PART V. FOREIGN-TRADE WORK THE EXPORT TRADE ACT (WEBB-POMERENE LAW) 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, 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 purpose 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 section 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 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." An export trade association must be entered into for the sole purpose 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 competitor. Such association must not either in the United States or elsewhere enter into any agreement or conspiracy or do 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. 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 methods are done without the territorial 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 reports 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 ($48,579,307) over exports in 1936. The products shipped, and money value thereof, are as follows: Commodities Metals and metal products, copper, iron and steel, Products of mines and wells, crude sulphur, phos- Other manufactured goods, rubber, paper, textiles, glass, cement, abrasives, and chemicals... Total__ 149, 296, 525 197, 875, 832 Early in 1937, exports were materially increased, partly on orders placed in 1936. This increase continued in some markets, but shipments 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 growing effort on the part of foreign countries to increase production to the point of supplying domestic needs, and the continuance of foreign exchange controls in some countries, have lessened shipments of some American products, notably foodstuffs. Associations shipping to the German market found it difficult to obtain exchange. 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 the United States Trade Agreements Act have removed or lessened restrictions and paved the way for better business relations. Members of the WebbPomerene law groups were in a position to place their problems before the negotiators 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, standardization 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. Shipments may be so controlled as to prevent periodic glutting of foreign markets. It is also possible to split large orders between the members of an association and thereby effect prompt shipment to the satisfaction 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 reduced; and the newer associations report substantial increase in export business over that obtained through individual sales prior to their organization. 44 EXPORT ASSOCIATIONS IN OPERATION Forty-four associations were on file with the Federal Trade Commission at the close of the fiscal year, June 30, 1938. These included a new group formed in October 1937, the Rice Export Association, comprising 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 had 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 Association, Barr Building, Washington, D. C. American Hardwood Exporters, Inc., 604 Carondelet Building, New Orleans. American Locomotive Sales Corporation, 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 6th Street, Los Angeles. California Dried Fruit Export Association, 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. Copper Exporters, Inc., 50 Broadway. New York. Douglas Fir Export Co., Henry Building, Seattle, Wash. Durex Abrasives Corporation, 63 Wall Street, New York. Electrical Apparatus Export Association, 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 & 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., Davenport, Fla. Metal Lath Export Association, 47 West 34th Street, New York. Northwest Dried Fruit Export Association, Title & Trust Building, Portland, Ore. Pacific Flour Export Co., care of Fisher Flouring Mills Co., Seattle, Wash. Pacific Forest Industries, Tacoma Building, Tacoma, Wash. Pacific Fresh Fruit Export Association, 333 Pine Street, San Francisco. Phosphate Export Association, 393 Seventh Avenue, New York. Pipe Fittings & Valve Export Association, 1421 Chestnut Street, Philadel phia. Plate Glass Export Corporation, Grant Building, Pittsburgh. Redwood Expert Co., 405 Montgomery Street, San Francisco. Rice Export Association, 1103 Queen & Crescent Building, New Orleans. Rubber Export Association, 19 Goodyear Avenue, Akron, Ohio. Shook Exporters Association, Stahlman Building, Nashville, Tenn. Signal Export Association, 420 Lexington Avenue, New York. Steel Export Association of America, 75 West Street, New York. Sugar Export Corporation, 120 Wall Street, New York. Sulphur Export Corporation, 420 Lexington Avenue, New York. Textile Export Association of the United States, 320 Broadway, New York. United States Alkali Export Association, Inc., 11 Broadway, New York. United States Handle Export Co., Piqua, Ohio. Walnut Export Sales Co., Inc., 12th Street & Kaw River, Kansas City, Kans. Walworth International Co., 60 East 42nd Street, New York. Wood Naval Stores Export Association, 1220 Delaware Trust Building. Wilmington, Del. SUPPLEMENTAL REPORT ON ANTIDUMPING LEGISLATION In June 1938, the Commission presented to Congress a Supplemental Report on Antidumping 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. 112, Seventy-third Congress, second session. This work was done under the provisions of Section 6 (h) of the Federal Trade Commission Act which directs the Commission to "investigate, from time to time, trade conditions in and with foreign countries where associations, combinations, or practices of manufacturers, merchants, or traders, or other conditions, may affect the foreign trade of the United States." TRUST LAWS AND UNFAIR COMPETITION IN FOREIGN COUNTRIES Also under Section 6 (h) of the Federal Trade Commission Act, the Commission follows trust legislation and unfair competition in foreign countries. Recent measures are briefly summarized. Argentina.-A governmental committee appointed to study the petroleum situation reported in 1937, recommending establishment of a National Petroleum Council to control and administer reserves, organize petroleum companies with Government and private capital, establish pipe lines, and regulate the import 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 Ministry 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 controversies in the industry and to present recommendations for legislation. A decree published on January 30, 1938, established an Office of Commercial Policy in the Ministry of Agriculture to conduct general studies of domestic and foreign economic conditions in connection with production, trade, and consumption, internal tax systems, economic balances, internal commercial policy, customs tariffs, commercial treaties, import quotas, embargoes, temporary importation, import premiums, dumping, drawbacks, clearing and compensation agreements, and exchange control. Belgium.-A decree dated January 13, 1937, prohibited the extension 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 |