directly to the purchaser are not subject to the payment of the tax, and that only sales which are made in the national territory are so subject, and thus foreign products are not taxed.

If an American company establishes its representative in an office which it has rented or acquired in its own name, the probability is that it is to be considered as doing business in Cuba, notwithstanding that orders taken by the representative are technically accepted at the home office of the company in the United States, and consequently the company is liable to registration and license requirements, as well as to the 12 per cent sales tax and other imposts.

The mere renting of office space, however, is not the ultimate test, for it is just as true that the American firm can provide offices for its representative at its own cost, provided the representative operates the offices in his own name, and provided his sole duty is to solicit orders which are transmitted to the home office in the United States for acceptance, after which the merchandise is shipped direct to customer by the home office. In such case, the representative is classified as a "commission merchant with samples." He must obtain a license to do business as such and is subject to a tax of 1 per cent on the commissions received by him from the company. Trading Through a Commission Agent.

Most of these problems are avoided when the manufacturer employs a Cuban commission merchant (comisionista) to represent his interests, and this is the method adopted when the product of the American house is already in demand in that market. Consignments of merchandise, to be paid for as sold and protected by insurance on the consignee, can be made to the comisionista, or goods may be sent to him for dispatch to the buyer, in the name of the American firm, or the comisionista can receive and indorse over to the buyer the documents covering the shipment to be dispatched by the buyer at the customhouse, and in no case will the American firm be subject to registration or taxation, although under a recent ruling the comisionista is himself liable for sales and profits taxes. Moreover, the comisionista may with equal freedom undertake to see that drafts are paid at maturity and do other things which a traveler could not do without exposing the American firm to the dangers discussed above.

The comisionista, like the notary, belongs to a class that deserves special mention, for his status, rights, and duties are regulated by law, one of the titles of the code of commerce being devoted to a consideration of his privileges and responsibilities. In the commercial code brokers, agents, and factors are regarded not as merchants, but as auxiliaries of commerce (agentes mediadores del comercio), but the comisionista is regarded as a real merchant and is permitted to carry out his commission contracting as well in his own name as in the name of his principal (comitente). In most cases the business is done in the name of the principal, although, as has been said, the comisionista may accept consignments and sell the goods in his own name, paying for them as sold. In either case the comisionista is arbitrarily regarded by the code, not as a mere agent, but as a merchant, entitled to a merchant's privileges.

ommencement of the Commission.

Usually the commission contract arises when the commission merhant accepts the proposal of the manufacturer or exporter, but the w specifies that should the manufacturer send a consignment of erchandise to the commission merchant the contract takes effect hen the latter actually receives and accepts it. If the commission herchant does not intend to accept the consignment, he is obliged to dvise the seller by the most rapid means of communication, con-rining the same by the next mail. Meanwhile he has the obligaon of a bailee and has to exercise due care in the custody and conervation of the merchandise until the seller designates a new comission merchant to take it over or disposes of the goods in some ther manner. He must respond in damages for any negligence, ther in the custody of the goods or in promptly advising the seller f his refusal; on the other hand, he is entitled to be reimbursed or any expenses to which he may be put in the disposition of the hipment.

If funds are to be supplied by the seller for handling the merhandise after arrival, the commission merchant is not responsible or carrying out the commission until such funds are provided, and f the funds sent are insufficient and are exhausted the commission herchant is entitled to suspend activities with respect to the matter ntil additional funds are provided.

Duties of the Seller (Comitente) and Comisionista.

The seller is responsible for all lawful contracts made in his behalf ith respect to the merchandise by the commission merchant and ust pay the commission agreed or reasonably computed and reimurse the comisionista for all necessary expenses.

The responsibilities of the comisionista are set forth in detail in he code of commerce. He must carry out the instructions of the omitente faithfully, but may adopt other measures when necessary or the preservation of the merchandise; he must notify the comiente of any such deviations from instructions promptly; he is an nsurer for all money coming into his possession by reason of the usiness; in buying and selling he must proceed with the care that he would employ if he were conducting his own affairs and is liable or the difference if he pays too much or sells too cheaply; he is olely responsible for any infringement of the laws or regulations of the country, unless such infringement was expressly ordered by he comitente; he must notify the comitente opportunely of the deelopments of importance concerning the business; he can not deleate his authority to another, for the commission is regarded as peronal unless otherwise provided by agreement, but he can employ inisterial employees.

The comisionista must carry the same books that the law requires f all merchants and must render accounts periodically to his omitente. For delay in transmitting surplus funds to the principal he comisionista is liable for interest at the legal rate, and should e return such funds by a method not authorized by the principal e is liable for any resulting loss; but in the absence of express intructions such surplus funds may be returned through the best

channels available at the risk of the principal. The comisionista is held liable civilly and criminally for conversion of money put into his hands in the course of the business.

Good Faith Required of the Comisionista.

The law exacts from the comisionista the highest degree of good faith (uberrima fides) in view of the confidence which must be reposed in him by his principal. To that end he is not allowed to buy for himself anything instrusted to him by the principal for sale without the authorization of the principal nor to sell to the prin cipal merchandise of his own when he has been charged with procuring such merchandise in the open market. He may not alter the marks on the principal's goods, nor may he keep merchandise of the same kind belonging to different principals without taking extraordinary precautions to keep it separated.

He must sell for cash unless otherwise authorized expressly, and if he breaks this rule he is liable for uncollectible accounts. Nevertheless there is nothing to prevent the principal from entering into a del credere arrangement.

Finally, provision is made for revocation and rescission of the commission. The principal may revoke the commission at any stage of the business, becoming responsible for any loss thereby sustained by the comisionista. The contract may be rescinded only in case of the death or civil disability of the comisionista; in case of the death of the principal, his heirs or representatives may revoke the authority granted.

