The activities of German technique are re flected in the number of technical publications in the German language, which is annually sev eral times the number of publications in all other languages combined. Such a vast volume of technical effort does not fail to make itself felt. It is the driving force back of German prosperity. It is not a force, however, which is permitted to wear itself down. The government constantly keeps in touch with the industrial life of the nation and does not permit its self improving spirit and initiative to flag. Not only by direct supervision is industry stimulated, but on indirect ways it is even more effectively en couraged. For example, the successful man of business, the notable inventor or technician is honored with positions of political importance and with decorations signalizing his work.
The German business man has opportunities of serving the government to which he may properly aspire as do our great lawyers to the Supreme Court bench, and as a consequence the government service attracts and rewards the brightest minds and gives as well as acquires prestige. Springing from such a source, it will be obvious that the energies of the government directed toward the improvement of industry will be effective and that any lack of individual incentive will be supplemented by governmental initiative.
Not alone in a technical sense is industry encouraged, but financially as well, since it is realized that without suitable provision for capital new industries cannot make headway •and old ones will languish. Snecial banks make it a feature of their business to provide capital on fair terms to new industries and inventions which are seen upon investigation to be worthy of encouragement. Thus any meritorious en terprise is sure of a fair start and cities not have to run the gauntlet of unsavory promotions as in some countries. Once started, new in dustries are protected so that larger concerns cannot drive them out of business, and thus the small business man, on whom the prosperity of the public eventually depends, is protected in his undertakings. In the place of trusts, which are of a predatory nature and seek to ruin com petitors with the ultimate object of despoiling the public, German industry is organized as a number of cartels which are encouraged by law and in which even the government participates as a member. In its organization, the cartel ap proaches that of the price-fixing pool in vogue in the United States before the era of trusts. In the pool, the various competing firms agreed on prices to be charged to the consumer by all the members, and upon volume of output to be allowed to each member. In some cases the earn ings were lumped or pooled and later divided on a certain pro rata basis. This made it pos
sible for competing firms to exist and do busi ness at a profit, which would otherwise have cut each other's prices to a point of bankruptcy. It is obvious that business to exist must make a normal profit, but in a state of unregulated competition the richer firms may sell their goods at such low prices that the small firms are ruined.
In Germany the tendency of business men to form into self-protecting groups was recognized as a proper and necessary effort. The individ ual business men and companies of an industry were permitted to organize themselves into a loose form of organization known as the cartel. In some cases there would be one or more car tels in an industry, and in others but one cartel for a number of industrials. Individual firms may remain outside of cartels if they prefer. The cartel is empowered to fix prices to be charged to the public and to allot the amount of business to be done by each member or the proportion of output to be allowed as compared with the output of the whole cartel. Competition is thus largely confined to quality and economies in production and service rather than price. A living profit is made possible and stability of the market insured. The public is not mulcted since the cartels are under legal supervision and are not allowed to fix prices at unreasonable levels.
The German industrial system is thus very flexible, being adapted to meet in the most fa vorable manner any and all of the problems which may arise. It preserves individual initia• tive, promotes proper competition but prevents its destructive manifestations, and is capable of meeting the most formidable rivalry, whether such rivalry exhibits itself at home or abroad. The efficacy of the German industrial system is particularly shown in the foreign field. The government is constantly active in foster ing foreign trade and in seeing the German manufacturers and exporters make use of every opportunity which presents itself. Even should the immediate business in hand not promise an inviting profit, the manufac turer is encouraged to occupy the field from motives of patriotism, in the knowledge that once the market is occupied by German goods other goods will be shut out and in time the trade will prove profitable. Suitable banking and financial arrangements are made so that the customs of foreign business may be observed and thus every effort is made to permanently establish German trade in every quarter of the globe. It is not surprising, therefore, that Ger man industry, with such far-reaching plans of organization in operation, should have made enormous strides.