greatly appreciated. There is a good opportunity to improve the engineering of Asia as related to fuel economy in both production and consumption of steam.

STEAM BOILERS.

Special caution should be exercised in sending steam boilers abroad, as in some of these countries there are local laws governing the construction and operation of any boiler or tank that is to be under pressure. Regardless of the merits of these rules, it is necessary to enforce them, and the little differences between European and American practice sometimes cause embarrassment. This should be remembered in connection with the exportation of road rollers, locomotives, hoisting engines, air receivers, and the like, as well as boilers alone, since the same inspection is in force. The writer has reports of one case where the working pressure on a battery of boilers was reduced 15 pounds (1 atmosphere) because the plating lacked the thickness required by the rule by only one-tenth of a millimeter. In another case the pressure on a battery of several thousand horsepower was reduced a like amount because certain joints were quadruple-riveted, a type of construction not contemplated by the local rule. In many districts spring-loaded safety valves are not admitted. Opposite page 255 is a photograph taken in the busiest part of Canton, showing what happens to the weight and lever type. Sometimes in place of the brick the lever is fastened in place with wire. The firemen seem to be annoyed by a valve that leaks. There are certain districts where this has become what might be called standard practice. Explosions do occur. The writer was told of a serious explosion on the Malabar coast in India which resulted from just this thing, and, moreover, it was a portable boiler that failed.

Although the Department of Commerce has copies of most of the boiler laws now in force in Asia, it is not quite safe to rely entirely on them, as these codes are being revised. In every case where such equipment is exported all parties concerned should have a very clear understanding as to just what inspection rules are to be applied. These remarks apply with especial emphasis to the Dutch East Indies, where there is the so-called "Java steam law," and to British India, where, at the moment, each Province has its own set of rules, but where efforts are being made to adopt a uniform code. Usually the inspector in Asia wishes to be assured that the boiler has been made of appropriate materials and under proper inspection, and it will ordinarily facilitate matters very much if suitable certificates are sent forward. Also, if the boiler is insured for a year it demonstrates to the inspector that the boiler is offered in good faith and at least conforms to American standards, which are recognized abroad as being pretty good. It is strongly recommended that spring-loaded safety valves be used whenever they will pass inspection. The photograph explains why, but if laws require the dead-weight type it becomes necessary to comply.

2 This subject is treated more fully in connection with the reports on the several countries, and those who are especially interested can secure further data through specific inquiries sent to the Bureau of Foreign and Domestic Commerce. Basic costs to users fluctuate rapidly, and fluctuations in exchange have been wide and rapid, thereby adding a further disturbing factor when calculations are made in American money. But no matter how far this complicated subject is analyzed it comes back to the conclusion stated above,

MISCELLANEOUS FACTORS AFFECTING SALES POLICY.

BANKING AND TERMS OF PAYMENT.

Certain manufacturers have asked for information regarding banking facilities in Asia. Much has been written about the credits extended by Germans in pre-war days. As applied to transactions in factory machinery the matter is simpler than for other merchandise of a more staple nature, as these usually represent investments in fixed plant as distinguished from a merchant's inventory. Practically all of this machinery is sold through agents or importing merchants in the different cities abroad. From the nature of their business it is necessary to keep their capital turning as rapidly as possible, probably once in 60 days or less. It is customary for the American export merchant when shipping such equipment to finance these exports through an exchange bank, sending the draft forward attached to the bill of lading (and other documents) through that bank. Usually on selling his draft to the bank the merchant can pay the manufacturer in full, and from that point of view his interests are satisfied. However, at destination the exporting merchant needs time to collect from his customer. During the war some manufacturers required that orders be accompanied by an irrevocable credit. It will be plain that this imposes a real hardship on the merchant in Asia, as that amount of his capital is tied up and inactive possibly for months. Although this procedure is safe enough, ordinarily it will not be found practical in normal times.

Sometimes the draft is D/P (documents against payment). In this case the bank holds the shipment as security until actual payment is made. Unfortunately, this also does not satisfy the importer, who wants to collect from his customer, if possible, before he himself needs to settle the account.

