Industrial Associations

ASSOCIATIONS, INDUSTRIAL. Associations whose membership consists of firms engaged in a particular branch of industry or trade are of three kinds : (I) those which exist for purposes of collective bargaining with their workpeople or their representatives; (2) those which are concerned with the regulation of prices, output, sales, etc. ; and (3) those which devote themselves to the technical, scientific and informational aspects of the business in which the firms are engaged.

These three types of function are not mutually exclusive, but in Great Britain most industrial associations devote them selves wholly or mainly to one or other kind of activity. In the United States employers' associations for dealing with workpeople are rare, trade unionism being neither so developed nor so rec ognized as in other countries ; price and output associations, being illegal, are not openly existent; therefore all industrial associations fall ostensibly within the third type. Such American employers as have occasion to negotiate collectively with workpeople are tending to do so through the medium of the informational trade association.

Employers' Associations.

There are in Great Britain some 2,500 associations of employers concerned with matters relating to the employment of labour. They may be regarded as the counterpart on the employers' side of the Trade Union on the workpeople's side. They exist for the purpose of establishing a unified policy among the employers in the industry in regard to wages, hours and working conditions generally, and their principal activities culminate in negotiating agreements on these matters with the responsible Trade Unions (see TRADE UNIONS), and in giving effect generally to the collective views of employers in the industry upon labour questions. In some countries there is a central organization whose membership consists not of individual concerns but of the Employers' Associations for the various in dustries. In Great Britain there is the National Confederation of Employers' Organizations, which exists for the purpose of co ordinating the industrial and political activities of the many em ployers' associations or federations which constitute its member ship. This body may be regarded as the employers' counterpart of the General Council of the Trades Union Congress.

Associations for the Regulation of Trade.—Associations of business concerns for the regulation of prices, output, tender ing, selling areas, etc., exist in very many branches of British trade and industry. They are properly constituted bodies having rules, constitution, officers, subscription, entrance fees, etc. The object of these associations is to control the competition in which firms in the same line of business ordinarily engage, in such a way as to make for remunerative prices, steady trade, and reduction of overlapping and waste. They represent one phase of the persistent tendency towards the replacement of competition in industry by combination (See COMBINES, also COMPETITION), but trade associations must be distinguished from some other forms of industrial combination in that they are terminable alliances and not permanent fusions (see AMALGAMATION also TRUSTS). The Trade Association is an association, for particular purposes, of otherwise independent and self-governing business concerns. So long as it exists, members must conform to its rules or incur penalties ; but if for any reason—stress of external circumstance or internal jealousy or disloyalty—it should break up, the cm stituent firms revert to their original unfettered independence, competing against each other, it may be, as keenly as before. These internal disruptive forces are on occasion very strong and the history of British associations for the regulation of trade exhibits many instances of dissolution followed after a time by re-formation.

Under English law contracts or agreements in restraint of trade, such as those between members of the associations described above, are not actually illegal unless they involve an illegal act, but they are in principle unenforceable, since the Courts will not in general entertain any legal proceeding instituted with the object of enforcing or recovering damages for the breach of such agreements. In the United States agreements for the limitation of competition are illegal under the Sherman Law (189o). In Canada associations regulating price or output are liable to in vestigation under the Combines Act of 1923 with punishment under the Criminal Code in case of proved offence. In Australia and New Zealand there is little legal interference with such asso ciations.

Informational Associations.—Associations existing solely for the supply of statistical or credit information to their mem bers or for scientific and technical research and standardization, and concerning themselves not at all with the regulation of trade, are not numerous in Great Britain, though some outstanding ex amples occur in the iron and steel, electrical, motor, chemical, silk, glass, leather, paint, flint glass, and paper industries. The inter change of information in regard to credit terms, railway rates, shipping freights, forms of contract, methods, and processes, the standardization and interchange of costings, and the collection and dissemination of trade statistics is more frequently carried out as an adjunct to the control of prices or output. The Federation of British Industries may be regarded as the central organization concerned with the co-ordination of the informational activities of trade associations and as the counterpart, in the sphere of trade, of the National Confederation of Employers' Organizations in that of wages, hours, and working conditions.

In the United States, however, concerted action in fixing prices or regulating output is questionable under the common law and definitely illegal under the various anti-trust statutes. The years onward from the passage of the Sherman act in 1890 have been years of uncertainty as to what a trade association might or might not legally do, but there has, notwithstanding, been a vast increase in the members of such associations. About 1910 the idea of "co operative competition" through the medium of "Open Price Asso ciations" took shape. Under this plan members were to furnish to the association day by day particulars of enquiries, quotations and orders and, less frequently, of output and stocks. These were to be collated, and a summary statement based on the returns despatched to all members. Since the information so furnished related to past, not future, prices and output, and was in the nature of an ascertainment, not an agreement, it was expected that these activities would be found not to be in contravention of the law, but to be a salutary and legal means of turning blind competition into informed competition. The courts, however, found against these activities where it could be shown that they resulted in fact in approximations to a unified policy in regard to production or price, but the decision of the Supreme Court, in the Maple Flooring and Cement cases in 1925, established the legality of a much wider range of informational activity than had previously been known to be definitely within the law. The trade association on the informational basis is one of the most momen tous features of modern industrial developments in the United States. According to an estimate made by the National Industrial Conference Board in 1925 "it is fairly safe to assume the existence of between Boo and ',coo trade associations of a national or inter- i state character." (J. H.) BIBLIOGRAPHY.-For British trade associations, see the Report of the Bibliography.-For British trade associations, see the Report of the Committee on Trusts (Cd. 9,236 of 1919) ; Reports of 57 Committees appointed under the Profiteering Acts 1919 and 1920 ; Report of the Committee on Industry and Trade, entitled Factors in Industrial and Commercial Efficiency, H. M. Stationery Office (1927) ; and Industrial Combination in England by P. Fitzgerald (1927). For American trade associations see A. J. Eddy, The New Competition (1914) ; Trade Association Activities issued by the Department of Commerce (1923) ; Public Regulation of Competitive Practices, also Trade As sociations, their Economic Significance and Legal Status, both issued by the National Industrial Conference Board of New York in 1925.