BUSINESS MERGERS

Evening Post, Volume CVIII, Issue 148, 19 December 1929, Page 8

BUSINESS MERGERS

POLICY IN AMERICA

CLABIS -FOR THE COMBINES

(From -lire post's" Representative.) NEW YOEK, 27th November.

One wonders to what extent the American movement to merge business organisations will be- adopted by British countries. It is a post-war development. The war left America immensely rich, but the aggregate wealth has been gradually decreased as countries like England, worn out by loss of man-power in tho war, have recovered some of their industrial prestige. As tho competition became intensive, enterprises in various fields of industry found it desirable to merge in order to prevent waste, economise, in distribution, and improve the manufactured proi duct. ■ ■ '

In the days of Bryan and Eoosevelt these mergers would have been assailed as trusts. Now, the Department of Justice at Washington actually co-operates with them, iv seeing that they do not conflict with the law. Some conspicuous examples of business consolidation are United States Steel, American Telephone and Telegraph Company, Dupoiit and General Motors. A notable exception is the Ford business.

It is claimed for tho mergers that they reduce the price to the consumer, as well as manufacturing a better product. Mass production follows and with it higher -wages, with correspondingly greater purchasing power. The JNational Industrial Conference Board discloses that the general upward trend ot prices, a feature of the post-war period, has been checked by consolidation. Mergers in electrical utility groups have led to the fear that the country is getting into the hands of a huge power trust. At the moment this criticism is met by the contention that they provided a higher standard product, sold at decreasing prices, and distributed to an ever-increasing number of consumers. The- telephone is one ot the greatest of these mergers, and is quoted as an example of tho efficiency of consolidation. Its organisation has standardised equipment and operating practices, without depriving local managers of authority adequate to enable them to handle local affairs and mept local requirements. '