Perth Amboy evening news., 1923-10-10

LETTER
COOPERATIVE IMPORTATION
BY Frederic j, HasIxin

| WASHINGTON. ID. c., Oct. 10:-
The next device to increase and pro-
tect American foreign trade probably
will be the import combination. In
| all probability congress will be ask.
| ed at the forthcoming session to en-
act legislation which will authorize
/ combinations of importers, dealing
| in the same general line of goods, tc
| form associations or cooperative or
ganizations through which they may
| Jointly import their goods. Impor-
! ters are in need of some new method
to enable them to keep possession OF
their home market.
| About year ago a new flood of i'm
| ports began coming into the United
| States. The Fordney tariff ball was
designed to keep them out so that
| the American market would be kept
as special prerogative of the Amer
| lean producer and manufacturer, but
| it did not succeed very well at this
| The reason Is the high price and
wage level in this country. Over
| the last twelve to eighteen months
prices have been climbing up. By
| the first of 1923 they had reached a
| level where foreign made goods, pro-
duced with cheap labor, could come
into the United States, pay the high
tariff rates and still undersell Amer
lean goods made with the highest
paid labor in the world.
Thers are many American manu-
facturers using foreign raw material.
They import this, manufacture it in
to finished goods in the United States
and sell to the American consumers.
They can buy abroad on about the
same basis with foreign manufactur-
ers using the same types of material,
but when the material is brought
here for manufacture, higher labor
and other costs operate, so that the
finished product must bring a higher
price than the same sort of article
manufactured abroad. Therefore,
the importers desire legislation Which
will enable them to import their
raw materials more advantageously.
It is believed that an import COM
bination would bring this about.
A typical example of the problem
is furnished by the rubber industry.
About a year ago, this Industry
awakened to a realization that Great
Britain, which controls the best tire
rubber in the world, had placed an
import restriction and a high export
tax on the rubber produced in the
various British tropical colonies. This
added about 200,000.000 a year to
the American rubber bill. Inasmuch
as the various crude rubber import
ers were all working independently,
they were unable to combat the move
and had TO pay the price. 1t is
thought that had there been an i'm
port combination in existence it
could have exerted enough influence
to have prevented the British action
or at least could have made cooper
ative arrangements which would
have cut down the cost of importing.
The same situation is true of a
number of products which are neces-
sary to American manufacture but
which are not produced on American
territory. Spain, for instance, con-
trolls the cork, Japan the camphor.
Peru the quinine, Mexico the sisal,
India the jute, and Chile the nitrates.
All of these products are used in
great quantities in American manu-
facturo and all come from foreign
sources.
The Department of Commerce has
been assisting the importers in work
ing out more advantageous methods
than now exist for the importation of
these commodities and has even gone
so far as to send forth expeditions
seeking places where rubber can be
produced under American control
but, as matters stand now, even
though the government can be of
much assistance, the importers are
all competing against each other be-
cause each is acting separately. The
foreign producers of these important
raw materials know the situation.
They know that two American con-
sumers are just as likely to bid
against each other for supplies as
an American and a Frenchman. AS
the result of this bidding, the price
Is run up to a high point and this
high price must be reflected in the
final retail selling price of the finish
ed product to the American consum-
er.
If American importers of rubber,
for instance, were permitted to form
an import association, competition
in buying the raw material would
diminish. The rubber planters in the
tropics would find that, instead of
having a hundred separate Ameri-
can customers, all bidding against
each other and running up the price.
there would be but one customer a
cooperative buying agency. The
United States consumes more rubber
than all the rest Of the world.
The Sherman law forbids such
combinations at present, The govern
ment takes the position that it Is un-
wise to permit dealers or manufac-
turers to combine and antitrust
suits are brought against all such
attempted combinations. The reason
for this Is that it is feared that II
the rubber manufacturers all were
working together they not only
would be able to get low prices in
buying their raw material but would
agree on uniform high prices in SELL
ing their product to the public. 1t
is recognized that there would be an
advantage in permitting the manu-
facturers to combine to get low pric s
If the low prices would benefit the ul-
innate consumer. The task before
| congress, in framing the new legis-
lation, is to devise some scheme by
which the manufacturers could be
permitted to combine in buying raw
materials from foreigners. but which
would not permit them to remain in
combination when it came to selling.
In word, the new law must provide
that the rubber trade or the jute
trade can work as a trust or a COM
bination outside the three mile limit