Show THE GERMAN ADVANCE XII iNDUSTRIAL INDUSTRIAL DEVELOPMENT BY FREDERIO J. J HASKIN T r HE modern modem Industrial development o oI of I tho the German empire dates from THE T 1880 1580 tho the year after atter tho the t protective protte- protte tive tariff was as enact enacted d. d The Tho same ame genius for tor or or organization the same capacity for tor thoroughness the tho same Ame su su- su of the tho Individual t tp the collective col col- col will which characterized tho the re rehabilitation re- re habilitation of ot Prussian military power under Von Yon and which obtained Prussian political dominancy under Bismarck were ero a an ap- ap i t- t piled lIed to the pro problems hems Jems of ot IndustrialS IndustrialS' Industrial S' S development an and trade trado expansion J When German t union was accomplished In 1871 and when It had been made permanent 1 as Prince BI t i thought by the forcible repression of ot the social democratic democratic demo demo- cratic party part the thew w whole attention o ot of the state stat was turned e deri de H Hs kin toward Ha its Indus Indus- tries The first movement was the erection 0 of a R. protective c tariff wall about the coun roun- tr try This resulted In relieving the German German German Ger Ger- man manufacturers from tram foreign competition tion and permitted tho the application of ot the Prussian system of at organization to bus bud busl- busl ns n's ness As was planned and expected ted there thera was an Immediate tend tendency nc toward towan combinations of ot rival concerns resulting In the present system of ot and syndicates which sustain practically the same rel relations to German Industries as do the tru trusts ts to American Industries The Th radical difference Is that tho the German trusts were fostered and encouraged by bythe bythe bythe the state while the American trusts have had to encounter at least the pretended enmity of ot the government In Germany German a a. cartell Is an or organization for fixing fixing- prices and determining conditions conditions condi- condi of sale sal but leaving Its component concerns free to exercise Individual Judgment judgment Judg judg- ment and to make much or little profit as tho the case may be he The Tho German syndicate Is III a more highly high high- ly lip organized concern It acts as th the sales a agent ent of ot its affiliated concerns and not only fixes prices but through th the pooling system stem exercises control over th the distribution of ot profits German business businessmen men lauding their own system of syndi- syndi and pretend to tr be horrified by the mere more suggestion us of ot tho the of at forming in Germany German a a. trust of ot the tho advanced American typo e. e Ho However e cr the board boa Of rf trade of the city of ot Essen a quasi public association llon has recommend recommended cd ed seriously serious tho the amalgamation In Germany Ocr Ger many of the coal and steel syndicates suggesting that such a merger merser bv hy negotiating with the American steel trust trus would be able ahle to rule the tho whole world As a n. matter of fact tact the differences be between between between be- be tween the German s syndicate and th the American trust are even en greater than 1 is 18 apparent on the tho surface The German combinations were brought Into existence by the tho deliberate and well welt considered action ac nc- ac- ac tion of ot the thC state while the American In In- In rt combines ha have ve resulted d partly from economic evolution partI from special public privileges 9 and partly from rein special private privileges e Germany German made mad Its laws law in advance and required the tho In IndustrIal industrial In- In combines to shape th themselves e to meet the of ot the law while the United States has not succeeded In dissolving and has not tried to regulate its trusts The Tho German trusts ar are made th the th beneficiaries benefic of ot tariff laws law ship subsIdies and other special legislation enact enacted d fo for tor their encouragement ement but thoy are arf prohibited from preying unon n weaker organizations within tho the confines of the Gorman German states st The German syndicate 1 Is If permitted clOd and encouraged to Incorporate ate In Itself every even concern interested In any particular Industry but each Individual ual concern must bo be taken In on terms of ot absolute It Is not hie ble for tor a syndicate to crush a small Independent Independent in independent In- In dependent competitor The suar guaranteed rights of If the small concern on rn are protected bv by enforced and arid laws both on the statute books book and In the code of ot ac accepted accepted accepted ac- ac business morals The state owns o or controls absolutely absolute cr c every means of oC transportation and neither by means of ot rebates private car carline carlines lines line nor superior Influence as ns a large customer can the great cat syndicate secure an any advantage ad whatever over o the small smal manufacturer When the tho great coal ant and steel ol R succeed In convincing the national railway administration that thata a readjustment of ot freight ht rates ratel is necessary necessary sar sary to advance an p. p tho the interests of ot those two all powerful combinations the government gov Iov- will not full fail to favor them But at the same time the reduced rates rate are made available I for the tho benefit benent of the smallest producer r of coal conI or the most In- In Iron master In the empire Both syndicates and are aro voluntary voluntary volun volun- tar tary or organizations of ot constituent companies companies com corn panics hut In themselves they