Cooperation for Foreign Trade 1

firms, selling, cartel, organized, combinations and engineering

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10. Selling organizations.—More common than buying combines are the selling combinations of for eign firms.

In England combinations are found especially among the engineering firms, tho the Cotton Spin ners and Doublers Association, and the Cambrian Coal combination are examples in other lines. The engineering combinations are usually made up of non competing firms producing, complementary products. The British Engineering Company of Egypt, the Egyptian Engineering Company, Ltd., and the Brit ish Manufacturers, Ltd., are instances. The Anglo Chinese Engineers' Association consists of some forty non-competing firms, and has as its purpose the es tablishing of "go-downs" (warehouses) under Chi nese-speaking Englishmen in various districts for the selling of the products of the firms and for bidding on plant and government construction.

In France coal, cotton goods and laces are sold on this cooperative plan. In 1910 the dye industry was organized on a similar basis.

In Italy the Anglo-Sicilian Sulphur Company, or ganized in 1905, controls about 60 per cent of the world's output of sulphur.

In Switzerland the Free Society of Swiss Chocolate Factories controls export prices, while before the war a similar combination between Swiss and Ger man firms, the Cocoa-buying Co. (Ltd.), located in Hamburg, bought directly from the planters. Con densed milk, laces, and Swiss cheese are all exported by such cooperative undertakings.

In 1913 the Swiss Trading and Industrial Com pany for Brazil was formed to act as a selling organi zation for a group of non-competing firms producing machinery, and a similar organization, especially for Argentina, was founded under the name Societe Suisse d'Exportation.

11. The German no country has the movement for combination received the strong back ing from the government which it received in Ger many before the war. As early as 1836 a cartel or combine was organized in the German alum trade, but the movement did not assume large proportions until the beginning of the period of protection, about 1879.

Cartels were organized for various purposes. The "territorial cartel" was organized to divide the mar kets among its members, the "price cartel" deter mined the selling price, the "production cartel" al lotted to each factory a certain percentage of the total production. These cartels were all free agreements between firms maintaining their independence. They aimed to control the market, to eliminate cut-throat competition, to present a united front in international competition, and to improve the competitive position of its members thru the economies resulting from a cutting of the selling overhead.

Many combinations in other countries are organ ized along lines similar to the German cartel. The syndicat in France is an organization of the cartel type ; many of them are rather of the type of the comptoir, an incorporated trading company owned by manufacturers and buying from its members to sell in foreign markets.

In Germany, whenever a lack of homogeneity of plants and enterprises existed and the formation of cartels was, therefore, difficult, a community of inter est leading to virtual control of the market was se cured by a higher type of organization. The trade in electrical goods is a case in point. More than 80 per cent of this trade is controlled by two great companies, Siemens-Schuchert, and the Allgemeine-E lektricitiits Gesellschaft called "A. E. G." in the trade. About 45 per cent is controlled by the latter.

Up to 1914, the A. E. G., with 800,000,000 marks of capital, maintained 38 installation offices, 12 engi neering offices, over 100 branches in other European countries, and 60 branch offices in the rest of the world, thru which everything in the electrical industry from lamps and motors to street car systems for entire cities were supplied. In addition to its con trol of the electrical trade, these companies were, mostly thru interlocking directorates, closely nected with many banks. The A. E. G. was in this way related to banking establishments representing $523,234,000.

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