Last but not least, concentration of demand has proved a vital factor in furthering the tendency toward combinations. Maximum efficiency in the placing of large government contracts for war materials of all kinds made joint action on the part of manufacturers or dealers a matter of great importance to the public interest. In numerous instances government authorities have advised producers or manufacturers in certain industries to combine, so that contracts for supplies could be allocated more efficiently. GREAT BRITAIN The world-wide impetus given to the combination movement by the new economic conditions produced by the war is most noticeable in Great Britain. While large trustlike concerns, such as the Cambrian Coal Combine, the Coats Combination, etc., as well as smaller price-fixing combines, have existed in Great Britain for many years, British manufacturers always showed a pronounced tendency toward individualism, and public opinion was more or less antagonistic to monopolistic enterprises. A marked change has taken place. Official committees declare themselves unqualifiedly in favor of combinations. The Departmental Committee appointed by the Board of Trade to consider the position of the engineering trades after the war declares: "We ourselves approve of trade combinations amongst manufacturers, as we also approve of combinations among workmen." The Committee on Electrical Trades reported: "It is essential that output should be thus consolidated instead of remaining in the hands of a number of weak concerns, many of which, moreover, have further reduced their competitive power by dabbling in a variety of productions." According to the Economist the Board of Trade has adopted the promotion of trade combinations as its "considered policy." A survey of the reports of annual meetings of some of the leading British industrial concerns for the past three years shows that co-operation among producers or dealers, a joining of like interests in the form of amalgamations, fusions, or pools and similar developments along lines of syndication for domestic as well as export trade have taken place on a large scale. I 1 December 1, 1917, p. 868. A few typical instances in the chemical, the steel, and the shipping industries will illustrate this tendency toward economic centralization. The largest enterprise of this kind backed by the government grew out of efforts to make British industry independent of the German dye-color industry and to establish a national dye-color industry which would constitute the keystone for the British textile industry. Shortly after the outbreak of the war the British Dyes, Ltd., was organized, and financed largely by the government. The latter undertook to advance £1 on debentures for every £1 of share capital subscribed up to a million, and thereafter £1 (up to a maximum of £500,000) for every additional £4 of subscribed share capital. The government also gave £100,000 for purposes of research. In a speech delivered by Sir A. Stanley, president of the Board of Trade, in May, in the House of Commons, he stated that: Negotiations were in progress for the amalgamation of British Dyes, Ltd., and Messrs. Levinstein, Ltd., who were the most important of the dye manufacturers of Great Britain. The arrangement proposed provided for the new company being permanently under British control, for government representation on the board of directors, and also for securing reasonable prices and equitable distribution of the company's products to the consumers.1 After lengthy negotiations the deal was apparently concluded, and on August 21, 1918, a meeting of shareholders of British Dyes, Ltd., decided definitely on amalgamation with Levinstein, Ltd. The branching out of the new combination into allied lines is indicated by the recent linking up of Levinstein, Ltd., with the Nobel's Explosives Company, Ltd., which has acquired a large stock interest in the great dye concern of Manchester. The extent to which the British iron and steel industries are organized may be seen from the fact that the Board of Trade Committee Report on those industries mentions thirty-five associations of producers. A glance through the pages of the British Directory of Directors for 1918 will show a whole network of interrelations through interlocking directorates linking up the great iron and steel industries with banking, shipping, and other interests. 1 Board of Trade Journal, May 23, 1918, p. 627. A Recently an amalgamation was negotiated in the steel industry between the Workington Iron and Steel Company; Steel, Peech and Tozer; Samuel Fox and Company; and the Rother Vale Collieries. The two first named own the whole of the share capital of the Frodingham Iron and Steel Company, Ltd., which in turn owns one-half of the share capital of the Appleby Iron Company. The new concern is to be known as the United Steel Companies, Ltd., and is capitalized at £7,680,000. Vast outlays of capital, well-equipped modern plants, and substantial interests in iron and coal production combine to make a formidable array. It is calculated that the union of interests will be capable of producing well over one million tons of steel of all classes per annum. similar joining of interests took place as a result of an alliance between the Metropolitan Carriage, Wagon, and Finance Company, Ltd.; Vickers; the South Metropolitan Electric Light and Power Company; and the West Kent Power Company. This new combine also has agreements with the General Electric Company and the Birmingham Small Arms Company. The Metropolitan increased its capital to £10,675,000. At the last annual meeting of Siemens Brothers and Company, Ltd., the announcement was made that an alliance had been negotiated with Dick, Kerr and Company, Ltd., in the field of dynamo installations, and that other alliances are in contemplation for the purpose of reducing unnecessary competition among other British companies doing similar business. An important amalgamation was consummated during the past year in the agricultural implement and machinery industry by the fusion of Ruston, Proctor and Company, Ltd., of Lincoln, with Richard Hornsby and Sons, Ltd., of Grantham. Some idea of the magnitude of this deal is furnished by the fact that the combined capital of the two concerns amounts to $7,027,250. Both companies have established a large export business, particularly with Australia. A noteworthy combination in the shipping business was established by the Royal Mail Steam Packet Company and its associated companies. In conjunction with certain leading French and Italian shipping interests the British concern has acquired a large holding in the Argentine Navigation Company. Through the latter concern an extensive organization has been created for linking up the South American ports by means of coasting vessels, river craft, tugs, lighters, etc. The Committee on Shipping and Shipbuilding in its final report made the following statement relative to combinations in the shipping industry: We think that British shipowners ought not to disregard the tendency of modern industry toward closer organization, since united action on the part of foreign shipping can only be met effectively by similar action on the part of British shipping. It is for the British shipowners themselves to devise the best methods of bringing united action into play.' GERMANY The cartel situation in Germany during the war exhibits a number of interesting features. In the first place there is to be seen a noticeable tendency toward decentralization, directly opposite to the current movement prevailing in other countries, which favors trade combinations. This trend of sentiment toward individualism and free competition made itself felt to such an extent in several instances where syndicate agreements were about to expire that co-operation was attained only in response to pressure by the government authorities with the covert threat of compulsory syndication or even government monoply in case of failure to form a voluntary combination. Two cases of this kind concerned the two largest and most important syndicates of Germany. The first instance was in connection with the imminent dissolution of the Rhenish-Westphalian Coal Syndicate, one of the most powerful cartels in the empire. The voluntary syndicate agreement was to expire in November, 1915, and disagreements among the mineowners made the voluntary formation of a new syndicate improbable. In view of the fact that the syndicate controls the major part of the country's production and distribution of coal, the government availed itself of the excellent organization of the syndicate for war purposes. However, the disinclination of several large coal magnates to join in a new agreement caused the situation to become so serious that the Federal Council took action. A decree2 issued on July 12, 1915, provided for the formaI London, March, 1918. Reichsgesetzblatt, 1915, No. 113, pp. 535 ff. 2 tion of a compulsory syndicate unless the old agreement should be renewed. This threat of state intervention brought the recalcitrant colliery owners to terms, and on October 14, 1916, a socalled "transition syndicate" was formed. On April 1, 1917, the syndicate agreement was renewed for five years. The new syndicate includes all of the coal mines operated in the RhenishWestphalian coal district and comprises also the Prussian state mines. On this occasion the syndicate succeeded in taking over the entire wholesale coal trade, thus becoming practically a private monoply.. A similar situation developed in connection with the Steel Syndicate (Stahlwerksverband). On January 20, 1915, representatives of the steel works met to discuss ways and means whereby the German iron and steel industry could be formed into a solid combination in view of the great changes which were expected to take place after the war. During the following May a special committee presented the draft of a scheme for the formation of a steel federation to be known as the "Stahlbund." The Bund was not to be a syndicate for sales in the sense of the existing syndicates, having nothing whatever to do with sales. The principal duty allotted to it was to promote the formation of syndicates and to maintain existing combinations. Besides looking after the interests of the Steel Syndicate itself the new federation was to endeavor to form sales syndicates for bars, plates, sheets, wire rods, and tubes. According to the statutes of the Federation, steel products were to be divided into the following three groups: (a) for semifinished steel, railway material, and shapes; (b) for bars, wire rods, plates and sheets, tubes and rolling stock; (c) for forgings, castings, and sundry steel products. The works in group c were for the present to remain independent, so as not to complicate the process of syndication by their inclusion. Negotiations were later suspended on account of disagreement as to a method of computing the allotments. Recently they were resumed in deference to the wish of the government that the negotiations should be conducted simultaneously with those for the renewal of the Steel Syndicate. The latter's agreement terminated at the end of 1918, and the government expressed a |