Jack Boles understands why people in the United States look quizzically at him when he talks about his business plan for Boles & Co. In 1981, when the San Francisco-based trading company was only two years old, he went to New York to raise equity capital for it and returned home empty-handed. A few months later, in London, he was able to line up $7.2 million in a week.

The British -- indeed most Europeans, and the Japanese, too -- have for centuries been doing something close to what Boles proposes to do. "But in New York," says Boles, "when we went to see the biggest names in the investment banking community, by and large their eyes glazed over. They'd say 'Tell me again what a trading company is.' "

A trading company -- the kind Boles is assembling -- manufactures nothing and owns no fixed assets. It buys where it finds the lowest cost, consistent with quality, and it sells where it gets the best price. It takes payment either in cash or in goods. It supplies capital technology, hardware, commodities, or raw materials. It is completely market-driven. It is also virtually unheard-of in the United States -- unheard-of by Americans, that is, but not by the Japanese.

The Department of Commerce could not supply figures but a Japanese source which isn't eager for publicity, reluctantly shared its own. Of the nearly $240 billion in goods and services exported by the United States in 1981, an estimated $22.7 billion, or 9.5%, passed through the 27 Japanese trading companies operating in the United States. And just 9 Japanese trading companies handled the bulk of those exports, $17.3 billion worth.

So, the Japanese trading companies profit not only on what they sell in the United States, where they imported $16.5 billion of goods and services in 1981 -- slightly more than 6% of all U.S. imports -- but also on the goods and services they export from the United States to Japan and to third countries.

Boles thinks that is not a bad business for an American to be in. He optimistically projects that by 1986 Boles & Co. will earn $150 million in pretax profits from $1.5 billion in revenues. By 1993, according to the Boles plan, the revenues will have risen to $18 billion, and the pretax profit margin will have stabilized at 2% to 3%. While that growth rate sounds ambitious, Boles claims it is no higher than the pace once set by Mitsubishi International Corp., the largest of the Japanese trading companies.

So far Boles & Co.'s revenues have grown from $396,000 in 1979, its first year, to an estimated $70 million in 1982. But it is the nature, not the size, of Boles & Co.'s business that is instructive.

Jack Boles, 46, appears charmingly bemused, with steel-rimmed glasses that seem just a little crooked on his nose and with hair that defies the brush. But for his expensive suit, he could be a midwestern history professor. He has had more luck in business than in politics. In 1968 he left his post as new-ventures manager for E.I. Du Pont de Nemours to become chairman of Citizens for Rockefeller. In 1972 he left a job as vice-president of Itek Corp. and headed the New Hampshire Presidential primary campaign for Rep. Pete McCloskey of California. From 1972 to 1979, while consulting, to pay the bills, he conceived the business plan for Boles & Co., which he based on several observations about how the world was, and still is, changing.

First, he decided that the United States is not the self-contained market that it once was or that many Americans still consider it to be. Asian and European steel makers, auto makers, and electronics companies are not just a temporary nuisance. They see the United States as part of their world market, and that is where they intend to keep doing business.

Second, and less obvious, Boles perceived that world commeree was becoming less product-driven and more marketdriven. Product-driven commerce is Henry Ford telling consumers what color Model T -- black -- they can buy from him. Or it is, as Boles says he observed more recently, the attitude displayed by Itek executives telling their overseas sales reps: "This is what we make; now go sell it."

Market-driven commerce, on the other hand, is illustrated by a story told by Washington attorney Frank Weil, who served in the Commerce Department during the Carter Administration. A couple Weil knows bought an electric rice cooker manufactured in Japan. They used it frequently. But during a transfer from the United States to Indonesia, the rice cooker was damaged. So the couple bought a new one -- same brand, same model -- to replace the damaged one. It cooked rice, but not the same way as the old one did. They returned it to the store and complained. The store manager was puzzled until he asked them where they had bought their first machine. "Ah," he said. "Americans like their rice one way. Indonesians like theirs another. So we make the rice cooker different for each country."

Stories like this, some suggest, make U.S. managers, especially of small and middle-size manufacturers, appear insensitive to fine distinctions in the marketplace and altogether less clever than their non-U.S. competitors. Such self-flagellation is pointless, in Boles's view, because it ignores a couple of historical facts One is that the U.S. domestic market has been voracious. U.S. industry, unlike the European or Japanese, has never had to look beyond its national borders for growth, respectable size, or profitability.

Another fact, often overlooked, is that U.S. companies have been innovators. When yours is the only computer, the only color TV tube, the only commercial jet aircraft, the world buys what you make or does without.

A third condition derives from the first two. Since U.S. industry, by and large, has been able to grow and profit by sticking close to home, and since foreign markets have usually bought U.S. goods when they lacked their own supplies, there has been no need for a domestic mechanism that would facilitate international trade across U.S. borders. In other words, until recently there was no need for what Boles calls an integrated trading company. Today, he obviously believes, there is.

