been usually the case when the valuation seems to have been fairly made, taking an establishment as a going concern and assuming that the sale is a private one, under ordinary conditions, between a willing buyer and a willing seller. It is doubtless the case, however, that in many instances, certain individuals would consider the amount of water considerably more than that. For example, one instance was cited where apparently quite a large valuation had in many instances been allowed for water privileges, which privileges would be of little, if any, value excepting for the business itself which was being purchased, so that in case of a forced stoppage, the value of the water right would fall away entirely. So long, however, as the business continued the value of the privilege was not questioned. Doubtless many other similar instances might be found where different items of that kind have been allowed and a very high valuation has been made by those whose business it has been to fix the value.

Speaking, however, as a whole, and taking into consideration primarily only the later great consolidations of the corporation type which correspond most closely to the great combinations of the United States, it would seem that the amount of water in the stock of these combinations is, generally speaking, very much less than that in American combinations of a similar type, although, beyond question, there is considerable of the stock that might fairly be considered water.

SAVINGS.

(a) Freight. It is probable that in the case of some of the larger pools and combinations in England, there is an opportunity for the saving of cross freights in individual instances, the manufacturer shipping to the purchaser from the nearest plant. Most of the large combinations, however, in England that are national in their scope, are so far those in which the freight forms no very material part of the cost of the product, and in consequence this element of saving is one that is rarely touched upon by the manufacturers.

In the United States it has been supposed that in very many cases the trusts have been encouraged by special discriminating rates of freight granted them by the railroads. Even where the trusts have been established without the aid of these discriminating rates it has often been supposed-and this seems to be generally conceded also that by virtue of the fact that their shipments were extremely large, the combinations have frequently secured special discriminations in their favor.

There seems practically no ground for believing that in England this element of freight discrimination has been an important factor in either bringing about the formation of combinations or in adding to their profits after they have been formed. It is true that one hears rumors that there are freight discriminations made at times in favor of the large shippers, but those persons whose opportunity for knowledge on this subject seems to be the best, are of the opinion that these discriminations are made under general regulations, if at all, and that all shippers under similar conditions secure equal benefits. Moreover, it is not thought that they are frequent enough to have any material effect upon the industry as a whole. One or two specific cases were found of a railroad that had encouraged the building of a manufacturing establishment near its line instead of upon that of a rival by granting some special favors in the way of freights on certain materials used for the building of the factory, a discrimination that was beyond question illegal; but such discriminations are after all, as compared with those which it is commonly believed are furnished in the United States to the combinations, mere trifles and such that they may be properly entirely overlooked in the general discussion of the effect of railroad discriminations in England upon the industrial combinations. As a practical matter it may perhaps be said that these combinations do not receive favors from the railroads. (b) Purchase of supplies and materials.-A source of saving that is very generally mentioned by the managers of the industrial combinations in England is that which comes from the buying of supplies and of raw material in large quantities through a central purchasing agent. Investigation into several of these combinations had shown that some of the members, when acting independently, had not known how and where to secure the best material at the lowest rates. In consequence, even when the management of the different establishments was not taken into one hand, it has been generally the custom to have all supplies bought through the central office and sent to the establishments needing them. In the case of the Bradford Dyers, for example, it was believed that the savings from this source were very materialenough to have a decided effect upon the dividends. Another large combination it is estimated, makes perhaps its greatest single saving in the advantageous buying of its supplies, oil, fuel, etc., the saving in a year running, probably as high as £30,000. It seems beyond question also that in the purchase of its raw material a considerable saving is also made.

The English Sewing Cotton Company is also reported to have made very substantial economies in buying its material and supplies, perhaps especially its supplies, that being mentioned as among the greatest benefits of the combination. Doubtless the experience of many of the other combinations is similar.

(c) Costs of selling.-In nearly all cases it is reported that very material sums are saved in connection with the disposal of the product. This in certain instances comes from the better organization of the selling force, particularly where traveling men are employed, so that less help is needed than formerly. It is commonly believed, for example, that the very great success of the J. & P. Coats' Thread Company has been largely due to the very great skill shown by Mr. Philippi, their chief salesman. Many different firms having their separate salesmen all covering the same field were persuaded by him to let one dealer act for all in each place, and to let, as far as the demands of customers would permit, the existing proportions of sales from each separate establishment in each locality remain the same, the prices being varied so as, on the whole, to secure this general result.

The English Sewing Cotton Company, it is thought, has also made very material savings in the same way, some estimating that their cost of distribution has been lessened possibly as much as 40 per cent. One can easily see that these companies would be peculiarly benefitted in this particular, inasmuch as their cost of selling as compared with the cost of manufacture is larger than that in many other lines of industry.

