MATCHES AND LOANS

Evening Post, Volume CXI, Issue 41, 18 February 1931, Page 12

MATCHES AND LOANS

factors in mml:d TRADE

THE PRICE OF MONOPOLY

••I:!\Tiiins Post," JSth Keurunry. One ol the greatest (if 'unified commercial interests in Hie world, an outstanding product of this business age, is the Swedish Match Company. There is practically no country in the world where its influence is not felt or where it hits no interests'of any kind. The Swedish match industry, as the Imperial Chemical Industries Bulletin shows, is no older than IS4B, when the first match factory was erected in Sweden. To-day the industry is controlled by a world-wide organisation owning 150 factories in thirty-five different countries and employing over GO.OOO work people. Up to 1903 matches were manufactured in Sweden by independent companies all in competition. In 1903 six important Swedish companies combined, and ten years later another combination of seven great factories was formed. This latter fusion brought into prominence M. Ivar Kreuger, an engineer, who may now be ranked with the leading financiers of our time. In 1917 U. Krcufier effected a combination of the abovenamed groups, originally thirteen separate concerns, and the .Svcuska Taudsticks -\ktiebolaget or Swcdist .Match Company was formed with a capital of 40 million l<toncr and a reserve of sixty-one million kroner; in 1927 this company had increased its capital to 270 million kroner and its reserves to 200 million kroner, and JB.IO kroner go to the £1 sterling. The company is one of the most outstanding examples of rationalisation in the "history'of the world. It not only makes matches but owns and operates paper mills, chemical work's, timber works, and aspen ■wood forests, and companies purchasing aspen timber in Baltic countries other than Sweden. Its ramifications extend even to ffew Zealand. In 1923, M. Kreuger organised the creation of the International Match Company of the United States -with a capital of 128,200,000 dollars, the majority of the shares being held by the Swedish IMateh Company. Where tariffs in various countries excluded imports of foreign matches the Swedish company set up its own factories within the tariff walls of such countries. In other countries it adopted a policy of co-operation with existing concerns, and in the United Kingdom in 1027 it launched the British Match Corporation : -with a capital of £0,000.000, and it amalgamated the firms of Bryant and May, John Masters, and other match manufacturers and selling firms. In the same year the Match Corporation formed the I)aido Match Company of Japan with a capital of 6,000,000 yen. ' A third method of procedure was to endeavour to obtain the monopoly of match : manufacture in certain countries by mak- ■ ing loans to their Government. These ■ countries include France, Germany, Hungary, Rumania, Yugoslavia, Poland, ; Latvia, Ecuador, Greece, Ksthonia, Lithuania, and Guatemala. To France a loan ■of nominal value of £15,000,000 at 5 per cent, issued at 93% per cent, was made; to Germany a loan of £25,000,000 was made in return for the monopoly of making and selling matches in the country. ' But there are other agreements in existence to which the Swedish company is an indirect party. One-fifth of the total of the world's matches are made in Sweden itself,' and !)0 per cent, of them are exported. The bulk of these matches is of "safeties." The only serious competitor with this great Swedish' company is the Soviet, for Kussia is a very heavy and increasing exporter of matches, the principal importing countries being Great Britain, Germany, United States, and Persia. Other countries, already making matches for themselves, are also importers of Soviet matches, and some of them have found their way into the New Zealand market.