CONDITIONS IN PARTICULAR INDUSTRIES. 209

rompany to the steelworks in the combination, while the second contract
 specifies the relations of the steelworks to one another.!
Each member of the combination has a quota allotted to him based
on the amount of crude steel originally allotted to him by the agreement.?
 All orders placed with the Stahlwerksverband are distributed
among the members according to their quotas, but with due consideration
 for the geographical location of the works and also for the
specialties of certain works which may be particularly desired by the
customer.? If a plant exceeds its assigned production quota or in
any other way violates the syndicate agreement, it becomes liable to a
fine. The A products have been standardized by the Stahlwerksverband,
 which has established a technical bureau to test the products
»f its members and, if possible, help to increase the uniformity and
improve the quality. The tendency is toward a standardization of
the products in the open market and a specialization of certain plants
in particular lines, thus bringing about a standardization and concentration
 of the entire steel production which entails a more economical
 division of labor and plant organization.
The Stahlwerksverband has a successful selling method. It attempts
 to harmonize as far as possible its own business policy, and
more especially its price policy, with that of the cartels following
or preceding it in the process of production. In particular its aim
is to fix the price of all syndicate products in accordance with the
prices of the raw materials in such a manner as to partake of the
benefits of the German protective tariff duties, while showing at the
same time the utmost regard for the interests of the industries of
the more highly finished products.® The selling company buys the
A products from mills on its own account and disposes of the same
at wholesale on its own account, the profit being distributed amoiig
the members at the close of each fiscal year, after deducting the selling
 expenses, the costs of administration, discounts, and sinking
fund, as a reserve. The surplus is distributed among the stockholders
 of the company as a dividend. The result is an extremely
low selling cost for the distribution of the products of the mills,
amounting during recent years to from 6.4 to 9.7 cents per ton. By
reason of its relation to dealers and dealers’ associations (discussed
below) competition from the syndicate to the consumer has been practically
 eliminated. A member of a former American structural steel
company in speaking of the experience of his company in purchasing
Tag 4 Flechthelm, Die rechtliche Organisation der Kartelle, 1912, p. 18. Co
'F. Walker, op. cit., p. 367.
3 A, Zollner, op. cit, p. 82, and Pt. II, p. 10.
* Kartell-Rundschau, 1914, p. 91,
’ See Pt. II, p. 10.
8J. Riesser, The German Great Banks and their Concentration, pp. 174-175; trans.
ation published by the National Monetary Commission; 6lst Copg., 2d Sess., 8S. Doc.
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