The Richmond Virginian. (Richmond, Va.) 1910-1920, 1917-10-20
my -Four Years In Germany"
Ambassador Gerard,s Experiences at German Court
Until Entrance of the United States Into
the Great War
German Trust" and How They Work Un-
der the Sanction of the Gouennent-Some
Trade War Possibilities

1t was also part of our commercial
work to secure permits for the ex-
portation from Belgium of American
owned goods seizeo by Germany. We
succeeded in a number of cases in get
ttHg tnese goods released. In other
cases the American-owned property
was taken over by the government,
but the American owners compensated
for the loss.
Germany took over belligerent
property and put 1t in the hands of
receivers. In all cases where the ma
jority of the stock of a German cor
poration was owned by another cor
poration or individuals of beiligerent
nationality the German corporation
was placed In the hands OF a receiver.
The German government, however.
would not allow the inquiry into the
stock ownership to go further than the
nrst holding corporation. There were
many cases where the majority of the
stock OF a German corporation was
owned by an English corporation and
the majority OF the stock of the Eng
lish corporation In turn owned by an
American corporation or by Ameri-
cans. In this case the German gov
eminent refused to consider the Amer
lean ownership OF the English stock
and put the German company under
government control.
With the low wages paid to very
efficient workingmen. who worked
long hours. and with no laws against
com bination. 1t was always a matter
of surprise TO ma that the Germans
who were in the process of getting all
the money in the world should have
allowed their military autocracy to
drive them INTO war.
AMERICAN TRUST
AND GERMAN CARTEL
am afraid. after this war, If we
expect to keep a place for our trade
in the world. that we may have to
revise some of our ideas az to So
called trusts and the sherman law.
Trusts or combinations are not only
permitted. but even encouraged In
Germany. They are known as car
tells" and the difference between the
American trust and the German car
tel is that the American trust has. as
1t were. a centralized government per-
manentiy taking over and combining
the competing elements In any given
business, while In Germany the com
peting elements form a com bination
by contract for a limited number of
years. This combination Is called a
cartel" and during these years each
member of the cartel is assigned n
given amount of the total production
and given a definite share of the prof
it's of the combination. The German
cartel. therefore, as Consul-Gensral
Skinner has aptly said. may be lfkened
to a confederation existing by-con=
tract for a limited period OF time and
subject to renewal only at the VIII
of It's members.
1t may be that competition is a relic
of barbarism, and that one Of the htst
signs of higher civilization is an
effort to modify the stress of conapeti-
ton. The debates of congress tend to
show that. in enaeting the Sherman
law. congress did not intend to for
bid the restraint OF competition among
those in the same business. but only
intended to prohibit the forming of IL
combination by those who. II COM
bined. would have monopoly OF a
particular business or product. II Is
easy to see why all the coal mines in
the country should be prohibited from,
com bining. But II Is not easy to see
why certain persons engaged In the
tobacco business should be prohibited
from taking their competitors into
a product which could be raised upon
10 illions of acres OF our land and can
not be made the subject of a monopoly.
The German courts have expressly
said, If prices are so low that the
manufacturers of particular article
see financial ruin ahead. that forma-
tion of cartels by them must be looked
upon as a justified means of self
reservation. The German laws are
directed to the end to which 1t seems
to me such laws should logically be
directed. namely. to the prevention OF
unfair competition.
So long as the question of monopoly
Is not involved. competition can al
ways be looked for when a combi :
ton is making too great profits. and
the new and competing corporation
and individuals should be protected by
law against the danger of price cut
ting for the express purpose of driv-
ing the new competitor out OF busi-
ness. However, Ii must be remem-
bered that a combination acting I'M
fairly in competition may be more OPP
pressive than a monopoly ! nysei.
am not convinced by the arguments
, of either side 1t Is matter for the
most serious study.
The object Of the American trust
has been to destroy it's competitors;
to Join the cartel.
GERMAN GOVERNMENT
IN THE CARTEL SYSTEM
In fact. the government in Germany
becomes part of these carteis and