14 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.
through branch offices, as mentioned above, and seldom through
agents.
Character of competition.—The Steel Verband endeavors to capture
 the market at home through both quality, sales organizations,
and the maintenance of a monopoly. The maximum price limit is
set by foreign competition. The Steel Verband and its subsidiary
organizations endeavor to come as close to this price limit as possible
without encouraging too strong competition from abroad. The object
of the Verband has been to maintain profitable but not exorbitant
prices.
As a general business policy great stress is laid upon an equal and
high standard of quality.
Central selling organization.—The combination maintains its own
selling organization for “A” products; that is, the Steel Works
Union Stock Company is itself a selling organization. The subsidiary
 combines have their own selling organizations, or occasionally
a cartel bank, or sometimes work directly with the consumers, but
in general for two-thirds finished and manufactured products the
distribution is in the hands of middlemen in the shape of dealers’
unions as has been described. .
Terms of sale and delivery—The Steel Verband, the German Wire
Rolling Mills Union (Verband deutscher Drahtwalzwerke) and the
Pig Iron Union (Roheisenverband) demand payment before the 15th
of the next following month after delivery. The wire-rolling mills
and pig-iron combines demand strictly net cash. The Steel Verband
 gives 13 per cent discount. These terms are justifiable in view
of the tremendous capital involved for the mills and have become
standard terms of payment for big business. An extension of credit
for such enormous amounts would greatly handicap the mills and
affect the entire economic life of the country. The result of this
policy of short payments has been that all the weak dealers have been
weeded out, leaving only a few strong firms. These wholesalers in
turn have been obliged to insist upon better payments from the retailers
 and consumers, which has intensified the movement of payments
 in the entire market.
The Steel Verband makes its own terms of delivery. The individual
 plant receiving the order from the Verband reserves the
right to set the date of delivery for each order, with due consideration
 for the activity of the plant at the time of taking the order.
Obligations to deliver at a fixed date are not entered into unless the
state of activity of the works permit. This irregularity of delivery
makes it impossible for small dd to deal directly with the works,
it being possible only for such large dealers as can maintain a stock
as a buffer reservoir to take up the shocks of the irregularity in the
open market.
Dumping. —The Steel Verband believes in dumping. They justify
their position as follows: Large steel plants must work at a certain
maximum capacity without interruption if they are to remain
efficient and produce at a minimum cost. It is impossible for the
home market of any plant in any country to absorb a large output
without interruption in the flow of orders due to periods of depresston,
 from economic causes outside the influence of the steel industry.
Also.the increased complication of the coal, iron, and steel industries.