424 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.

are honest people but slow in paying, and at present this question of credits
amounts to fully 75 per cent of the possibility for exports, or the failure to
close a deal. It has therefore come down to the point where the nation that
can give the longest credits secures the business. This might very well be
looked upon as unsound principles from nations that have, for general practice,
to meet their bills on 30 days, but nevertheless habit is second nature and those
people that have done their business with long credits for ages past consider
that to be sound, and just who is right is more a matter of opinion than of
actual facts. Now there are nations that will advance money on goods exported
 at as low rates as 8 and 4 per cent, and if we could have such arrangements
 in our country, it would take the biggest burden from our export trading,
If our Government ever thought of helping us to that extent, I am sure it
could readily model that organization after German principles, which have in
the past worked admirably.
A member of a New York exporting firm replies to the same effect
that—
Longer selling terms and large credits are necessary to develop export business.
 The 10 or 60 days’ terms of American manufacturers are altogether too
short, and foreign buyers have to make arrangements with private banking
houses that conduct a commission department to meet payments, as in most
cases they can not make remittances within the time limit from their respective
countries. Those banking houses charge them a commission and control as a
rule all their business in this country. Better banking facilities, to allow small
American manufacturers to give longer terms and larger credit, are necessary.
The general manager of a concern engaged in exporting lumber
explains:
I visited South America five years ago, and found that almost their entire
“lumber” supply came from the United States; and on account of the
superior banking facilities of England, which permitted long credits and discounting
 of bills of lading, and for lack of cooperation on the part of American
manufacturers, that nearly the entire lumber supply came through English
brokers.
Credits and wages—A large manufacturer of watch movements
considers the credit system to be the principal obstacle encountered
in export trade. The labor question, also, he considers of vital imporing,
 His statement, which is typical of many others received
y the Commission, is as follows:
We believe the principal difficulty encountered in export trade is the credit
system. Most American manufacturers have been in the habit of doing their
business on a cash basis, or at least not exceeding a 60-day basis, while most
of the export business is done od a 6-month basis and a considerable part of
the export business is done on a year’s time. Now, our manufacturers have
not the cash capital to handle business in this way and most of them do not
believe it is profitable. Most of the articles manufactured in this country have
to compete with articles manufactured abroad where the standard of living
is lower and the scale of wages is very much less. As far as we ourselves are
concerned, we can not possibly meet the prices and take the chance of losses
and make any money at all. In our line of trade the most skilled watchmakers
 get from $4 to $5 per day, while in Switzerland the same grade of labor
gets from $1.25 to $1.75 a day. It is true we have machinery whereby we can
use semiskilled labor, but even then, with our wage scale averaging around $2.65
per day throughout the entire factory, we have to compete with a similar wage
scale in Switzerland of not over 90 cents per day. We can not do it and make
any money in export trade if we also have to face a large amount of losses
from long credits.
Securities could be handled to better advantage.—An exporter who
has been engaged in foreign trade for 25 years gives the following
explanation in regard to the handling of loans and securities in the
export business: