wish that a decision respecting its further prolongation should be reached by October 1.

The same procedure as in the case of the coal and steel syndicates—namely, the threat of a compulsory syndicate was followed by the government for the protection of the interests of the cement industry. Prior to the summer of 1914 high prices and tempting profits had given rise to numerous new enterprises. In order to avert an impending overproduction, the existing cement cartels shortly before the war made an effort to buy up some of the leading newly established plants, to shut them down, and thus to curtail production. While overproduction was checked to some extent by this action of the cartels, with the outbreak of the war lucrative war orders gave a fresh impulse to speculation. The various cement cartels showed a growing disinclination to co-operate with one another. Finally the government authorities, fearing that the increasing lack of solidarity in the industry would become detrimental to its interests, exercised the necessary pressure to bring about the formation of a cartel agreement covering the entire cement industry and resulting in a firm price policy.

The second outstanding development in the war-time history of German cartels involves the coming together of the few big concerns which control respectively the electrical and the dye-color industries. Over against the tendency toward decentralization so noticeable in the coal and steel industries, we find a voluntary consolidation of interests taking place in the electrical and the dye-color industries. The underlying reasons for these divergent tendencies may be found in the fact that the former have been very prosperous during the war and are looking forward to an increased volume of domestic business in the reconstruction period after the war. By remaining independent and outside of a syndicate agreement which allows them only a certain limited allotment, some of the large concerns expected to do a more profitable business as long as the demand was great during the war. On account of the universal dearth of raw materials they anticipated a continued strong demand during the reconstruction period which they would be in a better position to take advantage of than the smaller concerns who favored syndication for equally

selfish reasons. On the other hand the electrical and the dyecolor industries, which had built up a large export trade before the war, have suffered enormous losses in their foreign investments and look with apprehension upon the strong competition which has grown up in other countries during the past four years. In their case foreign competition prompts them to join their resources and facilities. By solidarity of action they expect to be in a better position to meet foreign competition.

The German electrical industry prior to the war was controlled by two large groups or communities of interest, the Allgemeine Elektricitäts-Gesellschaft, which controlled about forty-five per cent of the entire electrical business of Germany, and the SiemensSchuckert concern, which controlled about thirty-five per cent. While these two groups were formerly more or less independent of each other the war brought about a loose organization. At first a war committee covering both groups was formed. Later a permanent organization was established, known as the Central Association of the German Electro-Technical Industry.

I

Likewise the German dye-color industry was consolidated during the war into a community of interests or an entente, the "Anilinkonzern." Immediately prior to the war the industry had been dominated by seven concerns which formed two groups of interests. They had grown out of sixteen individual concerns engaged in the manufacture of coal-tar dyes, by a gradual process of absorption from 1912 to 1914. In a review of the German chemical industry for the year 1917, the Frankfurter Zeitung states that the seven firms which form the new chemical combine have increased their capital to 353,400,000 marks, partly with a view to the erection of new plants, especially for the extended production of nitrates, and partly also in order to water their stock and check the rise of dividends. The present shareholders were given the option of taking up the new shares at 107 per cent. For the six companies surveyed (Höchst, Badische Anilin, Bayer, A. G. für Anilinfabrikation, Griesheim, and Weiler-ter-Meer) the gross profits for 1917 were 194,900,000 marks, or 41,400,000 marks in excess of those for 1916. The amounts written off totaled 63,400,000 marks, * Revue d'économie politique (1918), p. 238.

showing an increase of 18,300,000 marks over 1916. The average dividend for 1917 was 18.78 per cent, as against 24.84 per cent for 1916.

A war-time development along different lines is the joining of forces of the coal and iron with the shipping interests. Some of the great German ironmasters, Stinnes, Thyssen, and Haniel, have acquired large coal holdings and in addition have obtained interests in shipping firms and shipyards. An important undertaking of this kind is the new Hamburg Shipyard Company founded in August, 1916, by the Allgemeine Elektricitäts-Gesellschaft, the Hamburg-Amerika, and the Haniel concern, the latter representing the "heavy industry" of the Rhineland. Similarly, Hugo Stinnes, who holds a controlling interest in the German-Luxemburg Mining Company, has become affiliated with the HamburgAmerika line, the Woermann line, the North German Lloyd, and the German-American Petroleum Company. In 1917 the Mannesmann Tube Works acquired the large coal mine "Unser Fritz,” for which purpose it issued 14,000,000 marks worth of new shares. This linking up of coal and iron interests is a characteristic trend of the times, and is noticeable also in Great Britain, for instance, in the case of the Ebbw Vale Steel, Iron and Coal Company, Ltd. Its primary purpose is to make large enterprises selfcontained as far as possible. While this tendency on the part of large industrial concerns to make themselves self-sufficient by so-called "vertical" expansion was noticeable in several countries prior to the war, the dearth of raw materials, difficulties with labor unions, and other factors incident to the war combined to drive "big business" with increased momentum toward this form of industrial concentration in Great Britain, France, Italy, and Germany just as in our own country.

