Industrial Germany for a Book Which Mainly Describes and Analyses Certain Aspects of Industrial Organisation
Total Page：16
File Type：pdf, Size：1020Kb
1935 Kitchener 2001 Batoche Books 52 Eby Street South Kitchener, Ontario N2G 3L1 Canada email: [email protected] . Preface. ..........................................................4 Part I. Views and Figures. ...........................................5 Chapter I. A Comparison of the German and English Attitude Towards Industrial Combination................................................6 Chapter II. A Statistical Review of Cartelisation.........................19 Part II. Industrial Combination in Groups of Industry. ....................26 Chapter III. Mining. ...............................................27 Chapter IV. The Iron and Steel Industry. ...............................49 Chapter V. The Chemical and Allied Industries. ........................65 Chapter VI. Electrical Engineering and Electricity........................74 Chapter VII. German Industrial Combination in the International Sphere. .....85 Chapter VIII. Some Conclusions Regarding All Groups of Industry. ........105 Part III. The Organisation of Industrial Combination. ....................129 Chapter IX. The Legal Aspect.......................................130 Chapter X. The Forms of Industrial Combination. ......................158 Part IV. Effects of Industrial Combination. ............................179 Chapter XI. Co-ordinating Competition. ..............................180 Chapter XII. Diminishing Costs. ....................................193 Chapter XIII. Fixing Prices. ........................................205 Some Results....................................................214 A List of Cartels, Concerns and Trusts Discussed or Mentioned............221 Literature.......................................................226 Notes..........................................................234 When in January and February 1934 I was lecturing in the University of Cambridge about industrial combination in Germany I became impressed with the idea of dealing more fully with what is at present one of the foremost English industrial problems. As I was one of the first to write on English monopoly organisations and have some knowledge of the special features of the problem in England I felt myself qualified to write a book with the express purpose of comparing the German and English conditions of quasi-monopoly. Whether I have succeeded in doing this the reader must decide. It may seem audacious to choose so comprehensive a title as Industrial Germany for a book which mainly describes and analyses certain aspects of industrial organisation. But in fact the problem of industrial combination is so intimately connected with the most prominent economic, organisational, administrative, legal, technical, financial and even sociological conditions of German industry that I am anxious to show by the title that the aim of the book is to draw a picture of cartels, concerns and trusts against a background of the general structural development of German industry. Hermann Levy The problems of industrial monopoly, if not studied from a merely theoretical and abstract viewpoint, may afford a welcome opportunity of improving our insight into the differences in the economic structure and organisation of the nations. In fact the development of “Kartells” and trusts or monopolist associations of any kind or type has been in every country influenced by the specific attitude of its producers, by the structure of law and legal principles, by a different attitude of the State towards monopoly, not to mention the different material conditions favouring or checking the growth of combines. A theory of monopolies based upon marginal utility reflections and mathematical formulas will never lead to the necessary understanding of their actual conditions, effects and deficiencies, however interesting such deductions may be from the point of view of the theorist, while on the other hand a theory of modern industrial combination based exclusively upon the experiences of a single country would be of little general value, unless the specific structure and organisation of that country’s industry was taken into account. The study of industrial combination must necessarily be “comparative” and the truth evolved out of the study of the conditions of a single country may have to be regarded as essentially “relative.” In failing to apply this presumption to its investigations of cartels and trusts economic science has frequently been led into generalisations and conclusions which are not borne out by the international aspect of the problem. In the United States as well as in Germany the organisation of industrial monopoly has developed along pretty clear lines. One may say that the structure of the American “trust” seems less complicated than the far more differentiated monopoly form of German cartelisation. In England the evolution from free competition to associative Hermann Levy, Industrial Germany, 7 organisation has been obscured in many respects. Although at an early date books like that of Mr Macrosty or myself had called the attention of the public to the monopolist development in British industry, the Report on Trusts of 1919 (and 1924) with its statement that there were ninety-three quasi-monopolist associations in England, regulating prices and production, came as a surprise to the general public. Yet it was expressly stated by Mr Percy Ashley in that Report that by far the greater part of these trade associations and combinations restricting competition and controlling prices “had come into existence since the end of the century.” The belief that British industry would ever be characterised by a system of monopolist organisation such as was known to exist and to be on the increase in the rival German industry was shaken by many circumstances and considerations. In the first place, the development of industrial monopoly organisation in England came certainly much later than in Germany. Here as early as in 1883 the first cartels were “discovered” and described by Prof. Kleinwachter. The first official investigation into the cartel problem in 1905 revealed the fact that there were no less than 353 associations of that kind. In the chemical industries alone forty-six associations were reported, while a good many more were said to be in existence. In England, on the other hand, there was very much less publicity given to industrial combination. Associations and even amalgamated companies were led to hide anything in their business management which could be interpreted as a monopolistic control of prices or output, for fear of being prosecuted as infringing the law against restraint of trade. Certainly German industrial monopolists had to be careful not to arouse political anger with regard to their price policy. But there was no law penalising or forbidding monopolies as such. On the contrary in many cases the formation of cartels seems to have had official support from an early date; the State, as in the case of coal and potash, becoming a partner in private syndicates. Since, by the end of the ‘nineties, the wave of German economic liberalism, never a very strong factor in political life, had almost spent itself, there was never a real popular opposition to cartels from any individualistic or liberal standpoint. If there had been any strong antipathy to the growing power of combines it would have been dictated by anti-capitalistic feeling rather than by the desire to uphold the principles of free competition. In view of the very weak position of the German Liberals of that Hermann Levy, Industrial Germany, 8 time, any powerful opposition in parliament to industrial monopolies had to come from the social-democratic benches, which alone were free from the influence of industrial capitalists. Socialists, however, were not likely to oppose too strongly these forms of organisation, which in their eyes did not differ in principle from any other giant form of capitalist organisation, such as big banks or department stores, but which could be regarded as the forerunners of a future state socialism. A third reason why cartelisation in England was much less conspicuous than in Germany was the fact that English monopoly associations were not to be found in those industries which are most likely to attract general interest. In Germany the playground of cartels and amalgamations was from the beginning of the movement to be found in the great extractive and heavy industries, such as coal, potash, iron ore, iron and steel, and the heavy chemical productions. These industries enjoy a sort of general popularity. Important events happening or developing in such industries can hardly be silenced by the press or hidden from public knowledge. They will be a topic of general economic discussion. The price of coal or iron to-day is almost as important as that of bread or butter. In England amalgamations and associations were at first mainly formed in industries, which were of a special type or character, as for instance in textile specialities or in certain finished goods (Coats, Fine Cotton Spinners and doublers, calico printing, wallpaper, rails as contrasted with pig iron or raw steel, etc.). A coal trust or a steel combine would probably have aroused public interest and political discussion in England as much as in other countries and the “ cartel” problem would have swiftly become a topic of general public importance. It was, however, the most important English industries such as coal, iron, steel, shipbuilding, cotton spinning and weaving which,