for some years has actively aided the retail lumber dealer in the broader problems of retail distribution. Dealers have been fully informed as to the characteristics and proper uses of the several varieties of wood, effective service methods, opportunities for sales in special fields, methods of meeting mail order competition and given the effective assistance of national advertising campaigns. Paid representatives of the association have traveled among the retailers aiding them in installing service departments and more sound methods of merchandising to increase their ability to compete with dealers in competitive products.20 The Knit Goods Manufacturers of America publish a special trade paper containing educational matter intended to help the retailer.21 There is a growing number of associations which are closely coöperating with their distributors aiding them in every way possible to improve their business methods.

Educational work among other factors in the trade may also make selling easier. The Southern Pine Association has published a series of engineering bulletins designed to furnish to architects and engineers complete technical information and reference data on practically all phases of the use of wood as a construction material. These bulletins cover such subjects as the use of timber for structural purposes, physical properties, preservative treatments, fire retardants and so on.22 The cement association, the brick associations and various other associations have conducted extensive campaigns of this character.

The education of the consumer and user as to the merits and uses of a product may be of value in reducing sales resistance and lowering distribution costs. The value of coöperative advertising in enlarging demand and reducing selling costs has already been discussed in a previous chapter. It is probably the greatest single agency making for expeditious distribution. Many associations have developed great educational campaigns in connection with their advertising programs. The National Fertilizer Association has carried on an intensive program among the farmers utilizing the forces of the U. S. Department

20 R. S. Kellogg, Secy., Proceedings, Second Annual Meeting, Southern Pine Assn., p. 61.

21 Printers Ink, April 8, 1920, p. 133.

22 Proceedings, First Annual Meeting, p. 80.

of Agriculture, the state agricultural colleges, county agricultural agents, and the farm papers for this purpose.23 The cooperation of seed houses, canners, and farm machinery companies has also been secured. The National Association of Lumber Manufacturers has for years carried on an educational campaign which has had the widest ramifications. Newspapers, moving pictures, educational work at colleges and trade schools, traveling exhibits at fairs and conventions, lectures before clubs and other public organizations have all been utilized to convince the consumer as to the merits of lumber.24 The wholesale grocers have even had a book written on the geography of foods, for possible use in the schools as a reference work. The National Dairy Council, the Portland Cement Association and a number of other associations have used every possible agency to convince the consumer of the merits of their products and thus make selling easier for their distributors.

The beneficial results of these several activities cannot be gainsaid. Industry and public both benefit. With increased transportation rates and other factors enlarging costs of distribution any activity which will tend to reduce such costs is a public benefit. An association which simplifies and clarifies the basis on which business transactions of the industry are conducted through the adoption of simple rules and fair contract forms is forwarding not only its own interests but those of the nation as well. An association which reduces the friction and drag on distribution through the education of the salesmen of the industry, of distributors, and of the general public speeds. up the transaction of business, increases productivity and betters conditions generally. Such activities when they are not misused for ulterior purposes deserve the support and approval of the general public.

23 Proceedings, Annual Meeting, 1918, p. 21 ff.

24 E. A. Sterling, Mgr., Trade Extension Bureau, First Annual Meeting, Southern Pine Assn., p. 75 ff.

CHAPTER XIV

FOREIGN TRADE

RECENT years have seen an increasing emphasis placed upon the value of foreign trade as a factor in maintaining prosperity. First an agricultural nation, we have developed into a great manufacturing nation and have now definitely become an exporting nation. Our greatly enlarged productive capacity, our enormous holdings of gold, our great merchant marine, our rapidly developing banking facilities abroad, make the maintenance and development of foreign trade of the first moment. Our largest, highly integrated corporations, can maintain their position in foreign trade through, individual organization. But the great bulk of American manufacturers cannot hope to meet singly the competition of the great government fostered cartels of Germany, the comptoirs of France and the closely organized trade combines of England. The single manufacturer finds the varying customs, laws, transportation conditions and so on in the many countries an almost insurmountable obstacle to the successful development of permanent business. The smaller manufacturers must possess some sort of an organization to aid them and they must depend upon a reasonable measure of support from the government. Both are available. Any industry can utilize its trade association as a medium of assistance in foreign trade development or it may create a separate export association to engage solely in export trade. Both will have the effective assistance of the various government agencies interested in foreign trade, such as the Commerce Department, the Federal Trade Commission, the Tariff Commission, the State Department and the Federal Reserve Board.

