TRUSTS AND MONOPOLIES.

Timaru Herald, Volume LXXXIII, Issue 12871, 5 January 1906, Page 3

TRUSTS AND MONOPOLIES.

"Monopolies, Trusts, and Kartells," by Francis W. Hirst (London: Methuen), is a little book that can be -warmly mended to politicians, business men, and students of political economy. In less tha"' terestiiisj "**d sHiiHttnaimir «*•»""«!!» «i ir&noi c:>mb:nntlvns. The o west ton which he .«e:a j

the principle of monopoly encroached upon | that of comj>eliiion in the civilised states • of the wcrld iD recent years, and with what j i consequence to th* wealth and welfare of i nations?" Besides the trusts and " corners' j of commerce, he also deals with the various i monopolies established by governments and municipalities. His conclusions are, on the whole, reassuring;. He does not share the alarm of panic writers, who propSiesy the fntnre subjection of trade and industry to the tyranny of monopolistic and tyrannous syndicates. The facts which he has culled from the history of the great combinations in tie United States, in Germany, and in Great Britain, go to show:—(1) That competition is the life-blood of trade; (2i that it- is no easier now than of old to set up and maintain a monopoly, without the aid of legislation or some extraordinary natural advantage; and (5) that a protective tariff is thecal cause of such combinations as are a menace to tie public. A special feature of •the book is the lucid manner in which Mr Hirst explains the legal of monopolies in Great Britain, and the United States. In his preface he feels called upon to apologise for the attention which he has given to the legal aspect, of his subject, but by making the law and its influence plain to"his readers, he has greatly helped them to a clear understanding of the nature and consequences of monopolies and trusts. German company law does not permit the formation of trusts, but- the high tariff has induced producers to compass their ends by other means. They have devised a form of organisation known as the Kartell. A number of firms producing the same class of goods agree to hand over the control of their 1 sales to a central board, upon which they are all represented, by whose rules they are bound, and to whose funds they contribute. The Kartell has a pool, oub of which firms selling at a loss or below the average profit are recouped, and it fixes prices at different rates for different places,' not only charging less for export than for home sale, but even verying tire market prices quite arbitrarily in* Germany itself. Mr Hirst declares that there is no "evidence of any Kartells having succeeded in breaking down competition in foreign markets through "dumping," but he quotes several instances of the injury done to German industry by the practice of selling abroad at a lower rate than at home. Manufacturers of finished products suffered severely from the sale of German wool," pig-iron, rolled wire, and nails at low prices in Holland, Belgium, and England. The building of boats for use on the Rhine, for example, passed over almost entirely to Holland, because the Rhenish-Westphalian heavy-plate manufacturers sold their goods'more cheaply in Holland than in Germany. But for the high tariff, the German boat-builders would have been able to keep down Kartell prices by threats of importation from abroad. In the United States Mr Hirst proves from examples that trusts have little permanence, and that it is solely in virtue of the tariff that they are able to raise prices. In Great Britain no trust secures or has secured a monopoly, because no English combination can raise English prices above the level of international prices. Even the " Coates Combine " has not wona monopoly in cotton-thread. Its success is due solely to ability in industrial organisation, and its position would be lost as soon as it ceased to sell more cheaply than any possible competitor, English or foreign. "So-called trusts in free-trade Britain are simply large, wellorganised business concerns, so managed as to earn for a time enormous profits, and by underselling rivals to establish temporarily a qnasi-monopoly: but, being exposed to the xisk of competition from all parts of the world, they cannot raise home prices like the trusts "of America or the Kartells of Germanv.