
the dried fruit control to be in violation of section 92 of the Com- 
monwealth Constitution, which insures free trade between the Aus- 
tralian states {James v. Commomoealth of Australia). Thereafter 
amendments were proposed to make section 92 inapplicable to mar- 
keting laws, and to permit laws regulating aviation, the Common- 
wealth Air Navigation Act having been held invalid by the High 
"Court of Australia. But the proposed constitutio!idl amendments 
were rejected by the states in 1937. Section 7 of die Industries 
Preservation Act, which provides for freight-dumpnig duties, was 
amended December 7, 1936. 

Austria. — Increased prices in raw materials and semifinished goods 
have led to an increase in retail prices, and a demand for govern- 
mental price fixing for necessaries. A price commissary has been ap- 
pointed to receive claims and provide official hearings for disputes 
between producers, manufacturers, dealers, and consumers. 

Bolivia. — The price and profits control decree of June 20, 1936, 
provided that establishments dealing in articles of basic necessity be 
limited to a maximum profit of 12 percent, and other firms to a maxi- 
mum commercial profit of 20 percent. Stocks will be inventoried, 
actual costs of prime necessities computed, and selling prices fixed by 



CONCENTRATION OF ECONOMIC POWEiR 265 

inspectors of the permanent fiscal commission. A decree dated August 
20, 1936, required that any inhabitant who participates in any way 
in the production and distribution of wealth be required to join a 
syndicate operating under a national bureau of syndicates. An 
Executive decree of December 21, 1936, created a Government petro- 
leum monopoly. 

Canada. — Judgments were rendered by the Privy Council in 
London, January 28, 1937, on a number of Canadian laws. The 
Farmers Creditors Arrangement Act was upheld by the council, as 
was section 498A of the criminal code which provides penalties for 
the granting of discriminatory discounts, rebates, and allowances. 
The Dominion Trade and Industry Commission Act was upheld in 
part, but no appeal was taken from decision of the Supreme Court 
of Canada which had held invalid section 14 providing for price reg- 
ulation and production control by the Dominion. Government. The 
Natural Products Marketing Act which had provided for agricul- 
tural agreements, the Employment and Social Insurance Act, the 
Minimum Wages Act, Limitation of Hours of Work Act, and the 
Weekly-Day-oi-Rest-in-Seven Act, w^ere held invalid, and beyond 
the power of the Dominion Parliament under the British North 
America Act which reserves to the provinces control of trade and 
industry within their borders. 

The Combines Investigation Act, 1923, was amended on April 10, 
1937; the law will now be administered by a commissioner under the 
Minister of Labor. A report was made by a royal commission, dated 
February 3, 1937, on importation and distribution of anthracite 
coal in the Dominion. The antidumping provisions of the Customs 
Tariff Act were amended in 1937. 

China. — In December, 1936, a national foodstuffs distribution and 
transportation bureau was opened at Shanghai, to put foodstuffs 
under national control and to effect an adjustment between supply 
and demand in order to prevent local shortage and speculation in 
price. 

Colombia. — Under an act approved in 1936, the Government may 
acquire utilities that are considered of public and social interest. A 
new land-ownership law effective on December 30, 1936. provided 
that all rural lands shall revert to the state unless continuous pos- 
session or economic exploitation is shown for 10 years. 

Czechoslovakia. — In order to forestall an increase in prices after 
devaluation of the crown, a decree issued in October 1936 directed 
local authorities to watch the prices of daily necessities, raw ma- 
terials, intermediates, and other production materials, and to report 
to a newly created price advisory board in case of unwarranted 
price increase, speculative buying, curtailment of production, and 
any measures tending to increase prices or result in profiteering. 

A decree dated July 23, 1936, provided for organization of all 
textile producers into a syndicate, under regulation of a board author- 
ized to issue licenses and determine problems of production and dis- 
tribution. A decree dated July 8, 1936, amended the national de- 
fense law of May 13, 1936, defining war industries and providing 
strict con,trol for all of the industries and trades named therein. 
The wheat monopoly law was extended to June 30, 1940. Compulsory 
labor exchanges were introduced in October 1936; strikes and lock- 
outs are not permitted. 



266 CONOENTKATION OF ECONOMIC POWEB 

France. — The Price Control Act, passed on August 19, 1936, pro- 
vided for governmental committees to survey wholesale and retail 
prices, determine a normal spread between cost and sales price, and 
to prohibit unjustified increase in price. The Monetary Act of 
October 3, 1936, included a provision against alteration of the prica 
level. A decree of November 25 provided for a bureau to make in- 
quiries and recommendations toward a reduction in production 
costs. A law passed February 15, 1937, declared illegal all price in- 
creases on foodstuffs, merchandise, and services of prime necessity, 
above the level of August 1, 1936, unless justified by a rise in the 
price of raw materials or an increase in service charges. A national 
price-surveillance committee was provided to fix prices, in agreement 
with wholesalers and retailers. 

A decree issued on July 1, 1937, forbade an increase in prices or 
service charges above those in effect on June 28, 1937. 

The Coal Act, passed on August 18, 1936, empowers the Minister 
of Mines to fix the prices of coal and to grant subsidies to min«s 
that are inadequately exploited. A national wheat board was created 
by a law, August 15, 1936, to control production, fix prices, apportion 
sales to millers, provide credit, and grant export subsidies when 
.necessary. The board will have a monopoly of the import and ex- 
port trade in wheat, flour, and cereals. The export credit insurance 
law was amended August 25. Other laws passed in 1936 provided 
aid and credit for small-siz d commercial and industrial enterprises, 
gave temporary assistance to agricultural projects, and authorized 
delay in payments by merchants, industrialists, and artisans. The 
40-hour week was established in 1936, and a law dated December 31, 
supplemented by a decree on January 16,^ 1937, provided that all col- 
lective labor disputes in commerce and mdustry must, be submitted 
to conciliation and arbitration. A national committee has been ap- 
pointed to assist in enforcing orders to restrict to specified regions the 
prodiictio^i of wines bearing certain regional names, and to prohibit 
the shipment of such wines without an official certificate. 

GevTrmny. — An administrative order, July 7, 1936, directed coordi- 
nation of the regional economic chambers with the so-called groups of 
business ; a reduction in fees required for compulsory membership of 
business firms in the groups; and the creation of special courts of 
honor connected with the regional economic chambers, and a centra) 
court of honor connected with the Reich economic chamber. 

Under the second 4-year plan proclaimed in September 1936, fur- 
ther efforts will be made to make Germany independent of foreign 
supplies of industrial raw materials. A decree issued on October 
23, 1936, named 6 business groups that will participate in the plan, 
representing production of raw materials, distribution of raw ma- 
terials, labor, agricultural production, prices, and foreign exchange. 
An order issued by the Minister of Economics, November 12, set out 
the Government plan for compulsory organization of industry. 

In September 1936 warnings were issued with respect to advances 
in the price of food or rentals. Enticement of employees of a com- 
petitor by offering higher wages was denounced as an unfair method 
of competition. In October a new price commissioner was appointed, 
with authority to fix just prices for goods and services of all kinds. 
Several orders were issued prohibiting price increases in specific in- 



CONCENTRATION OF ECONOMIC POWEOR 267 

dustries, and on November 26 two decrees were issued, with an ex- 
ecutive order on November 30, prohibiting any increase in the price 
of commodities and services, incUiding rents, above the level of 
October 18, 1936. These orders did not apply to foreign trade which 
is under special rules issued by the import control boards. 

Under a decree dated January 26, 1937, all private stocks of plat- 
inum, silver, copper, lead, tin, nickel, or zinc, must be delivered to a 
governmental board for sale at prices and under terms fixed by the 
board. The Government has effected a plan for control of the supply 
of skilled labor; work books are now required and a worker must 
obtain a permit before he may change his occupation. The Reich has 
divested itself of a number of participations in private enterprise 
undertaken during the depression. 

A law dated September 30, 1936, authorized monopoly control of 
domestic production and importation of agricultural products to be 
named by further ordinances. 

A law 'dated January 26, 1937, designed to prevent absentee owner- 
ship and speculative sales, requires official approval for sale or trans- 
fer of all agricultural property in excess of 2 hectares (5 acres). 

Two new stock company laws were passed on January 30, 1937. 
In November 1936, the foreign exchange board announced that steps 
would be taken toward confiscation of foreign securities, and on No- 
vember 19 a decree was issued under which securities to be named 
from time to time by the board should be delivered for confiscation, 
to the foreign exchange bank. The law against economic sabotage, 
passed in December 1936, provided capital punishment for persons 
who, in violation of exchange regulations, leave their property abroad 
or transfer it to parties abroad. 

Great Britain. — A proposed enabling act to provide self-government 
in industry was introduced in the British Parliament during the past 
session but failed to pass. Regulation has been effected through the 
Coal Mines Act and the Cotton Spinning Industries Act, and some 
voluntary schemes toward dismantling of inefficient plants have been 
attempted through the reconstruction levy in the flour milling and 
shipbuilding industries. 

Report of the Food Council to the Board of Trade, dated June 26, 
1936, reviewed the schemes in operation for fixing maximum prices of 
bread, and a further report on December 3, 1936, covered the pigs 
and bacon marketing schemes. Report of the Milk Reorganization 
Commission of the progress of the milk marketing boards, was pre- 
sented in December 1936; and recommendations were made for crea- 
tion of a permanent milk commission with authority to fix prices, 
disburse government subsidies, and direct the operation of milk mar- 
keting boards. A Marketing of Eggs Act was passed in Northern 
Ireland in 1936. 

The Petroleum Transfer of Licenses Act of July 14, 1936, amends 
the Petroleum Consolidation Act of 1928. The Key Industries Duties 
Act was extended for ten years from August 19, 1936. 

Greece. — A committee was appointed in 1936 to present a plan for 
organization of production and economic development. The finance 
minister suggested a corporative system under which each branch of 
production should be united in a federation under State supervision, 
to determine all questions concerning trade, industry, and agriculture. 



268 CONCENTRATIQN OF ECONOMIC POWEJR 

Hungary. — A decree issued on December 19, 1936, provided that a 
price-control committee shall supervise regularly the prices of staple 
goods, domestic and imported. The president of the committee may 
require reports as to the prices at which goods are sold ; if these are 
deemed unjustifiably high, certain penalties may be imposed, favor 
granted regarding taxation and duties may be withdrawn, the firm 
may be excluded from public bids, its license may be revoked, or other 
means taken against the enterprise. 

India. — Amendments to the Indian Companies Act, effective on 
January 15, 1937, further safeguard the interests of shareholders. 

International. — A sugar agreement was entered into in London in 
May 1937, to be administered by an international sugar council. Basic 
export quotas were fixed for cane and beet sugar producers represent- 
ing almost 90 percent of the world's output; and the contracting 
parties agreed not to increase their production during the 5 years 
beginning September 1, 1937. 

An international coffee conference held at Bogota, Colombia, in 
October 1936, resulted in establishment of a Pan American coffee 
bureau in New York. Surplus stocks will be impounded. Further 
conferences were scheduled for 1937. In November 1936 the interna- 
tional tea committee fixed the export quota for the year beginning 
April 1, 1937, at 821/2 percent. 

A revised tin-restriction agreement was ratified on January 5, 1937, 
effective for 5 years. Producers of iron and steel, in Great Britain, 
Germany, Austria, Czechoslovakia, Hungary, Italy, Poland, Rumania, 
Sweden, and Yugoslavia are parties to an international scrap-iron 
convention signed in the spring of 1937, under which a central office 
at London will purchase for all of the members according to quotas 
allotted and under uniform terms. Producers of cement in Great 
Britain, Belgium, Germany, France, Netherlands, Yugoslavia, and 
Scandinavian countries entered into an agreement in 1937 which 
deals with production quotas and determination of prices. 

An international cartel regulating prices and terms of sale for 
sodium chlorate, was entered into on March 2, 1937, by producers in 
Czechoslovakia, France, Italy, Switzerland, Germany, and Sweden, 
The international nitrate cartel expired on June 30, 1936, due to 
withdrawal of the Chilean producers, and a European cartel com- 
prising producers of synthetic nitrogen was established. 

The reciprocal tariff agreement entered into by the United States 
with Nicaragua on March 11, 1936, became effective October 1, 1936; 
that with Finland dated May 18, 1936, was made effective November 
2, 1936. Further agreements were negotiated with Costa Rica on 
November 28, 1936, effective August 2, 1937; and with El Salvador 
on February 19, 1937, effective March 31, 1937. 

Italy. — Since devaluation, the policy of the Government has been 
to prevent price increase and generally to peg prices at the level of 
September 1936; but in order to permit necessary adjustments, a 
Royal ordinance dated October 7, 1936, provided for fixing of a maxi- 
mum price by &. central committee comprising Government officials 
and representatives of employers' and employees' federations. 

JapQU. — Under an Imperial ordinance of July 3, 1936, the law 
for control of important industries was extended for a second 5 
years from August 11, 1936. Plans of the Central Raw Silk Associa- 
tion include control of production, price fixing, consolidation of 



CONCENTRATION OF ECONOMIC POWEK 269 

plants, restriction of speculation, financial aid, and international 
agreements for distribution and sale. 

Latvia. — The law of industry and craft, of July 11, 1936, supple- 
mented by an act of January 7, 1937, required all industrial enter- 
prises (except electric-power undertakings) which are not owned and 
controlled by the state, to obtain a license from the Ministry of 
Finance, or in the case of dairies and abattoirs, from the Ministry 
of Agriculture. Conditions under which licenses will be issued may 
establish complete control of industrial production. A law dated 
January 20, 1937, established a central organization which will have 
monopoly rights in the purchase and sale of wool, rawhides and skins, 
and undres&.^d furs. A law of January 23, 1937, provided for a 
central union to combine all consumers' cooperatives, and to assist the 
Government in agricultural .plans. 

Lithuania. — A law dated August 14, 1936, subjected exports to 
license requirements. A law passed on April 23, 1937, effective Sep- 
tember 1, required the registration of all commercial and industrial 
enterprises for the purpose of regulating commerce and industry, 
preventing willful bankruptcies, unfair competition, and violation of 
tax measures. 

Mexico. — A law passed August 1936 required that merchants and 
industrialists shall be registered and organized into a confederation 
of chambers of commerce and industry. The expropriation law dated 
November 25, 1936, lists a number of enterprises that shall be deemed 
public utilities and therefore subject to expropriation proceedings. 

Netherlands. — Following currency depreciation in 1936, an emer- 
gency price-control law was passed, authorizing the Minister of Com- 
merce to prescribe maximum prices for the wholesale and retail trade 
and for some services. Prices and rents may not be increased, and 
large stores of goods may not be accumulated, without governmental 
sanction. A constitutional amendment bill proposed in 1936 would 
authorize creation of public bodies for the regulation of industry^ 
trade, and the professions. Laws have also been proposed to change 
emergency or crisis measures into permanent laws. 

New Zealand. — The Industrial Efficiency Act of October 29, 1936, 
gave to the Government wide powers of control over industry and 
trade. Part 1 provided for a bureau of industry to investigate and 
report as to organization of industries, their capitalization, the ren- 
dering of assistance by way of subsidies, loans, grants, tariff conces- 
sions, embargoes, and other means; the adoption of uniform methods 
of accounting and costing; standardization of products, processes, or 
materials; the training of workers; marketing and distribution of 
products and the purchase of raw materials ; and anymatters relating 
to employment. Part 2 of the law provided for industrial plans to be 
prescribed by the Minister of Industries and Commerce, upon advice 
of the Bureau of Industry. Part 3 covered registration and licensing 
of such industries as may be named by the minister. Part 4 required 
consideration and report by the bureau on applications for loans 
under the State Advances Corporation Act of 1936 and on grants 
and loans under the Employment Promotion Act of 1936. Upon 
recommendation of the bureau, orders-in-council may be issued by the 
Governor General covering the registration of persons and firms and 
the licensing of industries; reports to be required of industrial firms; 
fixation of prices or rates for any class of goods or services ; rates of 



270 CONCENTKATION OF ECONOMIC POWER 

royalties, fees, discounts, rebates, concessions, or considerations of any 
kind in respect of goods or services or in respect of any patent or 
proprietary rights; the control of production by fixing of quotas or 
otherwise; and the standardization and simplification of materials, 
processes, and products. 

A number of semiprivate organizations have been completely na- 
tionalized, including the railways, the reserve bank, and the mortgage 
corporation. The industrial conciliation and arbitration law was 
amended on June 8, 1936, to include compulsory features. 

Under the Primary Products Marketing Act of 1936, the Govern- 
ment has assumed control of agricultural and dairy products. The 
Minister of Marketing buys the produce from the farmer at a guar- 
anteed price for the whole season and markets it with the aid of pro- 
fessional distributors at a fixed price. If export sales are not made at 
figures high enough to cover the guaranteed price to producers, the 
deficit is met by the Government. 

Paraguay. — A new Department of Industries and Monopolies under 
the Minister of Agriculture, to study questions of industrial develop- 
ment, tariff protection, and the possibility of Government monopolies, 
was created by presidential decree on September 15, 1936. A decree 
law passed as a health measure on June 15, 1936, provided for regida- 
tion of production, transportation, and sale of food, pharmaceutical 
and beauty products. 

Psm. — A presidential decree dated July 16, 1936, established gov- 
ernmental control of medicinal products, drugs, and pharmaceutical 
specialties which are declared to be of prime necessity and therefore 
subject to the same regulatory measures as staple foodstuffs. 

