EXCERPTS FROM HEARINGS. 263

We have found that the representation of a number of manufacturers has
reduced the cost of selling and distribution of merchandise. We have also
found that our method of establishing branch houses has made it possible
to collect more promptly, and to reduce credit losses. It is, in my judrment,
the ideal way to extend our commerce and to meet foreign combinations and
competition, and I would therefore respectfully suggest as a basis for the
organization of such selling companies and the sale of their capital stock
that the following privileges or rights be given:
The right to make exclusive contracts with manufacturers covering the
exclusive sale of certain products in defined territory. These contracts should
be recognized in this country as well as abroad, as it is unfair to the foreign
selling merchant, who has invested in stocks of goods, and spent substantial
sums in creating business, to have such business taken by a domestic merchant
handling the same goods and who has not invested any capital or expense for
foreign trade.
Foreign selling organizations should be allowed to represent competing concerns
 if it is found to be mutually desirable. Such an arrangement may frequently
 give more than one manufacturer an opportunity of marketing his
zoods abroad in a satisfactory way, and it will help to prevent the destructive
effects of expensive and price-cutting competition.
The business and enterprise of foreign selling companies should be preferred
 by the Department of Commerce in making known opportunities for
foreign business. The company devoted exclusively to foreign business, and
which is conducted at large expense for that sole purpose, is entitled to preference,
 and opportunities for getting special orders which may come to the
Government’s notice.
Relief from certain taxes in this country should be given. Our foreign selling
 organizations pay very heavy taxes abroad, and it seems unfair that they
should likewise be heavily taxed at home on business and capital abroad.
The salaries of foreign managers and salesmen should be exempt from our
income tax.
If economically wise and practical, our banks should be permitted and
encouraged to grant special accommodations to selling organizations having
branches and stocks of merchandise in foreign countries. In my company,
as an example, we have an average of from $150.000 to $250,000 of merchandise
and cash en route at all times.
That means only cash and merchandise going to or from our own branches—
not shipments to customers; that is, stock shipments and remittances on
account of sales from stock.
Our merchandise is necessarily paid for before arrival at destination. Our
cash collections can not reach us for a period of at least 30 days after payment
Is made. It is frequently 60 days.
We therefore have a large amount of practically dead capital, which, if it
could be used as a basis for special credits, would permit of our doing a larger
volume of business. It is not at present possible to negotiate drafts against
branch houses on stock shipments. If this could be done, it would facilitate
financing our export business. If collections abroad could he anticipated by
the remittance of 90-day drafts it would help.
S. H. Roberts, secretary-treasurer of the Phoenix Horse Shoe Co.,
Chicago, Ill, after stating that in order to introduce their product in
South America they had to send a salesman there, said:

We were obliged to form a combination with several other concerns not
in the horseshoe business, but with concerns which cater to the horseshoeing
trade. We arranged with a nail concern, and a tool concern, and a pad concern
to share the expense of sending this man down there.
* * * That made the expense lighter, of course, on each one of us, but
aven at that the venture was not a profitable one, at least it has not proved so
yet. Of course, the financial conditions in the last two or three years in South
America have been such as to prevent a great expansion of foreign business,
They have lived within themselves as far as they could, and it may be that
later on we may be able to do something, but I think that, because of the
aatural handicaps of the American manufacturer, the Government ought to use
everything in its power to help rather than to restrict the business in foreign
lands.