One way to describe the kind of company Jack Boles intends to build is to illustrate the range of relationships it might have with a U.S. manufacturing business. Suppose the business, Apex Inc., makes a low-technology consumer product -- a rotary lawn mower -- and sells into a regional market from its sole plant in Indianapolis.

Apex management doesn't know how the Swiss cut their grass. The chief executive officer has never given it a thought. But one day he gets a call from Boles & Co.'s specialist in outdoor and recreational products. The specialist tells Apex that Boles & Co.'s marketing man in Zurich has spotted an opportunity to sell a lightweight rotary mower there. If Apex is interested, Boles & Co. will guarantee to take 20% of its production for the next 12 months. Boles & Co. will pay cash on Apex's standard terms and will take title to the goods FOB factory.

So far that is nothing very special. Any U.S. manufacturer can get that kind of service from any number of export management companies that usually specialize in a few product lines and in selected foreign markets.

Boles & Co. promises more. An integrated trading company's worldwide intelligence network can snoop out changes in lawn mower technology long before Apex is likely to hear about them. Forewarned, Apex can stay ahead of the competition. Should the trading company's Zurich man later detect a Swiss market for electric snow blowers, Boles & Co.'s merchant banking arm will help Apex raise capital in Frankfurt, if that is where the best deal can be made, to finance product development and plant expansion. And Boles & Co. can help Apex buy components for its snow blower from the least expensive source -- say, chrome-plated handles from Korea. With Boles & Co.'s help, Apex has become a participant in international capital and commercial markets without its chief executive officer ever leaving Indianapolis.

But there is one big caveat to the manufacturer. "In a trading company," says Boles, "there can be no allegiance to source." If an equivalent lawn mower became available at a lower price in Yugoslavia, Boles & Co. would supply its Swiss market from there and drop the Indianapolis line. Why shouldn't it? If Boles & Co. doesn't bring the Yugoslav machines to Zurich, someone else will. A trading company's business is trade, irrespective of source or market.

Just to sit in the Boles & Co. reception room in suburban Foster City, a landfill in San Francisco Bay, is to travel vicariously as the receptionist takes telephone calls from Zurich, New York, and Mexico City. "There is," admits Boles & Co. vice-chairman Charles Allen, "an air of mystique about a job that takes you to Londton and Paris more often than to Indianapolis." Allen, 64, worked with Boles at Itek, where Allen headed the corporation's international operations from London.

Because almost everything a trading company does is predicated upon risk taking, it is no place for the fainthearted. On the other hand, Allen says, Boles & Co once had a Hong Kong agent at the other extreme. "He'd be on an airplane with four big Formosan wheeler-dealers, and he'd call in to say we could corner the plywood chip supply in the Philippines. He called me once from the Thai-Cambodian border where he'd run across a couple of guys who were smuggling diamonds. He said we could make a killing." Allen says they had to let him go. "He was too entrepreneurial -- a charming rogue, but he actually never did much productive work."

The trading company Boles wants to build amounts to a confederation of entrepreneurs, each a specialist in some commodity, product line, market, or transaction. What binds them together is the company's communication system "There's a story," says Allen, "that in any week, Mitsui's intelligence traffic actually exceeds that of the U.S. Department of Defense."

International trading is a business that has no problem attracting talent. Feature stories about Boles & Co. in The New York Times and The Wall Street Journal early in 1981 precipitated a flood of resumes -- more than 3,000, according to Allen. A classified ad caught the attention of Christopher d'Arnaud-Taylor, then head of a $70 million international trading company based in London, now president of Boles & Co.

Steven Petersohn, who at 25 would be a David Stockman look-alike if he hadn't already lost half his graying hair, showed up for his 9 a.m. job interview in the summer of 1979 wearing shorts and sandals. "I knew I was going to like this place," he says, "when they called me at 11 and told me to report to work in an hour." Petersohn loaded cases of Thomas Cooper's Real Ale into his Volkswagen and drove to bars along El Camino Real, south of San Francisco. His grass-roots market survey persuaded Boles & Co. to import the Australian beverage, and Petersohn was given responsibility for national distribution. Later, on three weeks' notice, Boles & Co sent Petersohn to London, where he conceived the idea of shipping California wine in bulk to England. It could be bottled there and then shipped duty-free to other Common Market countries. Boles's wines, labeled "Californian," are now for sale in France, among other places.

Now Petersohn, wearing a white shirt and a three-piece suit, is back in San Francisco as assistant to the president of Boles BanCorp., a merchant bank recently added to Boles & Co.'s portfolio. "Jack Boles believes in encouraging an entrepreneurial spirit. I've only been here three weeks," Petersohn says, "but I'm expected to begin putting together my own deals." In his briefcase was a book called How to Read a Company's Financial Reports.

Lo Christy, who has a PhD in cybernetics, has worked as a cattle farmer and a general contractor in residential housing. Before joining Boles & Co. he was the director of technology transfer programs at the Stanford Research Institute, a consulting firm. He had been with Boles only four weeks.