are arc not corporations That Is to fla say pay the syndicate syndi cate or cartell is not capitalized but is controlled by hy a committee representing each constituent corporation each of which remains under th the tho control of or Its own separate wt set t of ot stockholders Th Tho iho I German law does everything everything- possible to I encourage the formation of ot a syndicate syndicat I to fix prices and anel to eliminate wasteful I methods of unrestricted competition bu buI I it will not permit such a a. syndicate U U. UI I capitalize It its op co-op operation co-operation nor to I a holding company I If It the German laws were In force toree In the United States the steel trust would I control an even greater percentage of ot tho the I Iron and steel Industry than It now does docs I but there thero would be no steel Steel common cammon I quoted on the tho stock exchange and Mr lr I Carnegie would have no steel corporation I bonds The steel trust would b be an amalgamation amal arnal- I of all aU tho the once Independent steel concerns concern but it would be owned b by tho the original stockholders In other words the German system en encourages encourages en- en th the tho operative co-operative Industrial features tea tea- turcs tures of the American trust system but bu prohibits Its financial features There Thera is considerable political Opposition tion In Germany to tho control of ot the tho In In by tho the syndicates and but It Is not based upon any objection t to their co operative organization nor does doe It t proceed from an any devotion to th the thc theory theor of ot Individualistic Uc comp competition I It Is rather a a. movement In opposition to th the protective tariff since It Is voiced In a demand that the tariff bo so 60 changed as u asto asto uto to prohibit tho the possibility of ot the 8 syndicates syndi- syndi nd cates and charging chanting higher prices price at homo home than they do abroad On tho the whole there here Is 18 little or orno no obJection ob oh to the tho German syndicate fI system on account of pt Its trust features The Th manufacturers both lar large e and small approve approve approve ap ap- ap- ap prove because the they profit by the elimination elimina- elimina tion of or throat-cutting throat competition am and wasteful sales methods trio Industrial Industria workers approve because syndication en enables en ables their employers to pa pay higher wages the general public approves be because because be- be cause It believes es that the pre present ent prosperity pros pros- of ot tho the country countr Is the result of ot th the prevailing system Socially th there re is little or no enmity to tho the syndicates and tar ear tolls tells Tho The aristocratic and t plutocratic elements approve because It Is to the their financial Interest and the socialists ap approve ap- ap prove because th they believe that every In In- In combination brings them nearer to the day everything Is combined combine In the state As the tI-ic government So itself Is sometimes sometime a partner In the syndicates and the Prussian government owns 27 pe per percent percent cent of ot the stock of the powerful potash syndicate there syndicate there Is concrete Justification for tor the tho socialist st position The German Germa banking banking- system banking system has felt fell the Influence o othe ot of the tendency toward combinations an and syndicates tes of banks s ard arc partners In In Industrial In- In syndicates nt s. s Th The anks are aro muc much more closely associated t d with th the th Industries industries Indus indus- tries than they are aro In America io closely close cloHe ly In tact fact that It would b be Impo Impossible fo for tor German banks to tb profit from tn disaster befalling Industrial concerns In times o ot 01 panic Not Nol only are the German syndicates syndicate different from American trusts In their constitution and in their relation t to- to th thu government go but hut they are arc organized upon an entirely different conception of ot th the nature of ot business In America and I In Britain Intense individualism controls a all business b tJ and collectivism 1 Is tolerated ani only when a combination can b be made In which there Is money profit fo forthe for tor the Individual combiners Business 1 Is business accord according Ins to the prevailing An An- Saxon glo-Saxon notion and the state has n no right to interfere In It except to punish fraud and theft In Germany German all fIO power cr lies tics in the state and individuals have the privilege of ot carrying car car- on business subject to the will o othe ot of the government If It th the state wishes t to tako take the railways It do does s so so and nobody nobody's notion of ot the proper sphere of governmental governmental govern govern- men mental tat activity Is outraged Germany next will take over its coal mines probably abl ably although the movement will be bo me meby met by determined opposition But that opposition opposition opposition op op- op- op position will not be based upon the tho argument ment mont that It IB is wrong rong for tor the government thus to invade the domain of private atc en en- en It It lt will be based on th the tho belle belIef that the venture would not be profitable for tor tho the government o In business as In I trio German GermanI every erp other phase of ot life lito I theory theor of ot the e extinction of the Individual I In the collective will the o othe or orI orthe I the private In the public Interest the I absolute domination of or the tho state Is the tho controlling spirit I Tomorrow Tomorrow The The German German- Advance XIII German German Business Methods |