visionary but a decade ago. The world-wide publicity and attention given to this phase of war-time economics is bound to produce permanent results of far-reaching effect.

In the following survey of significant trends in the evolution of cartels, syndicates, trusts, and state monopolies during the war attention will be given primarily to typical developments of a permanent character. Temporary war measures will be discussed only in so far as they are symptomatic of a universal tendency toward syndication and may ultimately lead to other permanent forms of monopoly.

WHY TRADE COMBINATIONS HAVE INCREASED DURING THE WAR

In the years before the war the desire to establish uniform prices and to avoid competition within an industry or a trade was, on the whole, the main motive that actuated producers and dealers to form cartels, syndicates, or trusts. The great increase in the number of trade combinations during the war is due to a number of other considerations which have grown out of war-time conditions. They vary somewhat in the different countries. In Germany and Austria the dearth of raw materials and the necessity of finding suitable substitutes acted as a stimulus for closer cooperation within certain industries which, before the war, procured their supply of raw materials from foreign countries. Thus, in the year 1915, the need of substitutes for tinplate, tin for soldering, pewter, copper, and antimony for the manufacture of gas meters prompted the three organizations existing in that industry to combine and form the Metal Distribution Office for the Utilization of Gas Meter Manufacturers. An experimental laboratory was opened for the discovery of substitutes and satisfactory results are said to have been attained through this centralization of efforts. The scarcity of fuel and the resulting shutdown of factories led to a syndication of interests in other industries for the purpose of safeguarding their supply and distributing the available quantity of coal equitably.

The effort to protect common interests against the everencroaching control of the state authorities has proved to be a strong stimulus in Germany toward the voluntary formation of

cartels during the war. There have been many complaints from syndicated interests that the policy pursued by the government authorities is marked by an unscrupulous destruction of all the values so laboriously acquired by commerce and industry, and that there exists an intentional pushing aside of these voluntary organizations. In many cases this antagonistic attitude of the government is said to be due to selfish price manipulations on the part of cartels. In several industries compulsory syndication and even a state monopoly is feared by private interests and it is felt that the solidarity of a voluntary syndicate organization will be helpful in protecting the trade interests. For example, the federal authorities have been called upon to work for the voluntary syndication of leather factories in order that compulsory syndication may not become necessary. Similarly a combination was recently formed by furniture manufacturers, the "Wirtschaftsdienst der deutschen Möbelindustrie, e.V.," the object of which is, among other things, to avoid public administration of the furniture supply by calling upon the trade itself to overcome the difficulties in the way of providing the public with the furniture needed. It is interesting to note in this connection that organized private interests throughout the world are exhibiting an increasing antagonism to government control and possible state ownership and are advocating the abolition of all war-time measures of this kind at the earliest possible time. This subject will be discussed more fully under the heading of "State Monopolies."

Direct encouragement by government authorities has unques-, tionably, more than any other factor, promoted the formation of trade combinations since 1914. This is most noticeably the case in Great Britain and in the United States where it had its inception chiefly in the desire to promote foreign trade. The widespread attention given to the investigations of the United States Federal Trade Commission into foreign trade conditions' focused public attention here and abroad particularly on the efficiency of trade combinations for export trade. The dislocation of foreign trade relations incident to the war, the elimination of Germany from overseas markets and of German interests from domestic 1 Report on Co-operation in American Export Trade.

corporations, the opening up of new markets, and especially the problem of export trade after the war-all these factors combined to make the question of foreign trade expansion an issue of national rather than private interest. "Co-operation in export trade" became a winged word.

In the United States the so-called "Webb Law" was enacted by Congress, and approved April 10, 1918. With certain restrictions associations for engaging in export trade were made lawful under this act.

In Great Britain special departmental committees appointed by the president of the Board of Trade made inquiries into many of the most important and staple trades, and most of these committees recommended that British manufacturers should form combinations. In July, 1916, Mr. Asquith, then Prime Minister, appointed a committee, of which Lord Balfour of Burleigh was made chairman, to consider the commercial and industrial policy to be adopted after the war. This committee held 49 meetings, in addition to extra meetings of special subcommittees, and examined numerous witnesses and a large amount of documentary evidence, including the reports of the above-mentioned committees of the Board of Trade. In its final report3 it stated as follows:

It is in our view necessary that in some important directions the individualistic methods hitherto mainly adopted should be supplemented or entirely replaced by co-operation and co-ordination of effort in respect of (1) the securing of supplies of materials, (2) production in which we include standardization and scientific and industrial research, and (3) marketing (p. 34).

