no publicist to tell them that some powerful influence has been brought to bear upon the price of this product. Although far less in power than either of the combinations mentioned, the Michigan Salt Association, from the extent of its influence over the price of an article of food so common and so necessary as salt, as well as from the magnitude of its operations and its great and apparently increasing power, seems to be a fit subject for a study of this kind. The extent of the influence of the association may be noted, when we consider that Michigan produces more than 40 per cent of all the salt manufactured in the United States, and that, of the Michigan product, not far from 95 per cent will be sold by the association during the coming year. In short, speaking generally, the price of the salt consumed in all the Northern states west of Pennsylvania and New York, until we approach those bordering on the Pacific ocean, is the price set by the managers of this association. It is the purpose of this article to give a short sketch of the history of this combination of manufacturers, with that of others which preceded it; to describe its plan of organization and its work, and to estimate the influence which it has exerted and that which it can exert on the price of salt.

The early settlers of Michigan had learned from the Indians of the existence of many salt "licks," or springs, in different parts of the state, and it was thought even by them that there was an opportunity for the growth of a great industry in its manufacture. In 1838 Dr. Houghton, the state geologist, called the attention of the legislature to these facts, and suggested that an appropriation be made for the sinking of test wells. The time was propitious for such a request. The newly adopted constitution had declared: "Internal improvements shall be encouraged by the government of this state;" and the governor had been authorized by the ambitious first legislature to borrow on the credit of the state the sum of $5,000,000, to constitute an internal improvement fund. From this fund $3000 were at once appropriated; the next year $15,000 more, and small sums in succeeding years. While salt was found, the wells were not sunk deep enough to yield brine in paying quantities.

1 Cooley, Michigan, ch. xiv. [American Commonwealth Series.]

In 1859, an act was passed exempting from taxation all property used in the manufacture of salt and offering a bounty of ten cents per bushel on all salt made in the state. A corporation, the Saginaw Salt Manufacturing Company, was formed the same year in East Saginaw to put down a well and engage in the manufacture of salt. So little was known, even by the board of directors and officers of the company, regarding the character of the work, that it was necessary for a committee to visit the Onondaga salt works to learn what buildings, machinery, and tools were necessary for boring the well. But by February 7, 1860, the directors felt warranted in making a report to stockholders, declaring the work a success. In March the well was completed; another one was immediately put down; and manufacture began in July. The works were thrown open for inspection July 4. In this first year, 1860, about 4000 barrels of salt were manufactured.1

As soon as it became known that brine of paying quality and quantity was to be found in the valley, capital was rapidly invested. In 1862, 243,000 barrels were made, and in six years. there were engaged in the manufacture of salt in the Saginaw valley, sixty-six different companies with an investment of nearly $2,000,000.

1 Statistics relating to the Saline Interests of Michigan, by S. S. Garrigues, Ph.D,

State Salt Inspector; Lansing, 1881.

now.

This table shows, in the falling off of the yearly product, 18651867, the result of the rapid and in many instances ill-advised investment of capital. Under the conditions obtaining at the time, unrestricted competition soon drove the weaker companies to the wall. In those days, the extent of the salt-producing territory and the methods of manufacture were less well known, and the business was much more of a natural monopoly than Under these circumstances, the solution of the difficulty was evident: combination was indicated and combination soon appeared. In a statistical summary of the leading products of the Saginaw valley, published by The Saginaw Daily Enterprise in 1867, we read: "This interest [salt] is somewhat under a cloud at present through the evil influence of speculation and inconsiderate management." Then, farther down the page come, as one might expect, the words: "At least two-thirds of those [blocks] now running turn in their production to the Saginaw Salt Company." Thus, as early as 1866, six years only after the industry was started, we find that many of the manufacturers were uniting their interests so far as the sale of the product was concerned.

Soon, from individual agreements the leading firms came to something more stable and far-reaching in its influence. On the 16th of April, 1868, the articles of association of the Saginaw and Bay Salt Company were adopted. The first year of its existence, this association handled four-fifths of all the salt shipped from the Saginaw valley. Its benefits to the manufacturers, as well as to the consumers, so far, at least, as the quality of salt is concerned, were at once recognized, and are clearly set forth in the Statistics of the Saginaw Valley for 1868:

The operations of this company have been completely satisfactory, and the organization is unquestionably of great benefit to the salt manufacturers who have availed themselves of the advantages it offers. It has, so far as its line of operations has extended, brought about the one thing needful, a uniform system of inspection, and introduced system, order and reliability into a business, which, without such general regulations, has in no quarter ever proved remunerative.

