BPECIAL REPORTS FOR FEDERAL TRADE COMMISSION, 115
Special Soros of Vice Consul John J. Ernster, Lyon district, France, October
Combination of velvet manufacturers of Lyon, France—It appears
 that some 8 or 10 years ago certain French velvet manufacturers
 endeavored to gain a footing in Germany, while a few German
manufacturers made the same effort in French territory. The mutual
difficulties caused by these attempts resulted in amicable agreement
between the manufacturers of the two countries, as well as a few
others, which led finally to the establishment of a syndicate of velvet
manufacturers. While there is at present a French and also a German
 syndicate, both are so closely allied as to form practically a
single concern. This association determines not only the prices at
which it sells to the middleman, but also the prices which he in turn
may ask of his customers. Thus far the system has proved profitable
 to the members, because the syndicate has been strong enough
to maintain prices, while at the same time the demand for velvets has
been regular and strong. It is interesting to observe that among the
few concerns from which members are allowed to buy outside of the
syndicate are the mills still employing the old-fashioned looms
(hand). While the hand looms have been superseded for the most
part by the power loom, there are still hand. looms in Lyon, and
the beautiful fabrics manufactured by them remain unsurpassed.
(The above is taken from a report written by Consul Carl Bailey
Hurst on March 16, 1913, and shows conditions as they existed during
 the year 1912. The syndicate of velvet manufacturers still con:
linues the same methods as far as the French market is concerned.)

[Supplementing report on Cartels, Syndicates, and Combinations.
Mr. ERNsTER. What you have often heard mentioned as the “ Syndicate of
Velvet Manufacturers” is in reality no syndicate, but only a sort of mutual
anderstanding between the leading manufacturers; the character thereof is
guarded with much discretion. Mr. George Cabot is charged with the management
 of the syndicaters’ affairs in France as well as abroad, and he handles
¢hem in a highly autocratic and draconic manner, which, however, has produced
 amazingly successful results. For example, I may state that the members
of this society give a check in blank in order to guarantee payment of fines
which might be imposed upon them. There are no printed statutes whatsoever.
It is my impression that this sort of a trust can not be classified as a
syndicate, in regard to which you have been requested to report. In Lyon there
are two syndicates of silk manufacturers comprising those manufacturing velvets.
 We are associated with the syndicate entitled the *“ Chambre Syndicale
je la Soierie Lyonnaise,” 19 rue Puits Gaillot. Should the statutes of these
two syndicates be of interest to you I would take pleasure in letting you have
the same.
Always at your service here, believe me,
Very respectfully, yours,
G. MoTTIN,
Manager of the Salt’s Textile Manufacturing Co.,
An Independent American Concern.

COPY OF AN AGREEMENT SENT OUT BY THE SYNDICAT DES FABRICANTS DE VELOURS
(VELVET MANUFACTURERS’ SYNDICATE). DATED DECEMBER 6. 1912.
In accordance with our agreement of to-day, we take note of the following
propositions which vou have made us in your quality of proxy for the veivet
manufacturers whose names are inscribed in the list given below:
This list which you communicate to us can be modified each year by the two
groups of manufacturers, or in other words certain names may be added to it
or taken therefrom. Advice will be given by registered letter and we will keep
the list constantly up to (ate. We note that the French manufacturers on the