The wallpaper combination discharged many of its travelers, besides specializing in machinery. It is said by Mr. Donald that the economies during the first year were alone almost enough to pay dividends.

Another prominent source of saving from sales in many cases, especially in those where the custom earlier prevailed of giving credit, has been in the elimination of bad debts. One of the establishments, for example, with a capitalization and sales running well into the millions of pounds sterling, states that during the 2 years after the combination its loss from bad debts has not amounted to £500. Inasmuch as the combination must be patronized, provided dealers are to secure a sufficient supply of goods of the various qualities needed, it is enabled to insist upon prompt payment or good security, and in that way it not merely avoids loss, but also it improves materially the business habits of some customers who, it was believed, by getting different manufacturers to bid one against the other, had practically plundered them. Most of the combinations on this subject agree with those in the United States that the savings from this source are material.

On the other hand, if one may judge from articles that one finds in the English papers, for example a late article in the Sunday Chronicle, of Manchester, dealers at times are inclined to think that industrial combinations are not so pleasant to deal with as were the individual firms. It was said that a buyer in the earlier days could have the personal attention of a member of the firm and was treated with much more courtesy than he is now treated by the special salesmen of the combination. It is probable that the method of doing business in the older days was somewhat more pleasant, particularly if a dealer had considerable leisure on his hands. It is questionable, however, whether on the whole the business habits of dealers have not been improved so far as the saving of time and the doing of business in accordance with business methods are concerned.

The methods of selling vary materially in the different establishments. In some cases all the products are sold from the mills, the buyers in many cases being able to deal substantially as before; but, on the other hand, the prices are all fixed at the central bureau. It may be, of course, that in many cases some discretion is left to the superintendent of the individual mill, and he is able to entertain an offer, but the final determination is made by the central office. This system is followed in the case of the Bradford Dyers. Each establishment is run independently, yet the managing directors of the combination are able to control each establishment completely should that prove necessary. It is particularly necessary, of course, to see to it that prices are kept uniform throughout. In consequence, there is a general rule that no branch company is to reduce a price or to quote a lower price than another branch company engaged in the same line of manufacture, nor to quote any lower prices than those on the lists that are generally furnished, without the consent of the managing directors. All quotations that are given to customers of the different branches are sent first to the central office where they are checked, recorded, and thence mailed to the customer, these quotations and contracts all of them stating plainly a time limit, in order to avoid difficulties that might arise with customers who, without such time limit fixed, might be securing after an inteval rates that would seem to their competitors to be discriminations in their favor. In that company, it is the custom for all inquiries regarding quotations of prices to be sent to the individual establishments and for the sales to be made from the individual establishments; but,

as has just been said, all these inquiries in case of doubt are referred to the central office and all contracts and quotations pass through the central office before they reach the customer, the managing directors in this way being able to retain absolute knowledge of the conduct of the business.

Naturally all of these combinations are careful to see what competition is coming up from the outside in cases where they do not have a complete monopoly of the business, as probably none of them do have throughout. In consequence, if, owing to a press of work resulting from an increase in the demand for goods, orders must be transferred to any outside dealers, or if, for any reason, there must be a loss of business to firms outside the combination, it is expected that reports will be made promptly to the central office, in order that in this way such loss of business may be met either by the furnishing of added facilities for manufacturing or by some change in policy or in lowering prices.

(d) Concentration in manufacturing.-It has already been intimated that there are material savings in certain classes of wages which lower the costs of selling. It is also true in certain lines of industry that these combinations are able to manufacture with less labor than was the case before the combination was formed. Some of them have already found it possible, without lessening their output at all, to close some of their establishments. Under those circumstances, they naturally select those that are less favorably situated or those whose entire power is not devoted to some one special kind of manufacture. The English Sewing Cotton Company, for example, found that several of its larger establishments were making their own spools. It is thought that it will be advantageous to have this spool turning done in separate establishments and the spools then supplied to all of the thread factories. Of course it must be kept in mind that most of these larger combinations in England are as yet new, having been in existence not more than two or three years. Naturally any changes of the kind suggested must be made slowly. The managers in every case nearly, where this subject has been discussed, say that public opinion would not justify nor would their own sense of what was fitting permit them to close establishments and without warning throw out men who had been long in their employ. In consequence, while they recognize the fact that very material savings in the cost of manufacture can be made by closing poor establishments or those unfavorably situated and shifting work to larger, better equipped, or better situated ones, these changes must be made slowly and at times when it can be done with the least disturbance of the labor force. One large combination stated that it had been keeping up so far several of its poor mills; one has already been closed, and it is probable that as suitable opportunity arises some others will also be closed. The general tendency in all of the combinations is toward more and more concentration, while still leaving so far as possible the management of different mills in the hands of their superintendents.

