interests of all and with its managers elected by them all, the selling of their entire product, as well as the allotment to each of his quota of production whenever a change in circumstances arises.

This is the form of combination most generally found in continental Europe-a central selling bureau, to which is given the power also of fixing the output, while in the organization agreement itself the proportional share of each member in the entire output is laid down.

Often with this general agreement, there are certain local peculiarities or variations dependent upon the nature of the combination itself. For example, in the case of the coal and iron syndicates of Germany, Austria, and France, ordinarily, while the entire product offered for sale within the home country must go through the hands of the bureau, reservation to the producer is regularly made of the material or fuel used within the establishment itself. In the Austrian iron combination each member sells his own product.

In the case of the powerful sugar combinations of Austria and Germany, the refiners of sugar guaranteed to the producers of the raw sugar a certain fixed minimum price. In case the price fixed in the world's market, as represented by the market at Magdeburg in Germany, or Vienna in Austria, went below this minimum price, the refiners made up the difference, and recouped themselves by higher prices to the consumers for the refined product. Such a plan of working for many years proved eminently successful in Austria, and somewhat later similar results were reached in Germany.

Speaking generally, even in the case of the greater

combinations in England, which have assumed the corporate form, it is probable that to the managers of the individual plants a somewhat greater degree of independence is permitted than is the case in the United States. The managing directors of the Bradford Dyers' Association found that in that business, where individual taste is of so great importance, it was wiser to encourage each individual superintendent to increase his sales as much as possible by exercising his inventive skill in producing a special quality of goods. They stimulated him still further to good work by paying only a small fixed salary and then making a large percentage of his income dependent upon the profits of his separate plant. A rigid system of comparative book-keeping among the different establishments was maintained, so that the managing directors and the individual superintendents were able to affect work to a material extent through this stimulus of rivalry. In some cases, such as the Calico Printers' Association, Ltd., it was found that the separate members clearly kept too much individual control to secure the best results. A report was made and a reorganization brought about which gave a much greater degree of centralization of directive power with improved results.

In Austria and Germany there are several combinations, although they are not among the largest, which took the form of corporations, such as the brush manufacturers of Nürnberg and the soda water manufacturers of Vienna, but these are exceptional. In England, on the other hand, the greatest of the combinations have taken this form, and their reasons for doing so are substantially those given in the United States

that thereby they can make more savings, and they can enter thus more effectively into the world's markets.

Very peculiar in its form, and for the time being exceptional in its methods and results, was the brass bedstead combination in Birmingham, England, organized and largely managed by Mr. E. J. Smith. As a result of much observation, Mr. Smith had reached the conclusion that ruinous competition was often the result of ignorance and careless management on the part of some competing establishments, they never having taken the pains to figure accurately their exact costs of production. He believed that it is not merely good business policy to get fair profits, but that it is also immoral under ordinary circumstances for a manufacturer to sell his goods below cost with the certainty of ultimate ruin before him if he continues the practice. He likewise was of the opinion that the laborers should have an active interest in the business and should prosper with the prosperity of their employer. Acting on these principles, he organized several combinations on substantially the following plan:

In the first place, the laborers of all the plants entering the combination must be organized into a union so that they can act as a unit as well as do their employers. In the second place, each establishment must make a very accurate statement of its actual cost of production, including interest on capital invested, a fair salary to the manager, even though he be the owner, a reasonable amount for depreciation of plant, and even at times a certain allowance to the employer above his actual salary for the added expense to which he is put by virtue of his higher social station. On the basis of

these returns, then, a minimum cost for the product was fixed for all of the establishments, and no one was permitted to sell below a certain percentage above that rate. Each employer managed his own establishment, sold his own goods, acted entirely independently in every way, with the exception that he must not cut his price below a certain percentage of profit on this agreedupon minimum cost. If, with the market rate thus fixed substantially by the cost of production in the poorer plants, one could make his products cheaper, owing to greater skill, his profits were naturally larger. The laborers were to benefit also from the combination in like proportion, inasmuch as starting with agreed upon normal wages on the basis of a minimum price and normal profits, they received a bonus of an increase of wages in proportion to every increase in profits made by their employer. The workmen agreed to work for no one excepting employers belonging to the association, whereas the employers, on their part, agreed to hire no one excepting men belonging to this union. It was thus a coalition between employers and employees to secure high wages, and at any rate reasonable profits, although this might well be at the expense of the general consumer. Mr. Smith did not consider one of his combinations a success until it had shown itself able to increase prices. He did not think that the consuming public ought to be aggrieved at any normal increase in price thus made, because he believed that laborers and capitalists are worthy of their hire, and that consumers ought to be willing to pay not merely cutthroat prices, but what he calls "reasonable prices."

He acknowledged that the average profit agreed

upon for the bedstead combination was about 10 per cent. on the entire cost of production, and that in the industry in question a turnover of the capital was expected from two to three times each year, making certainly a profit that would, by most consumers, at any rate, if not by others, be considered plenty high enough. This plan of Mr. Smith's seemed to have worked very successfully for some ten years in the bedstead trade, and to have spread successfully in other lines; but later difficulties arose and eventually the combination was discontinued. The chief difficulties came first from the attempt to prevent the public from getting the benefit 1 of the best methods of production, since prices were fixed really upon the highest costs; and second, that the alliance with the unions was also an attempt to exploit the public by cutting off the normal efforts of the workmen to get their full share of the improvements in the best plants. The high and secure profits eventually called in so many outside competitors whom the alliance could not afford to buy up that it went to pieces leaving the trade in bad condition.

It is probable that in Europe capitalization is, relatively speaking, not so high as in the United States. This is due in part to business habits-more particularly probably to the greater degree of publicity required for corporations as well as for most other forms of business enterprises. In England, when one of the large corporations has been formed, there has been made pretty regularly a careful appraisal of the value of the separate plants as going concerns with a capitalization at a moderate rate of the earnings of the separate plants for several years preceding the combination. It is doubt