SAVING THEIR SKINS

Dominion, Volume 11, Issue 116, 2 February 1918, Page 6

SAVING THEIR SKINS

/ GERMAN INDUSTRIAL MAGNATES PREv Paring for the crash f A NEW OLIGARCHY ■ f • "i- ■ ■ ■ '(Published by Authority' of 'ti<e War. v . per favour' of tho Royal. vi' Colonial Institute.) " .It:.is thffVdiity of; a Government toxoid. tho balance even between all classes of (tlie' community, and to protect, those who cannot protect theiu- , selves.'. . Consequently we are accustomed, 1 ; in.democratic countries, to see tho trusts. ' Germany .once r fodk tho same view; as la^to..as' ]904 "there'was a struggle between' Prussia and, the coal magnates. But the Government soon found it . was profitable to treat .tho big syndicates as allies, and secure participation; even in 1901 tho Prussian State was a great coal-owner. Professor Schmollef in 1903, after inquiring whether the State or the syndicates, were to rule in Germany, answered his question by proposing to place the syndicates tinder State control,; on; a basis of diversion of prpfits. The, State was to he a part-, »er. Mor'e r a¥d : more this has t been. carried out. "But obviously, if the SEato goes into partnership with some particular interest, it will not care much to./protect-others against that interest, to its own loss. The steady .refusal of the Government to tax large fortunes has, been notorious. The syndicates in Germany have been ihp principal agents, in the forced export system which. all but conquered i , Europe; as' a consequence thoy have raised prices to tho German consumer, ; aiid have, of course, as thev always do, damaged tho non-syndicated businesses., "Wo cannot traco here atlength tho in- ... teresting story of the growth of State participation before the war: It has- . often been said that it must end in monopolisation; and even Herr Delwhen Minister of the Interior, in. a speech of March 4, 1912. defending tho syndicates, limited at the eventuality of public.monopolies. It is worth, howevor| giving one instance' of Government: action/r.the potash syndicate. Several potash concerns owned hy tho State were members; tho syndicate maintained high prices in tho home market admitting every competitor; tho German paid much more for • the potash which Germany alone produced than tho foreigners did. In 1909 some memhera seceded, the syndicate broke Tip, aiid there seemed a prospect of 'ower 'prices in Germany. Thereon tlio . 'Reichstag intervened, and secured tho re^stablishment' of -the 'syndicate, on term's that all undertakings were to form- part, but that new privato companies were not to produce the f»ll amount, of-their;participation for. sis years;'" while', the -undertakings of the Stafe,' and< of; the ■ Companies in which tho,-';' State was',-.interested could do;,so at ; once.;. .Tlio-unexpected result . was" an' extraordinary growth of now coiiijjanies', entailing' vast over-proQuc-tioitestnd a loss of effective capital activity estimated at 1200' million marks . for!,the years "1911-1914; but the old .prices irere" i;9stqred;:in the home mar- ' ket'; •aMJ;thfi;.point is to observo how tho'i 'fact . Government- was a member/of the'original' syndicate led to Government action against tho interests of the German';consumer. Speak-. ing,-broadlythe'Ge'rm'an Government has;''cpme to beTregarded as tho protector of the syndicates and not as tlio protector of the people. The war has seen a great extension of- the principle of compulsory 'syndication: :; Horr Michaelis stated in an in-, . terview in 'tho "Neue Badische Landes-'

Boitung" in August: "Tho monopoly question is not yet ripo for decision, but it 13 clear that the enormous increase in the requirements of tho Imperial Budget make, tho fiscal exploitation of our raw materials supply indispensable." Ho added they must begin with cases entirely " new, like nitrogen. Wo fear lie was not quite frank. Coal had already been compulsorily syndicated, by a decree of tho Bundesrat'of July 12, 1915; and aniline dyes the same year; all producers had to bocome membors of an organisation h? c . determined by, official regulations. Textiles are to lie handled next, accompanied by tho closing down of all "unnecessary" concerns hot yet closed by force of circumstances.- ' To. show how; compulsory syndication works, wo may give details ..of the recent soap monopoly; soap, is hardly "entirely ne\v." The plans wore drawii up by officials and by certain-manufacturers' chosen by" tho officials and hot' by the industry, tho order for syndication was placed before the _.. manufacturers ~as :. a whole without preliminary notice. The Supervisory Committee is appointed by the Minister of tho : Interior, not by the members, and has wide powers'. It administers all raw materials and finished products, lixes Prices, arranges for a uniform trade mark (thus destroying the goodwill of particular makes), and arranges for distribution after the supplies to the Army and the big industries have been provided. It can order any factory to cease production; can requisition plant and move it from one factory to another; and can dismantle any factory for good That is to say, tho trade is absolutely in the hands of the Government and certain manufacturers chosen uy the Government: we do not think that the phrase we liavo used, an "industrial oligarchy," goes beyond tho mark. How w j]j S q Ueezo ou j. smaller .businesses 'is obvious • 'We have not yet heard to what" extent the Government participates in the profits, tho point of the whole matter: in the abortive oil combine of. 1912 the Gover;™.en t was to take 80 per cent ■ •this is how the big industrialists, ir. combination with the Government, hone of thnP ° Wn 6 1 inS i 4 tho 6X P cm:6 of tho-German people, whom that Government ought to protect, through monopolies combined with cheap labour No wonder that tliero is considunrest m Germany, and that protests against compulsory syndication are becoming more and .moro frequent, hence Micliaehs s disiiigenuous , statement about 'entirely new" industries. Frankfurter Zeitung" ft leading a crusade against the whole scheme ' •and it is noteworthy that at tho Buda--1 esth conference last June every reference to the superiority of private enterprise and individual initiative to fetate control was heartily cheered. The scheme is a delightful commont on the domocratisation" of Germany * anything less democratic cannot well to imagined. The Government under pressure of Jnancial distress abdicates itv, proper functions, allies itself with a small but powerful clique of large capitalists, and joins in a plan to close small businesses and to raise the price, of many articles of univorsnl necessity against the German consumer, thus levying a tnx indiscriminately on rich and poor alike without the least regard to the capacity of the victim to pay.