production involve an additional expense, which is reflected in a somewhat higher price. Markets for Raw Materials and Standardized Producers' Goods.-Demand for such commodities as wheat, cotton, and lumber, is, as a rule, not created through salesmanship. It is an active demand on the part of those who need the goods, the buyers in most instances searching the markets for sources of supply and being willing to pay prices warranted by market conditions. For a number of such products concentrating points or merchandising centers have been created in London, Liverpool, Antwerp, etc.; to these centers goods are first shipped, and here the deals between buyers and sellers are consummated. From entrepôt cities the wares are redistributed to places where they are needed. It is obvious that the problems involved in the sale of such goods differ materially from those connected with the sale of most of the finished consumers' wares. Prices for raw materials and foodstuffs are regulated by conditions over which individual shippers have very little, if any, control. These goods, like some of the articles in semi-advanced stages of manufacture, such as metals, leather, etc., have been largely standardized and they do not adapt themselves to processes of individualization. Neither is such individualization as necessary as it is in the case of consumers' articles, where the creation of distinctiveness is one of the essential preliminary steps toward conducting an advertising and selling campaign. In most instances it is impossible to change the appearance of raw materials or of semi-finished commodities so as to make them more attractive to the eye or the other senses of the buyer, or to make them otherwise more acceptable externally to a particular market, and there is little need for making such changes. Producers' goods are bought in accordance with their intrinsic value and their fitness for specific uses in manufacturing; buyers know more or less definitely what they want and are not swayed in their decisions either by the appearance of the commodity or by the sellers' arguments. DE HAAS, J. A. HOUGH, O. B. REFERENCES Foreign Trade and Shipping, Chap. II. FILSINGER, E. B. Exporting to Latin America, Chap. II. PRIZER, E. Export of Industrial Products. Official Report of the Sixth National Foreign Trade Convention, 1919. Pp. 8-24. SAVAY, N. Principles of Foreign Trade, Chaps. V, VI, VII. SNIDER, G. E. (Editor). Selling in Foreign Markets. Bureau of Foreign and Domestic Commerce. Miscellaneous Series No. 81, Chap. II. TOSDAL, H. R. Problems in Export Sales Management, Chap. III. CHAPTER XV FOREIGN COMMERCIAL LAWS IN THEIR RELATION TO EXPORT MERCHANDISING Variety of Laws Affecting International Traders.-Knowledge of fundamental foreign laws as they affect business transactions is of utmost importance to traders. In no part of the world does ignorance of the law excuse one from bearing the consequences of one's acts. Such ignorance may often lead to the undertaking of responsibilities which one never intended to assume and to the commission of costly blunders. Fortunately, in that branch of public and private law which governs commercial dealings there exists a certain degree of similarity in many legal systems throughout the world, and within twenty-five years or so developments have taken place which have introduced uniformity in the treatment of at least a few of the contingencies which may arise in connection with the international exchange of goods and services. However, there is room for much improvement; modern commerce is yet burdened with many unnecessary risks due to a divergence of legal conditions which confront business men. The Great War, which all but undermined the foundations of honor, good faith, and the spirit of reconcilation which characterized the meeting of business obligations in the recent past, has shown clearly the need for knowing in advance the legal rights and liabilities acquired through the conclusion of business contracts in different parts of the world. Laws affecting international traders embrace a great variety of subjects. They include regulations controlling COMMON LAW AND COMMERCIAL CODE COUNTRIES 237 the general conduct of business by nationals who go abroad to reside as agents and managers of branches or to travel as buyers and sellers; the domestication of American companies abroad; the establishment and operation of banks; the conclusion and the consummation of sales; the rights of principals in the matter of consigned goods; the extension of credits and the collection of accounts; bankruptcy procedure; the use of bills of exchange and the protesting of drafts; the collection of insurance claims; the rights and duties of cargo-carriers and shippers, of consignors and consignees, of principals and agents; the granting of patents and the registration of trade marks; the arbitration of commercial disputes; the taxation of business enterprises. Common Law Countries and Commercial Code Countries. -Although many advantages would accrue to the trade of the world from unifying and codifying different commercial laws, England and the United States have thus far been reluctant to cooperate with the nations of Continental Europe in an attempt to bring about such uniformity and codification. One of the main reasons for this may be found in the fundamental difference which exists between the common law systems of the United States and England and the systems of the countries of Western Europe, based as the latter are on Roman law. Western European nations draw a sharp distinction between traders and non-traders, business and nonbusiness transactions; they have special commercial codes which exist by the side of their civil and criminal laws. The commercial code of France was promulgated in 1807; it served as a basis for the commercial codes of the South American republics and of Holland. Germany adopted her commercial code after the formation of the German Empire; the influence of the German code may be seen in the laws of Sweden, Norway, Denmark, Switzerland and the former Austro-Hungarian Monarchy. The commercial codes of Italy, Spain, Portugal and Roumania show the joint influence of both French and German legislation. Commercial codes are, as a rule, administered by special tribunals, known as "commercial courts." These courts have registry bureaus where every concern doing business within a certain radius must register. In some instances commercial concerns are required to file periodical reports and sworn statements regarding their financial condition. The advantages accruing from the existence of special commercial tribunals lie in their freedom from technicalities and in their expeditious handling of affairs. The Anglo-Saxon system has no counterpart for such treatment of business differences, the jurisdiction over traders, like the jurisdiction over all other members of society, being vested in the general courts of the land. Decisions rendered by these courts are based upon what may be termed case law and upon isolated statutes. The results are not always satisfactory. Under the pressure of the demands of modern commerce, both England and the United States are gradually breaking away from their common and case law systems when dealing with commercial affairs. England codified many branches of her law pertaining to trade, the most conspicuous examples of such codification being the Sales of Goods Act, the Bill of Exchange Act, the Partnership Act, the Limited Companies Act and the Warehouse Receipt Act. The difficulty in the United States lies in the existence of separate state laws; uniformity and definiteness can not be introduced in our own country except through the adoption of any proposed measure by each state in the Union. The Negotiable Instruments Act and the Warehouse Receipts Act are two measures which have been so far most generally accepted. Rights and Duties of Principals and Agents.-There is substantially little disagreement in the laws of different countries regarding the rights and duties of agents and principals toward each other and toward third parties. The agent must carry out the instructions of the principal and in the absence of specific directions must follow the usual |