10 REPORT ON COOPERATION IN.AMERICAN EXPORT TRADE,
spikes, bed plates, and structural steel, including T, U, and I beams of
more than 80 mm. face. The “B” products include rods, steel
bands, barrel hoops, rolled wire, sheet metal, tin plate, tubes, caststeel
 railroad axles, steel forgings, steel rollers, etc. This division
into “A,” or half-finished products, and “ B,” or staple iron and steel
products, has had a wide influence on the Verband and the market.
The most important arrangement to keep in mind in considering the
Steel Verband is that the Verband has an absolute sales monopoly
only for “A” products, and that “ B* products may be sold by the
plants independently. "This distinction entails the stress of conflict-Ing
 interests in many parts of the industry. The entire demand of
the market is distributed among the members according to the capacity
 of each plant at a certain fixed amount of production called
the plant quota. This quota is relative, i. e., in fixed proportion to
the entire steel production of the syndicate as absorbed by the market.
Sales to foreign markets are also negotiated by the Steel Verband.
All orders placed with the Steel Verband are distributed among
the members according to their quotas, but with due consideration
for the geographical location of the plant and also for certain specialties
 of the plant, which may be particularly desired by the customer.
 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.
All the steel plants in the Verband must dispose of their entire
“A” products to the Verband. Mixed plants are required to purchase
 all their supplies of “A” products over and above their own
production from the Verband, so long as the same is desirous of
sclling. If the Verband is not desirous of selling, the members may
purchase “A” products elsewhere, but under the supervision of the
Verband.
The Verband buys and sells “A” products at its own risk and on
its own account. Therefore it is not an agent, but an independent
selling company.
The quotas of the entire ton production are not only divided among
the plants pro rata, but each plant quota in each line or type of
product is fixed, so that if a plant which runs short of orders in one
department but has plenty to do in another line can not shift its
production quota from one line to the other, the Verband acts as a
*learing house for redistributing quotas.
If a plant exceeds the assigned production quota they pay a fine
of 5 marks ($1.19) per ton for “A% products and 23 marks ($5.47)
per ton for “B” products. For any other violation of the terms
of the contract each owner of the steel plant is liable to a fine of
1,000 marks ($238) for each offense. Section 47 of the contract provides:
 (a) If a plant in violation of the terms of this contract
should sell, on its own account, any products or scrap from class
“A” he is liable to a fine of 100 marks ($28.80) for each ton of
products thus sold. (5) Whoever, through his own fault, fails to
meet his contracts for a delivery may be held to a fine for each ton
of undelivered goods, the amount of each fine being fixed by the
annual general assembly.