We are of opinion that every encouragement should be given by the government to the formation of combinations of manufacturers and others concerned to secure supplies of materials, and that, when it appears expedient that the control of mineral deposits in foreign countries should be obtained, all practicable support should be given (p. 37).

We believe that such development (the formation of combinations for export trade) is not only desirable in some cases, but is practically inevitable Public Act, No. 126, 65th Congress.

2 Report of the Committee on the Engineering Trades after the War, p. 26; Report of the Committee on the Iron and Steel Trades after the War, p. 45; Report of the Committee on the Textile Trades after the War, p. 179; Report of the Committee on the Electrical Trades after the War, p. 8.

3 Final Report of the Committee on Commercial and Industrial Policy after the War, London, 1918.

under modern economic conditions, and we think that the attitude of public opinion, of local authorities, and of the state, which, broadly speaking, has hitherto been more or less avowedly antagonistic to the very principle of combination, must be modified (p. 38).

The Garton Foundation made the following recommendation: Industrial concerns will need to unite for the joint cultivation of foreign markets, sinking their individual rivalries and jealousies in the common object, receiving much more active aid from the Board of Trade and the Consular Service than has hitherto been given.1

A subcommittee of the Advisory Committee to the Board of Trade on Commercial Intelligence, which was required to report in what industries it would be desirable that efforts should be made to induce manufacturers to combine or federate for the promotion of their joint interests in export trade, reported in favor of combinations. It found that the German cartel and the American and Canadian amalgamation systems were able to provide in a more effective manner than individual traders for the distribution of orders in such a way as to permit of the greatest possible amount of specialization by each plant, for branch offices holding stocks in export markets, for representation of individual manufacturers, for reduced selling costs, and for long-sighted advertising and development campaigns.

The Board of Trade accepted the report, which recommended that the Board should defray part of the cost of the dispatch by such associations of expert investigators to approved overseas markets, and, furthermore, that when desired the Board should appoint officers to attend the meetings of the executive committees of such export associations in an advisory capacity. Arrangements were made at once for a joint investigation by the Department of Overseas Trade and representative associations of the jewelry, silverware, electroplate, and allied trades of the South American markets.2

It is interesting to observe that the activities of the Board of Trade in promoting combination among manufacturers and exporters have encountered considerable criticism and opposition.3 It 1 Memorandum on the Industrial Situation after the War (London, 1916), p. 58. 2 Board of Trade Journal, Feb. 21, 1918, p. 208.

3 The Economist, 1917, p. 868; 1918, pp. 249, 335 ff.

is argued that the policy advocated by the Board of Trade "is socialistic, is being carried on in the face of protests from chambers of commerce and from merchants, who naturally object to money paid by them in taxes being used for the ruin of their own business." In Canada the acting Commissioner of Labor, W. F. O'Connor, in discussing present and future trade conditions in that country, advocated the formation of selling combinations on the plan of . European export cartels, as follows:1

As a result of war conditions Canada is now selling all she can produce, but we ought to organize so that we may sell with efficiency, as after the coming peace the powers now clamouring at our counters may require to be coaxed or informed. Canada's industrial equipment is said to be of a capacity twice or three times more than its home trade requirements demand, and only by greater export trade or through the extension of the home market by an abnormal immigration can extensive scrapping of plants be avoided. Production is not enough; what is produced must be sold. Efficient selling will reduce the cost of selling, and not only the manufacturer but the consumer will gain. Labour also will benefit through the greater volume of employment afforded through the export orders which efficient selling organizations will secure. A board or commission with jurisdiction over trade combinations and trade methods is therefore as much a necessity for the purpose of foreign trade as for internal trade.

War conditions have given rise to still another fertile cause for the concentration of commercial interests. The accumulation of considerable capital during the war in certain quarters in neutral countries, where fortunes have been made in an incredibly short time, made possible heavy investments in productive enterprises. Well-financed concerns absorbed smaller ones, especially in the Scandinavian countries. This accounts for the comparatively large number of amalgamations formed in Sweden, Norway, and Denmark during recent years. Similar developments may be observed in Holland, Switzerland, and Spain. An unprecedented growth of big business as a result of the war, together with active government support in the form of subsidies, tariff adjustments, etc., have materially quickened the process of industrial and trade syndication in Japan, where commercial organizations had been highly developed prior to the war.