Poland, — A Government commissioner has been appointed to control 
prices of certain necessary commodities, including food, clothing, oil, 
coal, iron, and bricks. A presidential decree effective on September 22, 
1936, lists certain properties which are destined for compulsory sale to 
the State Agrarian Bank. 

Portugal. — A' decree dated May 15, 1937, provided for appointment 
of a committee which shall organize the cotton industry, regulate im- 
ports of raw cotton, establish conditions under which importers shall 
engage in business, and encourage production of cotton in the Portu- 
guese colonies. 

Rumania. — A law dated April 29, 1936, provided for a Supreme 
Economic Council representing agriculture, commerce, industry, labor, 
and Government officials, for study and investigation of problems re- 
garding foreign commerce, the valorization of agricultural products, 
the regulation of labor, and other economic, financial, and social prob- 
lems. The council will also make recommendations for the negotia- 
tion of trade conventions. 

Spain. — A decree dated December 2, 1936, prescribed regulations for 
the exportation of national products of Spain. Export permits will 
be required, and if the value declared by the exporter is considered 
too low the Ministry of Finance may take possession of the goods, pay- 
ing for them the price at which they were declared. 

Three decrees in Catalonia dated October 27, 1936, provide for 
socialization of large industries and land holdings, organization of 
municipalities into social economic units, and division of the state 
into nine economic areas. A plan has been oflfered for a central bank 



CONCENTRATION OF ECONOMIC POWEiR 271 

to impound the gains of profitable enterprise and extend credit or 
compensate other industries for their losses. 

Switzerlcmd. — A decree effective on July 1, 1936, gives to the Federal 
Price Control Office the power to check price movements deemed harm- 
ful to producers or consiuners. A pure food ordinance dated May 28, 
1936, provided for regulation of the sale of foodstuffs, laying down 
standards of purity, and applying also to certain chemicals in the 
manufacture of clothing, cosmetics, and toilet preparations. 

Turkey. — Under a law dated June 9, 1936, all exporters are placed 
under license. 

Venezuela. — A new constitution adopted July 21, 1936, restates the 
power of the Government to legislate for the entire country on many 
matters listed therein. The Govermnent reserves control of salt de- 
posits, unoccupied lands and products thereof, pearl-oyster beds, and 
mines. 



EXHIBIT 9 

[Federal Trade Commisison] 

FOREIGN TRADE WORK 

Excerpts from Annual Report of the Federal Trade CoMMissiON 
FOR THE Fiscal Year Ending June 30, 1938 

November 30, 1938. 
Fedebal Trade Commission 

Garland S. Ferguson, Chairman; Charles H. March ; Ewin L. Davis ; W. A. 
Aybes ; Robert E. Freer; Otis B. Johnson, Secretary 

Foreign-trade work of the Commission includes administration of 
the Export Trade Act and inquiries under section 6 (h) of the Federal 
Trade Commission Act. This work is done by the Export Trade 
Section, under direction of the Chief Counsel. 

THE EXPORT TRADE ACT ( WEBB-POMERENE LAW) 

The Export Trade Act, known also as the Webb-Pomerene law, 
which was passed in 1918, provides that nothing contained in the 
Sherman Act (passed in 1890) shall be construed as declaring to be 
illegal any combinations or "associations" entered into for the sole pur- 
pose of engaging in, and actually solely engaged in, export trade or 
agreements or acts done in aforesaid export trade by such associations, 
under certain safeguarding provisions set out in the law. 

The Export Trade Act also provides that nothing contained in sec- 
tion 7 of the Clayton Act (passed in 1914) "shall be construed to forbid 
the acquisition or ownership by any corporation of the whole or any 
part of the stock or other capital of any corporation organized solely 
for the purpose of engaging in export trade, and actually eltigaged 
solely in such export trade, unless the effect of such acquisit^ion or 
ownership may be to restrain trade or substantially lessen competition 
within the United States." 

An export trade association must be entered into for the sole pur- 
pose of engaging in export trade from the United States to foreign 
countries. It may not produce, manufacture, or sell for consumption 
or resale in the domestic market ; nor may it enter into any agreement 
or act in restraint of trade within the United States or in restraint of 
the export trade of a domestic competitior. Such association must not 
either in the United States or elsewhere enter into any agreement or 
conspiracy or do any act which artificially or intentionally enhances or 
depresses prices within the United States of commodities of the class 
exported by such association or which substantially lessens competi- 
272 ' 



CONCENTRATION OF ECONOMIC POWER 273 

tion within the United States. The prohibition against unfair 
methods of competition contained in the Federal Trade Commission 
Act is extended to competitors engaged in export trade even though 
the acts constituting such unfair metliods are done without the terri- 
torial jurisdiction of the United States. 

The organization papers of such export trade groups are placed on 
file with the Federal Trade Commission, supplemented by annual re- 
ports and such other information as the Commission may require as 
to their business, conduct, practices, management, and relation to other 
associations, corporations, partnerships, and individuals. The law 
provides for a procedure to be followed in case of violation of its terms. 

EXPORTS SHOW SUBSTANTIAL INCREASE 

Shipments by export-trade associations during 1937 amounted to 
$197,875,832, which was a substantial increase (^8,579,307) over ex- 
ports of 1936. The products shipped, and money value thereof, are 
as follows: 



Commodities 



1936 



Metals and metal products, copper, iron and steel, metal lath, machinery, 
railway equipment, pipes and valves, screws, electrical apparatus, and 
signal apparatus 

Products of mines and wells, crude sulfur, phosphate rock, carbon black 

Lumber and wood products, pine, fir, hardwood, redwood, walnut, plywood, 
tool handles, barrel and box shocks, and wood naval stores 

Foodstuffs, such as milk, meat, sugar, flour, fruit (fresh, canned, and dried), 
and rice 

Other manufactured goods, rubber, paper, textiles> glass, cement, abrasives, 
and chemicals - 

Total. 



$40, 507, 335 
40, 780, 283 

8, 533, 374 

21, 250, 433 

38, 225, 100 



149, 296, 525 



958. 850 
580,219 

456, 922 

921, 343 

958, 498 



197, 875, 832 



Early in 1937 exports were materially increased, partly on orders 
placed in 1936. This increase continued in some markets, but ship- 
ments to the Orient lessened as the Sino-Japanese war advanced, and 
associations dependent upon the Chinese trade were materially affected 
by the chaotic conditions in that market. Increased freight rates late 
in 1937 were preceded by a spurt of buying to replenish stocks before 
the new rates were made effective, but later increased transportation 
costs were an important factor in lessening sales. As costs began to 
reflect such factors as the higher prices of raw materials, labor costs, 
loss through strikes, and other domestic conditions, export prices were 
increased, and it was more difficult to meet the competition of foreign 
producers whose costs were not increasing in proportion. 

The growii;g effort on tlie part of foreign countries to increase pro- 
duction to the point of supplying domestic needs, and the continuance 
of foreign-exchange controls in some countries, have lessened ship- 
ments- of some American products, notably foodstuffs. Associations 
shipping to the German market found it difficult to obtain excl ange. 
In Argentina, preferences given to goods from Germany and Britain, 
under special treaties, resulted in a scarcity of exchange for American 
goods. This was true to some extent in other Latin American countries. 

In some markets, agreements negotiated under tlie ITnited States 
Trade Agreements Act liave removed or lessened restrictions and paved 



274 CONCENTRATION OF ECONOMIC POWEK 

Ihe way for better business relations. Members of the Webb-Pomerene 
law groups were in a position to place their problems before the nego- 
tiators through the association officers. 

Collective bargaining in the matter of forwarding and freight rates 
proved also of advantage to the associations. Groups that operate as 
selling agencies reduce the cost of marketing for all of the member 
companies. Uniform terms of sale and contract forms, standardiza- 
tion of products and packing methods, pooling of shipments, and the 
elimination of impracticable and unsound trade customs, by association 
action, make for efficiency and economy in the export business. Ship- 
ments may be so controlled as to prevent periodic glutting of foreign 
markets. It is also possible to split large orders between the mem- 
bers of an association and thereby effect prompt shipment to the satis- 
faction of the foreign purchaser. In some countries, such as the Soviet 
Union, where buying is centralized, the association provides a single 
contact for all of the members' products. 

New markets have been developed through joint effort and expense; 
credit losses and claims for unsatisfactory shipments have been re- 
duced ; and the newer associations report substantial increase in export 
business over that obtained through individual sales prior to their 
organization. 

FORTY-FOUR EXPORT ASSOCIATIONS IN OPERATION 

Forty-four associations were on file with the Federal Trade Commis- 
sion at the close of the fiscal year, June 30, 1938. These included a 
new group formed in October 1937, the Rice Export Association, com- 
prising 23 mills located in Louisiana, Texas, and Arkansas, with a 
headquarters office in New Orleans. Two associations were dissolved 
during the year, the Inter- America Exporters, Inc., which had been 
organized to ship fresh fruit, and the Scrap Export Associates of 
America, which liad been formed in June 1937 to ship scrap iron and 
steel but did not become operative, finally dissolving in November of 
that year. The present list is as follows : 

American Box Shook Export Associa- California Pruna Export Association, 

tion, Barr Building, Washington, 1 Drumm Street, San Francisco. 

D. C. Carbon Black Export, Inc., 500 Fifth 

American Hardwood Exporters, Inc., Avenue, New York. 

G04 Carondelet Building, New Or- Cement Export Co., Inc., 150 Broadway, 

leans. New York. 

American Locomotive Sales Corpora- Copper Exporters, Inc., 50 Broadway, 

tioii, 30 Church Street, New York. New York. 

American Paper Exports, Inc., 75 West Douglas Fir Export Co., Henry Build- 
Street, New York. ing, Seattle, Wash. 

American Provisions Export Co., SO Durex Abrasives Corporation, 63 Wall 

East Jackson Boulevard, Chicago. Street, New York. 

American Soda Pulp Export Associa- Electrical Apparatus Export Associa- 
tion, 230 Park Avenue, New York. tion. 70 Pine Street, New York. 

American Spring Manufacturers Ex- Export Screw Association of the United 

port Association, 30 Church Street, States, 23 Acorn Street, Providence, 

New York. R. I. 

American Tire Mmufacturers Export Florida Hard Rock Phosphate Export 

Association, 30 Church Street, New Association, Savannah Bank and 

York. Trust Building, Savannah, Ga. 

California Alkali Export Association, General Milk Co., Inc., 19 Rector Street, 

523 West Sixth Street, Los Angeles. New York. 

Califoi-nia Dried Fruit Export Asso- Goodyear Tire & Rubber Export Co., 

ciation, 1 Drumm Street, San Fran- 1144 East Market Street, Akron, 

Cisco. Ohio. 



CONCENTRATION OF ECONOMIC POWER 275 

Grapefruit Distributors, Inc., Daven- Shook Exporters Association, Stahlman 

port, Fla. Building, Nashville, Tenn. 

Metal Lath Export Association, 47 Signal Export Association, 420 Lexing- 

West Thirty-fourth Street, New York. ton Avenue, New York. 

Northwest Dried Fruit Export Asso- Steel Export Association of America, 

ciation. Title and Trust Building, 75 West Street, New York. 

Portland, Oreg. Sugar Export Corporation, 120 Wall 
Pacific Flour Export Co., care of Fisher Street, New York. 

Flouring Mills Co., Seattle, Wash. Sulphur Export Corporation, 420 Lex- 
Pacific Forest Industries, Taconia ington Avenue, New York. 

Building, Tacoma, Wash. Textile Export Association of the 
Pacific Fresh Fruit Export Association, United States, 320 Broadway, New 

3:-!3 Pine Street, San Francisco. Ynrk. 

Phosphate Export Association, 3^3 Sev- United States Alkali Export Associa- 

enth Avenue, New York tion. Inc., 11 Broadway, New York. 

Pipe Fittings and Valve Export Asso- United States Handle Export Co., 

ciation, 1421 Chestnut Street, Phila- Piqua, Ohio. 

delphia. Walnut Export Sales Co., Inc., Twelfth 
Plate Glass Export Corporation, Grant Street and Kaw River, Kansas City, 

Building, Pittsburgh. Kans. 

Redwood Export Co., 405 Montgomery Walworth International Co., 00 East 

Street, San Francisco. ■ Forty-second Street, New York. 

Rice Export Association, 1103 Queen Wood Naval Stores Export Association, 

and Crescent Building, New Orleans. 1220 Delaware Trust Building, Wil- 
Rubber Exiwrt Association, 19 Good- mington. Del. 

year Avenue, Akron, Ohio. 

SUPPLEMENTAL REPORT ON ANTIDUMPING LEGISLATION 

In Jtme 1938, tire Commission presented to Congress a Supplemelital 
Report on Antidiniiping Legislation and Other Import Regulations 
in the United States and Foreign Countries, which brought to date 
material in a report on the same, subject published in 1934 as Senate 
Document No. Ili2, Seventy-third Congre.ss, second session. 

This work was done under the provisions of section 6 (h) of the 
Federal Trade Commission Act which directs the Commission to "in- 
vestigate, from time to time, trade conditions in and with foreign 
countries where associations, combinations, or practices of manufac- 
turers, merchants, or traders, or other conditions, may affect the for- 
eign trade of the United States." 

TKUST LAWS AND UNFAIR COMPETITION IN FOREIGN COUNTRIES 

Also under section 6 (h) of the Federal Trade Commission Act, the 
Connnission follows trust legislation and unfair competition in for- 
eign countries. Recent measures are briefly summarized. 

Argentina. — A governmental connnittee appointed to study the 
petroleum situation re])orted in 1937, reconnnending establishment of 
a National Petroleum Council to control and administer reserves, or- 
ganize petroleum companies with Government and private capital, 
establish, ])ipe lines, and regulate the im])ort and export trade. 

Three decrees were issued by the President in 1938 for regulation 
of flour milling, fixing official standards for the different grades, 
authorizing the Ministrv of Agriculture to regulate and control the 
activities of the Chamber of Millers, and establishing an advisory 
board comprising millers, pastry makers, and bakers, to settle contro- 
versies in the industrv and to present reconuiiendations for legislation. 

A decree published on January 30, 1938, established an Office of 
Commercial Policy in the Ministry of Agriculture to conduct general 

257700 — 41— Xo. t> 10 



276 CONCENTRATION OF ECONOMIC POWEiR 

studies of domestic and foreign economic conditions in connection 
with production, trade, and consumption, internal tax systems, eco- 
nomic balances, internal commercial policy, customs tarins, commer- 
cial treaties, import quotas, embargoes, temporary importation, im- 
port premiums, dumping, drawbacks, clearing and compensation 
agreements, arid exchange control. 

Belgivmi. — ^A decree dated January 13, 1937, prohibited the exten- 
sion of certain retail sales establishments (chain and department 
stores) and the period of" enforcement was extended to the end of 
1938 by further decrees. As authorized by law and royal order on 
January 15, 1938, and by ministerial orders on April 30, 1938, a 
National Office of Milk and Its Derivatives has been established to 
control the production and sale of milk, butter, and cheese, and to 
promote and improve the distribution and marketing of milk and its 
derivatives. 

Bolivia. — A decree of April 28, 1938, provided further Government 
supervision of the development and management of stock companies 
in order to prevent fraudulent acts. 

Brazil. — A new constitution decreed by the President and published 
on November 11, 1937, provided for complete reorganization of the 
Government by the President as supreme authority of the state, in- 
cluding the power to dissolve and reconstitute legislative bodies and 
the federal courts. 

Decree No. 366, published on April 12, 1938, added to the mining 
code regulations governing the subsoil deposits of petroleum and nat- 
ural gas. These and mineral deposits are the property of the National 
Government. Decree No. 395 of April 29, 1938, completed nationali- 
zation of the petroleum industry. Production, refining, importation, 
exportation, and distribution of petroleum and its products are subject 
to regulations to be issued by a newly created National Petroleum 
Council. Concessions shall be granted only to Brazilians and Bra- 
zilian enterprises. 

Camada. — Following decision of the Privy Council at London in 
1937, holding the Natural Products Marketing Act to be unconstitu- 
tional, a Canadian order in council dated December 22, 1937, canceled 
all the marketing schemes set up under the act. But in some cases 
growers have organized associations to carry on marketing schemes 
on a voluntary basis, including tobacco and cheese associations in 
Ontario, and m.ilk and fruit associations in British Columbia. The 
Royal Commission on the Textile Industry completed its hearings and 
presented a comprehensive report to the Minister of Finance in Jan- 
uary 1938. In December 1937 the Provincial Legislature of British 
Columbia passed the Commodities Retail Sales Act, which makes it 
a statutory offense to sell for less than the price fixed by the wholesaler 
or producer. 

Cuha. — The Petroleum Act promulgated on May 10, 1938, effected 
nationalization of the industrj^, including petroleum, naphtha, natural 
kerosene, hydrocarbon gas, helium, asphalt, resin, and coal. All de- 
posits are deemed the property of the state. Concessions are to be 
granted for deveiopment of the resources. 

