tion for the meeting of foreign competition and have derived tangible benefits through the direct agency of the association.'

Practical Workings of Export Association.

Mr. Edwin E. Judd, general manager of the American Webbing Manufacturers' Export Corporation, discussed a number of interesting experiences of that export association at the Seventh National Foreign Trade Convention, as follows, viz.:

"The factors which led to the formation of the export company were periodical, and to a slight extent seasonal, inactivity in the domestic market; the necessity for holding together a specially skilled group of workers; and a productive capacity in certain lines in excess of the normal domestic demand. ***

"It is expected that the establishment of outlets in a widespread foreign field, with a consequent counter-balancing of conditions of prosperity and inactivity in the different countries, will act to offset periodical slackening of demand at home, and thus permit the holding together of our mill organization during periods of domestic depression; while trade with the southern hemisphere is looked to to offset some such seasonal fluctuations as now exist.

"The growing popularity of belts and the wane of the Congress type shoe in the United States, have created a condition of over-production in suspender web and shoe goring which requires the seeking of new markets where 'galluses' and elastic top shoes still hold the popular favor.

"Several of the companies were doing a certain amount of export trade, but in only a few instances were they in direct contact with the foreign customer. This is an especially important feature, as the production of special orders to meet the requirements of fabricators of elastic webbing products is particularly desirable business. For any but the largest companies, the volume of foreign business in sight, however, was not great enough to warrant the maintenance of a special export organization; and for even the largest companies, the economies of operation through a central export organization were important.

"Another factor not much discussed at the time of organization but which has been a great factor in the success of the export company, is the comprehensiveness of the line

which the combination is able to offer. No one of the companies interested produces a complete range of elastic products, but acting together, they offer the foreign buyer everything from an elastic hat cord to the most complicated loomshaped webs. The extent of the line not only draws customers to this central source of supply, but puts us in position to secure the services of the best agents in each market."

ADMINISTRATION OF THE WEBB ACT.

Method of Officially Supervising Export Trade Practices. The Federal Trade Commission is charged with the administration of the Webb Act. In addition to requiring every association engaged solely in export trade to file the verified written statement mentioned above, Section 5 of the Act provides that on January 1 of each year each association

shall make a like statement of the location of its offices or places of business, and the names and addresses of all its officers and of all its stockholders or members and of all amendments to and changes in its articles or certificate of incorporation, or in its articles or contract of association. For copies of prepared forms for making the First Report, due within thirty days after creation of an association, and the Annual Report due January 1 of each year, the reader is referred to pages 469, 473 of this book, Exhibits No. II and No. 12.

In Section 5 wide powers of investigation are given to the Federal Trade Commission in the provision that each association "shall also furnish to the Commission such information as the Commission may require as to its organization, business, conduct, practices, management and relation to other associations, corporations, partnerships and individuals." Failure on the part of an association to comply with this provision subjects such association to a penalty and forfeiture of the benefits of the Act.

Special Division of Commission Administers Export Trade Act.

The numerous detailed matters of administration which arise in connection with the administration of the Act are handled by a special division of the Federal Trade Commission, known

as the Export Trade Division. All records required to be filed with the Commission are received, examined and filed by economic and legal experts connected with this division. Current developments relating to prices, market conditions, etc., in this country and abroad are closely followed in so far as they may have a bearing on the operation of the Webb Law.

Commission Act Supplements Export Trade Act.

The investigatory powers of the Commission under the Webb Act are supplemented by Section 6 (h) of the Federal Trade Commission Act which gives to the Commission specific powers to investigate trade conditions in and with foreign countries where associations, combinations or practices of manufacturers, merchants or traders may effect the foreign trade of the United States.

CHAPTER XVII.

Criticisms of the Export Trade Act.

Proposed Regulation of Foreign Trade Arouses General Interest.

The Export Trade Act (Webb-Pomerene Law) has been subjected to some measure of criticism at home and abroad. A careful examination of the principal arguments adduced in opposition to the Act, and of the answers thereto on the part of authoritative spokesmen may help to clarify many of the questions that have been raised.

Congress Gives Full Consideration to Vital Questions.

It should be noted that the Act was passed by Congress in response to a well-defined and quite general demand for such legislation by business men and commercial and trade associations in all sections of the country. It became a law only after careful consideration of the vital questions involved and after extended hearings and debates during the sessions of two Congresses,1 and not without opposition to the measure both in the House and in the Senate. Three members of the Committee on the Judiciary of the House submitted a minority report against the bill. The bill was twice passed by the House of Representatives, first, on September 2, 1916 (H. R. 17350, 64th Congress) by a vote of 199 to 25, and again on June 12, 1917 (H. R. 2316, 65th Congress) by a vote of 241 to 29. The Senate passed the bill on December 12, 1917, by a vote of 51 to 11, and it was approved by President Wilson on April 10, 1918.

Principal Opponents Fear Promotion of Trusts.

The fears of those who opposed the bill in Congress were

1Congressional Record, Dec. 12, 1917, pp. 185, 187.

2Report No. 50, 65th Congress, 1st Session, House of Representatives.

bottomed principally on the following grounds. It was contended that the measure constituted a covert attack upon the Sherman Anti-trust Act and tended to foster trusts and monopolies. Representative Volstead held "The trusts are asking for it. They want it for the trade at home; they want it to destroy the Sherman anti-trust Act, and that is exactly what it will accomplish." Moreover, it was contended to be impossible to separate the export trade from the domestic trade, that in fixing the prices for the foreign trade the combination will fix at the same time the prices for the domestic trade. The fear was expressed that the measure would pave the way for a domination of domestic markets by combines, nominally organized for export trade. Senator Cummins maintained that "It is utterly impossible to authorize combinations and agreements and monopolies of all kinds and sorts with reference to our foreign trade and at the same time preserve intact our protection of the Sherman Law with regard to domestic trade."2 Regarding this point, Representative Volstead contended "Everyone in the combination will know at what price goods are sold in the foreign market as in consulting one with another in regard to cost of production and sale of goods in the foreign trade no one can reasonably expect that this consultation will not inevitably involve a like discussion as to prices in the domestic trade and a like elimination of competition in that trade." A further objection raised was that export associations would sell American products cheaper to foreign consumers than in the domestic market, and would use the Act as a vehicle for manipulating domestic prices.*

Sponsor Defends Bill in House.

In answer to these objections Representative Webb said: "There has been a great deal of argument here of a very shadowy and scary sort, that great trusts are going to be

1Congressional Record, June 13, 1917.

2Congressional Record, Dec. 7, 1917, p. 80. 3Congressional Record, April 6, 1918, p. 5115. *Congressional Record, Sept. 2, 1916.