"The Cartel is an agreement for a time, the Trust is a permanent structure; the former is therefore a factor in industry full of speculative possibilities, both as regards its actual operation, and because the 'residual' competition of parties who break away at the end of the period is considerably to be feared. … The principle of the pure Cartel is compensatory action. It is an organization in which certain producers deal with themselves, and exist for that purpose in a double relation; they are producers of goods, and purchasers of their own produce. What they stand to lose in one aspect they stand to gain in the other. … "The operation is broadly as follows. The members of the Cartel, meeting as producers in general assembly, determine a price for their product which covers cost of production, being in fact practically a competitive price. This is the base or normal price (_Richtpreis_). Thus they assure themselves, in this capacity, of adequate remuneration. They then sell to the Syndicate, that is to themselves as members of the Syndicate, for what is called the ‘taking over’ or ‘accounting’ price (_Verrechnungspreis_) which is usually on the average higher than the base price, so that they have now created for themselves as producers a ‘Cartel advantage.’ The Syndicate then resells to the consumer, for a price which will be as high as it can get, but which varies with the competition to be met in different parts of the market; this price (_Verkaufspreis_) may not in some cases be so high as the taking-over price, or may not exceed it by more than the margin necessary to cover the Syndicate’s expenses of management. … It is the Syndicate which figures in the public eye; and while it itself offers no sign of monopoly profit it shelters the companies which gain by its handling of their goods. It conceals monopoly dividends." _D. H. Macgregor, Industrial Combination (G. Bell & Sons, London, 1906)._ COMBINATIONS: The Coal and Coke Cartels. Their influence. An elaborate history and description of the "Monopolistic Combinations in the German Coal Industry," by Francis Walker, was published for the American Economic Association in 1904. These are treated as representative, because, says Mr. Walker, "the most important and fundamental of all German castellated industries" are those in mining and metallurgy. He traces their development from a beginning in 1858, when an association of the mining interests of the mining district of Dormund was founded. In part, his conclusions as to the effect of the coal cartels are as follows: