319 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE,

sumption makes it desirable that a broader market be established
for the industry through the promotion of its foreign trade, so that,
as far as possible, the variations of the domestic demand can be
counterbalanced by those of the foreign demand, and the industry
be conducted on a more stable basis. To a considerable extent, also,
the foreign demand is for grades of lumber which, due to the limited
domestic call for them, command relatively higher prices abroad,
where there is a scarcity of such grades. In many cases foreign conditions
 make possible a more extensive employment of the wood for
uses to which its particular qualities adapt it than can be done in
the home market. In the difference between the domestic price and
the foreign price, because of the higher character of the utilization
possible abroad, there is a direct economic gain, it is argued, not
only to the American lumber manufacturer, but ultimately to the
American public. It represents the gain obtained through preventing
 the waste which takes place when a higher grade of material
is employed where a cheaper grade would give substantially equal
service.
When building up a more extensive foreign trade it is desirable,
however, that the conditions under which the past and present
sxportation has taken place should be radically modified. The control
 of the export trade in American lumber has been, and still is,
largely in the hands of foreign brokers. The part played by the
manufacturers in the transaction has usually ended with the placing
of the lumber on board ship. They have not been concerned with
the development of a foreign market for their products. Neither
have the brokers been interested, except in so far as they were able
to sell American lumber abroad cheaper than lumber obtainable
from other sources. The result has been that because of a lack of
sffective organization of the American lumber manufacturers in
sxercising a greater degree of control over the distribution of their
products which are exported, the foreign distributer and consumer
have obtained a large share of the benefits which the possession of
so great a national resource should have secured to an American
industry. It is not merely the profits of distribution which the
foreigner has been able to obtain. He has been able to concentrate
buying power into relatively few hands and to have recourse to other
sources of supply the product of which he can occasionally substitute
in the place of American lumber. Contrasted with the situation
occupied by the foreign buyers is the disorganized condition of the
American manufacturers. In the bargaining that takes place for
the sale of their product one manufacturer is played against another.
Their ignorance of conditions in foreign markets, their absence of
distributing facilities to reach the foreign consumers, and their
individual financial necessities make impossible any unity of action