HUGE CONCERNS

Evening Post, Volume CVII, Issue 51, 4 March 1929, Page 12

HUGE CONCERNS

t COMPANIES AT HOME

i EFFECT OF AMALGAMATION

In Teeent years there lias boon consider- » able progress iv the movement for amalga- ;*' mating kindred interests in various sec- ■'•? lions of industry, and. several big com--5 jianies whose finances were in anything „, but a healthy state have found amalgama- *■ tion their salvation.' The main object of J amalgamation is to obtain a reduction in ;"j production costs by effecting greater '■> economy in working and the elimination '. .of wasteful competition. In j/he case of ■; Great Britain, it has been found that •'•' cheaper production was absolutely esscu- .; tial if the export markets wen! to be pro- .' served. In the "Chamber of Commerce Journal ■"■ some instances of recent amalgamations of big business interests at Home are given. "Amalgamation, of course, is not a new ;. feature in industry iv this country," it is r stated. "Iv modern times the most im- ■ portant examples have been represented by ? the fusion of the railways systems into ■*' four groups and the concentration of the "■ bulk of the banking business, outside the . Bank of England, 1 into the hands of five great institutions. Of still earlier date was the formation of the combine repre- • srntedby the Imperial Tobacco Company with a present capital of £42,809,633, pri- -' raarily for the purpose of meeting an 1 American invasion of our market, while V there have been numerous amalgamations »' of firms engaged in the textile trade. Lever V Bros, represents ii great concentration ot •'*• the soap-making business in this country, company having an issued capital ot ;:. £06,627,54 G. In more recent times we -. have seen the formation- ot Imperial * Chemical Industries, of which Lord JVlel■Vchett is chairman, with a capital of nearly : 000 000, and this company seems likely ;■ greatly to extend its sphere of operations "; in the future. In some of these cases the '■'•' amalgamation may have resulted in higher .:• prices to the public, but there is little *! doubt that had they not been effected the *- industry Si the country would, have been £• in a more unsatisfactory state than it is t', D('"v survey of this aspect of industrial v finance would be incomplete without reier- •• ence to tho merger of cable and "wireless ,': telegraph interests. The Eastern and " associated cable companies and the Mar- ■ ?' roni Wireless Telegraph Company . in :. March last arranged a fusion ot interests "'■■ through the medium of a holdvug comJ iiariv which will have a capital ot ' £53,700,000. Another direction where ■■ amalgamation has been forced upon tlie ::' industry is coal-mining, especially in the -' anthracite branch. Following the iusion "' of the Amalgamated Anthracite and ;<-tJnitcd Anthracite Colliery companies, it :- was announced in July last that the com- '■'■ bine was to be further extended by melud- - in" various other collieries, an arrange- * meut which it was claimed would result •*■ iv placing under single control and diree- j : tion approximately 80 per cent, of the '-■ total output of Welsh anthracite. Later ": on an important linkiug-up ot interests ''■ took place when the Metropohtan-Viekers ■>■ Electrical Company absorbed the British "" 'I'homson-Houston Company, the Jidison *• Swan Electrical Company, and Ferguson, -••Pailin Ltd. In. tho production of asbestos, i tho firm of Bell's United Asbestos was •■ acquired l>y Turner and Newall, this and •V. other arrangements leading to an increase ■'■' in tho capital of the latter company from * £4 000,000 to £5,297,929. Following. the •'■' Acquisition of certain interests in the two ■■' firms, of Vickers and Armstrong, a very ■'•• important scheme lias been proposed tor .'. the ■ co-ordination of interests between ■ Vickcrs, Vickers-Armstrongs, and Cammel ■ Laird and Company. One agreement reflates almost' entirely to the steel and ~ lailway carriage wagon interests ot these. ■'concerns. In order to carry this out, the En"lish 'Steel Corporation has been formed ■'to take over from Vickers-Armstrongs "various works at Sheffield, Manchester, ; Jand Elswiek, excluding those devoted to Run-making and armoured cars 'and tanks. "Prom Victors, Ltd., it will acquire the '•ordinary shares in a Manchester company controlled by the latter, which is engaged ; in the production of steel tires, axles, and " -wheels, and from Cammel Laird and Com- ■- pany works at Sheffield and Penistone. A :.'. second agreement provides for the amalgamation of all the railway carriage and '. wagon interests of Vickers and Cammell 'J Laird and Company. For this purpose 'the name of the Carriage .. Wagon and Finance Company (a subsidiary :- of Vickers) will be changed, and this '' company will acquire the . interests indi:.;'cated. Vickers, Ltd., has a capital of ''£12,269,000, and the authorised capital of "the Metropolitan Carriage. Wagon and .;.Financc Company is £10,675,000. Cammell ' Laird and Company has an authorised ''capital of £4,500,000, and controls' the ') Midland Railway Carriage and Wagon '•Company, which in turn holds a controlling ■/interest in the Newlay Wheel Company. ,"..Tbis arrangement, therefore, will represent "a fusion of interests of firms that already •■••control various others, and will be the : most important of its kind in recent years. ;At about the time this development was ' announced it became known that the great ' firms of Dorrnan Long and Company, iron •■■'and steel manufacturers, bridge builders, ■•'■ etc., and Bolckow Vaughan and Company, .■which combines a similar business with •What of colliery owners, are negotiating for i.'n fusion'of certain of their interest."