(e) Payment by results.—In most of the combinations the attempt is made to secure efficient work in each of the separate establishments, not merely by a system of careful reports and checking up of one establishment against the other, as is the almost universal custom in this country, but also by a system of premiums offered to superintendents for efficient work done in their establishments. In some cases, for example, able young men acting as superintendents will be given a small fixed salary of perhaps £250 a year. In addition to this, each one will be given a bonus of from 1 to 3 per cent of the gross profits made by his separate mill, the accounts of each mill naturally being kept separate from those of all the others. This bonus frequently amounts to twice or three times as much as the fixed salary. The itemized accounts of each establishment are of course sent very frequently, daily or weekly or monthly, as the case may be, to the central office. The various items of expenditure and of saving are taken up and one checked against the other. The managing directors then know the strong and the weak points of each superintendent and are able to make suggestions accordingly. This intelligent competition of the different establishments in the same combination which has been found so very efficient in the United States seems to have proved equally efficient in England, although, as has already been said, there is often added to this (more frequently, apparently, than in the United States) the additional incentive of the very large increase in the wages of the superintendents that may come from the bonus for successful management.

The Bradford Dyers' Association, for example, seems to have found this system of paying a bonus to the managers the main feature in securing efficient work from their different establishments, although their superintendents are checked up frequently, one against the other, by means of the comparisons suggested. In that line of business there is great opportunity for the expression of individuality in the different establishments. Each manager is encouraged to introduce novelties and to make new kinds of products, so far as they will be advantageous to the trade. Of course it is requested in all cases that the manager of a separate

establishment confer with the managing directors of the combination before really entering into new branches of trade. In this line of industry also, as well as in several of the others mentioned, there has been a tendency already observable to have each branch devote itself more particularly to certain classes of trade, and in that way to have the work most efficiently done through specialization.

(f) Wages.-Attention has already been called to the fact that in certain instances manufacturers have been induced to enter the combinations because they believed that they would thereby secure added power to resist demands from trade unions for increase of wages or other demands that seemed unreasonable. Aside from this question, however, it may be worth while to note what the actual effects upon wages have been in individual cases, as well as to see what the intentions of the managers of combinations are regarding the general course of wages.

The testimony seems to be practically universal that they have hoped that, through controlling the output to a reasonable extent, they might be able to make production much steadier than it had been before, and that in consequence the wage earners might receive steadier employment and more continuous wages. It has even been believed that, owing to the savings of combination, there might be in many cases an increase of wages without any lessening of the profits to manufacturers. Of course, the primary motive on the part of the manufacturers has been rather the increase in their own profits than an increase in wages.

If one is to take strictly the declaration of purposes of the promoters of the E. J. Smith combinations, however, it would seem that a primary purpose is the increase in wages of the laborers. It will be recalled that the laborers are expected to form themselves into unions, unless such unions already exist, and that they enter into the contracts with the manufacturers regarding the control of the industry.

As a matter of fact, in the bedstead combination, the increase in prices of the product and the consequent increase in the profits of the manufacturers have resulted in the payment of a bonus to the wage-earners, which has been several times increased. In the year 1900 it was stated by Mr. Smith that in very many departments of that industry the bonus at that time was 423 per cent; that is to say, that an increase of wages had been made of 42 per cent above that which they received at the time the combination was formed some 10 years before.

In the case of the Bradford Dyers, there has been an effort to keep on good terms with the trade unions in all cases, and so far as possible to equalize the wages in different departments. As a matter of fact, the wages in certain departments have been increased and in others not. The intention was to equalize them throughout, and so far there has been on the whole a slight rise in wages.

The different members of this combination before its organization had, generally speaking, for the last five or six years recognized the trade unions, and had dealt with the men through their union representatives. There is, in connection with the combination, a labor board, consisting of an equal number of employers and of workmen. It is the duty of this board to settle the arrangements for wages in advance. The contracts are regularly made for one year at a time, with the understanding that there is to be a notice of 3 months given provided that any change is to be made. In cases of dispute which can not be settled by this labor board, arbitration is to be resorted to, and a deposit of £500 on each side is made to insure the carrying out of the decision of the arbitrator.

