men, in his judgment, than in Germany; and this appears, on the whole, to be the right conception.

On the other hand, there can be no doubt that the combinations at times make use of the tariff. In France, Germany, and Austria the tariffs seem in general to have been levied with the idea of furnishing a sufficient protection against foreign competition without placing them much higher than was necessary to cover the normal differences in cost of production. The governments seem inclined to stand firmly by their protective policy, and there is no very active hostility to it. In consequence, the combinations have no fear of the tariff being removed and their industry killed by foreign competition. The manufacturers, therefore, who are combined, as well as those who are outside of the combinations, expect, as they say, to use the advantage that has been given them by their Government as against foreign competitors. Herr Wittgenstein, the chief spirit in the organization and management of the Austrian iron combination, said a year or so ago that the Government having recognized the need of the iron industry for a tariff had levied it. The combination intended to meet these expectations by putting their prices as high as the tariff would under ordinary circumstances permit. Director Kestranek, of the same combination, takes the same position. But he goes farther, and urges that the Austrian Government ought to place its tariff rates still higher, so as to guard against attacks on the Austrian market by American combinations favored by their tariff. The competitive power of the foreigner, aided by his tariff, and not merely the difference in cost of production, ought to be the measure of the amount of protection needed.

One of the directors of the oil combination in Austria said lately, in the same frank way, that without their protective tariff the Standard Oil Company could probably drive them entirely out of business in Austria. The Government would certainly not permit their industry to be so ruined. With the protective tariff they placed their prices at such a rate that they were sure of making a fair profit in Austria; and this profit being secure, they had been able to make so much trouble for the Standard Oil Company in Germany and elsewhere that they had compelled that company to divide the markets, not merely of Germany, but also of two or three other countries, with them; a procedure which he claimed was to the advantage of Austria, inasmuch as it was making the Austrian oil industry more profitable than it could otherwise have been.

Likewise the managing director of one of the great iron combinations in France has stated that, if you wish to get his course of prices over a series of years, the simplest way is to take the English trade papers, get the London price of iron of similar grade throughout the period, and add to that the freight from England and the French tariff.

It should be noted in all of these cases that the manufacturers believed that without their tariff their entire industry would be ruined by foreign competition; that their tariff was in itself not unreasonable and did not permit them to take from their home consumers unreasonable profits; that, however, it did enable them to be perfectly sure of good profits and at times enabled them in consequence to enter foreign markets by making low prices there. In all of the cases it is probable that after the combination was made they could have stood some lowering of their tariff without being driven out of business; but it seems also probable that in nearly all cases when in those countries protection is granted, an entire removal of the tariff would have curtailed, if it had not completely ruined, their business.

WAGES.

It has been said that in certain cases it is probable that the desire to protect themselves somewhat against the attacks of the trade unions has been a reason why manufacturers have entered into combinations. On the other hand, it does not seem to be the case that any reduction of wages, speaking generally, has followed their

organization, although in certain instances, as in that of traveling salesmen, the combinations have been able to dispense with the services of some workmen. Often since the combinations have been formed wages have been increased. In other cases wages throughout the different branches of the industry have been made more nearly uniform than they were while the establishments were under different managements; and generally, so far as one is able to learn, the process has been one rather of leveling up than of leveling down.

It is claimed also, notably perhaps in the case of the coal and iron industries in Continental Europe, that the combination has been enabled to secure a much steadier output than was possible before the combinations were made. In consequence the number of workingmen employed has remained much more nearly uniform, and their employment much more nearly continuous than before. It may be that during times of special prosperity under the old system more mines would be opened and more men would be employed temporarily, only to be thrown out of employment completely whenever the demand slackened somewhat. During the last two years of prosperity, however, the German Coal Syndicate has increased its output more rapidly than its rivals have increased theirs. The managers of the combinations claim that their purpose is to keep their business steady, free as far as possible from the fluctuations which often arise under a competing system, and in consequence to secure for their workingmen much steadier employment at uniform wages. The results, in the one or two industries mentioned at any rate, seem to show that they have to a considerable extent realized their expectations; and although there have been some complaints, on the whole the workingmen seem to agree that these results have been attained. So far as can be learned, too, the leaders of some powerful unions have been in the main working in harmony with the managers of the combinations.

