In the case of the powerful sugar combinations of Austria and Germany, the refiners of sugar guarantee 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, is below this minimum price, the refiners must make up the difference, and recoup themselves by higher prices to the consumers for the refined product. Such a plan of working has for many years proved eminently successful in Austria, and there seems no reason to doubt that a similar result will be 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 say that in that business, where individual taste is of so great importance, they have found it wiser to encourage each individual superintendent to increase his sales as much as possible by exercising his inventive skill in pro

ducing a special quality of goods. They stimulate 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 is maintained, so that the managing directors and the individual superintendents are able to affect work to a material extent through this stimulus of rivalry.

In Austria and Germany there are several combinations, although they are not among the largest, which have taken 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 so far as I am aware, entirely unique in its methods and results, is 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 believes 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 is 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 has 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 rea

sonable 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 is fixed for all of the establishments, and no one is permitted to sell below a certain percentage above that rate. Each employer manages his own establishment, sells his own goods, acts entirely independently in every way, with the exception that he must not cut his price below a certain percentage of profit on this agreed-upon minimum cost. If, with the market rate thus fixed substantially by the cost of production in the poorer plants, one can make his products cheaper owing to greater skill, his profits will naturally be larger.

The laborers 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 receive a bonus of an increase of wages in proportion to every increase in profits made by their employer. The workmen agree to work for no one excepting employers belonging to

the association, whereas the employers, on their part, agree to hire no one excepting men belonging to this union. It is thus a coalition between employers and employees to secure high wages, and at any rate reasonable profits, although this may well be at the expense of the general consumer. Mr. Smith says that he does not consider one of his combinations a success until it has shown itself able to increase prices. He does not think that the consuming public ought to be aggrieved at any normal increase in price thus made, because he believes that laborers and capitalists are worthy of their hire, and that consumers ought to be willing to pay not merely cut-throat prices, but what he calls "reasonable prices."

It is true that he acknowledges 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 turn over 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 suc