by the trustees for each distillery, whose salary is paid out of the trust funds. This manager is, of course, usually one of the leading original stockholders and managers in that distillery. In order that the business may be kept well in hand, reports are required daily from each distillery engaged in manufacture; and each distillery that is running sends in a detailed report every month, showing the exact cost of manufacture of the product and all other details regarding the management of the business. Again, by these monthly reports the trustees are able, if they wish to lessen or to increase the amount produced, to close the distilleries that are working least successfully or to open those that furnish the best opportunity to supply any special market. The trustees are also at liberty to purchase distilleries that are running outside of the trust, and to lease distilleries managed by the trust, whenever in their opinion this plan seems more profitable than to operate them by trust officers. In the latter case, of course, the profits are still held under the control of the trust. This firm control over the different distilleries enables the trustees to control the market by limiting the output of the product to the amount demanded rather than by exporting the surplus at a loss, as was done under the old pools. Almost no attempt has been made by the trust to gain control of the foreign market, and none of the product has been exported at a loss since the formation of the trust. Their comparatively small exports (see Table I, page 300) have been at paying prices. A brief examination of Table II (page 305), which gives the monthly assessments levied upon the members of the old pool (from 6 cents to 18 cents per bushel) from September, 1884, to the formation of the trust in May, 1887, will show how great a saving has thus been effected. Another saving is that which comes from the lessened expenses of management, resulting from the closing of so many distilleries. Nearly all the distilleries in the former pool, to the number of more than eighty, have become members of the trust. In order to limit the output to the demands of the market, these distilleries, if running when they joined, have been from time to time closed, until at the present time twelve distilleries supply the total amount that is placed by the trust upon the market. One or two others are running, but for the production of yeast, or some other product than spirits. It is by no means to be assumed that the decrease in the output corresponds in any manner with the number of distilleries closed. When it is taken into consideration that for several years the output of the distilleries had been often limited to from 25 to 50 per cent of their capacity, many of them even closing for portions of the year, it will be seen that an equal output might be produced by a much less number of distilleries. That there has been a smaller aggregate output is doubtless true, and that to an extent more than enough to balance the lessened amount exported. The amount is held in hand well enough, so that the trust can manage to control the market. An examination of Table III (page 311), which gives the market prices of corn and whiskey from the time of the formation of the first pool, in 1881, to March, 1889, will show that the price of alcohol has not been to any noticeable extent raised by this closing of the distilleries. For some six or eight months after the formation of the trust the prices were lowered eight or nine cents per gallon, although the prices of corn ruled somewhat higher than before. Presumably the purpose of this lowering of the prices at first was to bring pressure to bear upon the distilleries yet remaining outside of the trust in order to force them to join the trust, or else because in the beginning the trust did not yet have strength to force the market. After all or nearly all of the members of the former pool had joined the trust, so that its membership was practically complete, and it became evident that a contest with the distillers yet remaining outside was at hand, the managers of the trust raised the price. The new members would need dividends to keep them contented, and there was also a necessity of accumulating a fund upon which to enter upon this contest with their rivals. A comparison of the prices of corn and alcohol for the year preceding the formation of the trust with the prices from May, 1888 to January, 1889 (see Table III, or Diagram) will show that the profits made by the trust have not been greater than those made by the old pool, unless the cost of management of the distilleries has been much decreased; and yet, during this period from May, 1888, to January, 1889, the trust had put the price high enough to enable them to pay good dividends to members that might otherwise have become dissatisfied and to accumulate a surplus for the purpose of a contest with outsiders. It is from this very evident that the saving in cost of management and manufacture has been very great. It must also