P.— ECONOMIC SCIENCE AND STATISTICS. ]07 



VI. 



Industry cannot be looked at only as a type of government, because 

 of its special relation to risks ; but some of its modern developments are 

 to be explained in large measure by reference to administrative ideas aol 

 peculiar to industry, and especially to the motive for extended leadership 

 and influence. When we consider the ' Concerns,' we come to the case 

 where technical economic reasons are least easy to assign. These have not 

 the definite continuity of the other forms of control. They are of the 

 nature of industrial aggregates or blocks. The interests which are thus 

 grouped come within the control of one or a few single personalities who, 

 because of the diversified nature of their influence, are rather magnates 

 than leaders. Thus in the period of the German concerns we had the 

 Stinnes, Thyssen, Kloeckner, Haniel, and Stumm groups ; and if, for 

 instance, we examine the Stinnes group, we find that it includes iron and 

 steel, special steel products, coal, electrical products, shipbuilding 

 shipping, chemicals, cables, aluminium, copper, automobiles, mineral oil, 

 margarine, newspapers, fisheries, and hotels, and this is not a complete 

 list. These interests are obtained largely by the method of holdings of 

 shares, and the interests of one group may, within the same large enter- 

 prise, touch those of another, the ramifications being so numerous that it 

 becomes difficult to say where one set of interests begins and another ends. 

 The Concerns appeared in Germany in a time of great unsett lenient, and 

 their explanation — the sudden limitation of her resources by the Treaty, 

 and the struggle to control what was left; — is not a- reason going back to 

 economic considerations to the same degree as in the case of the other 

 types. They do not appear to contribute to the solution of an economic 

 problem, or to create a force of leadership for any permanent purpose 

 of direction, and they cut across the lines of economic grouping. The 

 Stinnes Concern broke down by complexity, and it appears that the 

 remainder are being shaken out into parts which will adhere to one or 

 other of the main lines of economic grouping and control. But grouping 

 of this kind, on a lesser scale, is likely to continue, since it represents 

 partly a type of ambition which is satisfied by variety of industrial 

 interests, and partly the fundamental similarity of industrial finance, 

 whatever kind of thing it is that is financed. It appears, from an official 

 return, that 65 per cent, of the capital of companies in Germany in 1926 

 was in Concerns. 



VII. 



If we look at the picture which is being drawn by these forms of 

 grouping taken together, it is something of this nature. On different 

 levels, combination takes place by agreements or consolidations, that is. 

 Trusts or Cartels in the usual sense. Though the aim of Cartels is to 

 prevent the elimination by failure of smaller or weaker producers, in fact 

 they tend to create consolidations, because they allow stronger businesses 

 to buy up weaker ones, and thus to obtain their share of the allotted 

 output. As Cartellisation extends, on each level there come to be pre- 

 dominant interests, and decided leadership. But cutting verticallv 

 across this are the combinations which terminate on a product in the 

 higher stages, these combinations having considerable shares in the output 