Czechoslovakia. — Decree No. 121. June 18, 1937, provided for basic 
minimum prices in certain trades. Decree No. 122, also dated June 18, 
amended the law of December 22. 1933, Vv-hich restricted tlie establish- 
ment of single-price stores and extended the restriction to December 

A 



CONCENTRATION OF ECONOMIC POWEiR 277 

31, 1938. Decree No. 148, June 24, 1937, extended until December 31, 
1938, provisions of a decree issued in 1935 prohibiting establishment 
of new brand sales in certain industries. A decree dated June 26, 1937, 
gave to the Ministry of Social Welfare power to declare binding cer- 
tain labor contracts. A law dated December 21, 1937, affirmed and 
prolonged until March 31, 1939, the effect of a Government decree 
issued in 1934, prohibiting the unjustified closure of factories and 
mass release of employees. Law No. 245, dated December 21, 1937, 
imposed a tax on domestic cartels, from which export and inter- 
national cartels are exempt. 

Denmark. — New legislation in Denmark in 1937 extended the Gov- 
ernment's control over domestic trade and industry by providing 
control of private price agreements and forced arbitration of ^iabor 
disputes. A new grain law, effective on January 1, 1938, sufrersedes 
prior acts in 1936 and 1937. 

Ecuador. — Decree No. 159, August 9, 1937, established absolute con- 
trol over the manufacture, import, sale, and advertising of chemical 
and biological products intended for medicinal or veterinary use, and 
pharamaceutical specialities. Registration is required, and all adver- 
tising matter must be approved by the Department of Health. 

A presidential decree on October 28, 1937, created a Council of 
National Economy to centralize national statistics, advise with Gov- 
ernment departments on economic and financing operations, customs 
duties and fiscal policies, and to draft legislation of an economic 
character. A decree dated December 28, 1937, established a Commis- 
sariat of Industries, which shall take immediate control over the 
iiulnstrial and manufacturing production of tlie country with respect 
to commerce. Representatives of the commissariat are empowered 
to inspect account books, invoices, and other commercial documents 
regarding industry or manufacture. 

A decree published on January 7, 1938, provided for the establish- 
ment of and compulsory membership in chambers of commerce which 
shall have authority to defend and develop national commerce, to 
examine into the morality and honesty of commercial transactions 
and into the strict fulfillment of contracts and obligations to which, 
their members are parties, to cooperate with the Government in the 
study of social-economic problemSj and to require that all merchants 
located withixi their territorial jurisdiction join the chambers. They 
also will promote commercial fairs, expositions and conventions, un- 
dertake propaganda in favor of Ecuadoran products, and if requested 
to do so, may arbitrate claims arising between foreign shippers and 
Ecuadoran importers. 

Decrees No. 45 of February 16, 1938, and No. 9 of March 9, 1938, 
provided for mining and petroleum concessions under the general 
principle that private individuals or entities may operate only as 
concessionaires for the exploitation of natural resources. 

Estonia. — After several ' years of experimenting with subsidies, 
equalization fees, and guaranteed minimum prices, in February 1937, 
Estonia formed a monopoly for the processing and exportation of all 
livestock and meat products. 

France.— Kcis dated June 30, 1937, and April 13, 1938, authorized, 
the Government to take by decree any measure- required to insure 
repression of attacks on the credit of the state, the combating of 
speculation, economic recovery, the control of prices, the balancing of 



278; CONCENTRATION OF ECONOMIC POWER 

the budget, and the defense of the reserve of the Bank of France, 
without control of exchange. Under this authority, a number of de- 
crees have been issued. One dated June 30, 1937, modified the mone- 
tary law of October 1, 1936. Another decree also dated June 30, 1937, 
prescribed duties of the Departmental Commission of Price Control 
and prohibited any increase in the wholesale, semiwholesale^ or retail 
prices of goods and foodstuffs or in the price lists applied in industrial 
and commefcial enterprises which were in force on June 28, 1937. 
The new provisions supersede those of the Price Control Act of 
August 19, 1936. Numerous protests against the prohibition of in- 
crease in price resulted in some exemptions ; and the decree was further 
relaxed by a decree on November 7, 1937, which authorized retail price 
increases resulting directly from higher wholesale prices, transporta- 
tion charges and taxes. 

A decree on April 4, 1938, provided for establishment of a commis- 
sion to study ways and means by which control of production in the 
French industries may be effected, A law dated July 9, 1937, effective 
until January 31, 1938, conferred upon the Government special au- 
thority to modify customs duties by decree, and amended the anti- 
dumping powers of the Government. 

A company act dated July 24, 1937, and decrees issued thereunder, 
included new provisions for the protection of stockholders and in- 
vestors. Decrees dated August 26 and October 24, 1937, modified the 
Export Credit Guarantee Act of August 22. 1936. Four decrees dated 
August 27, 1937, provided for control of French colonial products, 
including their production, distribution, exportation from the French 
colonies, and importation into France and into the colonial territories. 

A decree on August 31, 1937, provided for nationalization of the 
country's railroads under an agreement effective January 1, 1938, 
whereby all main-line railways are taken over by a new state-controlled 
company which acquires all assets, assumes all their obligations, and 
will operate them as a unit until January 1, 1983, at which time they 
will revert to the state. 

Gemiany. — A decree of May 24, 1937, applied to mail-order houses 
the prohibition of establishment or expansion of retail shops covered 
by the law of May 12, 1933. A decree dated July 15, 1937, superseded 
a decree of September 22, 1934, for regulation of the domestic prices 
of foreign merchandise, and provided that the price base shall be the 
actual cost rather than the market price abroad ; and profits and prices 
charged by dealers in handling foreign merchandise shall be fixfed by 
the Reich Price Commissioner. 

A decree dated INIarch 13, 1938, forbade persons in Germany to estab- 
lish new industrial enterprises, acquire existing concerns, or to form 
branches, offices, or agencies in Austria. This plan was abandoned and 
the decree of March 13 abrogated on April 26, 1938, after passage of 
a law published in the Austrian Gazette on April 13, 1938, which 
authorized the Governor of Austria to control the establishment of 
industrial enterprises, and to appoint commissioned administrators or 
supervisors for all enterprises located therein. A decree published on 
March 30, 1938, prohibited increases in prices and remunerations of 
all kinds, as far as they relate to goods of daily necessity, to the entire 
agricultural, handicraft, and industrial production, and to the ship- 
ment of goods of all kinds, within the State of Austria, and in all busi- 



CONCENTRATION OF ECONOMIC POWEiR 279 

ness transactions from Austria to the other parts of the Reich. Excep- 
tions may be granted by the Reich Price Commissioner. The German 
stock company law of January 30, 1937, and subsequent regulations 
were made applicable to Austria by a German decree dated April 11, 
1938. 

Great Britain. — Laws passed in 1937 included the Livestock Indus- 
try Act, July 20, 1937, which provides for the regulation of importation 
of livestock and meat (except bacon), continuation of subsidies to pro- 
ducers of beef cattle, the regulation of markets and of central slaughter 
houses; the Control of Imports Amendment Act, which provides cer- 
tain changes in the act of 1934; the Export Guarantee Act, which 
amends and extends the authority of the Export Credit Guarantee 
Department of the Board of Trade; an Agricultural Act; a Trade- 
Marks Amendment Act (the first major revision of British trade-mark 
legislation since 1905) ; and the Factories Act, July 30, 1937, which 
serves as a consolidating measure and repeals a number of prior lawb 
regulating labor and factory conditions. 

A Special Committee on Share-Pushing, appointed by the Board of 
Trade in 1936, made its report in July 1937, recommending further 
regulation of the sale of stocks and shares in order to safeguard inves- 
tors. An important report of the Import Duties Advisory Committee 
on the present position and future development of the iron and steel 
industry (command 5507) was issued in July 1937, with recommenda- 
tions for regulation of the industry. Report on an inquiry into the 
costs and profits of retail milk distribution in Great Britain was sub- 
mitted by the Food Council of the Board of Trade in November 1937, 
recommending: Rationalization through concentration of processing 
and distributing depots, reduction in the number of shops and in the 
expense of advertising, decrease in costs on book debts and their collec- 
tion, and economies from simplified services; these ends to be accom- 
plished through voliuitary action by the industry, compulsory legisla- 
tion, or a combination of the two. Report of a Joint Committee on 
Cotton Trade Control, in October 1937, proposed a bill which would 
establish a Cotton Industry Board for further regulation of the trade, 
covering all phases of production and merchandising of cotton and 
allied textiles, including reduction of surplus capacity, prevention of 
waste through excessive competition, the regulation of production, 
supply, and sale, establishment of minimum prices or margins, insti- 
tution of pools and quotas, the imposition of levies, and legalization of 
wage agreements. The first annual report of the Spindles Board was 
issued in 1938 covering purchase of redundant mills and machinery 
under the Cotton Spinning Act of 1936. 

A coal bill introduced in 1937 would vest ownership and control of 
all unmined coal and mines in a National Coal Commission. Other 
features include amendments to the Coal Mines Act of 1930 to bring 
about further amalgamations in tlie mines and a continuance of organ- 
ized marketing schemes. A films bill would extend and amend the 
existing film-cjuota system and set up an advisory films council.^ The 
essential commodities purchase bill would authorize further buying of 
products for reserve; stocks of wheat, sugar, whale oil, and other 
materials haA-e already been purchased. 

International . — An' agreement for tlie control of coke exports, both 
in volume and in price, was entered into by producers in tlie United 



2g0 CONCENTRATION OF ECONOMIC POWEH 

Kingdom, Germany, Holland, Belgium, Poland, and Danzig, in June 
1937, effective for 3 years, with administration by an international 
association office in Brussels. The international tin agreement was 
renewed for a 5-year period beginning January 1, 1937. The mercury 
agreement was terminated in December 1936, due to war conditions in 
Spain. The European zinc cartel was reformed, comprising manufac- 
turers in Great Britain. Belgium, Holland, Germany, Poland, Austria, 
and Czechgslovakia. An agreement entered into in October 1937 by 
buyers of cacao in West Africa, whereby a pool should be formed to 
buy at an agreed price, resulted in a boycott by Gold Coast farmers, 
and the pool agreement was suspended until October 1938. An im- 
portant report on the possibility of obtaining a general reduction in 
the obstacles to international trade was prepared by M. Paul Van Zee- 
land, of Belgium, upon request of the Governments of England and 
France, and was printed as a British White Paper in January 1938. 

The United States entered into a reciprocal trade agreement with 
Czechoslovakia on March 7, 1938, effective on April 16, 1938. 

Iran. — An agricultural act was passed on November 16, 1937, for 
setting up a program to increase production, reclaim and improve 
lands, repair buildings and roads, and finance agricultural proj- 
ects. 

Italy. — Interest is centered primarily upon the activities of the 
guilds, to which have been assigned the duties of regulating prices 
and wages, authorizing the opening of new plants or the enlarge- 
ment of those in existence, regulating investments, and planning 
economic policies with a view to increasing the national wealth. 

/a;?6m.— Legislation in Japan in 1937 and 1938 increasing govern- 
mental authority over industry and trade, included : The temporary 
fund adjustment law, controlling new industrial investments which 
has been applied to a number of industries, namely, airplanes, metal 
production machinery, munitions, steel ships, iron and steel, gold, 
coal, and petroleum; the emergency import and export control law, 
authorizing the Government to control imports and exports, produc- 
tion, distribution, and consumption of commodities, during the Sino- 
Japanese hostilities and for a year after their termination; the ship 
control law ; the law concerning emergency rice measures to replenish 
stocks of Government-owned rice; tlie fertilizer distribution control 
law; the application .of armament industries mobilization law; the 
imperial fuel investment company law; the iron and steel industry 
law, which contemplates doubling the output of the mills, effecting 
compulsory extension of plants and furnaces, and granting to new 
plants exemption from taxation for a period of 10 years; the Gold 
Mining Act of August 10, 1937, providing for regulation of mining 
activities and the sale of ores, under a license plan, with subsidies 
to miners and refiners; the China incident taxation law; and the 
antiprofiteering amendment law, which revived an ordinance issued 
in 1917 in prevention of price increase. Measures adopted in October 
1937 placed all stages of the cotton industry under state control. An 
imperial ordinance on May 7, 1938, provided for a Materials Adjust- 
ment Bureau to adjust the supply and demand of important materials, 
including iron and steel, other metals, coal, machinery, fibers, chemi- 
cals, and articles in foreign trade. Price committees will enforce offi- 
cial quotations and standard prices. 



CONCENTRATION OF ECONOMIC POWEJR 281 

Latvia. — Under the chambers of commerce and industry law of 1934, 
state control of industrial activities has been extended to cover many 
important productive lines, including railways, airplanes, telephones, 
and r^dio service, hydroelectric power, forest lands, sugar, flax, grain, 
wool fabrics, confectionery, alcohol, beer,- tobacco, refined oil, cellulose, 
plywood, iron and steel products, wire, bricks, lime, peat, and films. 
The state also owns the Bank of Latvia, a number of credit institu- 
tions, two resort hotels, a life insurance company, a shipping company, 
and a travel bureau. Special attention is given to export commodities, 
such as butter, seeds, flax, and lumber. Plants for the packing and 
export of bacon, hams, butter, and eggs, have been erected under state 
control. A price inspector has authority to supervise the production 
of all merchandise and to regulate prices in all lines of trade and 
industry, including housing-. The value of state-owned property is 
estimated at one-third of the national wealth. 

Mamchukuo. — The law for the confrol of important industries ef- 
fective on May 10, 1937, gave wide power over industries designated 
as important, of which more than 20 have been named; changes in 
equipment or production, and any agreements relating to production, 
price, or sales, must be approved by the government An emergency 
trade control law was passed in June 1937, for protecting agricultural 
products, adjusting internal prices, and controlling imports. A for- 
eign trade control law passed in December 1937, went further toward 
adjustment of supply and demand. An iron and steel control law 
became effective on April 1, 1938. 

Mexico. — In addition to the program of land distribution and the 
organization of rural communities for collective farming under Gov- 
ernment supervision, a number of important decrees were issued in 
1937, including decrees in June 1937, for control of the silk and 
artificial silk industries, providing also that imports of certain tex- 
tile materials and thread, and machinery for knitting and weaving 
thereof, shall be placed under license control by the Department of 
National Economy; a decree effective on June 24, 1937, for expro- 
priation of the railways (under the expropriation law of November 
23, 1936) ; a decree effective on June 25, 1937, establishing control of 
production, importation, distribution, and prices of all commodities 
which may be declared to be of fundamental importance and re- 
quiring the formation of State producers' associations and national 
producers' unions; a decree under which a foreign trade bank was 
set up on June 18, 1937, and a workers' bank in July, to finance 
syndicates of employees and small merchants and manufacturers ; and 
in August 1937, a decree authorizing creation of a Federal elec- 
trical commission to organize and administer a national system of 
electric generation, transmission, and distribution. A petroleum 
council was formed in March 1938, to administer property expro- 
priated from the petroleum companies. 

NetJierlands.—k. law effective on April 8, 1937, authorized the 
Minister of Commerce^ Industry, and Shipping to control and limit 
new operators of retail business, trade, and small industries. This 
was supplemented by the industrial establishment law passed in 
March 1938, for the control of new industrial enterprises or the in- 
crease in capacity of those already established. 

Decree of the Governor General of Netherlands Indies, dated De- 
cember 30, 1937, extended for an indefinite period the industrial 



282 CONCENTRATION OF ECONOMIC POWER 

control ordinance of 1934, which has been applied to a number of 
industries, including dairies, metal foundries, the cigarette industry, 
ice factories, storage warehouses, the printing industry, the weaving 
industry, and native rubber smokehouses. 

New Zealand. — The primary products marketing amendment bill 
presented to the Parliament in December 1937, would empower the 
Marketing Department to fix maximum and minimum wholesale and 
retail prices for dairy produce, fruit, honey, eggs, and other food- 
stuifs prescribed by order in council, and to buy foodstuffs at fixed 
prices, exporting the surplus over home requirements. 

A law passed on March 15, 1938, provided for establishment of an 
iron and steel monopoly, under Government operation, utilizing do- 
mestic deposits of iron ore, and constructing new works for manufac- 
turing purposes. Prior to this, iron and steel products have been 
imported, largely from the United Kingdom and Australia. 

Newfoundland. — The act to amend and consolidate the law relating 
to the customs and excise, dated March 26, 1938, included provisions 
for valuation of goods for duty purposes, and also in case of imports 
at prices or values involving unfair competition with producers or 
manufacturers in the British Empire. 

Nyasaland {Central Africa). — Under the tobacco marketing law, 
December 21, 1937, all fire-cured leaf tobacco grown in the country 
must be marketed through licensed auction warehouses, under a 
tobacco control board. 

Panama. — A decree in .938 required that fixed charges (retail 
prices) must be asked foi all merchandise offered for sale. Each 
article must bear a tag showing the sales price to be observed by 
all stores. 

Peru. — A decree of June 17, 1937, required all commercial organi- 
zations to report to the Government in January and July of each 
year, declaring all raw nuaterial handled by them in their business 
undertakings. 

Portugal. — Law No. 1957, May 20, 1937, placed Portuguese agri- 
culture under direct supervision and control of the state, to be ef- 
fected through corporate organizations or guilds which will be 
authorized to promote the sale and marketing of farm products, and 
to enforce regulations laid down by the state for the protection of 
the national economy. The guilds also may own and operate stores, 
granaries, agricultural machinery, and livestock, and install various 
services for the common interest of the members. 

Rhodesia., Southern. — The Customs and Excise Amendment Act of 
May 18, 1937, repeats the antidumping provisions of the act of 1935. 

South Africa., Union of. — Marketing Act No. 26, 1937, provides 
for voluntary regulation of the production and sale of agricultural 
products, establishment of certain regulatory boards, the grading and 
standardization of agricultural products, and other matters incidental 
thereto. 

