Democratic Sentinel, Volume 15, Number 48, Rensselaer, Jasper County, 18 December 1891 — THE STARCH TRUST. [ARTICLE]

THE STARCH TRUST.

CONCERNING ITS ORIGIN AND HISTORY. Hqw It Manipulated Its Job In the McKinley BUI and Thus Gained Complete Control Reciprocity and Our Export Trade—Two Pictures Contrasted—Tariff Shot. Another Octopus. On February 5, 18(0, the leading starch manufacturers of the Uuiteii States met in Buffalo to consider the advisabilit. and the ways and means of uniting their Interests. The out omo of this meeting was the formation of the National Starch Company, popularly known as the “Starch Trust ” The Trust was organized at the end of March with a capital of *10,000,0u0, at Covington, Kentucky. Hiram Duryea, of the Glen Cove Starch i oinpanv, was elected President and Frank Schuler, of the A. Erkenbroehor Starch Company, of Cincinnati, Secretary. Eighteen of the largest concerns in the country camo under the absolute control of the trust Some of these were bought outright for cash, but the greater part were sold for 25 per cent, cash an! 75 por cent in debenture bonds.

The only large factory not in the trust Is that of the Kingston! Starch Company, whose product is a special class of goods not competing with that of the trust Two defunct concerns, the American Starch Company, of Columbus, Indiana, and the Ottawa Starch Company, of Ottawa, Illinois, threatened competition with tho trust, but wero ap-pea-ed, tho former by being taken into the trust on ft long lease and tho latter by being guaranteed a sufficient Income to keep out of business. The trust thus organized proceeded to business. When tho trust was formed lump starch wa3 sol ing at SSO per ton. Tho price was raised to $55 by tho trust and afterward to Stiff, to S7O, and, on Aug. 2, to SBO per ton, or an Increase of 60 por cent, above the price prevailing earlier in the year. In order to make its hold ori tho market absolutely securo, President Duryea had a consultation with .Mr. Thurber and other members of the Wholesale Grocers’National As.-o nation, tho outcome of which was an agreement on the part of the trust to sell at who esalo only, and on tho part of tho wholesa o grocers and jobbers to buy only of tho "trust’’ und to maintain tho trust prices The trust also agreed to grant the jobbers a rebate of 12 per cent, and freight (less onetwentieth of 1 per cent, for expenses). This rebate is paid to tho grocers’ association and distributed by it to all buyers who maintain prices. Having thus secured absoluto control over the production and sale of starch In the United States, tho trust began to formulate its “tariff job.” The duties on starch itself under tho tariff of 1883 wero practically prohibitive. Dextrine and sago Hour, the former manufactured by roasting starch, and the latter an East India product mado ffom tho pith of several varieties of palms, wore still Imported in considerable quantities. Both are used largely In textile and wall paper manufacture as sizing. It was the aim of tho trust to have the tariff so raised as to shut out both of these products, and in this way give it a complete monopoly of tho homo market. To carry out this purposo the trust did not aopear at the public hearings of the Ways and Means Committee, but secured the prlvato car of tho hlghtarift leadera Tho tariff of 1883 covering starch and kindred products was as follows: “Sago, sago crude, and sago flour, free.

“Potato or corn starch, 2 cents per pound: rice starch, 2)< cents per pound; other starch 2 (5 cents por pound. “Dextrine, burnt starch, gum substitute, or British guin. 1 cent por pound.” The schedules as recommended by the Starch Trust, and carried through by Major McKin'oy, were as follows: “Sago, crude, and sago flour, free. “Starch, Including all preparations from whatever substance produced, fit for use as starch, 2 cents per pound. “Dextrine, burnt starch, gum substitute, or British gum, 1 cents per pound. ” The only apparent change in these schedules was that Increasing tho duty on dextrine to IJ7 cents per pound The textile and wall paper manufacturers opposed this Increase, but at the same time they thought that as long as “sago flour" was on tho free list the Starch Trust could not force them to pay exorbitant prices for itsdextrino.

They were mistaken, however, for In January last the Treasury Department decided that sago flour was subject to a duty of 2 cents per pound, being a “preparat on, fit for use as starch.” Tho Job concocted by the March Trust and carried through by McKinley, was thus complete. Tho Trust had gained Its object The already prohibitive duty on starch was retained, that on dextrino was raised 50 per cent, and a prohibitive duty was imposed on sago flour. The effect of this job on the dextrine and sago flour used by the wall paper and print cloth manufacturers can bo easily shown by a comparison of tho prices before tho McKinley tariff was enacted with those ru.ing now. These are as follows: August, November, 18111. cts. $ tb. cts. It. Dextrine 4 6-6> 4. Sago flour a itfSji 4(3.494 This increase In the pr'ces of dextrino and sago flour bears heavily upon the cotton-cloth manufacturers, since It affects the cost of the goods which we are exporting to China and other Aslastlc countries in competition with France and England Such Is the history of tho Starch Trust and Its operations No wonder that McKinley wants tho tariff let alone. And why? Because Its jobs are manifold, and when brought to light will cause the repeal of his bill.