COMPETITIVE CONDITIONS IN SOUTH AMERICAN TRADE. 195

Although Chile possesses practically a monopoly of the available
supply, the producers have not been able to control the price of
this commodity. There are wide fluctuations in demand, and tc
a certain extent other substances are available as substitutes.
Because of the diversity of interests involved, it has not been
possible to secure for any length of time any concerted curtailment
of output on the part of the producers, although from time to
time there have been various combinations and agreements. About
half of the cost of the nitrate delivered on board ship at the
point of shipment is made up of the export tax levied by the Chilean
Government. In periods of poor demand nitrate has been frequently
sold at prices which netted a return to the producer below his actual
cost of production. Not only the concerns directly engaged in operating
 the nitrate “oficinas,” as they are called, but the commercial
life of all Chile is affected by a depression in the nitrate industry.!
One of the important by-products obtained in the preparation of
the nitrate for shipment to market is iodine. This is obtained from
the “mother liquor,” which remains after the nitrate has crystallized
 in the boiling vats. The quantity of iodine which can be
secured in this way varies greatly with the raw material obtained
from different sources.
For many years there has been a definite and fairly constant
demand for iodine in the markets of the world. Before the process
of obtaining it from Chilean nitrate was developed the principal
supply was obtained from kelp. This method, however, is much
more expensive than its manufacture from the Chilean source, and
the market is now in the hands of the Chilean producers, who arbitrarily
 fix both the price and the supply. This is done through a
combination of iodine producers known as the “Combinacion de
Yodo” (the Iodine Combination).
This combination was formed in 1894 and has continued active
and effective up to the present time. Its objects are to control the
quantity of iodine produced not only in Chile but elsewhere, to sell
it all through one common agency, and to increase, by means of a
suitable propaganda, the consumption of iodine. The combination
includes every producer of iodine in Chile. In the case of some “oficinas’’
 the “mother liquor” obtained in their operations has too small
an iodine content to pay to extract. In the case of others no attempt
is made to secure the iodine, though it is contained in the “mother
liquor” in quantities which would warrant extraction.
The quantity of iodine which each producer in the combination is
allowed to produce is definitely fixed by the officers of the combi~
nation. Each quota is supposed to be determined on the basis of

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18ee Report of Federal Trade Commission on the Fertilizer Industry, 19186, PD. 17-32.