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

0

Type 1. Export monopoly ^

2

3
4

21

2

3
0

0

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

0

0
0

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. 0 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 0

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.
0 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-
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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
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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.
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Nolz. William F. New phases of unfair competition and measures for its sup-
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300 CONCENTRATION OF ECONOMIC POWER

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Thompson, Huston. A Federal Trade Commission appraisal of Webb-Pomerene
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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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