206 TIN-PLATING IN ENGLAND and 1906, when trade in tin plates was extremely good, the number of mills and works increased considerably.1 Many considerable difficulties must be met with in projecting cartels among so great a number of undertakings. When the American Trust was founded in 1897 the manufacture of tin plates within the Union amounted only to 250,000 tons, and only about thirty-eight works had to be bought up in order to control 90 per cent. of the production, many of which had been rash speculations and were very nearly bankrupt.2 In Wales, on the contrary, there are practically no unprofitable works. All have an excellent type of workman at their command and a firm hold on traditional markets. As an expert explained to the Tariff Commission-" We cannot make a monopoly in the tin-plate trade, because it is divided up into such small units." 3 Even if a combination of the existing works were to be formed, it would probably only attract fresh competition in view of the resulting rise in price.* For trained workers, who are of the first importance in the tin-plate industry, are abundant in Wales; and fresh tin-plate works make relatively small demands on capital, so long as machinery is of less importance than manual labour and as new undertakings can be formed in times of prosperity as tin-plate works pure and simple. 1 Report, British Iron Trade Association, 1907, p. xviii. 2 Levy, 'Stahlindustrie,' p. 180, ff. 3 lbid. p. 986. 4 Even in America the tin-plate branch of the Steel Trust has met with growing competition. According to the 'Iron Age,' January 7, 1909, p. 45, the number of mills working at the end respectively of It must not be forgotten that an American tin-plate works requires more capital than an English one, and that therefore the rate of increase is bound to be slower. TIN-PLATING IN ENGLAND 207 The main factors which make the suppression of competition among English manufacturers at the present time impossible or in the long run inadvisable have now been considered, and the general outline of the sphere of competitive industry in England should be clear. But in ! the last ten years the limits of unrestricted competition have been increasingly narrowed by a number of circumstances which have given a growing impetus to monopoly in certain trades. These circumstances we must now investigate. CHAPTER IX EXISTING MONOPOLIST ORGANISATIONS IN (a) THE MOVEMENT TOWARDS CONCENTRATION PERHAPS the most far-reaching innovation in competitive industry during the nineteenth century has been the appearance of what is called the concentration of industrial + units. The course of development has been by no means uniform, as a review of any reasonable number of English industries shows. With rising demand the number of separate makers may be permanently increased, as in cotton spinning, even though as time goes on the average size of each separate unit is very much larger than it was. On the other hand, we also find the peculiar position, sometimes by no means new, that an increasing demand is satisfied by a continually decreasing number of firms, the greater productive power of the single unit reducing from decade to decade the aggregate number of firms. Nowadays this concentration, which John Stuart Mill noticed in the case of gas and railway companies, is not confined in England to staple industries. We meet it also in other cases; in shipping, in both wholesale and retail trade, in hotelkeeping, in newspapers, and in urban traffic schemes. We are not now concerned with the historical origins of this general tendency, nor need we investigate in detail its causes. It interests us only from the point of view of industrial competition. We regard it merely as a special variety of industrial development, one of many directions "EFFICIENCY" COMBINATION 209 Every which manufacturing on a large scale may take. factor which can exercise any considerable influence on the origin and development of such an industry-changes in facilities for communication, increased competition, new inventions and discoveries, and so on-can equally be the basis of a concentration of industrial units. The primary result of enormous industrial undertakings is the increased efficiency of each unit. If, however, the circumstances of the case are such that the demand for the commodity in question can be satisfied by fewer concerns of greater productive power, we then arrive at the special case of a concentration of industrial units. The productive power of an economically profitable undertaking grows so much faster than the aggregate of goods actually produced in the industry, that production is gradually concentrated in the hands of an increasingly small number of concerns. And just as a multiplicity of undertakings makes it difficult to suppress competition, concentration, if combined with a reduction of the competing undertakings,1 makes it proportionally easy. Nowadays concentration often appears at the very beginning of a new industry, when the productive power of an economically profitable unit is such that a few units alone suffice to meet the entire demand. But more usually it is the result of a lengthy process, in which the technically more efficient overcome, after severe competition, the less productive, and acquire their markets. The history of the English paper trade is an interesting example. Statistics of the licences granted show that in 1801 there were 413 paper factories; in 1811, 527; ten years later, as many as 564. Between 1803 and 1831 the amount of paper taxed in the year rose from about £31,000,000 worth to twice that amount. 2 In other words, the increase in the number of paper mills was accompanied by a corresponding increase in production. 1The case of an undertaking containing many separate branches of trade concentrated in itself is different. 2 Porter, 'Progress of the Nation,' pp. 367-9. 210 CONCENTRATION IN THE PAPER TRADE The next period shows a different picture. Between 1841 and 1845 there were still on the average 497 mills, but the number then sank steadily. The following are the figures for the whole United Kingdom:1 The production of paper rose from 43,350 tons in 1841 to 773,550 tons in 1903, but the number of mills fell from nearly 500 to 282. Continual improvements in machinery, the inaccessibility of certain older works to markets, and the increasingly strong competition of the more efficient mills were, according to Spicer, the causes of this concentration.3 In the production of pig-iron the tendency to concentrate appeared much later. From 1796 to 1880 the number of furnaces in existence rose steadily from 124 to 926, and there was a corresponding increase in production from about 125,000 tons to about 7,700,000 tons.1 But after 1880, though production increased, the number of furnaces fell-to 908 in 1884, 790 in 1890, and 514 in 1907. Even more interesting, perhaps, is the decrease in the number of working furnaces.5 A. Meade, 'The Coal and Iron Industries of the United Kingdom,' London 1882, pp. 829 ff.; 'Iron and Coal Trade Review,' Jan. 8, 1886, p. 51, Jan. 2, 1891, p. 7; 'Mines and Quarries,' 1907, p. 205. |