EXCERPTS FROM HEARINGS.

9
on

realize that they can send out a joint salesman and pool the sales made by
him, I believe it will be found that there are a surprising number of new lines
which can be initiated in South America. After the business is once started it
is not very likely that the pool idea will be retained. After the first orders
nave been distributed, probably each manufacturer, taking his share of the
‘nitial business as a basis, will start to do the business, on his own account,
‘hrough the means which appeals most to him, and competition will again be
restored. Some manufacturers will do a mail-order business throughout the
various parts of the new country; others will deal with some of the local concerns
 who act as distributors about the main centers; others will do business
with the foreign merchants who act as distributors in a more ' general
way. * * * For a business to assume really large proportions stocks must
be placed within easy reach of those who want to buy at the time they need
them; warehouse facilities must be furnished and the necessary credit facili
ties supplied to meet the demands of the local market. Whenever the business
in any market assumes sufficient proportions to be handled in this way, transportation
 facilities: and banking facilities have at no time in our experience
hindered American trade from continuing to do the business once started and
from gradually increasing its volume of business. as compared with that of
rompeting foreign countries.
Capt. Robert Dollar, president of the Robert Dollar Co., a steamship
 company of San Francisco, Cal.. said:
Now the big manufacturers are selling sufficient in the foreign trade, because
 they can establish their own houses in the different cities where they go.
The small manufacturer is dependent on combination of several and having a
selling agency to sell their goods. The Sherman Act, if we would take it literally
 as it reads, would prevent the small man from going into business in the
foreign trade altogether.

Ninety per cent of the American commerce of China is conducted by the
Standard Oil Co., the United States Steel Corporation, the Tobacco Company,
 and the Harvester Company. * * * If you take those companies out
of China there would not be any American trade to amount to anything at
all, * *= =»
Another thing that you want to encourage is to get more manufacturers to
club together.and get selling agencies out there to sell their goods, so that they
will be on an equality with the big manufacturers.
Prof. Oliver M. W. Sprague, professor of banking and finance,
Harvard School of Business Administration, Cambridge, Mass.,
said:

I feel, therefore, that the field for combination of independent producers is
by no means coextensive with the whole field of foreign trade. It is a comparatively
 narrow field, marked on one side by the possibility of more economical
 methods of marketing, * * * and marked in the other direction
by the possibility of lessening competition among American producers engaged
 in foreign trade. * * * Now, there seems to me to be a very
pssential difference between a combination, the primary purpose of which
is to prevent ultracompetition among American producers in the foreign
market, and combinations which are designed to spread the cost of marketing
among producers and to lessen the risk. I should think that it might be necessary
 to carefully distinguish between these two very different purposes in
formulating a policy with reference to combinations for foreign trade purposes.
+ * * 7 think it is clear that it might be found advisable to establish a
combination for purposes of developing foreign trade in certain markets, while,
tor developing the same business in other markets, the export house would be
found more serviceable.
The third reason for combining that is often brought forth is the existence
of combinations among foreign producers which have to be met in neutral
markets, - The Germans, of course, have done more in this direction than any
other country, through their cartel organizations. I think it would take altogether
 too much time to enter into a study of the effectiveness of the German
cartel system and the extent to which it has contributed to the development of
foreign trade. For fighting purposes in those lines in which there is clear