EXCERPTS FROM HEARINGS. 321

goods are very considerable. In the lumber business, for example, or in the
furniture business, it is necessary to have stocks of goods in warehouses at
different points in order to develop a proper distributing system. This expense
Is apt to be rather more considerable than the single furniture producer cares
to burden himself with. Here is a case where it is a8 question either between the
export house or combinations among furniture producers. Producers of furniture
 of different grades might combine together in order to spread the capital
expenditure of that business, Where, however, good will and trade-marks count
for much, there is no room for the combination of producers in a given line in
the foreign trade field. It is hardly conceivable, for example, that the various
producers of safety razors should combine together to develop sales agencies
in foreign countries, They sell under different methods and arrangements
in this country, and they are likely to do so abroad. Some might sell direct;
some through export houses. .
wy =

I think it is clear that it might be found advisable to establish a combination
for purposes of developing foreign trade In certain markets, while for developing
 the same business, in other markets, the export house would be found more
serviceable, * * *
The impression is so widely prevalent in big business circles that direct
selling is the only feasible method of conducting foreign trade, that I think
this Commission would be performing a service if it made a pretty careful
examination of the present place of the export house in our foreign trade,
and the place of the British export house in the development of English foreign
trade.

An export house has branches in the country from which it exports and
branches in the countries to which it exports. It may simply buy goods in the
open market for export purposes, or it may have various relations, contractual
or other, with products for supplying it with goods. In its foreign branches,
it has a staff of people who are acquainted with the language of the business
people in the country, and which pushes the goods that the export house has,
so far as it may.
Commission houses.—Mercer P. Moseley, of the New York Commercial,
 New York City, said:
Without in any manner desiring to reflect upon export commission houses
that have, through diligence and attention to their personal interests, built
up a more or less lucrative business in foreign fields, it Is nevertheless true
that many of them have done and are doing much to discourage the American
manufacturer. I make particular reference to the nefarious practice of subtitnition


L. D. Sale, president of the Western Wholesale Drug Co., Los
Angeles, Cal.. recommended large brokerage concerns:
The trade can be developed, but it requires a big capital, combination of the
different ones, and we have got to be in shape to take their goods before
they will take ours, or at the same time. I do not see why it could not be
done through large brokerage concerns. That is the way England and Germany
are doing the business in South America, through large institutions. One
firm told me they had a drawing account of a million dollars on England.
Now, they can load and ship or buy anything they like, sell it while it is en
route or store it.

(h) Quality and Price of Goods.

Joseph J. Slechta, New York agent of the Brazilian Bisamayip
Co.. referring to competition with foreigners in export trade. said:

Successful competition in foreign markets depends to the extent of 99 per
cent of the business upon two all-important considerations. The goods sold
must be suitable for the market and the price must be right. The Baldwin
Locomotive Co. had the Brazilian business for 60 years. The German manufacturer-
 put out cheaper locomotives, cheaper and poorer, but they would run.
They had not 10 per cent of the selling organization maintained by the Amerl-97941
 ° pp 2—1686——21