52 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.
and the like. The extent of this advertising abroad we are unable
to ascertain from here. }
Character of. competition— Quality is an important feature in competition.
 However, when products have reached as high a state of
perfection as those of the two companies, A. E. G. and Siemens, there
is little choice, so that price plays an important part. It is generally
understood that the A. E. &amp; is inclined to cut prices a little lower
than Siemens in order to capture the trade. A. E. G. is able to do
this, because the firm is so widely interested in various undertakings
that a momentary loss in one line is more easily supportable than
such a loss would be, for instance, to the Auer Gesellschaft, which
makes only lamps. Both companies have shown a tendency to undersell
 any competitor that may arise and, if possible, drive him from
the market. This policy of eliminating a competitor must, however,
be carried on very carefully because of the unfair-competition law
in Germany, which is very strict.
Central selling organization.—Each company maintains its own
central sales department at the home office. It may be noted here
that the late Dr. Rathenau, the creator of the A. E. G., who taught
salesmanship to the electrical industry of Germany, received most of
bis inspiration and his sales methods from his earlier affiliation in
America with the Edison Electric Light Co., of New York, with the
Thomson Houston Co., and in later years with the General Electric.
Terms of sale and delivery—Terms of sale ‘in an industry with
such widely different products as the allied electrical industry, vary
from line to line and almost from sale to sale. In the face of competition
 terms are inclined to become very lenient.
Dumping. —Dumping is not such an important factor in the electrical
 industry as it is in staple products, because much is manufactured
 on order, and the production of a series of articles such as
lamps, motors, and electrical apparatus may be easily restricted, if
necessary. Also it is as inadvisable to demoralize a well-organized
foreign market as it would be to demoralize the home market b
price cutting, except in the face of competition which it is desirable
to drive from the field.
Special relations.—The minister of commerce, Dr. Sydow, in
March, 1914, became anxious fearing an absolute monopoly might be
brought about in the electrical industry and introduced a bill into
the Prussian Diet which would regulate franchise obligations, called:
“ Konzessionspflicht.” The bill found little support. The situation
which Dr. Sydow feared is the monopoly established in certain districts
 by companies supplying electrical current. The situation contains
 several points of interest. In recent years, since the introduction
 of high-tension transmission, made possible by the development
of the alternating current, great stretches of country, including many
towns and farms, have been served with electric light and power
from one central power plant situated either at a coal mine or on an
inland harbor with cheap water transportation and coal-handling
facilities, or in some few cases at sources of water power. If either
company—A. E. G. or Siemens or both together, through the institution
 of a holding company or Treuhandgesellschaft—received the
franchise or concession to build such a plant, they also succeed
thereby in establishing an absolute monopoly for all the lamps,