278 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.

show that you do,” will be inevitably that they will take the little fellow into
their camp; they will be very glad to take him into their camp, because the
little fellow will really hold a power over them which will disturb their business.
 If they attempt, in the conduct of their foreign business, to put prices
up too high, the little fellow, through the cooperation and concentration and
control, through this Commission, will go in there and undercut them, so that
they naturally would take him into the camp.
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The tendency now to send out an inferior article is one of the results of
individual action and prohibition of concentration and cooperation. With cooperation
 I would anticipate a very considerable reduction in the sending
out of inferior goods from the United States, because there would be a number
 of concerns interested to see that that selling agency sells only good
zoods, and among those concerns you would have those whose policy has always
been, in this country, to sell only the best.
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The record of experience proves that only the big concerns with large capital
ran do a wholesome business abroad.
Now, it seems that it is perfectly plain why this should be the case. In
addition to the points that I have mentioned—the command of large capital,
the advertising saving, and the saving in various other ways of management
throughout the business—there is the potentiality of this large concern to
oppose the cartels and combinations of foreign manufacturers, which are
always ready to oppose the introduction of American goods anywhere. My
experience in foreign business has taught me that the customer has an open
ear and an open mind and a willing hand to purchase and use American
products; that you have really the first call on him, because he has a very
high opinion of the industrial strength and progressive condition of the American
 manufacturer. He is ready to get your goods; but that is not enough.
The other fellow comes along with a very much lower price, a machine made
In Germany or England, and you then have to figure to get your price approximately
 near the price of the competitor or to convinces the customer that you
are selling him something very much superior to what the competitor offers
him.
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The desirability of cooperation for foreign business is made acute by the
importance and almost the necessity of having a varied line of products. The
man who started in with a brake-shoe business, and who has reached out
to foreign fields, finds that he must also furnish axles and wheels and trucks
and cars and things of that kind, which will enable him to keep up a large
selling organization and to keep up a large volume of business, so as to keep
his cost down in dull times. And if small concerns are able to combine and
cooperate for foreign business, they would naturally bring into that combination
 a varied product. A man may make an engine and he may not make a
boiler that runs that engine, and the two generally go together. One concern
might manufacture a dynamo and not manufacture a switch, that invariably
goes with the dynamo; and in that respect the large concern has a great
advantage over the small concern in foreign business, because the large concern
 usually equips its manufacturing schedule with everything that correlates
in its line of products. That puts the manufacturer in a position to supply
the trade in foreign countries with a complete outfit covering the entire requirements
 of a customer, and it puts him in a favorable position before the
customer, and it also enables him to keep his warehouses reasonably filled with
stock and not unreasonably stocked, as the smaller fellow would have to do,
not being able to figure out the ups and downs of the business in the trade.
The trade may go down in one thing and up in another, and he would not be
prepared to meet that situation unless he had a large and varied line.
Joseph P. Grace, of W. R. Grace &amp; Co., exporters, New York
City. said:

I believe that the first and most important move in capturing South American
trade should be to make it possible to have each of the best selling articles in
this country represented in South America by a traveling specialist who could
demonstrate the article and make the first sales. Such trips are fairly expengive
 and a single manufacturer is not always justified in going to the expense
of sending out such an expert. * * * When manufacturers in the same line