23

A.—s

to new-comers who would attempt to establish novel sources of supply, but also that if the prices of sugar, brandy, beer, petroleum, salt, &c. (articles paying heavy internal-revenue duties), were increased by the indirect taxation of private companies controlling production, buying-rates, sellingrates, &c, the quantities consumed would be considerably lessened, and the Government revenues suffer. Therefore it was resolved to deal with combinations controlling the markets of such commodities, and the Government introduced in 1897 a Bill to the effect following: No combination could be considered as valid till it had been recognised by a State Board, to which must be declared the aim and means of the combination, the percentage of the industry, the number oi establishments (each with its firm's name and capacity), the rights and duties of members, fine, agreed on, &c, office of combination, officers (with their duties), method of representation abroad time for which agreement is made, mode of settling difficulties arising from agreement. If th< Government, after due examination, approved the combination was registered, but the Government officials had right to inspect books and make examination of officers. This Bill has, however, no< yet been passed, and is practically set aside. There seems at present no probability that any definite anti-trust legislation will for some time control Austrian combinations. Germany. There is some difficulty in assessing the position occupied by combinations in Germany on account of their great variety and the very temporary nature of some of them. Nevertheless, many of the combinations rise from the position of pools or rings into the larger forces of coalition known as trusts. Some of them date back to 1865, particularly in the salt and rail industries, followed ten years after by potash and coal syndicates. The combinations between 1870 and 1890 were so powerful as to extend their influences beyond Germany and become international; in 1897 more than 340 of these were known, and appear to have been formed mainly to meet the strain of foreign competition. In these are not included mere speculative rings or local agreements on prices, for these probably number thousands, but are scarcely to be comprehended under an account of trusts, as they have not the stability of the single compact corporation which embodies the trust proper. It is by the organization of coalitions with almost illimitable capital behind them that public attention is most violently aroused to the consideration of the affairs of trusts, and the flexible, inconspicuous character of German combinations has not had the effect of awaking popular hostility. When, as of late years, there has been a marked increase in prices, much of this is attributed to trusts, but may partly be allocated to increased demand and wider extension of business. The Westphalian Coal Syndicate, which practically controls the coal market of Western Germany, is accused not only of charging excessive prices, but of limiting supply so as to produce monopoly. The syndicate defends itself by replying that the demand in question was temporary and abnormal, and that it was not justified in opening up new mines and engaging thousands of workmen only to close down in a short time afterwards; the increased rates of wages that would certainly be entailed would be followed by discharge and reduction of payments, which would cause public calamity. The matter was brought up in the Prussian House of Representatives on the Ist February, 1900, but it was evident from the reply made by the Minister of Trade and Commerce that the feeling of the Government was rather in favour of the combination than otherwise. In this, as in later debates, the Ministry responded to the addresses made against syndicates by expressing willingness to have the question of trusts investigated and, if necessary, controlled ; but there was evidently no militant spirit against them. Some of the combinations are in the form of single corporations which have acquired the plants of the component members, but they are not many. With the looser formations comprised in simple agreements as to the output, prices, &c, many of the larger combinations have vast territorial extent, and control practically the whole interest of the country in a particular commodity. For instance, the spirits combination includes 97 per cent, of the producers of ardent spirits, and the sugar combination 98 per cent, of the sugar-refiners and manufacturers of raw sugar. The combinations for producing paint-brushes and ultramarine supply not only all Germany, but almost the whole world. If we take the principal industries in detail we shall be enabled to get a better idea of the position occupied by these pools and rings. When salt (previously to 1868 a Government monopoly) was thrown open to free trade the fierce competition engendered gave birth to mnay local combinations, but they were quite ephemeral, and for many years came into existence only to dissolve and reappear in a changed form. In 1887, however, two large combinations—viz., that of North Germany and that of South Germany— practically divided the salt trade of the whole country between them. The method adopted was to apportion business into territories, each allotted to certain members or groups, the productive capacity of each plant being fixed according to agreement based on prior output. There is no absolute rule as to sales among the groups, some having by sub-agreement a central selling bureau, and filling orders from the nearest plant so as to reduce freights. Other groups confine the output of their plant to its circle of former customers. There is no compulsion for any member to remain in the organization, but there is little effort to retire, since the groups are generally formed by the parties which were combined before the main combination was formed. The chief value of the coalition is to steady prices and keep competition from injuring the members. The Sugar Trust is mainly on the lines of that of Austria, but it has certain points of difference. The parties are manufacturers of raw sugar (from beets) and sugar-refiners. The refiners guarantee the producers a minimum price of 12-75 marks (12s. 9d.) per centner, this corresponding to the Austrian rate. The combination affects only the domestic, not the export, rate. The refiners, the white-sugar manufacturers (making white sugar direct from beets), and the producers from molasses pay to the syndicate of German sugar-refiners the difference between the inland normal price and the world market price, plus 10 per cent., and this is handed over to the German