Spain. — The Government has set up a committee to buy all the raw 
wool produced in the country and to take over imports, which will 
be placed at the disposal of the spinning industry. The purpose is 
said to be to reduce the price of wool and to prevent undue increase 
in the price of manufactured goods. A tobacco monopoly has been 
created to regulate the production, importation, manufacture, and 



CONCENTRATION OF ECONOMIC POWEiR 283 

distribution of tobacco, matches, and lighters. The production of 
raw tobacco will be increased, manufacturing plants may not be shut 
down or opened without governmental consent, and prices to be paid 
to the growers will be fixed by the Government. 

Sweden. — In an effort to strengthen the Government's control over 
prices and money market, a number of laws were passed in 1937: 
extending authorization of the National Debt Office to furnish the 
Riksbank with treasury bills or other state bonds, for sale in the 
open market ; authorizing the Government to issue special regula- 
tions concerning the cash reserves of commercial banks; appropria- 
tion of 70,000,000 crowns to purchase commodities for storage; in- 
crease of the stamp tax on the transfer of shares, effective to May 31, 
1938, and release of the Riksbank from its obligation to redeem its 
notes in gold, extended to February 28, 1938. 

Turkey. — Law No. 3003, 1937, authorized the Minister of Economy 
to control and fix the wholesale and retail prices of industrial prod- 
ucts where he considers such action necessary, and to make all 
inquiries requisite for the purpose. 

Uruguay. — Decree of October 21, 1937, provided for control of 
retail sales prices of pharmaceutical specialties and dietetic products, 
in order to safeguard the public health and also to prevent unduly 
high retail prices. 



EXHIBIT 10 

PART V. FOREIGN-TRADE WORK 

Excerpts From Annual, Report of the Federal. Trade Commission 
FOR the Fiscal Year Ending June 30, 1939 

The Export Trade Act. Supplemental Report on Antidump- 

Exported Goods Valued at $161,244,820. ing Legislation. 

Forty-three Export Associations on File. Trust Laws and Unfair Competition 

Services Rendered by the Associations. Abroad. 

Advantages Obtained by the Associations. 

Foreign-trade work of the Commission includes administration of 
the Export Trade Act (Webb-Pomerene law) and inquiries under 
section 6 (h) of the Federal Trade Commission Act, by the Export 
Trade Section, under direction of the chief counsel. 

THE export trade ACT 

The Export Trade Act, approved April 10, 1918, provides that the 
Sherman Antitrust Act shall not be construed as declaring to be illegal 
an association (which may be a corporation or a combination of two or 
more persons, partnerships, or corporations) engaged solely in export 
trade or an agreement or act of such an association in the course of 
export trade ; provided that any such association, agreement, or act is 
not in restraint of trade within the United States or in restraint of the 
export trade of any domestic competitor of such association, and that 
such an association does not, in the United States or elsewhere, enter 
into any agreement or conspiracy or do any act which artificially or 
intentionally enhances or depresses prices within the United States or 
substantially lessens competition within the United States. Organ- 
ization papers and further reports are filed with the Federal Trade 
Commission. 

exported goods valued at $161,244,820 IN 1938 

Total exports by Webb-law groups have varied from a low point of 
$91,180,000 in 1921 to a high point of $724,100,000 in 1929 (including in 
that ^ear the petroleum associations since dissolved and the copper 
associations not now active). Exports in 1937 totaled $197,875,832; 
and in 1938, $161,244,820. 

The associations may be roughly divided into five groups : 
1. Associations exporting metals and metal products and machinery. 
These now include steel products, metal lath, pipe fittings and valves, 
screws, electrical apparatus, railway signal apparatus, railway steel 
springs and tires, and there is also a copper association not now in 
operation. This group of 10 associations now represents 67 companies 
shipping to foreign countries. Exports by this class have varied in 
value from the high point of $271,000,000 in 1929 (which included cop- 
284 



CONCENTRATION OF ECONOMIC POWEiR 285 

per exports) to the lowest figure of $20,250,000 in 1935. The total in 
1937 was $93,958,850; and in 1938, $67,000,000. 

2. Exporters of products of mines and wells, including phosphate 
rock, sulfur, carbon black, and potash. At one time this group in- 
cluded petroleum companies, since dissolved. In the 5 associations 
now operating, 24 companies are represented. Exports under this 
classification have varied from a high point of $315,000,000 in 1930 
(including petroleum exports) to a low point of $5,556,000 in 1921. 
Their exports in 1937 totaled $32,580,219 ; and in 1938, $20,920,491. 

3. Exporters of lumber and wood products — pine, fir, redwood, hard- 
Avood, walnut, plywood, barrel and box shooks, tool handles, and naval 
stores. There are now^ 9 associations representing 140 mills, scattered 
from coast to coast. Exports of lumber and wood products in 1925 
totaled $38,000,000; this dropped to $8,000,000 in 1932. The total in 
1937 was $7,456,922; and in 1938, $5,881,028. Some of this decrease 
has been due to depletion of pine forests in the Southern States. 

4. Exporters of food products. Associations now operating export 
meat products, canned milk, fruit, rice, and sugar. The 9 associations 
represent 101 companies. Exports of foodstuffs by Webb-law groups 
have varied from a high point of $80,400,000 in 1928 to a low point of 
$5,839,000 in 1921. The total for 1937 was $19,921,343, and in 1938, 
$21,487,274. 

5. Exporters of miscellaneous manufactures, such as paper, textiles, 
rubber products, abrasives, chemicals, and glass. The 10 associations 
in this group now represent 93 companies producing these goods for 
export trade. Total exports under this classification have run from 
$2,334,000 in 1921 to $90,000,000 in 1929, $43,958,498 in 1937, and 
$45,956,027 in 1938. 

The Webb law association lists show some changes each year. ^ The 
number of associations has varied from 43 in 1920 to a high point of 
57 from 1929 to 1931. It dropped during the depression years to 43 
in 1935. 45 in 1936 and 1937, 44 in 1938, and again 43 in 1939. 

There are four associations that have been in operation since 1918, 
the first year that the law was passed. These are the American Paper 
Exports,' Douglas Fir Export Co., Redwood Export Co., and the Wal- 
nut Export Sales Co. Seven associations have been in operation since 
1919, just 20 years: The American Provisions Export Co., Ameri- 
can Soda Pulp Export Association, Florida Hard Rock Phosphate 
Export Association. General Milk Co. (at first called the American 
Milk Products Corporation), Phosphate Export Association, Pipe 
Fittings & Valve Export Association, and the U. S. Alkali Export 
Association. The first steel association operated from 1919 to 1923; 
the second steel group, Steel Export Association of America, has been 
in operation since 1928. The first copper group was also formed in 
1919 and operated until 1933. The second copper group, Copper 
Exporters, Inc., was formed in 1926 and is still filing papers, 
although not in active operation. The rubber and sulfur groups were 
formed in 1922. the petroleum associations in 1929, the textile group 
in 1930, and the electrical association in 1931. Other groups have 
been organized, some each year, as listed in the Commission's annual 
reports. 

The following associations were formed during the fiscal year ended 
June 30, 1939 : Potash Export Association, Inc., comprising the Ameri- 
can Potash & Chemical Corporation, U. S. Potash Co., and Potash 



286 



CONCENTRATION OF ECONOMIC POWER 



Co. of America, with headquarters in New York ; and the International 
Wood Naval Stores Export Corporation, comprising the Chemical 
Products Co., Continental Turpentine & Kosin Corporation,. Phoenix 
Naval Stores Co., Dixie Pine Products Co., Crosby Naval Stores, Inc., 
Southern Naval Stores Co., Alabama Naval Stores Co., and Mackie 
Pine Products Co., with headquarters at Gulfport, Miss. 

43 EXPORT ASSOCIATIONS ON FILE JUNE 30. 1939 

At the close of the fiscal year, June 30, 1939, 43 export associations 
were on file with the Federal Trade Commission under the Export 
Trade Act, representing 425 mills, mines, factories, and producers 
scattered throughout the United States, from coast to coast, shipping 
American products to all corners of the globe : 



American Box Shook Export Associa- 
tion, Barr Building, Washington, 
D. C. 

American Hardwood Exporters, Inc., 
Carondelet Building, New Orleans. 

American Paper Exports, Inc., 75 West 
Street, New York. 

American Provisions Export Co., 80 
East Jackson Boulevard, Chicago. 

American Soda Pulp Export Associa- 
tion, 230 Park Avenue, New York. 

American Spring Manufacturers Ex- 
port Assocation, 30 Church Street, 
New York. 

American Tire Manufacturers Export 
Association, 30 Church Street, New 
York. 

California Alkali Export Association, 
523 West Sixth Street, Los Angeles. 

California Dried Fruit Export Associa- 
tion, 1 Drumm Street, San Francisco. 

California Prune Export Association, 
1 Drumm Street, San Francisco. 

Carbon Black Export, Inc., 500 Fifth 
Avenue, New York. 

Cement Export Co., Inc., The, 150 
Broadway, New York. 

Copper Exporters, Inc., 50 Broad\,ay, 
New York. 

Douglas Fir Export Co., Henry Build- 
ing. Seattle. 

Durex Abrasives Corporation, 68 Wall 
Street, New York. 

Electrical Apparatus Export Associa- 
tion, 70 Pine Street, New York. 

Export Screw Association of the United 
States, 23 Acorn Street, Providence, 
R. I. 

Florida Hard Rock Phosphate Export 
Association, Savannah Bank and 
Trust Building, Savannah, Ga. 

General Milk Co., Inc., 19 Rector 
Street, New York. 

Goodyear Tire & Rubber Export Co., 
The, 1144 East Market Street, Akron, 
Ohio. 

Grapefruit Distributors, Inc., Daven- 
port, Fla. 



International Wood Naval Stores Ex- 
port Corporation, Gulfport, Miss. 

Metal Lath Export Association, The, 47 
West Thirty-fourth Street, New 
York. 

Northwest Dried Fruit Export Associa- 
tion, Title & Trust Building, Port- 
land, Oreg. 

Pacific Forest Industries, Tacoma 
Building, Tacoma, Wash. 

Pacific Fre.sh Fruit Export Association, 
333 Pine Street, San Francisco. 

Phosphate Export Association, 393 Sev- 
enth Avenue, New York. 

Pipe Fittings and Valve Export Asso- 
ciation, The, 1421 Chestnut Street, 
Philadelphia. 

Plate Glass Export Corporation, Grant 
Building, Pittsburgh. 

Potash Export Association, Inc., 21 
East Fortieth Street, New York. 

Redwood Export Co., 405 Montgomery 
Street, San Francisco. 

Rice Export Association, Queen and 
Crescent Building, New Orleans. 

Rubber Export Association, The, 19 
Goodyear Avenue, Akron, Ohio. 

Shook Exporters Association, 301 Mar- 
garet Street, Pekin, 111. 

Signal Export Association, 420 Lex- 
ington Avenue, New York. 

Steel Export Association of America, 
the, 75 West Street, New York. 

Sugar Export Corporat' j, 120 WalJ 
Street, New York. 

Sulphur Export Corporation, 420 Lex- 
ington Avenue, New York. 

Textile Export Association of the 
United States, 40 Worth Street, New 
York. 

United States Alkali Export Associa- 
tion, Inc., 11 Broadway, New York. 

United States Handle Export Co., the, 
Piqua, Ohio. 

Walnut Export Sales Co., Inc., Twelfth 
Street and Kaw River, Kansas City, 
Kans. 

Walworth International Co., 60 East 
Forty-second Street, New York 



CONCENTRATION OF EXX)NOMIC POWER 287 

SERA^CES RENDERED BY THE ASSOCIATIONS 

Each Webb-law association is formed to meet the needs of the par- 
ticular industry to be served. There is, therefore, considerable variance 
in the functions adopted. Most of the groups have become incor- 
porated for their own convenience, although the law does not requii^ 
it. Most of them operate on an expense basis, the profits accruing to 
the individual members. 

Some associations purchase the members' products for the purpose of 
selling them to foreign buyers at terms agreed upon by the members. 
Others serve as central selling agents for the members taking orders, 
negotiating sales, and handling the shipment of the goods. In some 
cases, the member companies negotiate the sales under direction of the 
association. Offices are maintained and agents emploj'ed in this coun- 
try and abroad. Special agents are appointed to exploit the members' 
products in new markets. Joint advertising and joint trade-marks are 
used, or the members' brands and patented goods promoted. 

The members may agree upon price, terms, and sales policies solely 
for export shipment, adopting uniform contracts. In some cases a 
minimum price is agreed upon; in others members are free to quote 
price but agree to report to the association any change in price. More 
often the price is finally determined by the foreign agent of the asso- 
ciation, varying in different markets to meet the local conditions. In 
this connection, it may be of interest to quote from a report recently 
received from a well-established association which has been in active 
operation for a number of years : 

The establishment of prices is a rlistinct function of the association. 
It has to be under our form of operation. Prices are established and main- 
tained by responsible foreign agents over whom supervision is exercised by an 
association otlicial who travels abroad. Prices must depend upon economic con- 
ditions in each market versus maximum consuming power of that market under 
uormal conditions. In other words, purchasing power is an important factor 
to be considered with respect to maximum sales. Another factor is competition ; 
still another is quality and a study of the needs of important consumers in accord- 
ance with their processes of manufacturing. Prices necessarily fluctuate in dif- 
ferent parts of the world, being controlled by innumerable conditions, both politi- 
cal and economic. In some instances the return exceeds domestic levels here; 
in others it is about the same ; and in others it will occasionally dip lower. Con- 
sequently we work on a final average annual price for export, which in turn is 
tributed equitably in proportion to each factory's shipments. 

Credits range according to market practices and the standing of customers. 
Exchange is a chapter in it.self. There is the problem of covering future ex- 
change, spot exchange, and operating with no exchange whatsoever. We have a 
free movement of exchange, semiembargoes and complete embargoes. This in- 
volves much in the way of difficult financing. 

In one country we have operated at a maximum of 1 year without securing $1 
of exchange, allowing our funds to accumulate and eventually liquidating them 
thrfiugh an easement in exchange regulations over a period of a year thereafter. 
These adversities cause much in the loss of interest, and at times much more in 
depreciated exchange, when available, as compared to the I'ate when sales were 
made. Where possible we cover exchange futures as far in advance as 6 months ; 
in other cases local trends indicate spot coverage over different periods; again 
customers have been permitted to hedge exchange and provide necessary guaran- 
ties against loss in our acceptance of local currency. Sales are made in sterling 
to markets with a different standard of currency- 
Constant changes in foreign tariffs come to us telegraphically and in ample time 
for us to adopt neces.sary safeguards by advance shipments in order to save large 
sums of money. 

At the very least, a maintained price level can return from 20 to .30 percent 
less than circumstances seem to warrant, and even reach a point where exports 



288 CONCENTRATION OF ECONOMIC POWER 

are blocked completely over certain periods. This involves heavy stocking of 
warehouses abroad in advance, increased expenses, and uncertainty regarding 
even an approximated price return. 

This fact alone illustrates the tremendous advantage of associated activity in 
contrast to individual effort. 

Some associations divide their export business among the members 
in predetermined proportions, or quotas, agreed upon by the members. 
For this purpose, the capital-stock holdings of the members may serve 
as a basis, or the volume of export business over some past period, or 
perhaps periodical reports by the members as to amounts available for 
export. Some quota systems are more complicated, including consid- 
eration of quality as well as quantity, shipping and loading facilities, 
iind other export factors. Provision is usually made for readjustment 
of quotas to meet changing conditions. 

Other functions that have been adopted by the export associations 
include standardizing products for export and improving the quality 
of the goods ; maintaining inspection service, employing claims agents, 
and settling disputes over export sales; establishing rules and regula- 
tions for packing and shipping the goods ; arranging for freight rates, 
cargo space, and shipping dates; consolidating the shipments of the 
members; taking out insurance and shipping documents; providing for 
storage during transit and warehousing abroad ; collecting and dissemi- 
nating trade information as to market conditions abroad, foreign cred- 
its, stocks available for export, exchange problems, tariff requirements, 
shipping rules and regulations, foreign laws that affect our foreign 
trade, and other data of value to American exporters. 

ADVANTAGES OBTAINED BY THE EXPORT ASSOCIATIONS 

The more functions the association adopts, the greater economy may 
be effected through cooperative action. The central selling agency for 
all members operates with much less overhead than if each member 
company were selling independently. The expense of exploitation or 
development of new markets can be divided among all the members 
with benefit to each. The association may fill large orders by drawing 
on the resources of the members ; and by pooling the shipments may 
(jbtain better cargo space and more reasonable transportation rates. 
Agreement upon trade practices has eliminated abuses, improved rela- 
tions with foreign buyers, and reduced claims for unsatisfactory 
shipments. 

The association is in a position to obtain for its members information 
concerning credits and market conditions abroad, which may be chang- 
' ing frequently ; no one member could obtain this information as quickly 
or with as little expense. 

The experience of the associations, in actual operation, may best be 
shown by a few quotations from their reports to this office : 

One of the first lumber groups to be formed reports that — 

The association has effected orderly merchandising of lumber exports, elim- 
inating unnecessary competition, and providing by united action financial support 
for trade development. Standard contracts are agreed upon with uniform terms 
and conditions of sale. Brands are standardized ; shipments consolidated ; cargo 
space arranged ; insurance handled ; all shipping documents prepared ; effecting 
savings in export. Market reports are received from foreign correspondents, 
credits checked through reliable sources, exchange abroad and tariffs closely 
watched ; sample shipments are sent abroad in the development of business. 



