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more incre *For earlier years, the prices of corn are those of the Chicago Board of Trade, the prices of spirits those reported by the Combination. Both series were taken mostly from the Peoria Board of Trade. For later years prices computed from Dun's Review.

WHISKEY*

A study of line C in Chart III, showing the difference between the price of the raw material, corn, per bushel, and the price less the revenue tax of the amount of the finished product, spirits, derived from one bushel of corn, shows nothing more clearly than the very great fluctuations in this marginal difference. The price of corn, owing to variations of the crops and to various factors which determine demand, fluctuates greatly from season to season. For a good many years during the time that the Distilling and Cattle Feeding Company, the successor of the earlier whiskey Trust, was in the hands of the receiver, General McNulta, the price of spirits was based directly upon that of corn, and fluctuated with it; but whether the price is directly based upon corn, or not, it is likely to be affected largely by that price. During the years 1881-1887 various pools were formed among distillers, most of which lasted but a short time, generally less than a year. The distillers entering into these pools as a rule agreed to limit their output to a certain per cent. of the normal output of their distilleries, sometimes to not more than 50 or 60 per cent. Usually also there were certain agreements regarding price. The chart shows clearly that during the existence of each pool the prices of alcohol were kept up, and the profits as shown by line C were correspondingly large. When, however, some untrustworthy distiller began to sell secretly at cut prices or to increase his output beyond the per cent. agreed upon, and in consequence the pool suspended, profits fell to a minimum, doubtless at times below the cost of distilling.

Immediately after the formation of the Whiskey Trust, in 1887, prices were cut for a time, in order, as the organizers of the Trust did not hesitate to say, to force their competitors into the organization; but within a few months, the rivals having been largely bought up or destroyed, the profits, as shown in 1888, became very large. These profits stimulating competition, however, it became necessary at the beginning of 1889 to cut prices again very decidedly, in order to force rivals into the combination. It was during this period also that the decisions of the courts rendered the legal form of the Whiskey Trust doubtful, and early in 1890 it was reorganized as a single corporation. For some two or three years after this change the price and profits were kept on the whole fairly high; but in 1892 a period of speculation led to startling sudden changes in prices and corresponding changes in profits, so far as any sales were actually made. At times, of course, with these very high prices sales were very small. From the years 1890-95 certain rebates were paid to wholesalers. The chart attempts to show the prices with these rebates deducted, instead of giving during this period the quoted market prices; but one cannot be entirely sure of the accuracy of the chart in regard to this, since it has been impossible to secure with absolute certainty the dates of the various rebates. The chart is, however, doubtless substantially accurate.

In 1894, owing apparently in part to speculation, in part, to competition or bad management, the conditions of the industry became bad; the prices of spirits were cut very low; the margin of profits entirely disappeared, and the Distilling and Cattle Feeding Company, the so-called Trust, went into the hands of a receiver. After the formation of the American Spirits Manufacturing Company, in 1895, the business seemed on the whole to have been considerably more stable than at any preceding period, even during the best years of the Distilling and Cattle Feeding Company.

From the time of the reorganization of the company, after it had been in the hands of the receiver, in the various forms which united the interests of the different establishments which were formerly rivals or which supplemented in a single organization the work of one another by controlling different parts of the business, there seems to have been a steady improvement in conditions. Although there was a fairly regular increase in the price of corn from 1897 to 1901, the price of spirits increased even more rapidly on the whole, so that the profits were, with here and there an exception, maintained. The general condition of the business is well indicated in a circular of April 30, 1903, issued by President Curley of the Distillers' Securities Corporation, the new organization that had taken the place of the Distilling Company of America. He said that the earnings for the fiscal year ending June 30, 1903, showed a substantial surplus; that the demand for their products was steadily increasing, the condition of the business fully justifying the expectation that the net profits would continue to show satisfactory annual increases. The assets of the company included not

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