port recently received from a well-established association which has been in active operation for a number of years:

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 responsible foreign agents over whom supervision is exercised by an association official who travels abroad. Prices must depend upon economic conditions in each market versus maximum consuming power of that market under normal 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 accordance with their processes of manufacturing. Prices necessarily fluctuate in different parts of the world, being controlled by innumerable conditions, both political 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. Consequently we work on a final average annual price for export, which in turn is distributed equitably 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, semiembargoes and complete embargoes. This involves much in the way of difficult financing.

In one country we have operated at a maximum of one year without securing one dollar of exchange, allowing our funds to accumulate and eventually liquidating 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 guarantees 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 necessary 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 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 consideration of quality as well as quantity,

shipping and loading facilities, and 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 regulations 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 disseminating trade information as to market conditions abroad, foreign credits, 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 obtain better cargo space and more reasonable transportation rates. Agreement upon trade practices has eliminated abuses, improved relations 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 changing 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, eliminating 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.

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 depending 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, standardization 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 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.

An association comprising mills scattered through several States in the Middle West, gathers its members' products together for exportation, and reports that:

By combining the resources of stocks, experience, etc., of the several mills, we at one time reduce 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 depression 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 uniform contract agreed upon, and guarantees to each producer a fixed quota of the association's total export business, also

agreed upon. 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 customs continue to be outstanding advantages 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 uniform contracts and terms of sale, the definition of trade custom, provision for inspection of goods shipped and certification thereof, arbitration, and promulgation of rules, regulations, and policies relating to the conduct of export trade, including the elimination of abuses.

The association offers to its members a method of presenting their claims before boards and conferences. One reports that:

During negotiations with the Conferences and Steamship Lines, this association, particularly this year, found of great value the control of the tonnage exported by its different members and was able to obtain a satisfactory ocean freight rate for the year 1939.

Another states that its ability to deal with large purchasing combines 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 compiled 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 Supplemental 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 (h), the Commission follows current trust legislation 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 pertain

ing to the planting, cultivation, sale, and transportation of the fruit. The French law of October 5, 1938, noted elsewhere in this report, is applicable to Algeria.

Argentina.-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 September 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 administered 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 plan adopted in 1938, a tax will be levied on all wheat milled for consumption 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.

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 materials, and other necessities. The Minister of Economic Affairs was authorized to grant export permits, to prohibit the use in animal feedstuffs 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 authority 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 Na

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