CONCENTRATION OF ECONOMIC POWER 289 

Another lumber group reports : 

The outstanding advantage of operation under the association plan lies in the 
ability to supply the foreign markets promptly and satisfactorily by drawing 
upon the entire group of mills through a central organization rather than depend- 
ing upon each unit, the most of which under normal conditions would not be able 
to furnish a full cargo of export lumber at one loading. As it is, what one mill 
cannot supply is readily procured from another and the export markets are 
supplied promptly and uniformly. 

An association formed to ship heavy-cargo material reports the 
following advantages obtained through cooperative action : 

Stabilized export prices at profitable levels, uniform sales terms, standardiza- 
tion of grades, reduction in selling expenses, saving on ocean freight, saving on 
insurance, reduction of credit losses, elimination of unfair claims from buyers, 
better ability to meet foreign competition in the export field, and better ability to 
meet centralized buying by centralized selling. Only by combination under the 
Webb law and acting as a unit can the American producers in this industry 
successfully meet the competition of foreign producers. There is little doubt, 
we think, that if the American producers had not been able or had neglected to 
take full advantage of the provisions of the Webb-Pomerene law to combine and 
make a joint effort, this American product would have been driven out of foreign 
markets many years ago. 

A group organized to ship specialized metal products reports that: 

Success of this company as a Webb-Pomerene organization is due chiefly to the 
fact that we have gone into the business of foreign trade in what we feel is an 
intelligent manner and have followed a consistent policy year in and year out, 
in good times and in poor times, of maintaining a foreign field organization. 
Through such organization we have been enabled to build up and maintain a 
recognition of the quality of our brand. This quality reputation, together with 
the goodwill created by tlie maintenance of a continued foreign sales force, has 
enabled us to continue to .-ecure bu.siness even in the face of foreign price com- 
wtition of a Tery serious type. 

An association comprising mills scattered tlirough several States of 
the Middle West gathers its members' products together for exporta- 
tion, and reports that: 

By combining the resources of stocks, experience, etc., of the several mills, we 
at one time redtice the costs of exporting as compared with individual operation 
(cost of the association operation is estimated as about one-fourth of the previous 
costs to the members) ; increase the ability to supply practically all items in our 
line, enjoy the effects of greater prestige in the foreign markets, and control in a 
greater measure the standards of measurement and quality. 

An association organized in 1933 and successful even in the depres- 
sion years, reports : 

Formed to meet chaos in prices, terms, and conditions of sale in all foreign 
markets when business was dull, and uneven stability when business was good, 
the association is now the exclusive distributor for the member producers in 
export trade. It sells on a miiform contract agreed upon and guarantees to each 
producer a fixed quota of the association's total export business, also agreed 
uiK)n. Sales are made to distributors, delivered at foreign ports; it is, therefore, 
able to effect economies in consolidating shipments, arranging freight rates, cargo 
space, and shipping dates, consolidating insurance, and preparing shipping papers. 

An association shipping food products since 1925 reports that : 

Uniform sales terms and sound trade custopis continue to be outstanding advan- 
tages of association operation. The association was formed primarily to correct 
chaotic conditions which had arisen in this industry as a result of activities of 
both organized and unorganized buying factors in Europe. The association 
facilities include the development of nniform contracts and terms of sale, the 
definition of trade custom, provision for inspection of goods shipped and certifi- 
cation thereof, arbitration, and promulgation of rules, regulations, and policies 
relating to the conduct of export trade, including the elimination of abuses. 



290 CONCENTRATION OF ECONOMIC POWEH 

The association offers to its members a method of presenting their 
claims before boards and conferences. One reports that : 

During negotiations with ttie conferences and steamship lines this associa- 
tion, particularly this year, found of great value the control of the tonnage ex- 
iwrted by its different members and was able to obtain a satisfactory ocean 
freight rate for the year 1939. 

Another states that its abilit;^ to deal with large purchasing com- 
bines abroad has been of material benefit. Some of the associations 
have presented data to the United States Government in connection 
with proposed reciprocal trade treaties that could only have been com- 
piled by cooperative action. 

As an illustration of association action during disturbed conditions 
in Europe in 1938, one reports : 

We were able to take advantage early in the year of strengthened exchange 
abroad and improve our selling prices in several countries. Later- with war 
clouds on the horizon, we were enabled to keep careful track of shipments en 
route, divert them to different ports or hold them in warehouses at European 
ports until the situation cleared and we could complete delivery. Thus no credit 
losses were sustained from territories which were taken over by Germany. 

SUPPLEMENTAL REPORT ON ANTIDUMPING LEGISLATION 

Under section 6 (h) of the Federal Trade Commission Act, a sup- 
plemental report on antidumping legislation and other import 
regulations in the United States and foreign countries, covering the 
years 1934 to 1938, was presented to Congress in June 1938. Copies 
are now available for distribution upon request. 

TRUST LAWS AND UNFAIR COMPETITION IN FOREIGN COUNTRIES 

Also under section 6 (A), the Commission follows current trust legis- 
lation and unfair competition in foreign countries. The following 
measures are noted : 

Algeria. — A decree in 1938 required formation of syndicates by all 
commercial producers of citrus fruit to enforce regulations pertaining 
to the planting, cultivation, sale, and transportation of the fruit. The 
French law of October 5, 1938, noted elsewhere in this report, is appli- 
cable to Algeria. 

Argeritina. — The grain board was reorganized and the minimum 
price guaranty program reestablished under laws passed in September 
and November 1938. A decree on December 8, 1938, extended the 
program to include cattle, under administration of the National Meat 
Board. Subsidies paid to producers of grain and cattle are covered 
by profits from control of exchange. An antidumping bill was sent to 
Congress in Septeipber 1938 but failed to pass before adjournment on 
September 30. A provincial law in Buenos Aires in 1939 declared the 
business of supplying electric current a public service, to be adminis- 
tered by a Bureau of Electric Services. 

Australia. — The Motor Industry Bounty Act and the Newsprint 
Paper Bounty Act became effective in December 1938. The bounty 
payable on exports of citrus fruits was continued. Under a plaii 
adopted in 1938, a tax will be levied on all wheat milled for consump- 
tion in Australia ; funds derived therefrom will be used to make up the 
difference between the export price and the domestic price if the latter 
is maintained above world prices. 



CONCENTRATION OF ECONOMIC POWER 291 

Austria. — Under a decree dated July 14, 1938, the German cartel 
legislation was introduced in Austria. 

Belgium. — In September 1938 a series of emergency measures were 
made effective to safeguard domestic supplies of foodstuffs, raw mate- 
rials, and other necessities. The Minister of Economic Affairs was 
authorized to grant export permits, to prohibit the use in animal feed- 
stuffs of any products that might serve as food for human beings, to 
inventory stocks of merchandise and regulate their use, and to regulate 
production, manufacture, and distribution of products for human 
consumption, 

. A royal decree dated January 18, 1939, limited the period of special 
sales in the retail trade in order to protect traders and consumers from 
unfair competition. Another decree, March 22, 1939, prolonged au- 
thority of the Government to regulate the use of designations under 
which products are sold in commerce when the interests of producers, 
distributors, or consumers so demand. 

Bolivia. — Under a constitution adopted in October 1938, all mineral 
wealth, public lands, and their natural resources, waters, and sources 
of power are the property of the nation. The state is empowered to 
regulate commerce and industry in the public interest. 

Brazil. — The Monopoly Act, No. 869 of 1938, declared violation 
thereof a criminal offense, punishable by fine and imprisonment. No 
bail will be allowed and no pardon or conditional freedom granted. 
All such crimes will be tried before the Tribunal of National Safety : 
Destruction or illegal use of raw material or products necessary for 
consumption of the people ; abandonment of tilled land or the closing 
of factories in return for payment to restrain competition; promotion 
or participation in combinations or agreements to restrain competitors 
in material used in production, transportation, or commerce, for the 
purpose of increasing profits; retaining or monopolizing raw material, 
means, or production, of products necessary for the consumption of 
the people, for the purpose of dominating the market and causing 
increase in prices; selling merchandise below cost price for the purpose 
of restraining competitors; using false news, fictitious operations, or 
other fraudulent means to increase or decrease prices, the value of 
public bonds, articles of value, or salaries; the use of false indications 
or statements in the sale of bonds or shares; interlocking directorates 
or officers of companies in the same line of business for the purpose of 
restraining competitors; operating fraudulently banks, banking and 
capitalization societies, insurance companies, savings banks, mutual 
benefit societies, aid and pension societies, or cooperative societies, by 
causing their bankruptcy or insolvency, or by breach of contract result- 
ing in loss to interested parties; fraudulent entries, registration, or 
reports for the purpose of concealing profits, dividends, or percentages, 
or the fraudulent use of reserve funds; entering into agreements to 
impose a resale price or demand that the buyer shall not purchase from 
another; departure from official prices of merchandise; attempting to 
obtain illicit gain by fraudulent processes such as "chains," etc. ; vio- 
lation of contracts of sale or installmfents, cheating in the drawing of 
lots, failing to deliver without return of the installments paid, in case 
of a contract rescinded by the buyer; fraudulently tampering with 
weights or measures standardized by law ; and usurious practices such 
as charging interest in excess of that permitted by law, or obtaining 

2'776il— 41 — No. G -20 



292 CONCENTRATION OF ECONOMIC POWEH 

a profit exceeding one-fifth of the current or fair value of the install- 
ment made or promised. 

Under a presidential decree of December 15, 1938, flour mills will 
be required to purchase home-gi"own wheat at a fixed price and in 
quantities to be determined on a quota basis. Imports will be limited, 
and the Government's efforts to increase wheat production to the point 
of self-sufficiency will be continued. 

Canada. — The Canadian Grain Act was amended on April 7, 1938. 
The Dominion Government submitted to Parliament in April 1939 a 
report presenting a new wheat-marketing policy in the form of a crop- 
insurance plan. To facilitate the plan bills have been introduced for 
the regulation of the Winnipeg Grain Exchange and the encourage- 
ment of cooperative marketing ; the wheat board would operate as a 
central selling agency for cooperative organizations. 

The Dairy Industry Act, Farmers' Creditors Arrangement Act of 
1934, and the Seeds Act of 1937 were amended on July 1, 1938. An act 
to assist the Provinces of Alberta and Saskatchewan in financing the 
cost of seed and seeding operations for the crop year 1938 was passed 
on April 7, 1938. An act to assist in the alleviation of unemployment 
and agricultural distress, supplemental to acts passed in 1936 and 

1937, was passed on May 25, 1938. 

An act to regulate the inspection and sale of binder twine and to 
establish weight of bushel for certain commodities was passed on June 
24, 1938; the inspection and sale act of 1927 was repealed. The Food 
and Drugs Act was amended on April 5, 1939, and the Meat and Canned 
Foods Act on May 2, 1939. The Kadio Act of July 1, 1938, provided 
for regulation of broadcasting stations. The Transport Act, July 1, 

1938, created a Board of Transport Commissioners to regulate trans- 
portation by railways, ships, and aircraft. The Shipping Act of 1934 
was amended on June 24, 1938. 

Under the Combines Investigation Act, report was issued on August 
31, 1938, on an inquiry into an alleged combine in the distribution of 
tobacco products. The Combines Commission found that retailers and 
wholesalers had been refused supplies for the purpose of maintaining 
fixed prices and monopolistic trade restrictions, resale price mainte- 
nance, certain standardization of packaging, and other uniform trade 
practices, had contributed to a lessening of price competition. As a 
result of the inquiry, action was brought under section 498 of the 
Criminal Code cliarging monopoly by 35 corporations and 10 indi- 
viduals, including manufacturers and wholesale distributors in the 
tobacco industry. Hearings were held in the superior court at Edmon- 
ton in April 1939; the case was to be continued at a later sitting of 
the court. 

A report by the Combines Investigation Commission on an alleged 
combine in the manufacture and sale of paperboard shipping contain- 
ers, was submitted on March 14, 1939. j The Commission found that 
two combinations had operated to the detriment of the public through 
a series of written agreements under which prices were fixed and main- 
tained, and a system of sales allotments or quotas developed, with pen- 
alties imposed if a member sold beyond his quota. An alleged combine 
in the distribution of fruits and vegetables in western Canada is now 
under investigation by the Commission. 

A provincial investigation of farm-implement prices and distribu- 
tion resulted in a report by a legislative committee in Saskatchewan 



CONCENTRATION OF ECONOMIC POWER 293 

in 1939. Several plans were proposed to bring about lower prices of 
agricultural implements, including a recommendation for prosecution 
under the Combines Investigation Act, and adoption of a purchasing 
plan through a cooperative association witli Government financial 
assistance. A provincial law was passed on April 1, 1939, authorizing 
the Saskatchewan Cooperative Wholesale Society, Ltd., to do retail 
as well as wholesale business. This organization might be used to 
further the agricultural-implement plan. The Saskatchewan Cooper- 
ative Associations Act of 1930 was also revised in 1939. 

A Natural Products Marketing Act, passed in Manitoba on April 17, 
1939, empowered a board to control transportation, packing, storing, 
and marketing of any natural product within the Province. Prices 
fixed by the British Columbia Milk Producers' Clearing House Cooper- 
ative Association, organized as a selling agency under the Natural 
Products Marketing Act of that Province, were attacked in the courts 
in 1939. An injunction issued against the association in April was set 
aside by the supreme court of the Province in May. 

Colombia. — A law passed in 1938 provided for the establishment 
of plants for the manufacture of iron and steel, by companies in 
which the Government may hold a majority of the capital stock. 

Czechoslovak Republic. — A temporary governmental decree effec- 
tive on November 8, 1938, provided for the licensing of trades, pro- 
fessions, and industrial enterprise. Its purpose is said to be to effect 
business reorganization in the State, and to avoid too hasty removal 
of industries from Austria and the Sudeten region. 

Dominican Republic. — A decree issued on November 7, 1938, pro- 
vided for the regulation of production, preparation, and marketmg 
of rice. 

Ecuador. — Under a decree of July 8, 1938, Government regulation 
of the banana industry will be effected. No one company may oAvn 
more than 80,000 hectares of land; holdings in excess of that must 
be disposed of to Ecuadorans within 5 years or they will become the 
property of the state without compensation. Exportation will be 
supervised by the Ministry of Social Welfare. 

Egypt. — A law passed on August 1, 1938, provided regulatory con- 
trol for the cultivation of cotton. An advisory council was estab- 
lished on December 18, 1938, to study the cotton situation and assist 
in formulating a policy. Minimum prices have been fixed and short 
selling discouraged. Barter agreements with other countries, and 
plans for collection of debts owed to Egyptian exporters by coun- 
tries with currency restrictions are under consideration. 

Finland. — A new grain law effective from September 15, 1938, to 
January 1944, will regulate the use of imported wheat and rye. 

France. — A law dated October 5, 1938, authorized the Government 
to issue decrees having the force of law, and to take measures in- 
tended to bring about the immediate economic and financial rehabili- 
tation of the country. A number of decrees have been issued. The 
system of price control instituted in 1937 has been modified. Any 
increase in the retail price of goods or in the charges for services 
rendered to individuals, above existing levels, is prohibited unless 
authorized by price supervisory committees (certain food and perish- 
able goods excepted). Increase in the wholesale or semi wholesale 
price of industrial products may be prohibited by decree, especially 
if the sales are made through cartel organizations or under agree- 



294 CONCENTRATION OP ECONOMIC POWEH 

ments between producers, including international agreements; or if 
the goods are imported and subject to quota regulations. Decrees 
also include regulations as to marking of prices and goodsoflfered for 
retail sale. The Government is authorized to raise the selling prices 
of monopoly products and to increase direct and indirect taxes 
in order to adjust them to present prices of goods and services. 

A law on March 19, 1939, authorized the Government to issue de- 
crees approved by the Council of Ministers, which may be necessary 
for the defense of the country. A decree on April 21, 1939, limited 
profits which may be made by suppliers of materials to be used for 
tlie national defense; the Government may collect certain percentages 
of profits, varying with the amounts of the transactions. 

The National Economic Council issued a report on January 1, 
1939, recommending a self-sufficient agricultural policy covering a 
list of farm products of importance in France and its possessions. 

Gernuiny. — A law dated February 25, 1938, provided for reorgan- 
ization of the Reich Economic Court, and transfer to it of the func- 
tions of the German Cartel Court. A Reich Committee for Increas- 
ing Industrial and Economic Efficiency has been established by the 
Minister of Economic Affairs, to further cooperation between the 
state and economic organizations. Numerous orders have been issued 
by the president of the German Trade Development Board in regu- 
lation of commercial advertising. 

Great Britain. — The Coal Mines Act of July 29, 1938, strengthened 
provisions of the act of 1930 for compulsory amalgamations, pro- 
vided for the purchase and administration of coal royalties, and pro- 
longed to December 1942 part I of the 1950 law which was the legal 
basis for the quota system and selling schemes. 

The Prevention of Fraud (Investments) Act of April 28, 1939, 
added to blue-sky laws of Britain, further provisions intended to put 
a stop to "share pushing" and similar fraudulent practices in the 
sale of securities. 

The Essential Commodities Reserves Act, passed in June 1938, em- 
powered the board of trade to obtain from traders, information as 
to their stocks and facilities for storing commodities essential in time 
of war. The board was also authorized to create reserves of these 
products. A comprehensive Ministry of Supplies bill was presented 
to Parliament in June 1939. 

