The Herald of Wales. — 1889-04-20 (Swansea, West Glamorgan, Wales)

PROPOSED TIN-PLAIT! CONSOLTDATION.  Dear The success whioh has attended the union formed by us and our associations in the salt trade has elicited an expression of opinion from influential quarters in South Wales that a plan conducted on similar lines might with equally beneficial results be applicable to the tin-plate industry: The vote passed at the Swansea meeting OD the 2nd instant cannot be said to have been conclusive, as some of our best friends were evidently absent frum the meeting, and so many of those present did not vote at all. Since that meeting such weighty offers of support have reached us from so large a number of the makers in the trade, that we have felt authorised to proceed, modifying, however, our original programme so as to meet the objections that have been made.  It is believed that the adverse vote taken at the meeting did not actually represent the opinion of the generality of the makers, and in any case the details of our original scheme, being new to a large raajority of the manufacturers, 'required farther elucidation than could possibly have been afforded at the meeting,  The'two principal points made against our proposals were (I) the erection of new works, 2) the probable raising of the United States duty. With regard to the first point, experience, particularly in the United States, has shown that powerful trusts and consolidations have never suffered from excessive competition traders not caring to risk a small capital againsi powerful resources if the duty should not be raised.  With reference te the second-point, American consumers would certainly never notice or take I action against the very moderate profit that would pay investors a reasonable interest on their capital—if, on the other hand, a high or prohibitive tariff be imposed, the only one way for makers to save themeelvos would be by combination beforehand, to endeavour by the use of the power—which united action and great wealth • gives—to counteract the movement; and, failing that, to meet such injurious action by severe retaliation during the time required before the plates could be produced in the States. No industry in our country has attained to greater magnitude and perfeehon than the manufacture of tinplates none has grown with greater rapidity, nor has more effectually excluded foreign competition; and yet for many years past it haa been subject tolong periods of extreme depression, these periods being aggravated and prolonged by the acceptance of losing prices and the continuation of a larger output than the market required, owing to the want of concerted action throughout the trade. Except with eminent firms, whose command of ample capital and special ability have given them some of the advantages now desired to be extended to the whole trade, highly satisfactory returns have been the rule—a fact proved by the. 000111T011Ce of the above mentioned periods depreesion, and more plainly still by the statement that since the Ist of January, 1880, the number of failures in the trade has been more than half that of the number of works existing. This may be attributed in part to the fact that the proFress of production has outrun the amount of capital available for carrying on the trade, and that the increase in the number of works hae not brought a corresponding increase in the number of buyers, thus creating excessive competition in effecting sales. It is believed that an investment on a large scale (there being at the present moment vast supplies of capital seeking an outlet) may be made in the tinplate trade with beneficial and far-reaching results to all parties concerned. The consolidation of a large majority of the works would, in our opinion, result :-1. In a reduction of the cost of production by the judicious use of ample capital in keeping plant and machinery in the highest working condition. I. In improvement in the average price by having one seller instead, as now, of many sellers on the market. It is within our knowledge that previous attempts at combination in the trade , have proved abortive, because they were based' on a merely temporary principle. With this experience before our eyes, it is not now our intention to attempt to form a combination of this kind.  What we purpose is :-.1. A. purchase of the works and stock of such makers as may be disposed to sell at a fair price, provided a large majority of the trade are willing to sell. 2 To form a powerful company here, having its directorate principally composed of the most experienced and infinentialmembers of the trade. 3. To pay for the works and stock two-thirds in cash, one-third in shares of the company. 4. It is intended to make as little change as possible in the present managel.ient of the works or their staff, except that, of course, they would come under the supreme control of the board of directors. 5. To interfere aslittleas possible with existing arrangements with bankers, brokers, and others. 6. In alloting the share capital of the company, full consideration would be given to the claims of the friends and customers of the vendors provided they made application to be placed on the first list of such intending shareholders. Will you be so good as to inform us whether you are disposed to treat with us on the above basis? If so, we will forward you a printed form with schedule attached, upon which you can send to us in strict confidence the price you are willing to take for your works and business. —We are, dear sir, your faithful servants, FOWLFat. & CO. We are glad to notice that the tinplate makers are extremely sceptical as to the awed " advantages" to be derived from the process of syndicating the industry. The promoters of the proposed scheme appear to be doing their best to secure the adhesion of the manufacturers, but it is creditable to the intelligence of most of the latter that they decline to take any part in the project. In so doing they are wise. There are any number of perfectly valid objections to the syndicate per so, but over and above these there may be reasons which are of serious 1110111011 t, although not very obvious at the moment. For instance, it is just on the cards that the whole scheme may be part of an ingenious American device limier which such a combination in South Wales would be used as the strongest possible argument for advancing the duty in the United States in order to "protect American artisans from the products of British pauper labour and aggressive British capital." We do not state positively that this is the case, but such things have happened, and the tin-plate makers must take particular care not to be entrapped in a manner which would virtually mean the suicide of their inanstry.—lronmonger.