be kept in mind that from twelve to twenty distilleries have been earning these dividends on stock that represents some eightythree distilleries. This emphasizes still more the great saving effected in expenses. The immediate result of this increase in price (from $1.05 to $1.09 per gallon, and then to $1.14) was the building of new distilleries, notably the large distillery at St. Paul; the opening of many small distilleries, and the manufacture of spirits by the smaller distilleries in Kentucky, whose normal product was whiskey for aging. When at length it became evident that the distilleries outside of the trust were also making a large product and the output from these distilleries was beginning to have its effect upon the market, the trustees, on the Ist day of January, 1889, again cut the price of the product to $1.04 per gallon, in order to crush their opponents. The smaller distilleries in Kentucky and elsewhere of course closed promptly, or changed the character of their product. The most formidable rivals of the trust, Shufeldt & Co. of Chicago, who had doubtless also made large gains from the increase in price and who had run their distillery at even more than its normal capacity, at once cut down their output, though they have not closed and are even building a new house of 3000 bushels capacity. What the next move will be, remains to be seen. It is said by the managers of the trust that their best policy is to hold the price of the product below the cost of manufacture by most of the rival distilleries and thus keep the market steady. They claim that they are able to do this from the saving in manage TABLE III. MARKET PRICES AT PEORIA FOR WHISKEY AND CORN FROM 1881 TO 1888 INCLUSIVE. 1.14 1.12-1.14 34-40 1.10 1.14 1.10 33-35 33-351 34-323 1.14 351-331 1.09 47-45 1.04 291 33-34 1.14 338-38 1.09 45-49 1.04 30 331-324 1.14 374-36 1.09 471-531 33-29 1.14-1.05 37-38 1.09-1.13 524-574 1.14 44-47 1.10 29-31 1.05-1.09 383-36 1.13-1.14 531-461 1.14 47-43 1.10-1.07 281-41 1.05 381-341 1.14 49-431 1.14 451-424 1.09-1.11 40-39 1.05 43-404 1.11-1.13 381-36 1.04-1.09 42-384 1.13-1.14 354-324| 444-32 1.09 1.14 331-36 1.05 394-46 1.09-1.10 334-314 1.14 354-334 1.05 443-49 AVERAGE YIELD PER BUSHEL.1 1.09 481-47 1.04 30 1.05 1.05 1.05 381-421 1.14 453-40 1.14 424-38 1.14 334-294 ment and from the fact that they run only the distilleries most favorably located. For local trade they can run those that will save freight; and, in fact, they run one in Cincinnati, one in St. The average yield for the last three years is for the Trust or Peoria distilleries. The government report, including all distilleries, gives for the years 1886, '87, '88, respectively, the yield 4.09+, 4.23+, 4.24+. Louis, one in Kansas City, etc. The figures of the trust, gathered from the various distilleries under their control, show that the distilleries at Peoria have an advantage of from 14 to 15 per cent over most of the distilleries located elsewhere, so that here some six are running. It is the belief of distillers not members of the trust, as well as of the trustees, that a Peoria distillery has at least 10 per cent advantage over a distillery located at Chicago, and nearly 20 per cent over one located at St. Paul. This claim seems to be substantiated by the statement of Charles Clark, for many years past a prominent distiller at Peoria, though not now in the business himself. He says that at times of great depression in the business, during the existence of the former pools and earlier, his distillery made regularly 10 per cent on the running capital and 25 per cent on the plant, besides good salaries for the managing members of the firm. With the exception of one year this rate of profit was made for many years prior to the formation of the trust, and in that unfortunate year there was a clear profit of $12,000. During this very time the complaints of distillers in other parts of the country that money was being lost and that no interest. could be made on their investments were doubtless often true. On the other hand, in estimating the ability of the trust to compete with its rivals, it must be remembered that fourteen distilleries must make profit enough to pay dividends on the capital invested in more than eighty distilleries, a drawback amply sufficient to offset any slight benefit in the cost of manufacture. A distiller who has no closed houses to carry, no dividends to pay on capital that is inactive, has certainly something of an advantage. If the trust holds its own firmly, however, this advantage will soon to a great extent disappear, as the trust will doubtless, as opportunity offers, dispose of the useless closed distilleries and turn the dead capital into profitable channels. The trust has, doubtless, had some benefit from the fact that dealers would fear to incur the hostility of so powerful an organization by purchasing from its rivals. This is again offset in part, by the popularity of certain brands of whiskey (though this would apply especially to the Kentucky product) the manu |