The Bacon Industry Act, 1938, set up a new board to regulate the 
sale and purchase of bacon pigs, guaranteeing that for 3 years the 
price shall be adjusted to differences in the cost of feeding stuffs, and 
that the curer shall receive a standard price. 

Administrative powers of marketing boards and schemes under the 
Agi-icultural Marketing Acts, Coal Mines Act, and the Herring In- 
dustry Act, are considered in a report issued in 1939 by a committee 
appointed to study this phase of regulation. 

The Export Guarantees Act of 1939 replaced prior laws in effect 
since 1920, to provide export credit insurance. 

Greece. — Law No. 1490, passed in 1938, required registration of ex- 
porters, prosecution of defaulting exporters, and control of the qual- 
ity of exported merchandise, treating adulteration of exported goods 
as a criminal offense. 



CONCE^-:SLATION OF ECONOMIC POWER 295 

Italy ^ — Under wheat and flour regulations, in 1938, the service of 
-delivery of grain to the mills is under control of the Minister of 
Corporations. 

ja'pwn. — A commerce and industry order effective on July 9, 1938, 
provided that ordinances may be issued to prohibit increase in the 
price of articles designated, above those ruling on the date of the 
order. A number of products have been named. A far-reaching pro- 
gram adopted in 1939 by the Central Price Commission will include 
more rigid control over the costs of raw materials, freight, labor 
wages, and other relating cost factors. A 10-year plan has been 
■announced in Taiwan for increase in agricultural production and 
•diversification of crops other than rice. 

Latvia. — Under a law passed in December 1938, syndicates are to be 
established for the purpose of rationalizing branches of trade and in- 
<lustry. An Institute of Economic Research will make recommenda- 
tions for rationalization plans. 

Mexico. — A decree published August 12, 1938, provided for a Reg- 
ulatory Committee for the Control of Commodities, and further regu- 
lation of the supply, distribution, and prices of the necessities of life. 
Departments will Idc formed to regulate customs tariffs, taxes, subsi- 
dies, transportation, crop credits, clearing houses, produce exchanges, 
and other factors bearing on the price of food. When necessary, the 
committee may buy, sell, and store commodities in order to regulate 
the price. 

Under a decree of October 4, 1938, the Government may fix the maxi- 
mum price at which' sales shall be made to consumers in the country. 
There are also production groups formed under the Ministry of Na- 
tional Economy, which are subject to instruction as to their produc- 
tion plans, and must sell through a central organization. The 
National Commission for Foreign Trade has been directed to assist 
in the organization of exports, preparation of trade agreements, and 
<;ontrol of the quality of. goods exported. 

Executive orders published in August 1938 incorporajted into the 
national reserves all potassium salts and phosphate rock (deposits not 
theretofore covered by concessions, including deposits lying under 
surfaces of privately owned property. 

Norway. — A committee has been organized for the purpose ot in- 
vestigation and study of the various unfair trade practices, with a 
view toward revision of the Unfair Competition Act of 1922. 

Poland. — The Law for the Encouragement of Private Investments, 
April 9, 1938, and regulations thereunder, granted special tax exemp- 
tions on investments, for a 5-year period, to build up industries deemed 
of national importance, including industrial plants, agricultural proj- 
ects, mineral and petroleum prospecting and refineries, and building 
plans. A law dated August 5, 1938, empowered the Minister of Agri- 
ture and Agrarian Reform to secure the supply of articles of prime 
necessity (food, clothing, and fuel), to store such products, and to fix 
prices, in order to prevent undue increase in price. 

Peru. — A law dated July 27, 1938, provided for Government con- 
trol of the prices of articles or services to the public and prohibited 
an increase in prices at that time prevailing witliout permission of 
the Minister of Public Welfare. 



296 CONCENTRATION OF ECONOMIC POWEH 

Portugal. — Under decrees in 1938, a board was established to con- 
trol standards and exportation of cotton from the colonies, and a 
minimum price was fixed. If the landed cost of American cotton in 
Portugal is lower than the fixed price for the colonial product, the 
difference is to be refunded to the purchaser of colonial cotton by the 
Cotton Board. To provide funds for the payment of this subsidy, a 
tax is collected on all foreign cotton imported. 

Salvador. — A new constitution was signed on January 20, 1939. 

Switzerland. — A federal decree dated July 8, 1938, placed all war 
materials under Government regulation, including arms, ammunition, 
explosives, aviation equipment, and chemical products. 

TurkeU. — The Tobacco Monopoly Act of June 10, 1938, created a 
State monopoly for control of the culture, manufacture, transporta- 
tion, and sale of tobacco products. 

Venezuela. — A petroleum law published January 6j 1939, declared 
the petroleum industry to be a public utility. The right to explore, 
exploit, manufacture, refine, and transport petroleum products, may 
be exercised by the Government or through concessions granted for 
that purpose. The National ' Coffee Institute was reorganized and 
granted new powers, under an executive decree of January 18, 1939. 

Yugoslavia. — A Government regulation issued June 24, 1938, pro- 
vided for formation of a joint stock company, under Government own- 
ership and direction, which shall acquiqre and operate steel mills, iron 
foundries, and iron and coal mines. 

On April 1, 1938, the Minister of Agriculture was authorized to 
draft plans for a system of public warehouses for farm products. A 
privileged company for warehouses wa^ registered on August 15, and 
a special board set up for the purpose of fixing standards for farm 
products to be warehoused. Government loans will be granted on 
products placed in storage. A decree effective on July 1, 1938, author- 
ized a permanent fund for land conservation projects, flood control, 
and soil improvement. A decree published on July 12, 1938, included 
regulations for control of fruit intended for exportation. 

A petroleum decree publisx-ied July 1, 1938, declared mineral oils, 
resins, and gases found in the earth or on its surface to the property 
of the state. Prospecting and exploitation may be conducted by the 
Autonomous State Monopolies Administration, or concessions may be 
granted under regulatory conditions. Expropriation by the state is 
permitted. Imports and exports are under Government control, and 
maximum wholesale prices may be fixed by the Minister of Finance. 



EXHIBIT 11 

SELECTED LIST OF REFERENCES ON THE EXPORT 

TRADE ACT ' 

Anderson, B. M., Jr. Competition and combination. The Webb Act. American 
Academy of Political and Social Science. Annals, March 1919. V. 82:210-212. 

Barnes, Joseph. The Webb-Pomerene Act of 1918. In Government promotion 
of foreign trade in the United States. Prepared for the fifth Biennial Con- 
ference of the Institution of Pacific Relations. . . . Banff, Canada, August 14 
to 28, 1933. New York, American Council institute of Pacific Relations, 1933. 

Bartells, E. J. The Webb law in operation. Address before the Seventh National 
Foreign Trade Convention, May 14, 1920, at San Francisco, New York, Na- 
tional Foreign Trade Council, 1920. pp. 658-663. 

Beer, Henry Ward. America's answer to foreign combines. American exporters 
meet the cartel menace on its own ground. Export Trade and Finance, July 7, 
1928. V. 19 : 15-18. 

Bissell, L. H. The Webb Act : its legal aspects. An address delivered at the 
Sixth National Foreign Trade Convention, Chicago, April 25, 1919. New York, 
National Foreign Trade Council, 1919. pp. 461-470. 

Brown, James L. Exporting through the Webb-Law Associations. Comparative 
Law Series, June 1939. V. 2: (new series) 257-275. 

Charls, George H. Organization of a district export selling company under the 
Webb law. An address delivered at the Fifth National Foreign Trade Con- 
vention, Cincinnati, April 18, 1918. New York, National Foreign Trade Council, 
1918. pp. 318-344. 

Colt, Frederick A. Exporting cotton textiles. Address delivered at the Twentieth 
National Foreign Trade Convention, Pittsburgh, April 26, 1933. New York, 
National Foreign Trade Council, 1933. pp. 163-169. 

Colt, Frederick A. The operation of Webb-law export associations — Textiles. 
Address delivered at the Eighteenth National Foreign Trade Convention, New 
York, May 28, 1931. New York, National Foreign Trade Council, 1931. pp. 
233-240. 

Colver, William B. Concentration and control ii' industry and trade. In 
American problems of reconstruction, Elisha M. Friedman, ed. New York, 
-E. P. Button & Co., 1918. pp. 177-195. 

Copland, D. B. and Norris, J. G. Some reciprocal effects of our Anti-trust laws 
with special reference to Australia. (With particular reference to the Webb- 
Pomerene Act) American Academy of Political and Social Science. Annals, 
January 1930. V. 147 : 117-124. 

Davies, Joseph E. Combinations for export trade under the Webb Act. Amer- 
ican Academy of Political and Social Science. Annals, March 1919. V. 82: 
150-158. 

Davies, Joseph E. Cooperation in foreign trade. Address delivered at the 
Third National Foreign Trade Convention, New Orleans, January 28, 1916. 
New York, National Foreign Trade Council, 1916. pp. 454-462. 

De Courcy, Harold, and Brown, James L. The export trade act, by H. De 
Courcy, and export trade through Webb-law associations, by James L. Brown. 
Washington, D. C, U. S. Bureau of Foreign and Domestic Commerce, 1935. 
G. L. B. 162. 35 pp. Processed. 

De Courcy, Harold. Increased exports of Webb Act associations. Commerce 
Reports' October 28, 1937. p. 838. 



» Compiled by Madge E. Harkness, assistant librarian, Federal Trade Commission. 

297 



298 CONCENTKATION OF ECONOMIC POWER 

Donovan, J. J. The operation of Webb law export associations — Douglas Fir. 
Address delivered at the Eighteenth National Foreign Trade Convention, New 
York, May 28, 1931. New York, National Foreign Trade Council, 1931. pp. 
240-250. 

Duncan, C. S. Legalizing combinations for export trade. Journal of Political 
Economy, April 1917. V. 25 : 313-338. 

Fort, John Franklin. Webb law and foreign trade. Scribner's Magazine, May 
1919. V. 65 : &4a-644. 

Fournier, Leslie. The purposes and results of the Webb-Pomerene Law. Amer- 
ican Economic Review, March 1932. V. 22:18-33. 

Gent, Ernest V. After the W. R. A. — The Webb-Pomerene Act. An address de- 
livered at the Twentj'-second National Foreign Trade Convention, Houston, 
November 19, 1935. New York, National Foreign Trade Council, 1935. pp. 
18-20. 

Gent, Ernest V. America fights for foreign markets. World's Work, May 1030. 
V. 59 : 24-27, 115. 

<3ent, Ernest V. Operation of Webb Law export associations — Zinc. An address 
at the Eigliteenth National Foreign Trade Convention, New York, May 28, 
1931. New York, National Foreign Trade Council, 1931. pp. 220-227. 

Gent, Ernest V. Why is not the Webb law used more generally by'inland manu- 
facturers engaged in foreign trade? An address before the Twentieth National 
Foreign Trade Convention, April 27, 1933, at Pittsburgh, Pa. New York, Na- 
tional Foreign Trade Council, 1933-. pp. 335-346. 

Grace, Morgan H. Twelve years' experience with Webb law associations. An 
address before the Eighteenth National Foreign Trade Convention, New York, 
May 28, 1931. New York, National Foreign Trade Council, 1931. pp. 245-250. 

Guaranty Trust Co. of New York. Combining for foreign trade, plans and 
methods of oijeration. New York, Guaranty Trust Co., 1920. 15 pp. 

Guaranty Trust Co. of New York. Export trade combinations permitted by the 
Webb law. New York, Guaranty Trust Co., 1918. 46 pp. 

Guest, Charles E. The operation of Y' bb law export associations — Rubber. An 
address delivered at the Eighteenth . Uional Foreign Trade Convention, New 
York, May 28, 1931. New York, Nat- Hal Foreign Trade Council, 1931. pp. 
227-233. 

Hines, Walker D. Cotton Textile Institute takes steps to strengthen export 
trade. Joint representation under the Webb-Pomerene Act. Textile World, 
January 19, 1929. V. 75:353-354. 

Huebncr. Grover G., and Kramer, Roland L. Cooperative exporting in the 
United States. In Foreign trade — principles and practice. New York, Apple- 
ton & Co. 1931. Chapter XXII. 

Burley, Edward N. Awakening of business. New York, Doubleday, Page & 
Co., 1919. Chapters VII-XII. 

Hurley, Edward N. Co-operation in foreign trade. An address before the 
Seventeenth National Foreign Trade Convention, May 22, 1930, at Los Angeles. 
New York, National Foreign Trade Council, 1930. pp. 172-176. 

Interpretation by Federal Trade Commission of provisions of Webb-Pomerene 
Export Trade Act respecting formation of export association by silver producers. 
Commercial and Financial Chronicle, August 9, 1924. V. 119: 649-650. 

Jones, Eliot. The Webb-Pomerene Act. Journal of Political Economy, No- 
vember 1920. V. 28 : 754-767. 

Jones, Franklin D. Export as.sociations. In Trade association activities and 
the law. New York, McGraw-Hill, 1922. pp. 223-236. 

Judd, Edwin E. Export Management under the Webb-Pomerene Act. An ad- 
dress before the Seventh National Foreign Trade Convention, May 14, 1020, 
at San Francisco. New York, National Foreign Trade Council, 1920. Pp. 
664-670. 

Judd, Edwin E. Webb-Pomerene Act problems. Experience and difficulties of the 
export manager of one corporation organized under this act. World Markets, 
June 1920. V. 7: 47-48. 

TCir.sh, Benjamin S. Foreign trade functions of trade associations. ITniverstty 
of Pennsylvania Law Review, June 1928. V. 76: 891-925. 

Klrsh. Benjamin S. Trade Associations in law and business. New York, 
Central Book Company, 1938. Chapter XI, Foreign Trade Functions, pp. 
321-374. 



CONCENTRATION OF ECONOMIC POWER 299 

Klein, Julius. Foreign trade combinations. An address before Foreign Com- 
merce Group luncheon, May 8, 1928. Sixteenth annual meeting Chamber of 
Commerce of the United States of America. U. S. Daily, May 9, 1928. pp. 1, 5. 

Kramer, Roland L. The American cartel system in export trade. Success 
and failure experienced by Export associations organized under the Webb- 
Pomerene Act. Export Trade and Finance, October 27, 1928. V. 19: 7-9. 

Lamb, George N. Selling American walnut abroad — Seven years' actual ex- 
perience of a combination under the Webb-Pomerene Act. Export Tl-ade and 
Finance, October 23, 1926. V. 16: 11-15. 

Litman, Simon. Combinations for export trade. In Essentials of International 
trade. New York, John Wiley and Sons, Inc., 1927. 2d ed. Chapter XXIV. 

Love, Ellen L. The Export Trade Act (Webb-Pomerene law). George Wash- 
of Pennsylvania Law^ Review, June 1928. V. 76 : 891-925. 

Montague, Gilbert H. Agreements in American export trade. An address at the 
Fourteenth National Foreign Trade Con'^'ention. May 27, 1927, at Detroit, Mich. 
New York, National Foreign Trade Council, 1927. pp. 400-414. 

Montague, Gilbert H. Cooperation in foreign trade: why not at home? An 
address delivered at the luncheon session of the American Manufacturers 
Export Association and the National Foreign Trade Convention, New Yorl^, 
May 28, 1931. New York, National Foreign Trade Council, 1931. pp. 215-219: 

Montague, Gilbert H. Cooperation under the Webb-Pomerene law for the re- 
habilitation of Europe after the war. An address delivered at the Fifth National 
Foreign Trade Convention, Cincinnati, April 18. 1918. New York, National 
Foreign Trade Council, 1918. pp. 302-317. 

Montague, Gilbert H. The Federal Trade Commission's investigation of foreign 
trade conditions (Report on Cooperation in Export Trade). American Academy 
of Political and Social Science. Annals, January 1916. V. 63:67-68. 

Montague, Gilbert H. The Webb bill and the antitrust laws. American Bar 
Association Journal, April 1917. Vol. 3 : 145-161. 

National Association of Manufacturers of the United States of America. Export 
trade development. A plan for the organization and conduct of export corpora- 
tions . . . under the Webb-Pomerene Act. New York. The Association, 1919. 
10 pp. 

National Association of Manufacturers of the United States of America. The 
Namusa plan for export trade development. A nonprofit organization in- 
corporated in the State of New York and qualified as an export association 
under the Webb-Pomerene Act. New York, The Association, 1919. 12 pp. 

National Foreign Trade Council. The Webb bill. Report of Committee on 
Cooperation in Foreign Trade. . . . for enactment of H. R. 17350 (Webb bill) ; 
Fourth National Foreign Trade Convention, Pittsburgh, January 25. 1917. 
New York, The Council, 1917. pp. 155-182. 

National Shawmut Bank of Boston. An introduction to the Webb law. An 
act to promote export trade and for other purposes. Approved April 10-, 
1918. Boston. 1910, 32 pp. (Shawmut Series No. 109.) 

Notz, William F., and Harvey, Richard S. American foreign trade, as promoted 
by the Webh-Pomorene and Edge Acts with historical references to the origin 
and enforcement of the antitrust laws. Indianapolis, Bobbs-Merrill Co., 
1921. 593 pp. 

Notz, William F. Export trade problems and an American foreign trade policy. 
Journal of Political Economy, February 1918. V. 26: 105-124. 

Nolz. William F. New phases of unfair competition and measures for its sup- 
pression — national and international. Yale Law Journal, February 1921. 
V. 30:384-394. 

