seem to show that it has been beneficial to the greater portion of the manufacturers of alcohol and spirits in the United States, although individual distillers have perhaps made no more, and some, it may be, have made even less profit than they could have made acting independently; while, so far at least, the prices to consumers have not been on the whole increased, and the tendency seems to be towards lower and steadier prices for the future. As has been said, however, only the future can

The (dotted) line A shows the average market value of corn per bushel at Peoria, The line B shows the average market value of the whiskey (the spirits used for base in prices) from one bushel of corn. To obtain this value, the revenue tax was de. ducted from the market value of one gallon, and the difference multiplied by the average yield per bushel of corn. - The space between the lines A and B represents, of course, the cost of production plus the profits. During the greater part of the pool's existence, assessments for export expenses must be deducted from the profits. (See Table II.)

determine what the policy of the trust is to be. The facts seem to show that it is within the power of the trust to bring about this result; and it seems to be for its interest so to do. As regards the stronger rivals of the trust, the prices have so far been so high that they have not suffered materially. The next year or two will show whether they can endure the competition. Even if they should be forced to close, the question is still an open one whether more distilleries would have not been closed

The line in the lower right-hand corner shows the fluctuations in the value of the trust certificates: par value, 100; cash value of plant estimated at about 30.

1 Professor Jenks, in his Trust Problem, N.Y., 1902, p. 146, continues this price diagram to 1900. Much other information is in the Reports United States Industrial Commission, Vol. I, 1900. — Ed.

under free competition. Many stockholders are now drawing dividends from the trust who, without the trust, would doubtless have lost much of their capital.

At the time of the formation of the trust, it was thought by some of the distillers living at Peoria that, on account of their unusual facilities for manufacture, the trust should be limited to Peoria distilleries and a few others favorably located. The experience of the trust seems to show that, had this plan been followed, the trust might have paid higher dividends to its members and might also have held the price of alcohol so low that outside competition would not have been much more successful than it has been under the present arrangement. Some distillers who believed in this latter plan - presumably for the most part Peoria manufacturers still think it would have been better to have limited the organization to five years with the option then to continue, suspend, or reorganize. They feel that the owners of the less favorably situated distilleries have an undue advantage. Of course, this depends mainly upon the relative value placed upon the plants when they entered; but it is probable that it would have been cheaper to crush some of the weaker members than to buy them by admitting them to draw dividends. Against this view is, of course, the fact that such action would have aroused bitter hostility that might well have resulted in the building of new distilleries in locations where they would have become formidable rivals.

On the whole, while there is this slight tendency to think that matters might have been better under some other form of organization, or even, for a few, with no organization; and while there may be a slight feeling that the trustees are not entirely free from nepotism in their appointments, any more than are our highly esteemed executive officers of the United States; yet, as was shown a year ago by the unanimous reëlection of all the trustees at a meeting in which ninety-nine and one-half per cent of all the certified holders were represented, as well as by the general expression of satisfaction on the part of the distillers one meets, the trustees are thought to have performed their responsible duties with descretion, and the trust is considered by its members a success. J. W. JENKS

The later history of this combination has been checkered. In 1890, it was reorganized as a corporation, as the Distilling and Cattle Feeding Co. Its ownership of distilleries was extended to practically all important competitors. In 1893, failure impending because of the accumulation of floating debts for unpaid rebates, bonds were issued. For two years various scandals, mainly speculative, developed under its control by receivers; and the Supreme Court of Illinois in 1896 ousted it from its franchises (156 Ill. 448). Meanwhile in 1895 it had been again reorganized as the American Spirits Manufacturing Co., incorporated in New York. This company took over all the best distilleries in the field. Other plants and branches of the business were independently incorporated under the laws of New Jersey during the next four years in three principal companies. These were again united to the main stem in 1899, as The Distilling Co. of America, capitalized at $125,000,000. Over ninety per cent of the securities of this company in 1902 were in turn acquired by a holding or finance company, the Distillers' Security Corporation of New Jersey, which has issued about $50,000,000 of capital stock. — Ed.

NOTE. W. S. Stevens, Industrial Combinations and Trusts, 1913, pp. 4 and 36, reprints texts of agreements. His chapters II and IV give additional data on the legal trust form of organization. Standard Oil experience is outlined in Chapter XVII, infra.

THE WIRE-NAIL ASSOCIATION OF 1895-96
AND OTHER IRON AND STEEL POOLS1

So lately as 1888 The American Architect began an article

66

on nails in this way: The nails commonly used in connection with building operations are too well known to require any description. They are specifically designated as plate nails." That year, 1888, was almost the first in which plate or cut nails felt a real competition from wire nails. In that year the latter formed less than a fifth of the total product; in 1895 they constituted nearly three fourths. The idea of making nails of wire did not arise in America; in fact, our people were even somewhat slow to adopt it. The first wire nails-headed by hand and ground to a point

appear to have been made in France early in this century. Mr. M. Baackes, an old wire-nail manufacturer of Cleveland, says that the first machine for forming the heads was made in France about 1850. According to Mr. John Hassall, who is still engaged in making wire-nail machinery in New York city, his father was active in making and running the first wire-nail machines used in this country, early in the fifties. The business seems to have extended itself only modestly, for Mr. Baackes regards the factory which he helped to start at Covington, Ky., in 1875, as "the first mill for the manufacture of wire nails on this side of the Atlantic." The production rose from 20,000 kegs in 1880, according to Mr. Baackes's estimate, to 125,000 in 1887; and the average price fell from $20.00 per keg in 1875 and

1 From the Political Science Quarterly, Vol. XII, 1897, pp. 246-272. Some footnotes are omitted on account of lack of space. For the best analysis of modern pools, one should consult W. S. Stevens, American Economic Review, 1913, PP, 545575.-ED.