Arizona republican., 1917-09-20

Germany. They are known there as "Cartels" and the difference between the American trust and the German cartel is that the American trust has, as it were, a centralized government permanently taking over and combin- ing the competing elements in any given business, while in Germany the competing clements form a combina- tion by contract for limited number of years This combination is called cartel" and during these years each member of the cartel is assigned a given amount of the total produc- tion and given definite share of tn, profits of the combination. The Ger man cartel therefore, as Consul Gen eral Skinner has aptly said, may be likened to a confederation existing by contract for a limited period of time and subject to renewal only at the will of it's members.
 It may be that competition is q relic of barbarism, and that one Of the first signs of a higher civilization is an effort to modify the stress of competition. The debates of congress tend to show that, in enacting the Sherman law, congress did not intend to forbid the restraint of competition among those of the same business, but only intended to prohibit the forming of combination by those who, if combined, would have monopoly of a particular business or product. It is easy to see why all the coal mines in the country should be pro- hibited from combining. But it is not easy to see why certain persons engaged in the tobacco business should be prohibited from taking their
 hai because tobacco is a product which could be raised upon millions of acres of our land and cannot be made the subject of a monopoly.
 The German courts have expressly said. if prices are so low that the manufacturers of a particular article see financial ruin ahead, the fOrma- ton of cartels by them must be looked upon as a justified means of self preservation The German laws are directed to the end to which it seems to me such laws should logic ally be directed, namely, to the pre- vention of unfair competition.
 So long as the question of mono- poly is not involved, competition can always be looked for when combi- nation is making too great profits, and the new and competing corpora tion and individuals should be pro- tected by law against the danger CT price cutting for the express purpose of driving the new competitor out or business. However, it must be re- membered that combination acting unfairly in competition may be more oppressive than a monopoly. l my self am not convinced by the agree ments of either side. It is matter for the most serious study.
 The object of the American trust has been to destroy its competitors; the object of the German cartel to force it's competitors to join the cartel.
 German Government in the Cartel
 System
 In fact, the government in Germany becomes part of these cartels and takes an active hand in them, as Wit ness the participation of the German government in the potash syndicate, when contracts made by certain American buyers with German mines were cancelled, and all the potash pro ducing mines of Germany and Aus tria forced into one confederation. Witness the attempt by the govern ment which I have described in an other chapter, to take over and make a monopoly of the wholesale and re- tail oil business of the country.
 The recent closer combination of dyestuff industries of Germany with the express purpose of meeting and destroying American competition aft CT the war is interesting as showing German methods. For number oi years the dyestuff industry of Ger many was virtually controlled by six great companies, some of these com panies employing as many as 5OO chemists in research work. In 1916 these six companies made an agree ment looking to still closer alliance, not only for the distribution of the product. but for the distribution Of ideas and trade secrets.
 For years these great commercial companies supplied all the countries of the world. not only with dyestuffs and other chemical products, but with medicines discovered by their chem ists and made from coal tar. and which although really nothing more than patent medicines. were put upon the market as new and great and beneficial discoveries in medicine The Badische Aiin and Soda Fabrik, with capital of 54.000,0O0 marks, has paid dividends in the ten years from 1903 to 1913 averaging more than 26 per cent
 The Farbwerke Meister Lucius nd Pruning at Hoeckst. near Frankfort, during the same period. with a capital of 50,000,000 marks. has paid divi- dends' averaging more than 27 per cent, and the chemical works of Bay CT X Co.. near Cologne, during the same period. with a capital of 54.- 900, 900 marks, has paid dividends averaging more than 30 per cent.
 Concluded Tomorrow