SPECIAL REPORTS FOR FEDERAL TRADE COMMISSION. 13
ase of this seat. The Verband also reserves the right to veto the
wholesale prices set by a dealer’s union, but has made use of this veto
only twice, once in the case of the Bremen Dealers’ Union and once
in the case of the Hanover Union. Dealers realize a profit of only
2 per cent gross or about one-half per cent net, which is too small
a profit in consideration of the fact that the market price fluctuates
and dealers must carry a large stock and tie up a considerable capital.
Nevertheless, the dealers, although nominally independent, are virtually
 commission agents. The unions after a struggle with the Verband
 succeeded in slightly raising their profits.
Not only have the dealers’ unions been divided into the five geographical
 districts, but the wholesalers in these districts are assigned
definitely prescribed territories. The wholesalers also assign to
the retailer his definitely prescribed territory. Thus from the Verband
 to the consumer competition has been practically eliminated
among members of this Verband hierarchy as well as among the producers.
 The result of this rigid sales organization has been twotold,
It has stabilized the market, but, on the other hand, it has deprived
iron dealers of any opportunity to exercise their own private initiative.

The Steel Verband and the sales combinations connected with it
show that although the modern tendency is for a few large firms to
gradually absorb all subsidiary branches of their line of production
from mines to finished product, and, through their own sales, force
the distribution of the same to the consumer, in the case of the steel
industries of Germany, this consolidation has only partly taken
place, and the smaller plants and dealers have not been eliminated.
The distribution of “B” products is highly complicated by the
fact that the different trades which carry on the manufacturing
processes organized themselves into cartels, unions, and syndicates,
who in turn have their own selling organization independent of the
Verband which also negotiates sales of “ B” products for its memvers,
 but not on its own account. Many firms sell through the Verband
 and its own sales organization in order not to lose contact with
the market in case the Verband should be dissolved. These smaller
trusts for drawn wire, woven wire, nails, castings, radiators, pipes,
and the like were mentioned in the introduction. In the case of form
iron, however, the Steel Verband has kept this line in its own hands
and sells directly to the consumer through its own sales organization.
The bar-iron industry is still unorganized in spite of various recent
attempts to bring about a union. This disorganization is shown in
the lower and violently fluctuating prices.
Selling methods abroad. —The methods of exporting are guarded
with extreme secrecy by the Stahlverband and lesser organizations.
The export curve of steel products from Germany shows a marked
npward tendency following the foundation of the Steel Verband in
1904. There is no doubt that the Steel Verband has given great
attention to the pushing of exports of German steel products, half
Gnished and finished. The Steel Verband collaborates with other
German organizations in exhibiting at international expositions and
the like, and it is generally conceded that it has been one of the most
important factors in German exports during the past decade, since
to foundation. It seems that it operates, whenever it pays to de so,