BPECIAL REPORTS FOR FEDERAL TRADE COMMISSION. 25

the deficiency in their own deliveries. On the other hand, in periods
of slack demand, the Syndicate dumps the surplus abroad, preferably
 in northern France, Belgium, and Holland, at the best rate
possible, it being better to do this even at a loss than to disorganize
production and distribution in the home market.
Llelations to the German governsienir~The Coal Syndicate has no
direct connection with the Imperial Government. The official relations
 of the Coal Syndicate are with the States in which it operates.
The most important is with Prussia, in which it is incorporated and
in which the Ruhr coal fields are located. Some years ago, at the
time of an investigation on the part of the Prussian Diet of the
Steel Works Union, the Coal Syndicate Co. was also investigated.
The result of the investigation, which was conducted in an efficient
and scientific manner, left a very favorable impression on both Government
 and public regarding the combinations in the coal, iron, and
steel industries. The Government sees in the healthy growth of these
industries, in their erganization, and in reasonable profits, unshaken
by violent market fluctuations or price wars, a uniform: source of
revenue for itself through income and other systems of taxation.
Although these combinations have no influence whatsoever on the
Government or on legislation, relations are very friendly.
A point of direct contact between the Coal Syndicate and the
Saver mat of the State of Prussia is to be found in the railroad
reight rates on the Prussian-Hessian railroads. Coal comes under
the lowest tariff, the so-called “raw materials tariff,” which is 2.2
pfennigs ($0.0052) per ton-kilometer for hauls under 350 kilometers,
 and 1.4 pfennigs ($0.0033) per ton-kilometer for hauls over
350 kilometers. To these rates is added a handling fee of 7 pfennigs
 ($0.016) a fon (Abfertigungsgebiihren). Of course water
transportation, inland and ocean, is still considerably lower. For
export the usual export rate or rebate is conceded to coal. The railroads
 also discriminate against imported coal by imposing a higher
freight rate.
The third and most important point of contact between the Coal
Syndicate Co. and the State of Prussia is the competition of the
State-owned coal mines. The output of the Prussian State coal
mines of the Ruhr district grew from 308,000 tons in 1903 to 3,300,000
tons in 1912 and 5,000,000 tons (estimated) in 1913, which is over 4
per cent of the entire coal production of the district. The competition
 of the State mines had become so strong that a rupture of the
Coal Syndicate Co. was prophesied unless the State mines (Fiskus)
joined the Syndicate. The Syndicate threatened the State and maintained
 that the dissolution of the Syndicate would demoralize the
coal market, abolish profits, and greatly reduce wages. The Prussian
 minister for commerce and trade maintained that the Government
 coal mines must occupy a special position apart, so as to be
able to influence the coal market for the benefit of the public. He
said that the Prussian Diet had voted the large appropriations to
extend the Government mines with this end in view, and also argued
that the State must be free to supply its own needs directly from
its own mines without regard to the Syndicate. (The coal demand
of the State railroads alone is a great factor.) The question has
finally been settled by the State mines entering the Syndicate, the
argument being that the influence for the public good may be even