CONDITIONS IN PARTICULAR INDUSTRIES. 297

Commerce Departmerits on the possibility of establishing trade relations
 through a common and cooperative organization. (See Pt. II,
p. 273.) Although no tangible scheme of organization has been
proposed, it was desired that membership in any export company
should be open to manufacturers of competing as well as noncompeting
products: By noncompeting products is meant allied products which
do not compete but are included in the chemical industry.
Advantages of export cooperation.—Export comnbiations would
reduce the expenses and supply the information and equipment necessary
 to the successful entry of the small manufacturer into the
foreign field.
Direct representation in foreign markets is an essential factor in
the sale of articles, like chemicals, which require special technical
knowledge on the part of the salesman. In 1912 Consul General
Griffiths, reporting on the sale of American paints and varnishes in
London, advised that the English trade could be developed only
through direct representation and the establishment of branches and
branch stores. Such foreign branches are often needed. Combinations
 could afford to establish foreign branches and stores and maintain
 direct representatives where individual American concerns
could not.
European chemical firms are accustomed to grant very long credits—six
 to nine months at 5 to 6 per cent per annum. The longest
terms granted by Americans are three to four months.? One reason
for this is that American houses have not the banking facilities or
resources to make extended credits possible. Another reason is the
lack of information as to the financial soundness of the buyer. A
combination could maintain facilities for securing such credit information
 and would represent enough capital to finance long credits
and apportion the risk.
In the establishment of chemicals in a foreign market the competition
 is often one of quality and repute more than of price. The creation
 of a demand for an American product in the face of an already
established demand for a similar foreign product with a reputation
for superiority requires extensive and intelligent advertising. A
combination would have sufficient capital and perseverance and variety
 of products to do this. -
The ability to adjust and fix export prices would be a great advantage
 in dealing with underselling in foreign markets by foreigners,
An American combination could afford to make lower prices and
sustain losses rather than relinquish markets abroad to foreigners
who were dumping there. By fixing an export price it could prevent
Foreign Trade in Paints and Varnishes, Special Consular Report No. 56, 1912, p. 44.
The Americas, July, 1915