If the manufacturer covers a given territory through a merchant firm as agent, he has very little occasion to worry about terms of payment, provided his agent has an American office, as that office will finance the shipments, but if the agent has no office in America it then becomes practically necessary for the manufacturer to absorb in his own organization the duties of the export merchant, which include financing the shipment. Under these conditions it is not only legitimate but almost necessary to increase the selling price enough to correspond to the charges of the export merchant, which for machinery transactions will approximate 2 per cent. Under these circumstances it will also be necessary to decide what form of draft will be issued. Normally the agent overseas will want it drawn D/A (documents against acceptance) 30, 60, 90, or more days. As the exchange banks require two names on all such paper, it is clear that the manufacturer is accepting a real responsibility if he concedes this point, which will usually be necessary; this demonstrates one of several reasons why the agent should have an American office.

It is in this connection that certain criticism is directed at the banks. If a manufacturer is to extend credits to importers in Asia, he commonly can get his credit information only from the banks, which in turn always refuse to extend the credit they recommend because of this two-name rule-yet this is the general attitude of the exchange banks.

However, it is not recommended that manufacturers engage in unbusinesslike practices, nor is it to be inferred that European manufacturers do so. On the contrary, if it is found that liberal terms are extended, most probably some safe method has been developed. It is not possible to take up here the various methods followed, but one example will serve as an illustration.

USING THE BANK TO ASSIST IN MAKING SALES.

In some countries there are discount banks (not to be confused with the exchange banks). If a buyer wants a very long time in which to pay and the importer agrees, the transaction is followed in the usual way, except that on delivery the buyer issues an acceptance to the importer, which the bank discounts. In this way the manufacturer, exporter, and importer are all paid in full and the transaction stands in effect as a loan from the bank to this buyer. When the acceptance is discounted "without recourse," the bank has full responsibility, but this is seldom done and the importer's name is commonly on the acceptance throughout its life.

In some places people speak of discounting "del credere," which at first suggests that the acceptance is "without recourse," but there are certain supplementary clauses that restrict this very much.

Almost everywhere in Asia one can find plenty of banks to enable him to take care of ordinary exchange transactions. It is true that there is probably plenty of room for more competition. Sometimes the existing banks seem somewhat arbitrary. There is a great shortage of discount banks.

From the above it is plain that the manufacturer has few responsibilities if he sells "cash against documents f. o. b. factory or even "cash against documents f. a. s. New York" (or equal), but as soon as he undertakes to quote "c. i. f. Asiatic port" he needs men in his organization who understand the meaning of all these and other terms and can distinguish clearly between the responsibilities of railway, stevedore, steamship, insurance company, and consignee and also appreciate clearly the differences between the different kinds of insurances 99.66 ""all risks, W. a., war risk," etc.

66

99 66

f. p. a., But there is another angle to this banking situation that is of great importance to American manufacturers of machinery, and that is the influence of nationalism and investment banking in controlling the competition for business. Probably 90 per cent of the railways of China are forced to buy their materials in markets that are inferior to those of the United States because these roads were built under foreign loans, the agreements for which stipulate that purchases shall be made in the lending country.

The principle applies to other countries as well as China and to industries and mines as well as railways. Frequently where European capital is employed it has been very difficult for American. manufacturers to supply the equipment, even though they might

offer better goods at a cheaper price. But, in the future, it will probably be even more difficult. The war has intensified nationalistic feeling everywhere. There is a tendency for manufacturers, merchants, banks, and diplomatic services of the several countries to coordinate their efforts along nationalistic lines, and this, of course, implies a certain discrimination against outsiders. Unquestionably Americans are at a disadvantage in these matters. Regardless of what views we may have as to the unwisdom of such a strongly nationalistic policy on the part of others, American business is still forced to depend upon foreign banks very commonly even for routine services. Obviously it is simple wisdom to encourage American banks in their foreign efforts. Also, now that the United States is a creditor nation, it will be desirable, if not necessary, for us to invest large sums abroad. The American manufacturer of industrial machinery has a very active interest in having these investments so made as to stimulate his business, as has already been indicated on page 37.

