referring to specific subjects. It can be grouped under three heads: a) Commodities in International Commerce. This takes up all classes of merchandise and furnishes a comprehensive survey of international commerce in specified commodities throughout the world, as for instance cotton, wheat, sugar, coffee, iron and steel. This is the favorite method in German commercial education and forms the basis of Sonndorfer's works "Internationale Handelskunde" and "Technik des Welthandels" and many other treatises. b) Commercial Geography, treating international commerce concretely by markets. c) National export and import practice, offering the student an insight into the country's advance in the technique of export and import. The present work attempts to furnish in PART I an outline of the theory and the general principles of international commerce, as suggested under caption I above; it does not undertake the stupendous task of an exhaustive treatment of the applied science of international commerce either by commodities or countries (Caption II, a and b), particularly as the re-grouping of state and economic entities suggests a dignified presentation of these subjects by competent authors at some future time, not too remote, we may hope. These subjects are treated with particular reference to postwar conditions. While throughout that portion of this work which deals with the theory of international commerce it has been the author's aim to present, wherever possible, practical applications of the principles developed, it is PART II which deals specially with modern practice in international commerce. A work dealing with the practice of export and import must necessarily be encyclopedic in character. It is a very difficult task to present in one volume every phase of international commercial practice without the risk of superficiality. If such a work can adequately prepare the student for a thorough understanding of the intensive study units and special treatises dealing with such branches as document technique, insurance, transportation, it will have attained its aim. Here excellent books have been published, among them "Practical Exporting" by Olney B. Hough, the dean of American writers on export topics, and Ernst B. Filsinger's "Exporting to Latin America," both of which are considered as classics in this field, and only lately Norbert Savay attempted in a masterly work entitled "Principles of Foreign Trade" to present in one volume information covering the entire domain of foreign trading. Meanwhile the literature dealing with specific phases of international commerce is daily growing in volume and import ance. In view of the excellent manner in which the elementary side of practical exporting has been covered, we will not attempt in the second part of this work to present a systematic exposition of practical exporting, particularly as almost all of the practical methods of both the export and the import trade are applications to local conditions of the principles thoroughly considered in the first part of this work. On the other hand history has made rapid strides in these latter days. The businessman is confronted with changing conditions. These demand his study and consideration. Questions of clerical routine, faulty packing, inadequate postage, important as they are, must be left to books dealing with elementary instruction, and yield to the consideration of weightier problems. Some subjects allied to international commerce, as Foreign Exchange, Ocean and Inland Transportation, Marine Insurance, are adequately covered in standard works, a list of which may be found in the bibliographic table at the end of this work. We have, therefore, selected for consideration in that portion of the work which is assigned to strictly practical phases of international commerce the following topics: The Credit Problem of To-Day; Modern Developments in American Banking; International Law in Relation to Commerce; Analysis of the Results of Trade Promotion; Modern Publicity Methods. CHAPTER II. BASIC FACTORS IN THE DEVELOPMENT OF INTERNATIONAL I. International Merchants as a Factor in the Devel- Commerce, as a private economic activity, is naturally affected, both with regard to its volume and to its characteristics, by the nature of its agencies, that is of the individual business houses and of their management. The development of international commerce from this point of view is therefore greatly influenced by that section of the merchant class which participates in it immediately-the international merchant class, we might say, as well as by that section of the business world which enters into relations with the international merchant class either as customers or as furnishers of supplies. The group of international merchants which is to be considered in the commercial relations of one country with another may be located in the two countries concerned, or as in the case of intermediate commerce, in a third country. The group of international merchants located in a country may be composed of citizens of that country or of foreigners. The international merchant located in the exporting country is generally a national of the exporting country; the international merchant located abroad, in the importing country, may also be a national of the exporting country, but is generally a native of the importing country. German and British merchants have frequently settled abroad or established branches abroad, and in certain importing markets, as we shall see, an important distinction exists between native merchants and foreigners engaged in the importing business. Finally the international merchant located in the exporting country may be a citizen of a third country. The extent to which the international merchants located in the exporting country, as well as those located abroad, are nationals of the exporting country forms a criterion of the exporting activity of that country. Unquestionably Germany in the period of her greatest commercial expansion before the world war, and Great Britain, with her marvelous network of branches in foreign countries and in her dominions, were far superior to United States from the point of view of export activity, a condition which has undergone a considerable change not only with the curtailment of Germany's physical capacity of maintaining her predominance in the export markets, but even more so with the growing establishment of American branch offices and agencies abroad and with the unprecedented use by American exporters of the weapon of publicity abroad, which was almost an undeveloped auxiliary in the pioneer days of modern international commerce. Another criterion of export activity is also the extent to which the international merchant of a country seeks out foreign trade of his own initiative or is solicited by foreign inquirers, by foreign buyers, either through correspondence or through personal visits. Activity or passivity in international commerce greatly influence the development of export and import trade in general, and of trade in specific commodities in particular. In countries passively interested in international commerce, foreign merchants, European or American, are obliged to do pioneer work, sometimes undertaking speculative selling trips to those countries (generally commercially undeveloped or backward countries), establishing branches there, or endeavoring to interest the native business people in international transactions through written solicitation or through the sending of traveling representatives. Under these circumstances these international merchants endeavor in the first instance to introduce in these passive markets the products of their own nation, and to export from those markets to their home land such native products-generally foodstuffs and industrial raw products as their home land requires. Should the passive market in addition to these articles produce industrial commodities, in other words manufactured goods, the foreign international merchant will only then interest himself therein, if the handling of these goods yields him a greater margin of profit than the handling of kindred goods of his own home production. As a rule, if a commercially backward country produces manufactured goods, its capacity to compete in the world trade is very limited, and the foreign international merchant would find it very difficult to market them in his own home land, for which reason the industry of a country which is passive from the point of view of international commerce can only in exceptional circumstances depend upon foreign merchants to market its industrial products. But it can look to the merchants of its own country who deal with foreign merchants; to its own banks; to the sagacity of its own government which should strive to assist the infant export industry in making those initial efforts and sacrifices which are required to gain a competing footing in the world's markets. The foreign merchant, however, working along the lines of least resistance, will make it his business to sell in such markets the products of his own nation; to buy in those markets the foodstuffs and raw materials needed by his own nation; and will interest himself in the promotion of the sale of native manufactured products only in exceptional cases. Therefore the development of the export trade in manufactured products requires a vigorous export activity from the home land; whereas the development of the import trade, and of the export trade in raw products, particularly such as are needed by manufacturing countries, can progress even through merchants of foreign allegiance, where the domestic business people maintain a passive attitude to international commerce. Translated into practical application for the American business man, this truth teaches that the promotion of the export of American manufactured goods depends entirely upon the efforts and the activity of American exporters, and the growth of American exports of manufactured goods is co-incident with the abandonment of the old policy of entrusting their sale to foreign agents and connections, of waiting for chance inquiries, and of haphazard methods. The export merchant, in order to be successful, requires the possession of certain qualifications. |
