The potash syndicate has at all times attempted to secure the maximum gain, but has realized that the demand for agricultural purposes is capable of great expansion, and that the highest prices may not be the most profitable. In general, potash prices, tho not to be classed as extortionate, are said to have been higher than the demand for the product, the cost of production, or the interests of the industry itself justify. The fact that mines running at much lower than normal capacity could, in 1906, pay dividends averaging 13.5 per cent; that the cost of production was a considerably smaller part of the selling price than in other mining industries; the fact that Schmidtmann and others could contract to deliver large quantities of potash at 30 per cent below prevailing prices, with the expectation of still securing profit therefrom, — all these indicate a range of prices above the competitive level. The figures given in Stange (p. 95), Engelke (p. 38), and Schulze (p. 59) vary slightly from those given above. The syndicate has had no effect in decreasing the expenses of production; its influence has actually been exerted in the opposite direction. The economies which have been effected by syndicate organization have been in distribution, elimination of the wastes of competitive selling and increase in the effectiveness of advertising. But, tho these savings have been considerable, the syndicate and the legislation enacted in the attempt to check tendencies induced by syndicate policies have contributed to bring into existence such an over-supply of facilities for production that no net gain in efficiency has resulted. Since the demand for potash is only sufficient to give existing establishments employment much below normal capacity, there is good reason to believe that expenses of production are higher than they would be under competitive conditions, and that costs as well as prices would be lower. Domestic consumers, as noted above, have fared somewhat better than the foreign. The influence of the government mines has always been exerted in the direction of lower prices for domestic consumers. Most favored have been the large agricultural associations, in part, it is alleged, because of their political influence. The favoritism shown to these societies has led to many complaints from potash dealers. The syndicate finally made some concessions to the dealers in 1905, but did not place them in every particular on a footing with the agrarian associations.1 After 1909, when the restrictions on combination among dealers were removed, a large number of dealers' organizations sprang up to take advantage of the rebates given for purchase in large quantities. But the agricultural associations 1 Heimann, pp. 15, 35. are still favored. The attitude of dealers has generally been unfriendly to the syndicate. One must not neglect to give the potash combination credit for what it has accomplished in connection with its propaganda work. By the distribution of publications, exhibits at important agricultural shows, fertilizer experiment stations, and other methods, it has conducted a general educational campaign on the use of fertilizer, potash especially. The efforts of the syndicate to keep up the standard of the products and to insure prompt deliveries are also commendable. The membership of the Prussian government has given the potash syndicate a character distinct from other Kartells. Far from being a passive member, the government has always exerted a large influence upon syndicate policy. More than once it has directed its energy toward keeping the organization intact in the numerous crises through which it has passed. In the negotiations of 1879, 1888, 1898, and 1901, the fisc took an active pro-syndicate part; when renewal came up in 1903, the Prussian fisc took the initiative; in 1908, the government early directed its influence toward renewal. It cannot be seriously doubted that, had not the Prussian government played the part it did, the syndicate would early have gone to pieces. The opinion so often expressed during the progress of syndicate negotiations that in the continuance of the syndicate lay the only means to avoid the ruin of a number of enterprises and losses to thousands of investors, was undoubtedly correct.1 But one may doubt whether or not it was wise to enter into combination to preserve the profitableness of all the undertakings, when the policy of procrastination, as one might term it, caused and will continue to cause much greater 1 It is said that bankers would extend credit only to those mines whose intention to enter the syndicate was known. K. R., vol. v, p. 307. losses. Free competition during the eighties would have been attended with losses smaller than in the decade 1900 to 1910, or none at all. The dependence of the value of potash enterprises upon the existence of the syndicate is clearly shown in the course of the market for potash securities during the past decade. It is reasonable to suppose that under the rule of competition the enormous over-investment of capital in potash enterprises would largely have been avoided. When all is said for and against the syndicate, one may doubt whether the potash industry is, as a whole, in 1913, in a more flourishing financial condition as a result of the existence of combination. H. R. TOSDAL. HARVARD UNIVERSITY. INDUSTRIAL BOUNTIES AND REWARDS BY AMERICAN STATES 1 SUMMARY Direct grant one of many forms of state aid, 192. Bounties on mulberry trees and silk, 193. - Hemp, flax, jute, and ramie, 197. Woolen yarn, 199. Binding twine, 199. - Starch, 199. — Iron and Wheat and corn, - Cards, 199. iron pipe, 199. - Cordage, 199. --- 200. Salt, 200.- Artesian wells, 201.- Timber and shade trees, Chicory, 202. — Rewards on arms and powder, 201. 203. Sugar, 202. Timber Sheep and woolen cloth, 203. - Canaigre and leather, 203. Wheat, oats, and potatoes, 204. Salt, 204. Coal mine and artesian and oil wells, 204. Methods of treatment of ores, 205. and shade trees, 205.- Sugar, 205. The California reward act of 1862, 205. — The question of public policy and constitutionality, 206. THE claims of our national ward, Infant Industry, have been constantly presented before Congress and also before our state legislative bodies, but with results which have received too little comprehensive attention from the student of public affairs. True, there is no end to the discussion of the protective tariff, tho the economist has long since satisfied himself as to the theoretical aspects of the subject. Our two experiments with national bounties fisheries in 1813 and sugar in 1890 are recognized as noteworthy instances of departure from what has come to be the established method of protection. Little is known, however, 1 This study was undertaken with a two-fold purpose: first, of course, to present a true statement of the subject chosen; second, to show something of the wealth of materials of economic history scattered throughout the dusty files of the session laws. As over a hundred acts are considered, it has seemed impracticable to give specific citations except in case of acts still in force. Furthermore, it is unnecessary, since any person who knows the year can easily find any desired act. |