Company News and Views

to another
A person cannot recover for a _voluntary service_ that he has rendered
to another. A man would be very mean indeed who refused to pay another
for any service rendered to him that was truly valuable; yet if he
would not do so the man rendering the service could get nothing
through the law. Suppose that a person when walking along a road
should see some cattle astray in a corn-field having a good time with
a farmer”s corn. He knows they are in the field for business and in a
short time, unless driven out, will get the best of nature and down
her efforts in corn-raising. In the kindness of his heart he jumps
over the fence and succeeds in driving them away. Suppose there
happens to be among the number an unruly animal which is unwilling to
leave such a tempting field of plunder and turns on him and gores
him, and he is taken to a hospital. The farmer finds out who drove out
the animals, and of his injury, but declines to give him any reward
whatever. Can the man recover anything? The law says not, because the
service is purely voluntary.

great commercial nations of the world, it should now remain for us to
review these conditions in the United States
Having reviewed the industrial and trading conditions of the other
great commercial nations of the world, it should now remain for us to
review these conditions in the United States. But the United States is
so large a country, and its trading and industrial interests are so
diversified and extensive, that it would be impossible for us in the
limits of our space even barely to touch upon all these interests. So
that with respect to the ‘Trade Features of the United States’ we
shall simply confine ourselves to one part of the subject–namely, the
character, extent, and importance of our foreign trade. And we shall,
further, have to restrict ourselves in the main to our exports. These
will be found to be principally not manufactures, but the products of
our great agricultural, mining, and forest industries. The total value
of the manufactures of the United States amounts in round numbers to
the immense sum of $10,000,000,000 annually, a sum considerably more
than a third (it is thirty five per cent.) of the total value of the
annual manufactures of the world. But only a very small portion of
this vast output is exported. The greater portion of it is used to
sustain the still vaster internal trade of our country, a trade which
amounts to more than $15,500,000,000 annually, an amount not far short
of being one third of the total internal trade of the world, and not
far short of being twice the internal trade of Great Britain and
Ireland, the country whose internal trade comes next to ours. Our
exports, therefore, are not in the main manufactured goods, but
breadstuffs, provisions, and raw materials, the production of our
farms, our plantations, our forests, and our mines. But principally
they are the products of our farms and our plantations, for with the
exception of cotton we do not export much raw material. Nearly all the
raw material we produce (other than cotton) we use in our own
manufactures. And even this is not enough, for in addition we have to
import considerable quantities of raw material for our manufactures
from other countries, the principal items being raw sugar, raw silk,
raw wool, chemicals of various kinds including dye-stuffs, hides and
skins, lumber, tin, nickel, and paper stock.

Pooling agreements have never been legal in this country. Being
illegal by the common law, they could not be enforced in the courts.
Section 4 of the interstate commerce law made it unlawful for the
carriers subject to the act to pool their freights or the earnings
from their freight traffic, and made it necessary for the traffic
associations to reorganise without the pooling agreements. Until March
22, 1897, it was supposed that the associations, without pooling
agreements, were legal; but, on that date, in the case of the United
States _vs._ the Trans-Missouri Freight Association, the United States
Supreme Court held that the law of July 2, 1890, popularly known as
the Sherman anti-trust law, applied to railways, and made it illegal
for railway companies to contract with each other to maintain rates.
Thus at the present time traffic associations are permitted neither to
contain a pooling feature nor to provide arrangements for the
enforcement or maintenance of rates, although the charges may be
reasonable and be sanctioned by all the carriers interested. The
associations may now legally exercise those functions which are
connected with the joint business of their members, and they may act
as bureaus of information regarding the competitive traffic. They
have no power to make or to maintain rates.

letter is to be written, and the address of the person for whom it is
intended is usually written at the lower left-hand corner instead of
on an envelope
Commercial usage, however, recognises a particular form in which this
letter is to be written, and the address of the person for whom it is
intended is usually written at the lower left-hand corner instead of
on an envelope. Commercial drafts usually reach the persons upon whom
they are drawn through the medium of the banks rather than directly by
mail. Let us illustrate. Suppose that A of Chicago owes B of Buffalo
$200, and B desires to collect the amount by means of a draft. He
fills in a blank draft, signs it, and addresses it on the lower
left-hand corner to A. Instead of sending it by mail he takes it to
his bank–that is, deposits it for collection. It will reach a Chicago
bank in about the same way that cheques for collection go from one
place to another. A messenger from the Chicago bank will carry the
draft to A”s office and present it for payment or for acceptance. If
it is a _sight_ draft–that is, a draft payable when A sees it–he may
give cash for it at once and take the draft as his receipt. If he has
not the money convenient he may write across the face ‘Accepted,
payable at (his) Bank,’ as in the illustration. It will then reach his
bank and be paid as his personal cheque would be, and should be
entered in his cheque-book. Banks usually give one day upon sight
drafts. The draft will not be presented a second time, but will be
held at the bank until the close of the banking hours the next day,
where A can call to pay if he chooses. Leniency in the matter of time
will depend largely upon B”s instructions and the bank”s attitude
toward A. If the draft is a time draft–that is, if B gives A time, a
certain number of days, in which to pay it–A, if he wishes to pay the
draft, _accepts_ it. He does this by writing the word _accepted_ with
the date and his signature across the face of the draft. He may make
it payable at his bank as he would a note, if he so desires. He then
returns the draft to the messenger, and if the time is long the draft
is returned to B; if only a few days, the bank holds it for
collection.