"Boles & Co.," Christy says, "is trying to position itself as a problem-solving organization" by addressing the developing world's attempts "to close the gap between the technology they have and the technology they want.

"A trading company with its eye on the market in Africa or South America can come back to the United States and respecify a product to suit the culture, the sophistication, and the environment of the foreign market. The manufacturer is often too close to his product to do that, and the smaller manufacturer has no way of knowing, by himself, what is needed.

"As an example, there's a big need in the developing world for water purification. The reverse osmosis [purification] technology exists, but the companies that have the technology don't have the marketing. We'll go to the market, figure out how the technology has to be hardened and packaged to fit the on-site need, and bring that information back to the maker. Then, maybe, we'll set up a joint venture with a company in the Philippines, teach them how to franchise the sales, installation, and management of this technology."

The individuals at Boles & Co, like Lo Christy, seem to have a view of business that is not obscured by cultural bias, limited by national borders, or cluttered by organizational hurdles. They don't see problems; they see possibilities.

"They opened our eyes," says Hank Abrahams, chairman and CEO of Allied Canners & Packers Inc., a Boles subsidiary since May 1981. Pre-Boles, Allied exported canned fruits and vegetables processed primarily in California, and its business was declining as California produce became less competitive in the world market. "In the old days we worked from a supply base," Abrahams says. "We had a supplier, and we were married to him. Now we're working from the outside in. We find a market, find out the needs, and source it wherever we can. We sell corn from the Midwest, cherries from Michigan, coffee creamer from Illinois, grapefruit juice from Texas, shrimp from New Orleans, and pineapple from Thailand. Yesterday we offered Japanese mandarin oranges to a Swiss account."

To say exactly what Boles & Co. does or precisely what it looks like, you must specify a date -- today -- because tomorrow the company and its trades will have changed. That is how quickly the company is growing and adapting its shape to that growth. In the time it takes to convert these words from penciled notes to print on a magazine page, Boles & Co. probably will have become one of four wholly owned subsidiaries to an as-yet-unnamed holding company chaired by Jack Boles.

Boles & Co. will handle all foreign and domestic product and technology trading, which, in addition to Allied's business, includes:

* Importing Australian, Scottish, and British beer.

* Exporting bulk California wines to Europe.

* Exporting frozen chickens and fresh eggs from South Carolina to Puerto Rico and Hong Kong.

* Importing British reconnaissance cameras for the U.S. Navy and selling the same cameras to Canadian and South American militaries.

* Running a Palo Alto travel agency, which might be for sale.

Nelson Hunter, president of Boles BanCorp., has been in London making a $3 million private placement for a Silicon Valley satellite communications company. Simultaneously, Boles BanCorp. was helping the company owner find a corporate buyer for his business.

Boles Commodity Corp. is not yet completely formed, but its first division, an office that trades in edible oils and fats, is already in full swing. Eventually, the commodity company will trade in foreign currencies and the commodities futures markets -- for starters.

Boles Confirming Corp., also not yet formally created, will act as financial intermediary between mid-size U.S. exporters and their overseas customers. For a fee, the confirming house assumes the risk of invoice collection and takes care of other niggling details for clients, which it will also try to steer to the trading company.

Jack Boles says that he has or can find plenty of capital and that, so far, he turns down more trade deals than he accepts. What he could use more of, he says, is competitors.

"A pioneer is a guy with arrows in his ass," says Charles Allen. "We don't want too many arrows in our ass."

There are models for Boles & Co. to draw on in fashioning its own business, most visibly the Japanese trading companies. "They tend to integrate backward toward the source," says Boles. "They especially like to own natural resource companies. We don't want to own anything."

Boles pushed hard for legislation, finally approved last fall and signed by President Reagan, that permits bank holding companies to invest in trading companies, an activity from which banks have been barred since the 1930s. While Boles had no problem raising capital for his company in Europe, he believes that American banks, probably the major regional banks, will have to be part of any industry growth. "The country badly needs other trading companies," he says, "and we need them to prosper. We need partners in deals. We need to hone our competitive instincts."

Trading companies, no matter how many pop up in Boles's wake, won't bail out U.S. industry, won't keep the United States "number one," as it likes to think of itself. They only facilitate trade; they can't make a noncompetitive product competitive again. Boles & Co. will still be selling rotary lawn mowers in Zurich when Apex Inc. files for bankruptcy.

Jack Boles's definition of a general trading company: "It is an integrated financial institution that has the ability to move products, services, and currency on a multilateral basis with equal facility in and out of hardand soft-currency countries. It has to be totally market-driven. There can be no allegiance to source. . . . It becomes in essence a nation-state. . . . Its reach is global. It is generally apolitical and altogether transnational."

It is, after all, a sobering prospect. Jack Boles is building a company, and maybe an industry, that can, with equal facility, be the conduit of U.S. trade growth and prosperity or of a hemorrhage of capital and technology. Either way, Boles & Co. is likely to prosper.