BIG GERMAN DYE CAMPAIGN.

Taranaki Daily News, 9 February 1920, Page 5

BIG GERMAN DYE CAMPAIGN.

TRUST TO FIGHT FOR THE WORLD'S TRADE. INCREASE OF CAPITAL. The Daily Chronicle's Berlin correspondent, writing on December 2, says that the firms composing the German Dye Trust have decided to increase their capital to an extent without parallel in the whole history of German industry. The trust, which consists of the three great and the four minor concerns in the industry (which are valued at, roughly, 1,500,000,000 marks), is doing so for two reasons. It is determined to reassure Ger..ian supremacy in the dye industry. In the second place, there is the question of nitrate, so important for the agricultural life of the country.

Before the war Germany produced very little herself. The trust is aiming at making the Fatherland independent of foreign supplies, and of increasing production so as to be able to export large quantities. The story of the trust is extremely interesting. As I have said, seven main concerns form the industry. Before the war they were constantly drawing closer together for their mutual benefit. The Bedische Anilin und Soda Faybrik of Ludwigshaven linked up with ibe Elberfelder Farbstoffworke, while the Hoechster Farbwerke, the third of the.large concerns, came to a similar ngreement with Messrs Leopold Cassella and Co., of Frankfort-on-Main, a private company. HUGE WAR-TIME TRUST. With the first-mentioned combine the Anilinfabrikation of Treptow entered into trust relationships shortly afterwards. When it was seen that, during the war, foreign countries were making ever more strenuous efforts at competition, and in view of after-war conditions, the five firms mentioned made an oven closer compact, and they were joined by the two remaining concerns —the GriessheimElektron and the Weiler-ter Meer Companies. This was in litlG. It was agreed that the firms should retain their nominal independence, and that the profits should be pooled and allocated in a proportion agreed upon. In 1917 the three leading companies each increased their capital from 54,000,000 marks to 90,000,000 marks. At that their shares stood at a very high figure. They gradually fell, however, consequent on the reduction of war-time dividends. Last year the dividends fell from 20 per cent, to 12 per cent., and a further decrease is likely this year.

But it has been noteworthy during the past five or six weeks that the shares of nil the six public companies have been rising. Speculators say they are reckoning on considerable exports of dyes and on a large issue of new cheap capital to share-holders. What the intentions of the trust are with regard to the second matter has just transpired. THE NEW SHARE ISSUE. The six public companies are not only going to double their capital, but to issue a large nnmber of preference shares. In the matter of the ordinary shares the,trust will issue them at the low rate of 107 in order to attract its present shareholders. The preference shares will be issued to holders of ordinary shares in the proportion of 40 preference shares for every 100 ordinary shares held.

The issue of new ordinary shares has nothing remarkable in it, except that the amount of new capital to be thus obtained is exceedingly large. But the preference share issue is curious and interesting. The preference shareholders will be given a double vote, and only 25 per cent, of their holdings will be called upon. The idea, lam informed, is to retain control of the trust for the old shareholders. OUSTING FOREIGN INFLUENCE. With this vastly increased capital, the trust will, at the earliest possible moment, begin a vigorous onslaught on the markets of the world. 'Particularly important arrangements are being made to work through five different "neutral" countries.

The trust, as I have said above, also intends to pay particular attention to the production of nitrate. Heforo the war Germany's agriculture required 022,500 tons of nitrate. About half of that amount came from Chili, there was a coiisideraMo import from Norway; !)2,000 tons of sulphate of ammonia was obtained in the course of the production of coke; Professor Habere pr.icess (the extraction of nitrogen from the air) yielded about 4000 tons. In ilie latter process the Bedische Ariilin uud Soda Febrile was interested. The Government is not noxv minded to provide funds to the three {treat con--terns, so they have to face an altered situation. As the three companies apparently believe that the burden is rather too heavy for thorn to bear, it has been arranged that all seven companies will exploit Professor Haber's process. The plant which has already been get up is, I am informed, sufficient to produce 300,000 tons of nitrate yearly, and the trust will almost immediately set ! down more plant. Seeing that Germany's pre-war consumption of nitrate was 22,500 tons, the trust calculates that as soon as the whole of Ihe present and projected plant is working there will Ibe something like 230,000 tons of nitrate I tut