In spite of the competition of New York and the Ohio river (relieved in part by an agreement with the Onondaga Salt Com

pany which will be considered later), the business grew with remarkable rapidity, and the association ran smoothly till 1871, when the vigorous efforts of some of the members opposed to the management became of serious moment. The real merits of the controversy, which became bitterly personal, several letters of a violently abusive character being published, it is hard to determine. On the one side, charges of mismanagement, even of dishonest practices, were made against the officers of the association by Duncan Stewart, president of a salt manufacturing company; on the other, Stewart's dissatisfaction was said. to have been caused by the refusal of the managers to ship salt by a line of boats in which he was interested, at rates above those offered them elsewhere. For our purpose it is enough to know the result. In the Annual Statement of the business of the Saginaw valley for 1871, we find it in compact form:

In salt, the season of '71 may be quoted as of extra activity both in manufacture and sale. Early in the season it became evident that a commercial rivalry had been excited which could not end but by the going to the wall of one of the parties engaged in it. Assuming the shape of individual antagonism to a corporate company, it became at an early day evident that many of the manufacturers who are members of the Salt association, would take sides with the opponents of the association, and as a result fully one-fifth of the entire salt product of the valley, which under ordinary circumstances would have been handled by the association, was purchased by the firm of J. L. Hurd & Co., of Detroit, at prices in advance of those realized by those who remained in the association. Since the close of navigation, the association has resolved to suspend operations for the present, and each manufacturer will, during the season, be left free to realize as best he may on his products.

It is significant, and somewhat surprising to note that by the determined efforts of one man, the association was forced to suspend operations, even though, as has been reported, this man was compelled to destroy his own financial standing to bring about such a result. Table I, again, furnishes us with an interesting comment upon this financial battle. For 1872 the production of salt in the state is more than 3600 barrels less than that of the year preceding; whereas both 1871 and 1873 show a gain of about 100,000 barrels.

Five years passed before a thoroughly effective union could again be made. Smaller organizations were formed to sell salt for groups of manufacturers, notably the Saginaw Salt Association and the Michigan Salt Association; but the competition was fierce, prices went steadily down, and the weaker companies found themselves in need. At length, after low and declining prices throughout the year 1875, the time seemed ripe for another organization which could control the sale of a large proportion of the Michigan salt, and through this added power of union both secure a saving in the expenses of sale and transportation, and either compete more effectively with the New York and Ohio river manufacturers or force them into a union which should control the whole American product. January 8, 1876, J. E. Shaw, president of the Michigan Salt Association (a smaller combination of manufacturers), issued a circular address to the salt manufacturers of Michigan, calling a meeting to be held at Bay City, January 20, to effect such an organization, if it should be possible. The address exhibits in an almost pitiable light the situation of the manufacturers, and urges strongly the need of organization. Mr. Shaw declared:

The old adage, "in union there is strength," is true wherever you apply it, and in manufacture of salt there is no exception. To secure this union with its attendant strength is the object of the Michigan association. This is the object it had in view when it was organized, and this is the object it has in view to-day. That the organization has remained inactive, is attributable to the fact that it could not secure control of a sufficiently large percentage of the state product to warrant [aggressive action], a few manufacturers declining, for reasons best known to themselves, to enter the association. And what was the result? Salt has depreciated in value, dropped steadily down, until to-day it has no market price on the Saginaw river, and is quoted at only $1.27 in Chicago, and $1.00 in Toledo. That the experience of '75 will be that of each succeeding year, unless something is done to check the general demoralization, cannot be gainsaid. The oldest manufacturers of the Syracuse, Kanawha, and Ohio districts, tell us that their experience, dating back forty years in some cases, has always been this: "Organized we have prospered. Unorganized we have not," This is the experience which we have been buying and paying dearly for.... The trouble lies in the marketing of the product. Each man has taken care of (or