Organization of Commission Merchants in Habana.

The Cuban comisionistas, unlike the notaries and brokers, are not required by law to form "colleges" or self-governing corporations but there has been voluntarily established in Habana an organization composed of comisionistas engaged in import and export called the Association of Representatives of Foreign Firms (Asociación de Representatives de Firmas Extranjeras), whose president, Sr. Armando Marcé, has provided the division of commercial laws with much practical information regarding the operation of commission merchants in Cuba, and who has offered to give attention to specific inquiries from American firms that wish to enter the Cuban market. Members of the association enjoy certain privileges accorded by law; and it is now proposed to establish a class of "commercial notaries," with powers similar to those of American notaries, for the benefit of members of the association.

This association exists, primarily, for the purpose of caring for and watching over the credit and standing of its members and fostering their welfare in general. Its disciplinary powers are indirect but none the less effective. To be admitted into the association it is necessary to have a clean record or to be able to justify any doubtful act committed prior to the application for membership, and any member may be suspended or expelled for failure to comply with the standard of honest commercial practice set by the association. Applicants for membership must, of course, obtain the necessary government license and secure registration with the municipal gov ernment and the mercantile register; in addition, they must satisfy the association that they are maintaining their offices and keeping

their books in accordance with law and good custom. The associa tion has been in existence about two years and is now composed of over 100 firms of comisionistas, representing some 2,000 foreign houses, doing an annual business estimated at $125,000,000.

The association has other activities in its field, also, and has done. much to promote Cuban foreign commercial relations. The association is attempting to organize the facilities for the exchange of commercial and credit information and is boosting the construction of a suitable building to house the Department of Trade-Marks and Patents.

How the Representative Operates.

In the office of each such representative of foreign firms the necessary books are kept and the necessary staff is employed, including travelers who call on the trade throughout the island. When an order is obtained it is transmitted by letter or cable to the foreign house, where a confirmation or contract is made out and the merchandise shipped direct to the buyers. Shipping documents may be sent to the representative with draft attached, but the common practice is to present them through the bank. In most instances the intervention of the representative is limited to this, except that he is in a position to inform the foreign firm of the reasons for the nonacceptance of goods shipped to buyers, or the dishonor of drafts, and may in some cases assist in settling trade disputes between buyer and seller.

The representative sells with the price lists and quotations furnished by the foreign firm. If the subject of the sale is an article of movement in the market, the manufacturer quotes on each change; for instance, in wheat flour, the millers or manufacturers cable daily the fluctuations of the market. With these cables the representative calls on the buyers and exercises his selling efforts. Receiving an offer, the representative cables it to the mill, which by another cable either accepts or refuses the operation. Should the transaction be accepted by the mill the representative makes out a contract in triplicate, which he signs in behalf of the mill (having been previously authorized to do so), and which are also signed by the buyer. The original copy is mailed to the mill or manufacturer, the duplicate is given to the buyer, and the representative retains the triplicate. A standard form of such contracts (printed in Spanish and English) reads on its face as follows:

JOHN DOE, Representative of Foreign Firms

Habana, Cuba,‒‒‒‒‒‒192__. of

Messrs --, of ---, have sold through me to Messrs. as per my cable or letter dated

----, and subject to the conditions on the

On the reverse the following conditions are printed in English and Spanish:

CONDITIONS

Consular charges for invoices and bills of lading will always be for the account of the buyer.

Shippers are not responsible for any loss, delay, or damage that the goods may suffer while in transit. In such cases the buyers will refer their claims properly to the insurance, transportation, or steamship companies.

Shippers are not responsible for delays or losses caused by strikes, embarg wars, or other contingencies beyond their control.

All claims must be made in writing to the seller's representative or his legal agent within 48 hours from time goods are placed on wharf. Each ship. will be considered as a separate contract. Claims against the insurance company for any goods sold c. i. f. must be presented by the buyer to the proper insurance company.

Any addition or correction made on this contract will be void. Any disagree ment regarding this contract will be settled according to the by-laws of the Habana Produce Exchange.

TERMS

F. o. b. means free on board steamer or railroad car at the place from where the goods are to be shipped.

F. a. s. means free alongside the steamer or railroad car at the place from where the goods are to be shipped.

C. & F. means that in the price is included the cost and transportation expenses of the goods to the port or place indicated.

C. i. f. means cost, freight, and insurance paid to the port of destination by the shipper.

The responsibility of the shipper ceases upon delivering the documents from the railroad or steamship company to the buyer.

These conditions are part of the contract as signed by the buyer on the other side.

Quoting Prices with Regard to Consular Invoices.

It is important for shippers to remember that when sales have been made on a c. i. f. bas's the consular invoices should be based instead on the f. o. b. cost of the goods, whenever the goods must pay Cuban duty ad valorem, since the consular regulations do not demand payment of duty on the maritime freight or consular expenses. Sales made for delivery by parcels post must comply with all consular regulations, and consular invoices must be attached. Full information regarding Cuban consular regulations and customs practice is available in the division of foreign tariffs, Bureau of Foreign and Domestic Commerce.

Dispatch of Goods Through Customs.

As a rule, as has been said, the purchaser of goods attends to the dispatch of merchandise through customs, and the comisionista has nothing to do with this procedure. The latter receives a copy of the invoice which is sent to the purchaser, and in some cases duplicates of other documents, and may be occasionally appealed to for assistance in case of need. In some cases the comisionista receives direct the documents controlling the shipment, which he delivers to the purchaser upon the acceptance of draft by the latter, but this is not a common practice. The same may be said with regard to the procedure followed by a very small number of comisionistas of making collections and remitting to the seller. Ordinarily the ship ment is a transaction from the seller to the purchaser, with no inter