New-York tribune., 1896-11-27
THE HISTORY OF A TRUST.

The reported collapse Of the Wire Nail Trust
affords striking illustration of the workings of
such combinations and Of the fOOliShneSS OF
much that Is said about them. This trust was
formed under the present tariff, with lower
range of duties on wire and cut nails than had
existed for many years. 1t was not formed be-
cause Of the duty or Of the change, nor had the
extent of the duty anything whatever to do with
its workings or It's collapse. The price Of nails
In this country has been so low for many years
that the duty has had no practical effect what
ever except to defend the industry at times
against the unloading Of foreign products at a
sacrifice The combination was formed for the
purpose of stopping the competition OF home
manufacturers, by which the price had been so
far depressed that the manufacture had become
improbable to nearly all concerned.
About nine years ago wire nails were first
quoted at SO 20 per keg, while cut nails were at
that time selling at 81 TO- The rapid growth
OF the wire nail manufacture steadily reduced
the price. and brought abont sharp competition
with the cut nail works; but In the earlier stages
the rates of duty then about 4G TO 60 per cent
had nothing to do with the price or production
IN this country. And when the duties were re-
duced by the Act Of 1890 to 81 per cent at the
lowest and 4615 per cent at the highest rate. the
cost of imported nails was still much higher
abroad than here that the duty was practically
without effect The Act Of 1894 reduced the
duty to % per cent. But the price had by that
time been depressed by home competition SO
far that again the change of duty had prac-
tically no effect. Prom 50 80 per keg the price
was reduced prior to the adoption of the Nc
Kinley tariff with its lower rate, to %225 per
keg cut nails selling at the same time at 81 00:
within year after the Mckinley tariff went
into effect wire nails had been reduced TO 81 80
and cut nails TO 81 GO, and in February. 1888
before the inauguration OF President Cleveland,
the price had been reduced TO 81 40 for wire
nails and cut nails at the same time sold at
81 A. the latter being at that time and since
rapidly drveo out Of use. so that last year the
production was 5,S41. .403 kegs wire nails and
only 2129.S94 cut nails. The prostratiOn OF
business in 1893 affected this industry much as
others were affected. causing great reduction In
the cost Of the material--in Bessemer pig. for
instance, from about $14 to less than $40 per
, ton at Pittsburg. The severe competition be-
tween the domestic producers as early as March.
1894, before the change Of duties that year. had
reduced the price OF wire nails to % cents per
keg, cut nails selling at the same price. During
the summer both were raised little, and re-
gardless of the reduction Of duty the higher price
continued without much change through the
year. Early in 1895 cut nails were selling at 80
cents and wire nails at 90 cents, and about May
Il the wire nails actually sold at IS cents and
cut nails at 75
r It was this intense competition and destruc-
tive depression Of price which the combination
was designed to prevent Accordingly the pro-
ducers associated. bound themselves to main
tain an established price. and imposed tax Of