DOMESTIC PRICES.

Under other headings the subject of prices has been somewhat discussed. It will perhaps suffice to say here that the managers of the combinations acknowledge that in many instances they have been enabled to secure prices somewhat higher than was possible under the system of ruinous competition which prevailed before the combination was made. Many special instances are given in the following chapters. Generally they claim that their prices have been more uniform than before. The managers of the coal syndicate in western Germany say, for example, that during the period of the strongest demand for coal during the last two years, judging from earlier experience, they have held prices far lower than would have been the case under a system of free competition, believing that this policy was in the long run a wiser one. This plan would tend to prevent any crises in the industry, with a corresponding depression following. In this claim they are supported also by one of the Prussian ministers. In other lines of industry similar claims are made. Uniformity of price at rates affording a secure profit seems to be the end sought for throughout Europe, openly avowed, and to a reasonable extent attained. While there are certain savings which might possibly justify a reduction of price, these do not seem to be emphasized so much on the Continent as in either England or the United States, nor are claims of reduction in prices so frequent.

EXPORT PRICES.

As in the United States so in Europe complaints are frequently heard that the combinations sell for export at rates lower than domestic prices. The combinations do not deny the charge. They claim that they must do so if they are to export at all, and that the export business is necessary to keep their works running full time and their laborers employed. When their governments grant export bounties and the government railroads grant special low rates on export goods, as appears fully in the chapters on Austria and Germany, we might expect that they would make no effort to conceal their low export prices. Indeed, some of the combinations themselves give premiums on their goods exported.

ATTITUDE OF GOVERNMENTS TOWARD INDUSTRIAL COMBINATIONS. Industrial combinations in Europe do not seem to have awakened the hostility in any country that is met with in the United States.

In England one finds in the papers a little expression of fear of the newer large corporations. The Government has taken no action whatever regarding them further than to pass, August 8, 1900, an amendment to the companies act, which provides for greater publicity regarding the promotion and the annual business of corporations than before.

In France there has been some complaint, especially against what was believed to be a combination on the part of the sugar refiners, but no general public movement. One or two cases, in the porcelain industry for one, have been brought by competitors against the syndicates, but the decision of the judiciary was simply that there was no cause for action. The complainant did not show any increase in price, and the fact that a decrease in price was likely to drive the complainant out of business did not seem to the Government a public menace.

In Austria, as has been said before, the courts have held that under a law of 1870 contracts for fixing prices were contrary to the public interest and were nonenforceable. There has been also much greater alarm apparently on the part of the public than in either England or France. Inquiries into the movement have been made by several chambers of commerce, notably those of Vienna and Prague. The Government instituted an inquiry some years ago, and in 1897 introduced a bill providing for satisfactory investigation and limitation of the action of these corporations in the sugar, petroleum, beer, and spirits industries. The immediate cause of this movement was a financial one, the fear that these combinations, by raising prices, would lessen the consumption of the product, and thereby lessen the internal-revenue tax which would be received by the treasury. The bill, however, owing chiefly perhaps, to the unsettled political conditions, was not passed. There is at present an inquiry on foot in the department of trade and commerce in Vienna. The committee investigating the question has reached certain conclusions: The combinations should be recognized as juristic persons; they should be put under state control, with a good degree of publicity; and the tariff and state railroad rates should be arranged so as to check their monopolistic tendencies.

They have, however, not decided exactly what the nature of this control should be. In the bill introduced in 1897 the remedy for proved monopoly was to be merely complete publicity, though some power was given the ministry to forbid certain contracts in exceptional cases. Now they recommend a bureau for registration and oversight of combinations with certain judicial power, but a draft of a complete law remains still to be worked out.