Notz, William F. Ten years' operation of the Webb law. American Economic 
Reviev. March 1929. 'v. 19:9-19 

Notz William F. The Webb laAv, its scope and operation. Journal of Political 
Economy. July 1919. V. 27 : .525-543. 

Notz, William F. The Webb-Pomerene Act — its importance to the foreign credit 
man. Credit Monthly. .Lnnuary 1922. V. 24 : 9-16. 

Notz, William F. The Webb-Pomerene law — extraterritorial scope of the nn- 
falr competition clause. Yale Law Journal, November 1919. V. 29:29-45. 

Putting tosrether the tvplcal export associations. The Americas. February 1919. 
V. 5 : 8-il. 

Regulation of export practices by the Federal Trade Board. The Ame 
November 1918. V. 5 : 13-15. 



300 CONCENTRATION OF ECONOMIC POWER 

Savay, Norbert. The Webb-Pomerene law. In Principles of Foreign Trade. 
New York, Ronald Press Company, 1919. Chapters 17-19. 

Snider, Guy Edward, comp. Selling in foreign marlcets. Miscellaneous Series 
No. 81, Bureau of Foreign and Domestic Commerce. Washington, D. C, Gov- 
ernment Printing Office, 1919. Chapter VIII. Export Combinations. 

Thompson, Huston. A Federal Trade Commission appraisal of Webb-Pomerene 
law. It has promoted business economies and greater efficiency in the handling 
of our export trade. Export Trade and Exporters Review, October 1, 1921. 
V. 6 : 29-34. 

Thompson, Huston. How the Export Trade Act (Webb-Pomerene Law) is oper- 
ating. American Business & National Acceptance Journal, September W21. 
V. 4:12-13. 

Thompson, Huston. Our foreign trade problem : results of Federal supervision 
and control. Forum, July 1920. V. 64 : 70-78. 

U. S. Congress. House. Committee on the Judiciary. To promote export trade, 
and for other purposes. Hearings, 64th Cong., 1st sess. on H. R. 16707. July IS, 
20, 1916. Government Printing Office, 1916. 82 pp. 

U. S. Congress. House. Committee on the Judiciary. Promotion of export 
trade, etc. Report. To accompany H. R. 17350. Government Printing Office, 
1916. 4 pp. Ordered printed August 15, 1916. House report 1118, 64th Cong., 
1st sess. 

U. S. Congress. Senate. Committee on Interstate Commerce. Promotion ot' 
export trade. Hearings, 64th Cong., 2d sess. on H. R. 17350. January 5, 1917. 
Government Printing Office, 1917. 156 pp. 

U. S. Congress. Senate. Committee on Interstate Commerce. Export trade. 
Report. To accompany H. R. 17350. Government Printing Office, 1917. 4 pp. 
Ordered printed February 14, 1917. Senate report 1056, 64th Cong., 2d sess. 

U. S. Congress. Senate. Committee on Interstate Commerce. Export trade. 
Report. To accompany S. 634. Government Printing Office, 1917. 4 pp. 
Ordered printed April 16, 1917. Senate report 9, 65th Cong., 1st sess. 

U. S. Congress. House. Committee on the Judiciary. Promotion of export 
trade. Report. To accompany H. R. 2316. Government Printing Office, 1917. 
10 pp. Ordered printed May 11, 1917. House report 50, 65th Cong., 1st ses.s. 

T^. S. Congress. Senate. Committee on Interstate Commerce. Export trade. 
Report. To accompany H. R. 2316. Government Printing Office, 1917. 4 pp. 
Ordered printed August 20, 1917. Senate report 109, 65th Cong., 1st sess. 

U. S. Congress. Conference Committees, 1918. Promotion of export trade. Con- 
ference report. To accompany H. R. 2316. Government Printing Office, 1918. 
3 pp Ordered printed April 5, 1918. House report 468, 65th Cong., 2d sess. 

U. S. Federal Trade Commission. Annual reports. Washington, Government 
Printing Office, 1915-39. 

U. S. Federal Trade Commission. Discussion of practice and procedure under 
the Export Trade Act (Webb-Pomerene law). Foreign Trade Series No. 1, 1919. 
13 pp. Foreign Trade Series No. 2, 1935. 23 pp. Government Printing Office, 
1919, 1935. 

U. S. Federal Trade Commission. Report on Cooperation in American Export 
Trade. Washington, Government Printing Office, 1916. 2 pts. (This report was 
the result of a comprehensive study and recommended the passage of the 
Export Trade Act.) 

tJ. S. Laws, statutes, etc. Webb-Pomerene Act. An act to promote export trade, 
and for other purposes. Approved April 10, 1918. Government Printing Office, 
1918. 3 pp. Public, No. 126, 65th Cong. (H. R. 2316), 40 Stat. 516, 15 U. S. C. A. 
sec. 61. 

Wallace, Benjamin B., and Edminster, Lynn R. A third possible exception to 
our historic policy of nonrestriction of exports grows out of tlie federal law 
permitting combinations for export trading (Webb-Pomerene Act). In Inter- 
national Control of Raw Materials. Washington, D. C., Brookings Institution, 
1930. pp. 258-265. 

Walsh, John. The Webb law in operation. Address before the Sixth National 
Foreign Trade Convention, Chicago, April 25, 1919. New York, National For- 
eign Trade Council, 1919. pp. 449-461. 

The Webb-Pomerene Law. The Americas, February 1919. V. 5 : 3-8. 



i 



INDEX 



Page 

AGRICULTURE: Foreign capital invested in United States, 1937 101-103 

ALGERIA: Trust laws and unfair competition legislation, 1938; sum- 
mary 290 

ANTIMONY: Only smelter in United States owned abroad 106 

ARGENTINA : 

Trust laws and unfair competition legislation ; summary : 

1036 264 

1937-38 . 275 

1938' 290 

ARTIFICIAL TEETH MANUFACTURE : Pricing policv, export market— 47 
ASSOCIATIONS: EXPORT TRADE ACT. {See Export Trade Associa- 
tions.) 
AUSTRALIA: 

Trust laws and unfair competition legislation ; summary : 

1936-37 264 

1938 290 

AUSTRIA : 

Trust laws and unfair competition legislation : summary : 

1936 264 

IQ^g 291 

AUTOMOTIVE CHEMICALS: Pricing policies, export market I— I 56 

AUTOMOTIVE INDUSTRY : 

Foreign capital invested in United States, 1937 ; automobile parts ; 

dollar amount 100 

Pi-icing policies : Domestic and export market 42 

BALANCE OF INTERNATIONAL PAYMENTS. (See Investments.) 
BANKING, INVESTMENTS, etc. : Foreign capital invested in United 

States. 1937: dollar amount 101 

BELGIUM: Trust laws and unfair competition legislation, 1938-39; 

summarv 291 

BIOLOGICAL PRODUCTS: Pricing policies: Domestic and export 

market , 56 

BOLIVIA : 

Trust laws and unfair competition legislation; summary: 

1936 . 264 

1938 276, 291 

BORON MINERALS INDUSTRY: Percent of domestic output by com- 
panies under foreign control 106 

BRAZIL: Trust laws and unfair competition legislation. 1938 sum- 
marv 291 

BUILDING MATERIALS INDUSTRY: Foreign capital invested in 

United States. 1937 100 

CACAO CARTEL: International agreement for a buyers' pool, 1937 280 

CALCULATING MACHINES: Pricing policies, export market 41 

CALLMAN, DR. RUDOLPH: Das deutsche Kartellrecht ; cited (n.) x 

CANADA : 

Trust laws"and unfair-competition legislation; summary: 

1937 "^65 

1938 -^6 

193&-39 292 

301 



302 INDEX 

Cartels (see also heloio References to Literature, items 1, 4, 12) : Page 

Branches of foreign cartels or subsidiaries in United States 99 

Federal Trade Commission's report of 1916 summarizing status of 

foreign cartels 115 

Germany, pre-war cartels 115 

International agreements and cartels, entered into or revised : 

1937 268 

1937-38 280 

CEMENT INTERNATIONAL AGREEMENT, 1937 268 

CHAMBERLAIN, E. : Theory of monopolistic competition ; cited (n.) 78 

CHEMICAL INDUSTRY : 

Export price policy of principal world supplier of a chemical product 32 

Foreign capital invested in United States, 1937 ; comment and dollar 

amount 100-101 

German pre-war investment in United States 101 

Pricing policies, export market of heavy chemicals industry 46 

CHINA : Trust laws and unfair-competition legislation of 1936 ; summary 265 

CIGARETTE MANUFACTURE : Pricing policies, export market 46 

COFFEE INTERNATIONAL CONFERENCE, 1936 268 

COKE, INTERNATIONAL CARTEL, 1937 279-280 

COLOMBIA : 

Trust laws and unfair-competition legislation ; summary : 

1936 265 

293g 293. 

COMMISSION houses": Export price policy II II 61 

COMPETITION {See also below References to Literature, items 2, 17) : 

Competition versus monopoly 74-80 

Unfair competition legislation in foreign countries, 1937-39; sum- 
mary : 

1937 264 

1938 275 

1939 290 

COMPRESSORS (See Machinery Products.) 

CONSTRUCTION INDUSTRY. (See Building Materials Industry.) 

COPPER CARTEL 116 

COPPER EXPORT ASSOCIATION: Function of x 

COPPER EXPORTERS, INC.: Function of y 

COST OF DOING BUSINESS : Export Trade. (See Export Trade : Costs.) 

COTTON PIECE GOODS INDUSTRY: Export pricing policy 38 

COTTON STAPLES INDUSTRY: Pricing policy, export market 62 

CUBA : Trust laws and unfair competition legislation of 1938 ; summary^ 276 
CZECHOSLOVAKIA : 

Trust laws and unfair competition legislation ; summary : 

1936 265 

1937 276 

1938 293 

DENMARK: Trust laws and unfair competition legislation, 1937; sum- 
mary 277 

DICKENS, PAUL D. 

American direct investments in forei.i^n countries, 1936; cited (n.)__ 109 
Direct foreign investments in American industry, 193"; 1940; cited 

and text x, 85-110 

DOMINICAN REPUBLIC : Trust laws and unfair competition legislation 

1938 ; sum"mary 293 

DUMPING iSec also hclotv References to Literature, item 28) : 

Federal Trade Commission, supplemental report on antidumping 

legislation, 1934-38; cited 275,290 

Theory of 4 83 

ECUADOR : 

Trust laws and unfair competition legislation ; summary : 

1937-38 . 277 

1938 293 

EGYPT : Trust laws and unfair competition legislation, 1938 ; summary___ 293 
ESTONIA : Trust laws and unfair competition legislation, 1937 ; summary__ 277 



INDEX 303 

EXPORT PRICE POLICIES (See also hclow References to Literature, Page 
items 11, 14. 19. 23, 26) : 

Comparison of export- and domestic-price policies 29-62 

Domestic- and export-sales departments establish prices independently 
on basis of factory costs plus distribution costs; some concessions 

in exports 52 

Early studies of 7_H 

Economic factors determining export-price policy 63-90 

Export agents and commission houses acting for American manufac- 
turers 61 

Export customer different type than domestic 47 

Export prices equal to domestic prices 36,68 

Export prices higher than domestic 25, 63, 67 

Lower export than domestic prices 44,70 

Foreign sales made by company branches ; price concessions in some 

markets . 58 

Factors in foreign market conditions which necessitate lower export 

prices 72 

Factory price wlus distribution costs for all customers 37 

Foreign branch plants, effect of 90 

Foreign sales made at less than average costs 50 

International price discrimination not a sign of monopoly 91 

Market price plus distribution costs for all customers 36 

Mass production and 83-86 

Monopoly aspects of tlie problem " 74 

Monopoly prices . 31 

One-price policy for all customers 39 

Problems involved in comparing domestic and export prices 16-29 

Profit margin differentials 28 

Public control of export prices 92 

Range in export versus domestic prices for identical product ; table 57 

Sample study of differences between domestic and export pricing policy 

of United States corporations. By Dr. Milton Gilbert 1-93 

Standard export prices lower than domestic for some commodities 50 

Standard export prices same as domestic but concessions given in some 

markets • 44 

Why a firm is willing to grant price concessions on export shipments 70 

Why domestic prices are higher 74 

Zone price system 40 

EXPORT TRADE: BALANCE OF PAYMENTS. {See Investments.) 
EXPORT TRADE; COSTS: 

Group 1 cases analysis ; higher export tlian domestic prices.^ 31-36 

Group 2 cases analysis ; export prices equal to domestic prices 36-^4 

Group 3 cases aiialvsis; lower export than domestic prices 44-62 

EXPORT TRADE ; PROFITABILITY : 

Group 1 cases analysis ; higher export than domestic prices 31-36 

Group 2 cases analysis: export prices equal to domestic prices 36-44 

Group 3 cases analysis; lower export than domestic prices 44-62 

Type of price policy analysis : 

All foreign sales made at less than average costs: six named 

products: comment and tabh^ 59-61 

All foreign sales made by company branches ; concessions in some 

markets; calculation of profits 58-59 

Domestic and export sales dejiartments establish prices inde- 
pendently on basis of factory plus distril)ntion costs; some 
concessions in exports: 15 nam"d products; comment and 

table 52-58 

Standard export prices lower than domestic for some commodi- 
ties; six named products, comment and table 50-52 

Standard export prices same as domestic but concessions given 

in some markets; 15 named products, comment and tables 44-50 

EXPORT TRADE : REFERENCES TO LITERATURE. (See bcloiv Refer- 
ences to Literature, items 5-10, 27.) 



304 INDEX 

EXPORT TRADE ACT (April 10, 1918, 40 Stat. 516. Webb-Pomerene Pag«- 
Act) : 

Administration of the law 123- 

Advantages derived by cooperative effort under act 143 

Amendmeiit proposed in 1921, by Senator Fletcher, S. 2683, Sixty- 
seventh Congress ; text of bill 124 

Analysis of law as passed on April 10, 1918 119 

Annual report form of associations under act 237 

Associated group-^ formed under the act, 1918-38 ; summary in chrono- 
logical order 132 

Bills, debates, and hearings, and reports, 1924-28, redrafting or 

amending provisions of Export Trade Act ; summary 128 

Debates in Congress, hearings and committee reports preceding pas- 
sags of the act 118-119 

Federal Trade Commission statements of Export Trade Act activi- 
ties, 1916-39; summary 131 

Future of the law 146 

Operation of, report by the Federal Trade Commission ; cited and 

text X, 111-300 

Practice and procedure under the act. Federal Trade Commission, 

Foreign Trade Series No. 1, 1919; extracts; text 123,240 

Practice and procedure under the act. Federal Trade Commission : 

Foreign Trade Series, No. 2, 1985 ; cited and text 129, 251 

Procedure of Federal Trade Commission under act ; summary 132 

Section 5. Pacific Forest Industries case; action by Federal Trade Com- 
mission, 1939'-40; text of recommendations, January 27, 1940 12&-130- 

Selected list of references on the Export Trade Act, compiled by Madge 

E. Harkness 297-300 

Silver letter, 1924; text 125 

Text of the law as approved April 10, 1918 149-151 

Text of the law as approved April 10, 1918; annotated 245-249 

Wilson Tariff Act antitrust amendments not modified by act 249 

EXPORT TRADE ASSOCIATIONS : 

Advantages obtained by the associations 288 

Annual report, form of : 287 

Directory of associations on file with Federal Trade Commission : 

June 30, 1937 (45) 261 

June 30, 1938 (44) 274 

June 30, 1939 (43) 286 

Feb. 1940 (44) 152-253 

Directory of associations that have operated or been formed imder the 
act: 

1918-35 258-260 

1918-39 154-233. 

Functions of the groups organized under the act 138 

Number of associations in operatioia each year, 1920-40; number of 

member companies represented in 1940; table 135 

Obstacles met by export associations ; reasons for dissolution of some 

of the groups 145. 