European countries have engaged in the "peaceful penetration" of various districts through coordinating the activities of diplomatic services, railroads, and banks, and while the present writer does not in any way recommend this method for the United States it will undoubtedly assist American diplomats and interests generally if our manufacturers will take a more active interest in these problems. It is at this point that business, banking, and world politics mingle. The subject becomes involved and will not be pursued further here, although it is of absorbing interest.

PATENTS, TRADE-MARKS, AND COPYRIGHTS.

In all the countries of Asia there is a tendency toward the copying of designs, the pirating of trade-marks, the imitation of labels, containers, etc., as well as other abuses from which manufacturers wish to be protected. The laws covering these matters are not so well developed as in many other countries, but in most instances there is a certain amount of legislation whereby patents may be issued and trade-marks and copyrights registered. Flagrant disregard of the various laws is exceptional, and manufacturers should arrange for appropriate protection before establishing a line of products in these markets. This must be done according to the laws of the several countries, and it is necessary to be very punctilious in conforming closely to all details so as to comply not only with these foreign laws, but also to keep within the practices of foreign jurisprudence.

In some instances unauthorized parties apply for the registration of American trade-marks for speculative purposes-a procedure that may prove profitable in those countries that base ownership of marks on priority of registration regardless of prior use by another. When these fraudulent registrations are secured it is practically equivalent to the acquisition of an exclusive agency for the products involved unless the manufacturer is willing to adopt a new trade-mark for

The Bureau of Foreign and Domestic Commerce has collected a great deal of information on this subject in the Foreign Tariff Division and can supply, on request, information and advice on specific problems.

that particular market, and this in turn usually involves the sacrifice of good will that may represent a great deal of expensive advertising. A similarly embarrassing situation develops sometimes when it is found that registration has been made in the name of the local agent or importer. As long as the agent is satisfactory there are no complications, but when the principal wishes to make a change the agent may have the power to prevent the importation of the protected goods, unless it be done on terms he may dictate. During the war similar complications arose where the agent's name was placed on the enemy trading list, as happened in some instances. Agents should be instructed to obtain registration in the name of the principal.

When an agent is a man of integrity and dependability he can often be of great service in matters of this sort, but ordinarily it is a legal matter and should be handled by competent attorneys. Also it should be remembered that these rights will not protect themselves, and the manufacturer should be prepared to resort to litigation should this be necessary. This must be conducted under the laws of the foreign country involved, and the case must be handled in. accordance with the alien procedure. One should be very careful to handle these matters so as to be sure of having a good case at court if litigation should be necessary.

PLANNING A TRIP TO ASIA.

NECESSITY OF ACCURATE INFORMATION AND PROPER CAUTION.

Those who are considering their first trip to the Orient seem to find it difficult to plan intelligently. If the individual is of a methodical turn of mind, there is a temptation to work out an itinerary for months in advance; but this is not wise if arrangements make it necessary to adhere closely to such a schedule, for the unexpected frequently develops and usually it will be found that an oriental trip requires much more time than is anticipated, for the traveler should usually allow a good deal of time in which to get an understanding of each new country. Conditions in Java or China or any of these other countries need to be seen to be appreciated and will usually require thoughtful study on the ground in addition to what can be learned by reading, though, of course, a trip to Asia deserves a good deal of related reading.

People who are rather impulsive sometimes fail to give sufficient care to their plans, and in Asia it is amusing to observe the things that happen to such individuals. For example, in Calcutta there are 13 successive holidays early in October. Allowing for the demoralization preceding and following this celebration, one landing there about September 20 is very apt to waste an entire month in expensive surroundings.

But matters can easily become even more serious. By reaching certain districts in the very hot or rainy season one can come near wasting his time and money altogether. In 1919 there was a war on the Afghan border of India, followed by a peace conference at Rawalpindi, in northwestern India. These negotiations were conducted, to a very large extent, on days when the thermometer went above 120° F. That may be all right when really necessary, but