Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1921-12-01
British Tendency Toward Large
Capital Organization

capital organization is evldent"ln the
industrial and financial Life Of Great
Britain, according to the National
Bank of Commerce in New York.
Wartime expansion and postwar for
eign competition, it declares, have led
to consolidation and larger resources
at the expense of the smaller in
dividual enterprises.
"The impulse toward consolidation
of interests and resources which pro-
duced in America the United States
Steel corporation, the Standard Oil
company and the Ford organization
has in recent years been felt with
particular force in British industry"
the bank says in the December issue
of its magazine, Commerce Monthly.
''The desire for expansion of enter
prise. during and after the war and
the need for liquid capital to main
tain expanded enterprise in the face
of Tightening conditions were alike
conducive to charging the capital of
commercial and industrial companies.
Fear of foreign competition en-
phasized the desirability of eliminat
ing by amalgamation. or agreement
major competitions at home and Of Sc
curing the resulting economies in pro-
duction. Either course tended to pro-
duce large organizations with extern
sive capital resources at the expense
of the smaller individual enterprises
which have played so large a part
in the industrial life of Great Britain.
Besides new organizations which
sought capital during 1919 and. 1920,
numerous long established companies
increased their capital either for the
purpose of expanding business, ex-
tending plant: or purchasing allied
concerns.
"New issues of capital for ! COM
mercial and industrial purposes in
Great Britain in 1920, exclusive of
conversion loans, bonus shares, and
shares issued to vendors, amounted
to about three times pre-war issues
for the same purposes, as compared
with twice the pre-war amount in
1919. !; In the first nine months gof.
1921, however, 1.-The general business
depression was clearly reflected lin
marked decrease of new capital is
sues. The largest relative expansion
occurred in the iron, steel, coal and
related industries, mis- .ellaneous COM
mercial and Industrial enterprises,
banks, motor traction and breweries.
"a second characteristic of the pc
riod is the number Of amalgamations
which took place. This was in many
instances but the continuation of a
movement which had been going. on
even prior to the war, notably in the
iron, steel and coal, and the textile
industries.
"In contrast with the elaborate.
antitrust laws Of the United States,
the common law is practically the only
check upon combinations in Great
Britain. 1t holds null and void agree
ments in restraint Of trade, but it
has been broadly construed and con-
siderable weight is given to freedom
of contract. so that combination is
not prohibited. Existing combina-
tons range all the way from asso-
Citations somewhat resembling the
German cartel, in which each firm
retains its identity and its independ-
ence in all save certain specific mat
tiers controlled through amalgamation
or through share ownership in sub
sidiary companies. Many of the
largest capital issues in 1920 were
for this purpose. Corporations or
holding companies of this kind do not
require for their success the inclusion
of practically an entire industry and
they make possible economies of pro-
duction as we'll as regulation of out
put and selling price. Their effect
upon dominance in the field of indus
try concerned, but through the ad-
vantages of large scale organization