Foreign Trade Work by Trade Associations.-A trade association with a foreign trade department, can be very helpful to its members who have a foreign business. The Tanners' Council, for example, have made their association of practical

help to its members. This association maintains a large file of credit reports on buyers throughout the world. It has published an international code for use by the hide and leather trade, which has enabled its users to cut their bills in half. It aids in the adjustment of complaints arising out of sales of goods to foreign buyers, in order to protect the good repute of American goods in foreign markets. Information regarding foreign tariffs, marking regulations, regulations regarding traveling salesmen, foreign patents and trade-mark laws, and many other difficult questions are furnished the members. The International Association of Garment Manufacturers maintains an export bureau which advises its members as to packing, labeling and shipping, furnishes lists of advertising mediums and advertising suggestions, maintains credit ratings on foreign buyers and assists its members in every way possible in the furtherance of their export trade. The National Association of Manufacturers also maintains a foreign trade department, with the following divisions: Latin-American Division, Far Eastern Division, Russian Division, Credit Investigation Bureau, Compilation Bureau, Translation Bureau, Trade-marks Bureau, Customs Tariff Division, Bureau of General Investigation and Special Service Division. Secretary Hoover is rapidly developing, in the Department of Commerce, a great organization for coöperation with business men in the development of foreign trade. Some seventy committees from the various trade associations of the country, representing about 150,000 firms have been appointed to work in close coöperation with the Department, in order to maintain intimate contact with foreign trade development. The Bureau of Foreign & Domestic Commerce is endeavoring to keep in closest possible touch with foreign trade matters, whether they be tariff changes, packing methods, op

1 Edward A. Brand, Secretary, Tanners' Council, New York Evening Post, April 1, 1922.

2 A. F. Allison, Secretary, New York Evening Post, April 1, 1922.

3 National Trade Association, A Study by the National Assn. of Manufacturers, 1922, p. 109.

4 Address, Dr. Julius Klein, Chief, Bureau of Foreign & Domestic Commerce, Official Summary, Proceedings, Conference Trade Assn. Representatives, Washington, D. C. April 12, 1922.

portunities for new business or what not. It maintains a force of commercial attachés and trade commissioners in many countries to aid in the development of new business for American firms. In order to secure the quickest diffusion of trade information at the minimum of expense, and to prevent such confidential data reaching foreign competition, the Department is now utilizing the trade association as the medium of distribution. Any trade association whose members are interested in foreign trade should not fail to avail itself of the valuable assistance of this bureau, as well as the aid of the Consular Service and Trade Advisers' Office of the State Department.

5

Export Associations.—On the recommendation of the Federal Trade Commission, the National Foreign Trade Council and various trade bodies of the country, Congress in 1918 passed the Export Trade Act, known as the Webb-Pomerene law. This Act, as has already been pointed out, limits the prohibitions of the Sherman Law and permits the American business man to form coöperative selling agencies for the disposition of his products in foreign trade. In a general way it may be said, this Act recognizes the formation of combinations, or associations of manufacturers or others engaged solely in export trade, provided they neither restrain trade in the United States nor restrain the export trade of their domestic competitors. Any acts done by such associations in export trade are also made lawful if they do not intentionally or artificially enhance or depress domestic prices, or substantially lessen competition, or otherwise restrain trade in this country. But no unfair acts against American competitors in foreign trade are permitted. The prohibitions of Section 7 of the Clayton Act against intercorporate stockholders is qualified, by the permission granted to any corporation to own stock in an incorporated export association, unless the effect of such ownership is to substantially lessen competition in the United States. This Act, therefore, may be broadly said to remove the prohibitions of the Sherman Law in so far as it applies to export trade solely, and so long as there are no undue reactions on the domestic situation.

On June 30, 1921, there were 48 such export associations do

5 See p. 12. For text of act, see p. 292.