New-York tribune., 1919-06-06
BUSINESS NEWS BUREAU:
Tribune Building
l54 Nassau Street
Insurance for
Foreign Trade
Risks Proposed
u. S. Merchants, Says Cotton
Goods Man, Want Protec-
ton Against Fickleness of
Buyers in Other Countries

Charles L. Bernheimer, president of
the Bear Mill Manufacturing Company,
producers of cotton goods, believes that
system ought TO be worked out for
insuring American manufacturers and
exporters against the fickleness of for
agn buyers. The Chamber of Com
merce of the State of New York yes
terday adopted a resolution which he
proposed. providing that the insurance
committee examine and report on the
feasibility Of devising and carrying
Forward a system of insurance against
rejection of merchandise at its des-
tination in distant lands.
In analyzing the reasons that make
ANY merchants of this country hest
tate to emerge from their shell of in
dustrial provincialism Mr. Bernheimer
said:
Merchants Lack Confidence
Undoubtedly the American business
man has been made to see the impor-
lance of seeking foreign markets for
me overfowing productivity Of his fac
tories, and, although shipping and
banking facilities and the ability to
compete in foreign markets seem as
sured, he nevertheless lacks the conf
isnce that his merchandise, when hon
cstiy produced and packed and shipped
N accordance with the agreement made
1t the time of the sale. will be accepted
and his drafts duly paid
In most lines of merchandise the
margin Of profit in foreign business is
not much larger if any, than in do
nestle business, yet the risks involved
are much greater Freights, marine
insurance, import duties and deteriora-
ION are important factors in the cost
Of getting goods to far-away places.
These costs are shifted back TO the
shipper if the distant buyer whimsi-
oally decides he does not want the
goods after they reach him and re-
uses 20 honor drafts on him. I sug-
cest covering this risk of rejection by
spec lal insurance, and l am confident
shat, as American foreign trade ex-
pands. such an insurance enterprise
could grow to extremely large proper
lions.
Under the impulse of foreign needs,
American merchants in November, De-
cembcr, January and February last
shipped large quantities of goods to
other countries. During those months
O adjustment TO new conditions prices
ieccded from - to 40 per cent, and
foreign buyers anticipated further de-
oines. And. therefore, though deliv-
eled according to specifications, for
eign buyers in immune rable instances
refused to receive. the goods or to
honor drafts issued against them. In
isolated cases there may have been
bona tide reasons.
Why Orders Are Cancelled
This condition set me to thinking
knew something had to be done to
take care of such contingency. First
thought it might be advisable to have
Uncle Sam certify as to standards of
goods at the point of shipment, so
that its quality could not be used as
Z preteXt for rejection. But the ten
dency is away from paternalsm, and
therefore that plan seemed unsatis-
iactory. Then | thought that possibly
somo large association Of American
manufacturers might in a similar way
put its seal of approval on goods, but
! decided that foreigners would con-
sider its judgment predudced. And,
besides, poor quality is rarely the real
reason for rejection.
Foreign purchasers cancel orders
and refuse to receive goods for the
same reasons as domestic buyers do,
but the action of the former is more
costly. Goods arc rejected chiefly for
these reasons, my experience shows:
Buyers are overbought, they change
.heir plans, prices decline after the
ale is made, buyers regret making
purchases for miscellaneous reasons
and VARIOUS local conditions. The chief
pretexts used by those who reject
goods are inferior standard, faulty
execution Of contract, and faulty pack
irG.
The American manufacturer could
we'll afford to pay a premium to an
insurance company which would as
sumo the risks of non acceptance. I
think ths plan is feasible. AS far as
know, it is wholly novel, never yet
having been tried out"