$86,000,000 annually in imports
Japan has a foreign trade of $60,000,000 annually in exports and
$86,000,000 annually in imports. Of the export trade the principal
part, running from a fourth to a third, is with the United States. The
next largest part is with France, the next with Hongkong, the next
with China, and the next with Great Britain. But Great Britain”s
direct share is not more than a twelfth. Of the import trade the
principal part, almost one third, is with Great Britain. The United
States” share is about a twelfth, and that of France about one
twenty-fifth. The principal exports are RAW SILK (about one third of
the whole), SILK GOODS (about one tenth of the whole), TEA, coal,
copper, rice, and matches. The export of matches amounts to $2,500,000
annually. Characteristic exports, though they do not figure largely in
the total amount, are floor rugs, lacquered ware, porcelain ware,
fans, umbrellas, bronze ware, repousse work, paper ware and
papier-mache, fibre carpets, and camphor. There is also a large export
of fish, shellfish, cuttlefish, edible seaweed, and mushrooms to China
and other Asiatic countries. The chief import is RAW COTTON (almost
one fifth of the whole). Other important imports are sugar (although
she raises almost 100,000,000 pounds of sugar herself annually),
cotton yarn, cotton goods, woollen cloths, flannels and blankets,
kerosene oil, watches, and articles of iron and steel as above
enumerated. The fishing industry is a very important one and over
2,500,000 people are engaged in it. The number of fishing-boats is
about 400,000. The fish trade, which includes seaweed, is (when not
for home consumption) principally with China.

continent of Asia, somewhat as the British Isles are situated to the
west of the continent of Europe
Japan consists of a group of islands situated to the east of the
continent of Asia, somewhat as the British Isles are situated to the
west of the continent of Europe. But the Japan islands are of volcanic
origin and are very numerous. There are said to be 4223 of them.
However, there are only four that are of important size, and it is
these that are usually thought of when Japan is spoken of. The area of
these four islands is 147,655 miles, which is almost a fourth more
than that of Great Britain and Ireland. The population (census of
1895) is 42,270,620, which is 4,000,000 more than that of Great
Britain and Ireland. The population per square mile is 286, which,
though large, is not quite so large as that of Great Britain. If,
however, we do not take into consideration the northern island (Yezo),
which is still partly inhabited by uncivilised aborigines, the
population per square mile is 375, which is considerably in excess of
that of both China and Great Britain and Ireland, though still
considerably less than that of England alone. The above statistics do
not include the island of Formosa (area 13,500 miles, population
almost 2,000,000), which was transferred from China to Japan in 1895,
at the close of the late Chino-Japanese war.

because they are willing to take goods at lower prices than they would
if they were to be responsible for all losses
The courts have permitted carriers to thus lessen their liability
because they are willing to take goods at lower prices than they would
if they were to be responsible for all losses. They now virtually say
to the shippers: ‘If you are willing to be your own insurers, or
insure in insurance companies, and hold us for no losses except those
arising from our own negligence, we are willing to carry your goods at
a much lower rate.’ And, as shippers are willing to take the risks
themselves for the sake of getting lower rates, the practice has
become universal for lessening the liability of carriers in the manner
described.

in connection with the storage features
Many of the warehouses find it advantageous to do a banking business
in connection with the storage features. Very frequently, for the
convenience of the importer, goods are consigned to the warehouse and
sent subject to a sight draft for the amount of the invoice. The
warehouse company will pay the draft with the exception of about
twenty per cent., which the importer is expected to furnish. If the
duty is paid then the value upon which a loan is estimated is based
upon the market value of the goods in this country. After the draft
has been satisfied the goods are placed in the stores of the warehouse
company subject to the customs and storage charges. The amount
advanced by the company bears interest at current money rates. In
illustration let us suppose bonded goods to be shipped and invoiced at
$10,000, customs duty $4000, and the goods consigned to a bonded
warehouse. The draft ($10,000) is sent to the warehousing company,
which advances $8000, and together with the $2000 received from the
importer pays the draft. The $8000 loan made by the company is then
charged to the importer at the usual interest rate, and when the
borrower withdraws his merchandise from storage he will have to pay
the government the $4000 customs duty and pay back his loan of $8000
to the warehouse company, together with interest and storage charges.
If any portion of the goods stored is withdrawn for use in the
business of the importer, the company will rebate a proportionate
amount of the interest. If goods decline in value as collateral in
storage the company will demand additional margin for its protection.
If goods appreciate in value the loan may be increased. The market
value of the goods is ascertained by the appraisement of some expert,
who receives a commission for his services.

transfer of credits
The purpose of the clearing-house is largely to facilitate the
transfer of credits. This is explained by the following illustration:
Suppose that Brown and Smith keep their money on deposit in Bank A and
that Brown gives Smith his cheque for $100 and Smith deposits it in
the bank to his (Smith”s) credit. The officers of the bank will
subtract $100 from Brown”s account and add the same amount to Smith”s
account. No actual money need be touched. It is simply a matter of
arithmetic and bookkeeping. Credit has been transferred from Brown to
Smith. If all the people of a city kept their money in one central
bank there would be no need of a clearing-house. The bookkeepers of
the bank would be kept busy transferring credits from one customer to
another on the books of the bank. But if Brown keeps his money in Bank
A and Smith keeps his money in Bank B it is necessary that Bank A and
Bank B come together somewhere to conveniently make the credit
transfer, and this is practically what they do in the clearing-house.
Then, again, if Bank A should be located in San Francisco and Bank B
in Boston, the difficulty of transfer of credit is greatly increased.