In a review of the German cartel situation, written shortly before his death, the late Professor G. Schmoller called attention to what he considered an important new phase of cartel development, that is, the formation of purchasing syndicates for the purchase of large quantities of raw materials.'

1 Schmoller's Jahrbuch, 41. Jahrg. 2. Heft, p. 436.

While Germany has been cut off from her former overseas markets during the past four years, preparations have been made in the meantime by private interests as well as by the government authorities for extending foreign trade after the war. Although of late the formation of export cartels has not been advocated as much as in the United States and in Great Britain, nevertheless one or two enterprises of this kind merit attention. On February 28, 1918, an Export Trade Company, Ltd., was formed under the Imperial Ministry of Economics. The purpose of this company is to provide German industry and trade with opportunities for participating in the expected revival of export business, especially with countries hitherto hostile. The company bears a semiofficial character and has been founded in co-operation with the Central Association of German Wholesale Trade and the Association of Exporters. The board of directors will consist of eight representatives of trade and industry and eight deputy representatives, nominated by the Imperial Ministry of Economics on proposals made by the association. The new company is to regulate exports during the war and during the transition period.

Another concern formed recently with the participation of the government is the Export Company for the Ukraine, having a share capital of $2,500,000. The Central Union of German Manufacturers, the Federation of Manufacturers, and the Central Union of German Wholesale Firms became members of the new company. The German government has granted to the Export Company the sole right of export to the Ukraine with the exception of fuel. In order to equalize distribution of the orders the Export Company has induced the various German syndicates to appoint expert committees to advise the company in the allocation of the orders, and to put forward the names of those firms which come into consideration for the execution of contracts.

Private interests are backing the Stock Company for Home and Foreign Enterprises, which was incorporated at Hamburg in April, 1918, with a capital of 2,500,000 marks. Exporting and industrial concerns, shipping firms, and banks from all parts of Germany participated in the formation of this export combination.

TRADE COMBINATIONS IN OTHER COUNTRIES

Outside of Great Britain and Germany the most significant developments in other European countries in connection with cartelization of commerce and trade during the war may be observed in the Scandinavian countries, in Russia, and in Italy. The rapid accumulation of wealth in Sweden, Norway, and Denmark has led to the absorption of numerous small concerns by well-financed corporations. In Sweden several export cartels have been formed. In Italy the elimination of German interests, which had been closely linked up with the leading Italian cartels, resulted in a general reorganization of the industrial administrative machinery of the country. Perhaps the most important recent development in Italy's industrial expansion is the action of the Minister of Finance, Nitti, who in July, 1918, arranged a general agreement between the four greatest commercial banking institutions of that country, the Banca Commerciale Italiana, the Credito Italiano, the Banca Italiana di Sconto, and the Banca di Roma, to underwrite the bulk of the new capital stock issued by the Ansaldo works of Genoa. This large shipbuilding, engineering, and armament concern increased its capital from 100,000,000 to 500,000,000 lire. It has now become the strongest industrial interest of any kind in all Italy, constituting practically a trust in its line.

In Russia the Soviet government has promulgated a decree nationalizing foreign trade. It provides that "commercial transactions relative to purchase and sale of products (raw materials, manufactures, agriculture, etc.) with foreign countries and private foreign commercial organizations are controlled directly by the Russian Republic through specially authorized organs." A Council of Foreign Trade has been constituted which shall "keep a register of the demand and supply of exported and imported goods; organize foreign purchase through the government against requisitions by co-operative societies and firms; and regulate the prices of imported and exported goods."

In Australia the Prime Minister in February, 1918, outlined to the Chamber of Manufacturers at Melbourne a scheme for the organization of Australian industry and trade after the war. He stated that the unit of the scheme would be the association representing each industry. This shall be composed of all the produ