In Germany, where the movement has existed for a good many years and has been carried very far, there seems to be little popular sentiment against the combinations as a rule, but in certain localities there has been some activity. For example, during the last two years, since the price of coal has been high and the coal syndicate has refused to fill the orders of many manufacturers, much complaint has been heard and one or two inquiries have been set on foot by the chambers of commerce, particularly the Chamber of Commerce of Cologne. The coal syndicate claimed, as has been intimated, that it was furnishing all the coal that was needed for manufacturing purposes, but that the manufacturers wished to secure larger quantities for speculative purposes, and this did not seem to them to justify the opening of new mines, which would be a source of loss to them as soon as the extraordinary demand ceased. As a consequence, presumably, of this feeling, the Governments both of Prussia and of the German Empire have set on foot inquiries in their executive departments into this subject. They are collecting literature within the country and from foreign countries, and will possibly later make a more immediate inquiry on the ground.

On the 6th of December, 1900, there was introduced into the Reichstag a resolution requesting the imperial chancellor to introduce a bill providing for governmental supervision over such combinations and syndicates as were shown to have assumed a monopolistic character. In response to a somewhat similar suggestion, made in the spring of 1899, the Prussian minister for trade and industries took the position, in a speech in the House of Representatives, that the high price of coal was, under the circumstances, a normal one and that there was no reason for complaint. He even went so far as to say that up to that time, at any rate, he thought that no one had any ground for making any objections to the working of the syndicates. On the contrary, he declared that they had in general contributed toward making the course of prices, as well as that of wages, even more steady than they had been in earlier times, and added that he was convinced that if the syndicates did not exist they would have had higher prices, followed by a sudden fall, a course which would have been much more severe upon industry and upon consumers, as well as upon wageearners. He took similar ground in the Reichstag, and was supported by the other ministers.

The courts of Germany have taken the position that these agreements regarding output and prices to check ruinous competition sanctioned by a penalty, are enforceable.

LEGISLATION.

The legislation on the subject has already been indicated in part. In France the penal code provides a penalty of imprisonment and fine for coalition to raise or lower prices. This provision was, of course, made in earlier days, and was not intended to be against modern syndicates, although it is believed that it would apply to them in certain instances.

No other country has any special provisions against syndicates. In England the corporation laws, as already suggested, provide for a great degree of publicity in connection with promotion of corporations and their regular management.

There is a like degree of publicity for corporations in France, Germany, and Austria; and in these latter countries there are such rigid provisions regarding the valuation of property, and reports of promoters and directors that stock watering, in the ordinary sense of the expression as used in the United States, is almost if not quite an impossibility.

CONCLUSION.

On the whole, the experience of Europe would seem to justify the following conclusions:

1. There is, relatively speaking, little objection to combinations in Europe, and in some countries the Governments and people seem to believe that they are needed to meet modern industrial conditions. They do believe that they should be carefully supervised by the Government and, if necessary, controlled.

2. There is little or no belief that the protective tariff is responsible for their existence. It is known that they at times use the tariff to keep their prices higher than would otherwise be possible, and that their export prices are often lower than their domestic prices. The tariff should be guarded so as to prevent serious abuses, but there is practically no thought of its abolition.

3. Railroad discriminations have been practically abolished in Europe, and in consequence they have had no effect toward creating combinations.

4. The great degree of publicity in the organization of corporations has largely prevented the evils arising from stock watering, and has evidently had much effect in keeping prices steady and reasonable and in keeping wages steady and just.

5. There seems to be no inclination toward the passage of laws which shall attempt to kill the combinations. That is believed to be impossible and unwise. Laws should attempt only to control, and that apparently chiefly through publicity, though the Governments may be given restrictive power in exceptional cases.

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CHAPTER II.

ENGLAND.

EXTENT OF COMBINATION MOVEMENT.

For several years past the trend of business toward consolidation and combinations of different establishments has been noticeable in England. For the last two or three years this movement has been very marked. Ten or 12 years ago some of the organizations which are still in existence, such as the National Salt Union and the Brass Bedstead Combination in Birmingham, were formed, but within the last two years a large crop of new consolidations in the form of single large corporations have sprung up, especially in the manufacturing districts of the north. Not merely is this tendency toward the formation of combinations noticeable, but the still further tendency toward making existing combinations much more complete in the control which the central management holds over the different members is no less striking, a fact which will be brought out more completely in the discussion regarding the forms of combination and the methods of organization.

The following list furnished by Robert Donald to the Daily Mail of April 4, 1901, includes the best known of the later combinations, with other facts regarding them.