16 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.
their “A” product from the Verband. In the home market this tension
 is not so keenly felt, but when the Verband dumps “A” products
abroad at low prices, these prices enable the English, Belgian, and
Scandinavian manufacturers of “B?” products to buy their halffinished
 raw materials at such a low figure that they are able to sell
manufactured products in the German market at a price which the
German Ta who must pay the high price for their “A”
materials, are unable to meet. Therefore the Ferband rather than to
break the market at home, because of temporary low prices abroad,
offers to the home industries exporting finished products made from
“A” products purchased from the Verband, an export bounty. This
export bounty is set by the Verband at a figure which aims to absorb
 the strain or margin of potentiality, resulting from the difference
 in price of German “A” products at home a abroad.!
Only firms belonging to a union, ring, pool, cartel, syndicate, or
other organization buying exclusively from the Verband, are given
export bounties. It is this fact, as much as any other, which has influenced
 the organization of all the subsidiary combines mentioned
above. For instance, the hardware industry is not organized and
receives no refunds. In practice the largest exporters are firms who
manufacture their own “A” products and are themselves the members
 of the Steel Verband, so that bounties need not be paid, because,
as stated, such bounties are only intended to aid those plants mannfacturing
 “B” products alone.
Bounties are not paid unless the difference in the price of halffinished
 products at home and abroad is marked. For instance, in
June, 1907, when the price of sheet iron fell to 10 marks ($2.38)
below cost in the home market and 20 marks ($4.76) below cost in
the world market, the Verband gave a refund bounty of 10 marks
($2.38) a ton for all firms organized or independent. In December
of the same year the V re withdrew the bounty from all unorganized
 exporters, but raised the bounty on organized exporters to
15 marks ($3.57). This price policy abroad has given the Steel
Verband the name of the economic general staff.
Critics say that the price policy of the Steel Verband at home and
abroad tends to maintain a certain stability of production and prices,
so long as ordinary conditions prevail, but that the organization of
31 large firms, governed by a general assembly, is too bulky and unwieldy
 to meet sudden and new situations. The case of the competition
 of the reinforced concrete firms in the building market is cited.
The introduction of reinforced concrete came at the time of increasing
 building activity, the cement trust took advantage of it, and
through clever salesmanship, advertising, and demonstrations, practically
 captured the entire building construction market and bridge
work by substituting concrete at a much lower figure than steel
girders could be purchased from the Verband. About two years too
late the Steel Verband opened an office for competition against the
concrete firms and reduced their prices. If this had been done
sovner, before the public had gained confidence in concrete construction,
 the triumphal entry of concrete construction might have been
retarded for some years.

1 For the latest available statement of the schedule of refunds of export bounties of the
Rteel Verband. see Pt. 1. D. 222..—FEDERAL TRADER CCOMMISRION.