418 
THE NATIONAL NURSERYMAN 
THE NEED OF ORGANIZED KNOWLEDGE 
IN THE NURSERY BUSINESS 
T HE big problem before the National Association of 
Nurserymen, in fact all nurserymen, is the one of 
co-operation so that production may be regulated 
to prevent over-prdduction and waste and stimulate the 
production in those lines where there is a shortage. In 
other words to foster and guide the business in the way 
it should go. 
Mr. Watson, the president of the Association had this 
in mind when he talked about statistics at the Milwaukee 
Convention, and as he pointed out, the first essential is to 
get together data or statistics that will give an idea of 
the situation in general. 
If the total of the whole supply is known, prices would 
be more intelligently fixed. 
It is merely following the government’s lead in its 
crop reports of wheat, cotton, corn, etc. 
It is not likely the German plan will appeal to the av¬ 
erage American, but it is worth reading and careful 
thought and is pregnant with suggestions along the lines 
which must be followed, if our business is to be placed 
upon a modern and sound economic basis. 
Arbitrary price fixing is not what is wanted, but a 
regulation of the supply so the nurseryman will get bet¬ 
ter returns for his investment and labor. 
The present loose, unorganized conditions are crim¬ 
inal in their waste and tends to breed unmoral business 
ethics. 
THE “GERMAN IDEA” OF GOVERNMENT’S RELATION TO INDUSTRY 
Germany is, in a sense, a land of co-operation imposed by Gov¬ 
ernment fiat. Such a country could not tolerate the idea of pro¬ 
duction running riot, which at certain epochs becomes the out¬ 
standing characteristic of big industries in countries that main¬ 
tain a greater theoretical and practical democracy than does Ger¬ 
many, in the manner in which they foster business competition. 
The kartell is often confused by American readers with the 
trust, which is a combination under the masterful control of one 
powerful business talent, or, at most, of a powerful financial 
group, with the primary object of destroying or of driving out of 
business all competitors in the same field; but in almost every 
case the history of a German kartell will show that • it was 
founded in some period of industrial or financial depression with 
the purpose of resisting the lowering of prices and the over-pro¬ 
duction of commodities. In a few cases, however, there were 
formations of preventive kartells, that is, of kartells established 
not during a period of bad business, but in anticipation of such 
a period, in order, if possible, to forestall it; but such cases are 
quite rare in Germany. 
The kartell usually has the legal status of a stock corporation, 
is one, in fact. Its object is the cooperative sale of a certain 
product. For the attainment of this object two methods are 
pursued: either through a sales bureau (Verkaulsbureau) under 
central control, or through direct sales, which are also, however, 
under the central control. The Verkaufsbureau fixes prices; 
all the products of its associates pass through its hands; it dis¬ 
tributes the orders among the affiliated factories in accordance 
with their capacity; all publicity work is performed by it, as well 
as all necessary negotiations with customers. This seems the 
simplest solution of the sales problem, yet it is by no means 
master of the field in the administration of the German kartell. 
As above indicated, in many of them the executive board fixes 
the prices, leaving to each producer the task of finding his own 
market, but limiting, in some manner, the total of his output, or 
restricting his sales to a certain geographical district. 
The entire system would be broken up if any of the manufac¬ 
turers, thus left to themselves, should yield to the temptation of 
securing a large order by asking a lower price than that agreed 
upon, or of achieving a more efficient utilization of their plants 
by manufacturing for sales outside their own districts. It was 
therefore necessary to establish a rigorous system of super¬ 
vision; “active, intelligent and more or less pugnacious” inspec¬ 
tors have a right, at any moment, to make whatever verification 
they like, inspecting the books, the correspondence, the manufac¬ 
turing end, or the stocks carried, of any firm in the combine. 
Punishments, in the event that frauds are detected, are severe. 
Affiliated companies are required to deposit with the executive 
board drafts accepted by them, which are presented at the proper 
banks if any fine that has been incurred is not paid at once. 
When there is a sales bureau the thing is easier still to regulate; 
in that case the amount of the fine is simply charged to the de¬ 
linquent firm, and thus subtracted from the amount accruing from 
its sales. 
The essential point about any kartell is that it fixes the price 
for all the firms in it, and this applies with equal force to both 
the sales bureau method and to that of separate sales with cen¬ 
tral supervision. In either case the object attained is the exclu¬ 
sion of cut-throat competition by the general acceptance of a 
reasonable price at which to sell products. 
One result of this prime characteristic of the kartell is that it 
is impossible to form a kartell unless you have succeeded in 
making at least 90 per cent, of the productive agencies in your 
field join the organization. In fact, it is desirable that even a 
greater proportion than that be inside the movement. For a 
long time it was impossible to get up a kartell for sugar refining 
in Germany, for it was first necessary to include the large num¬ 
ber of sugar producers who dealt not in refined sugar but in 
crude sugar, much of which in those days went directly to con¬ 
sumers without passing through the process of refinement; and 
it was just these small producers who were hardest to convert 
to the advantages of a broader organization of industry, owing 
to their ingrained prejudices against anything that was large and 
strong and capable, and to their distrust of the financial classes. 
Another characteristic resulting from the very nature of the 
kartell is this: the kartell is feasible only if the product to be 
sold is rather uniform in quality; only if quality and prices, in 
other words, can be made practically the same for the various 
affiliated companies. In a word, the establishment of a kartell 
depends on the possibility of setting up a fixed scale of prices. 
This is the case with coal, with smelted metals, half crude steels, 
sheet metals, wires, needles, pins, &c.; but once your product is 
variable instead of uniform, once its selling price depends con¬ 
siderably on virtures imparted by peculiar and little known modes 
of manufacture, it at once becomes impossible to set up a scale of 
prices and the formation of a kartell is out of the question. A 
good example of the difficulties attending the founding of a kar¬ 
tell under these circumstances is that of the textile trade: 
while the cotton spinners were able to enter into a kartell, the 
weavers could not do so because their output is too varied in 
character, and because, being subject to the fickle demands of 
fashion, it is not possible to establish a fixed scale of prices. 
'The selling price is fixed by the executive board, which, owing 
to the ease with which the unanimous consent of the companies 
is obtained and owing also to the German protective tariff, has 
no difficulty in maintaining a sufficiently remunerative price in 
the home market. 