Report to Federal Trade Commission due within 30 days after cre- 
ation of each association; facsimile in blank 234 

Services rendered by the associations 287 

Types of organization formed under act 136 

Value of products exported : 

1920^34 257 

1920-38 134 

1925-38 284-285 

1935-36 262 

FEDERAL TRADE COMMISSION: 

Alleged violation of antitrust laws by combinations being formed 
abroad by American firms and alleged dumping of American goods 

in foreign markets; report 1926; cited (n.) 10,16 

Annual report, excerpts relating to foreign trade work of the Com- 
mission : 

1937 261-263 

1938 272 

1939 284 



INDEX 305 

FEDERAL TRADE COMMISSION— Continued Page 

Cooperation in American export trade; report 1916; extracts 113 

Export Trade Act activities, statements by Commission ; summary 131 

Export trade associations on file with the Commission : 

June 30, 1937 (45) 262-263 

June 30, 1938 (44) 274 

June 30, 1938 (43)—, 286 

Feb. 1940 (44) 15^153 

Export Trade Division : 

Creation of - 123 

Name changed to Export Trade Section, July 1, 1927 129 

Foreign Trade Series No. 1. Discussion of practice and procedure 

under the Export Trade Act, 1919, extracts; text 123,240 

Foreign Trade Series No. 2. Practice and procedure under the Expoi t 

Trade Act, 1935; cited and text 129,251 

Pacific Forest Industries, an export association ; recommendations for 

readjustment of business of, January 27, 1940; text 129-130 

Pacific Forest Industries, effect of recommendations of January 27, 

1940 138 

Procedi ' e under Export Trade Act ; summary 132 

Report on the operation of the Export Trade Act ( Webb-Pomerene 

law), 1918-40; cited and text x, 111-300 

"Silver letter," July 31, 1924, to Silver Producers' Committee ; text 125 

FEDERAL TRADE COMMISSION ACT ( SEPTEMBER 26, 1914. 28 Stat. 
717) : 

Section 6 (h), inquiry on trade conditions in and with foreign coun- 
tries: text 113, 250 

FERTILIZER INDUSTRY. (See Boron Minerals Industry; Phosphate 

Industry; Potash Industry). 
FINANCIAL INSTITUTIONS : 

Foreign capital in the United States, 1937 ; comment and table 101-102 

Insurance.. (See Insurance. ) 
FINLAND: Trust laws and unfair competition legislation, 1938, sum- 

marv 293 

FOODSTUFFS INDUSTRY: Foreign capital invested in United States, 

1937 100 

FOREIGN CAPITAL IN THE UNITED STATES. (See Investments.) 
FOREIGN COUNTRIES: 

Trust laws and unfair competition in ; excerpts from annual report 
Federal Trade Commission : 

1937 264 

1938 275 

1939 290 

FORMULAE EMPLOYED IN STUDY: 

Basis of export price quotations, f. o. b., f. a. s., c. i. f 22 

Credit terms to domestic and export customers 25 

Draw-backs 22 

Export price differentials 20 

Export price list timing - — 21 

Price quotation to similar types of buyers 25 

Special packing cost differentials 24 

FOUNTAIN PENS. (See Stationery Goods.) 
FRANCE : 

Trust laws and unfair competition legislation; summary: 

1936-37 266 

1937-38 277 

1938-39 293 

GERMANY : 

Cartels, pre-war 115 

Investment in United States chemical industry, pre-war 101 

Trust laws and unfair competition legislation ; summary : 

1936-37 266 

1937-38 278 

1938 294 

GILP>ERT. DR. MILTON: A sample study of differences between domestic 

and export pricing policv of the United States corporations ix, 1-93 

GOVERNMENT CONTROL OF EXPORT PRICES 92 



306 INDEX 

GREAT BRITAIN : Page 

Trust laws and unfair competition legislation ; summary : 

1936 267 

1937-38 279 

1938-^9 294 

GREECE '. 

Trust laws and unfair competition legislation ; summary : 

1936 , : 267 

1938 294 

HABERLER, GOTTFRIED VON: Theory of international trade; cited 

(n.) 6,77 

HARKNESS, MADGE E., compiler: Selected list of references on the 

Export Trade Act 297-300 

HOSIEKY: WOMEN'S WEAR: Pricing policy, export market 40 

HOSIERY MANUFACTURE : Pricing policies export market 42 

HOUSEHOLD TEXTILE GOODS : Pricing policies export market : towels, 

bed linens 60 

INDIA : Trust laws and unfair competition legislation of 1937 ; summary 268 

INSURANCE. (See also below References to Literature, item 22) : 

Foreign capital investment in United States, 1937 ; type of insurance ; 

comment and table 101-102 

INTERNATIONAL CARTELS. (See Cartels.) 

INTERNATIONAL PAYMENTS. (See Investments.) 

INTERNATIONAL PRICE DISCRIMINATION. Not a sign of monopoly. 91 

INTERNATIONAL SUGAR COUNCIL: Establishment of, 1937 268 

INVESTMENTS (see also below References to Literature, items 3, 13, 
20-22) : 

American capital in foreign countries, 1936. By Paul D. Dickens ; 

cited (n.) 109 

Foreign capital in the United States : 

Amounts of 1937, long-term, by categories aild short-term ; com- 
ment and table 1 99 

Amount by principal countries and industries ; comment and 

table 3 103 

Concentration of assets and investment; comment and table G-- 108-109 

Control of United States production 105 

Direct investments by countries, 1937; comment and table 4 105 

Direct investments, dollar amount by industry, 1937 ; comment 

and table 2 100 

Foreign investments in American industry, 1937. By Paul D. 

Dickens ,__ 85-110 

Geographical distribution; comment and table 104-105 

Industrial distribution; comment and table 100-103 

International affiliations of American industry, 1937 ; comment 

and table 5 105-108 

IRAN: Trust laws and unfair competition legislation, 1937; summary 280 

IRON AND STEEL INDUSTRY; Foreign capital invested in United 

States, 1937 100 

Scrap-iron, international convention of, 1937 268 

ITALY : 

Trust laws and unfair competition legislation ; summary : 

1936 268 

1937_, 280 

1938 295 

JAPAN : 

Trust laws and unfair competition legislation ; summarv : 

1936 268 

1937-38 280 

1938-^9 295 

KREPS, THEODORE J. : 

Explanatory introductory statement to Monograph No. 6 ix-xii 

Export, Import, domestic prices in the United States, 1926-30, 

cited (n. ) ^ x 

LABORATORY APPARATUS INDUSTRY: Pricing policies, export 
market. 



INDEX 307 

LATVIA : Page 

Trust laws and unfair competition legislation ; summary : 

193&^7 , 269 

1937--, 281 

1938 ^ 295 

LIEFMANN, DR. ROBERT: Cartels, combines, and trusts, cited x 

LIQUOR INDUSTRY : Foreign capital invested in United States, 1937_^ lOl 
LITHUANIA: Trust laws and unfair competition legislation, 193&-37; 

summary 269 

MACHINE TOOL INDUSTRY : Pricing policies, export market 45 

MACHINERY PRODUCTS : Pricing policies, export market ; compressors 

and pumps 51 

MAFFRY, DR. AUGUST : Insurance transactions in the balance of inter- 
national payments of the United States; cited (n.) - 102 

MANCHUKUO: Trust laws and unfair competition legislation, 1937; 

summary 281 

MASS PRODUCTION : Pricing policy, export market, and mass produc- 
tion 83-86 

MEN'S WEAR INDUSTRY: Pricing policies, export market; collars and 

shirts 41 

MERCURY CAJRTEL: International agreement terminated, 1936 ^- 280 

MEXICO : 

Trust laws and unfair competition legislation; summary: 

1936 269 

1937-38 281 

MINING INDUSTRY : Foreign capital invested in United States 100, 103 

MONOPOLY {see also helow References to Literature, items 2, 17) : 

International price discrimination not a sign of monopoly 91 

Monopolistic competition 74-80 

Monopoly aspects of the export pricing problem 74 

Monopoly prices; export pricing policies 31 

NETHERLANDS : 

Trust laws and unfair competition legislation ; summary : 

1936 269 

1937 281 

NEWFOUNDLAND : Trust laws and unfair competition legislation, 1938 ; 

summary 282 

NEW YORK TARIFF REFORM CLUB : Report on comparative domestic 

and export prices ; cited (n.) 9 

NEW ZEALAND: 

Trust laws and unfair competition legislation ; summary : 

1936 269 

1937 282 

NITRATE INTERNATIONAL CARTEL : Expiration of, June 30, 1936 268 • 

NYASALAND: Trust laws and unfair competition legislation, 1937; sum- 
mary '■ V 2^ 

OFFICE SUPPLIES (see also Calculating Machines, Stationery Goods, 
Typewriters) : 

Pricing policies, export market . 51 

PACIFIC FOREST INDUSTRIES : 

Federal Trade Commission recommendations for readjustment of busi- 
ness of Pacific Forest Industries, an export trade association ; Janu- 
ary 27, 1940, text 12&-30 

Federal Trade Commission's recommendations of January 27, 1940; 

effect of 138 

PAN AMERICAN COFFEE BUREAU : Establishment of, 1936 268 

PANAMA : Trust laws and unfair competition legislation, 1938 ; summary— 282 

PAPER SPECIALTIES : Pricing policy, export market 40, 41, 46 

PARAGUAY: Trust laws and unfair competition legislation, 1936, sum- 
mary 270 

PERU: 

Trust laws and unfair-competition legislation; summary: 

1936 270 

1937 — 282 

257769 — 41— No. 6 21 



308 INDEX 

Page 
PETROLEUM INDUSTRY: Foreign capital invested in United States, 

1937 101-102 

PHARMACEUTICAL SPECIALTIES : Pricing policies, export market 55-56 

PHOSPHATE INDUSTRY: Foreign-owned companies control in United 

States 106 

PIPE FITTINGS : 

British and American thread-price spread 21 

Pricing policies, exi)ort market : black and galvanized iron and brass. 42 

PLUMBING .FIXTURES : Pricing policy, export market 61 

POLAND: Trust laws and unfair competition legislation 1936; summary.. 270 
PORTUGAL : 

Trust laws and unfair competition legislation ; summary : 

1937 270, 282 

1938 296 

PORTZELT, PAUL : Potash, a new industry making satisfactory progress ; 

cited (n. ) 106 

POTASH INDUSTRY : 

Foreign capital invested in United States 103 

Potash, a new industry. By P. Poftzelt ; cited (n.) 106 

United States industry developed since 1914 106 

PRICING POLICY FOR THE FOREIGN MARKET. {See Export Pric- 
ing Policies. ) 
PROFITABILITY OF EXPORT TRADE. [See Export Trade: Profit- 
ability. ) 

PUBLIC UTILITIES : Foreign capital invested in United States, 1937 101 

PUMPS. (See Machinery Products.) 

QUICKSILVER. (See Mercury Cartel.) 

RADIO MANUFACTURE: Export price policy, sets and phonograph 

branch 34 

RAILWAYS : Foreign capital invested in United States 102 

RAYON INDUSTRY : 

Export pricing policy, r.ayon piece goods 38 

Foreign capital invested in United States companies 107 

Rayon and staple fiber yearbook; edition 3, 1919; cited (n.) 107 

World investments in, 1929 and 1938; cited 107 

RECIPROCAL TRADE AND/OR TARIFF AGREEMENTS : 

Czechoslovakia and the United States, 1938 280 

United States and other countries, 1936-37 268 

REFERENCES TO LITERATURE : 

(1) Callman, Dr. R. Das deutsche Kartellrecht (n.) x 

(2) Chamberlin, E. Theory of monopolistic competition (n.) 78 

(3) Dickens, Paul D. American direct investments in foreign coun- 

tries, 1936 (n.) 109 

Federal Trade Commission : 

(4) Alleged violation of antitrust laws by combinations formed 
al)i'oad; report, 1926 (n.) 10, IG 

(5) Cooperation in American export trade; report, 1916; extracts- 113 

(6) Foreign Trade Series No. 1; extracts and text 123,240 

(7) Foreign Trade Series No. 2; cited and text 129,251 

(8) Operation of -Export Trade Act, 1918-40; report, cited and 

text X, 111 

(9) Haberler, G. von. Theory of international trade; cited (n.) 6,77 

(10) Harkness. M. E. References on the Export Trade Act 297-300 

(11) Kreps, T. J. Export, import, domestic prices in the United States, 

1926-30; cited (n.) x 

(12) Liefmann, Dr. R. Cartels, combines and trusts; cited x 

(13) Maffry, Dr. A. Insurance transactions in the balance of interna- 

tional payments of the United States; cited (n.) 102 

(14) New York Tariff Reform Club. Report on comparative domes- 

tic and export prices ; cited (n.) 9 

(15) Portzeldt, P. Potash, a new industry ; cited (n.) 106 

(16) Rayon and Staple Fiber Yearbook, edition 3, 1939; cited (».)___ 107 

(17) Robin.son, Joan, Economics of imperfect competition (n.) 78 



INDEX 309 

REFERENCES TO LITERATURE— Continued. Page 

(18) Taussig, F, W., Some aspects of the tariff question (n.) 5 

(19) United States, Commerce and Labor Departments. Manufac- 
tured products sold in foreign markets at lower rates than in 
American (n.) 10 

(20) United States Commerce Department: 

Balance of international payments of the United States, 1937 (n.)_ 102 

(21) Foreign investments in the United States, 1937 (n.) 102 

(22) Trade Information Bulletin No. 834. Insurance transac- 
tions in the balance of international payments of the United 
States (n.) 102 

(23) United States Industrial Commission Reports, vol. 13, Foreign 

and domestic prices of American products; and vol. 19 (n.) 7,8,9 

(24) United States Mines Bureau : 

Information Circular 7034 (n.) 106 

(25) Minerals Yearbook (n.) 106 

(26) United States Treasury Department. Monthly summary of com- 
merce and finance, Aug. 1900 (export v. domestic price policy) (n.) 7 

(27) Van Zeeland, P., Report on international trade, 1938; cited 280 

(28) Viner, Jacob., Dumping (n.) 6,7,16,92 

RHODESIA : Trust laws and unfair competition legislation, 1937 ; sum- 
mary 282 

ROBINSON, JOAN, Ecbnomics of imperfect competition; cited (n.) 78 

RUBBER MANUFACTURE : Foreign capital invested in United States, 

1937 100 

RUMANIA: Trust laws and unfair competition legislation, 1936; sum- 
mary 270 

SAN SALVADOR: Constitution adopted January 20, 1939 296 

SCRAP-IRON INTERNATIONAL CONVENTION, 1937 268 

SELLING PROBLEM (See also above Export Price Policies) : 

Foreign and domestic markets 82 

SILVER PRODUCERS COMMITTEE: Federal Trade Commission reply, 
July 31, 1924, to queries propounded by the committee, relating to a 

proposed formation of an export association 125 

SODIUM CHLORATE INTERNATIONAL CARTEL, 1937 268 

SPAIN : 

Trust laws and unfair competition legislation ; summary : 

1936 270 

1937 282 

STATIONERY GOODS AND SUPPLIES : Pricing policies, export market- 40, 46, 

48 52 54 
STEEL AND IRON INDUSTRY. {8ee Iron and Steel Industry.) 

SUGAR AGREEMENT, 1937 268 

SWITZERLAND : 

Trust laws and unfair competition legislation; summary: 

1936 271 

1938 296 

TARIFFS, INFLUENCE OF 81 

TAUSSIG, F. W. Some aspects of the tariff question ; cited (n.) 5 

TEXTILE INDUSTRY: 

Cotton piece goods. (See Cotton Piece Goods Industry.) 
Cotton staples. (See Cotton Staples Industry.) 

Foreign capital invested in United States, 1937 100 

Household textiles. (See Household Textile Goods.) 
Rayon. (See Rayon Industry.) 
THORP, WILLARD: 

Foreword to Dickens study on direct foreign investments in Ameri- 
can industry, 1937 : 86 

Foreword for Monograph 6 XIII 

TIN RESTRICTION AGREEMENT: Revision renewed for 5-year period 

January 1, 1937 ; ratified January 5, 1937 268, 280 

TOBACCO MANUFACTURE: 

Cigarettes. (See Cigarette Manufacture.) 

Foreign capital invested in United States, 1937 101 



310 INDEX 

TRUST LEGISLATION: Page 

Trust and unfair competition legislation in foreign countries, 1937- 
39: summary: 

1937 , , , 264 

1938 , 275 

1939 ^ 290 

TURKEY : 

Trust laws and unfair competition legislation ; summary : 

1936 271 

1937 283 

inqg _ _ _ __ 296 

TYPEWRITER MANUFACTURERS : Pricing policy, export market 49-50 

UNION OF SOUTH AFRICA: Trust laws and unfair competition legis- 
lation, 1937 ; summary 282 

UNITED STATES: 

BUREAU OF MINES : 

Information Circular 7034; cited (n.) 106 

Minerals Yearbook; cited (n.) 106 

COMMERCE DEPARTMENT: 

Balance of international payments of the United States, 1937; 

cited (n.) 102 

Foreign investments in the United States, 1937; cited (n.) 102 

Trade Information Bulletin No. 834, insurance transactions in the 
balance of international payments of the United States; cited 

(n. ) 102 

COMMERCE AND LABOR DEPARTMENT. Manufactured products 

sold in foreign markets atJower rates than in American ; cited (n.)_ 10 
FEDERAL TRADE COMMISSION: {See alove Federal Trade Com- 
mission. ) 
Foreign capital invested in oe United States. {See above Investments.) 
INDUSTRIAL COMMISS 3N : 

Report, volume 13, Foreign and domestic prices of American prod- 
ucts; cited (n.) 

Final report, volume 19; cited (n.) 7,8,9 

TREASURY DEPARTMENT: Monthly summary of commerce and 

finance, August 1900; cited (n.) 7 

URUGUAY: Trust laws and unfair competition legislation, 1937; sum- 
mary 283 

VAN ZEELAND, PAUL : Report on international trade, 1938 ; cited 280 

VENEZUELA : 

Trust laws and unfair-competition legislation ; summary : 

1936 271 

1939 296 

VINER, JACOB: 
Dumping : 

A problem in international trade; cited (n.) 6,7,16 

Article in Encyclopedia of Social Sciences, volume 3, page 276; 

cited 92 

WEBB-POMERENE ACT (April 10, 1918. 40 Stat. 516). {See Export 

Trade Act. ) 
WEBB-POMERENE ASSOCIATIONS. {See Export Trade Associations.) 
WILSON TARIFF ACT (Aug. 27, 1894. 28 Stat. 509) : Amendments of 
February 12, 1913 (sees. 73, 76, 77, 1894), not modified by Export Trade 

Act, text 249 

WOOD-PULP PRODUCTS INDUSTRY : Export price policy 33 

WRITING PAPER INDUSTRY : Pricing policy, export market 40 

YUGOSLAVIA: Trust laws and unfair-competition legislation, 1938; 

summary 1 296 

ZINC CARTEL : European cartel, reformation of 280 

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