64 REPORT ON COOPERATION IN AMERICAN EXPORT TRADE.

pletely to demoralize the entire industry. These conditions forced
the distillers and refiners to put aside their differences and combine
in their present form in March, 1899. In doing this they aimed particularly
 at three objects—to increase the profits from the rectification
of alcohol, to effect a central control of sales, and to reorganize the
alcohol exchange.
Under the treaty of 1899 the members of the cartel were bound until
 September 80, 1908. A central selling organization was provided
for, which absolutely controlled the prices of the various products,
and could raise or lower them according to the demands of the market.
This central selling agency had all of the powers cf the same agencies
in other German syndicates. It alone could make contracts for the
sale of alcohol, and it alone had the power to apportion orders to the
individual factories. The quantity which was assigned for produetion
 to each distillery was also determined by the central agency,
which, of course, took into consideration the size of the concern.
The. refineries were subject to the same restrictions in the matter of
prices and making of contracts as the distillers. All of the alcohol
produced by the members of the cartel had to be handled by the refineries
 of the cartel. The quota assigned to each refinery was determined,
 just as in the case of the distilleries, by the central agency.
The profit allowed to the refiners was calculated on a sliding scale,
the premium of refining, which usually varied between 7 a 9 per
cent, corresponding to the rise or fall in the price of alcohol.
In 1908, at the expiration of the first treaty term, the distillers and
refiners formed a new treaty, very similar in its provisions to the
original one. This treaty is still in force; the only important change
in the organization of the Alcohol Cartel which this treaty brought
about was the strengthening of the position of the distillers. Under
the first contract the refiners had occupied the dominant position, but
by this time the distillers, having become financially independent,
were able to force concessions from the refiners by threatening to shut
off production. As a result of this victory of the distillers the proortion
 of profit which should in the future go to the refiners was
Bxed at a somewhat lower and at a definite instead of a variable rate.
Up to this time (1908), although the advantages of belonging to
the syndicate were great, there remained outside about one-fifth of
the distilleries and refineries of Germany, which in most part, howaver,
 were small, the only exceptions being the Ostdeutsche Spritfabrik
 and the Vereinigten Nord- und Siiddeutschen Spritwerke.
These large distilleries, with the smaller ones still remaining outside,
were forced into the syndicate by the Branntweinsteuerreform law of
1909. There are now in Germany about 140 distilleries, all belonging
to the syndicate.
Foreign markets—The principal foreign markets for German
alcohol are the neighboring countries of Europe, especially France
and Spain. In these countries the former strong competition of Austria
 and Russia have been driven out, so that Germany to-day occupies
 the most important position in Europe as an exporter of alcohol.
Products.—The products controlled by the Alcohol Cartel are raw,
denatured, and refined alcohol, alcohol in the form of spirituous
liquors, for lighting, for motors, and other industrial uses. ~ - -
Extent of monopoly of home market and of emports—Until 1908
the cartel handled 80 per cent of the production of German alcohol.