In the case of the English Sewing Cotton Company, the laborers were mostly independent, not having been organized into unions. The combination, however, expressed no hostility toward the unions. Since its formation there has been no material change in wages. It will be recalled, however, that in this industry there had been a material saving from the lessened costs of selling, since the combination was to do without the services of many traveling salesmen. Another prominent association has been in the habit regularly of negotiating with union men through their officials, and has no objection to such arrangements. Since the organization was made there has been an increase of some 5 per cent in the wages of laborers in certain classes of industry, mostly the daily laborers, but in the main the wages have remained about the same. It is to be expected, of course, that as the business continues there will be a gradual adjustment of wages among the different establishments, so that those in the city and those in the country districts will be adjusted in ways fair to both employers and employees, taking into consideration the added cost of living in the cities, the added rentals, or what amounts to the same thing, the added cost of the ground and factories in cities as compared with the country districts. On the whole the testimony throughout seems to be to the effect that the employers are extremely sensitive to the pressure of public opinion as regards fair treatment of the wage earners. When it is clearly recognized that much money can be saved to the combination by the closing of poorer establishments, and the concentration of

the industry under a better division of labor, they hesitate to make such changes, if it is to throw laborers out of employment, without waiting for a time when it can be done with the least possible hardship to the workers and with the possibility of transferring as many of them as possible to other establishments. The statement was frequently made that, owing to the somewhat less favorable labor conditions in England than in the United States, the employers would neither be justified in making radical changes in their methods so rapidly as might properly be done in the United States, nor would public sentiment permit them to make such changes at the expense of their employees even if they felt inclined to do so.

DEGREE OF CONTROL.

The Calico Printers' Association, Limited, states in its prospectus that the businesses acquired comprise about 85 per cent of the calico print industry in Great Britain. It declares that it includes nearly every leading house of the trade, and that these supply goods not only to all branches of the home trade, but practically to every open market of the world; they deal also with all sections of the trade and include the production of almost every description of goods along the lines under consideration. The Associated Portland Cement Manufacturers, Limited, say in their prospectus that upwards of 80 per cent of the entire output of Portland cement in the United Kingdom is produced on the Thames and the Medway, and that they control all of the works in that locality, with the exception of 3.

The British Cotton and Wool Dyers' Association, Limited, states that the 46 companies and firms entering into that combination, together with the two branches of the Bradford Dyers' Association engaged in warp and hank dyeing, represent about 85 per cent of the volume of both branches of the trade. The British Cotton and Wool Dyers, it is noticed, in these lines of the industry, work in harmony with the Bradford Dyers' Association; and that association is said to have started with 90 per cent of its business; in some lines with a complete control.

The Yorkshire Indigo, Scarlet, and Color Dyers, Limited, claim to have almost a monopoly of the business of indigo and scarlet dyeing, although they state that owing to the benefits to be derived from the amalgamation, they hope, without interfering with the existing scale of charges, to be able to secure the benefits needed; and they will certainly be in a position to avoid cutting prices below the standard rates.

The British Oil and Cake Mills, Limited, claim that they will have a crushing capacity of more than one-half of the total annual importation of oil seeds into the United Kingdom. They think it worth while to state in their prospectus that it is not their intention to attempt to create a monopoly or to raise prices. They propose to give to the customers of each mill entering into the combination a favorable consideration in the allotment of shares, with a view to their having a direct interest in the profits of the company.

The Bradford Coal Merchants and Consumers' Association, Limited, a local combination, claims to control upward of 90 per cent of the steam coal trade in the city of Bradford, as well as a large proportion of the household trade of that city. They propose also to acquire such other coal businesses as may be deemed desirable.

The English Velvet Dyers' Combination is said to have recently told merchants to sign an agreement empowering it to "advance or reduce prices without any notice whatever." Before accepting the statement in full confidence, one would need to know the circumstances, but that combination has doubtless a substantial monopoly. The Wall Paper Manufacturers, Limited, has some 98 per cent of the business in the hands of its 31 firms. It has also an agreement with most dealers to buy only its goods under penalty of receiving none of them.

In England as in the United States, the combinations as a rule are unwilling to claim any monopolistic power. The word "monopolistic" has an unpleasant sound. In their prospectuses, however, attention is frequently called to the very large percentage of the industry which the combination will be able to control; to the advantage which will come from the lessened competition brought about by the combination, with a consequent greater certainty of steady profits, as well as to the great economies that will result from the combination.

In certain individual instances there will be found a statement of the hope of saving in the wages of establishments entering into the combination in England that will appear much less often in the United States, although at times one finds also in this country a tendency in the same direction.

In England there are very many firms that have been established through several generations, so that the business has become almost hereditary in one family. In many such instances, especially if the family has become wealthy through the conduct of the business, it often follows that the younger generations do not have the