Bankruptcy and Deeds of Arrangement Acts for the period 1888-98 is 8,686,340, a sensible addition to the company losses already noted. This glimpse into the shady side of modern commerce leads us to look more closely into some moral aspects of private trading, remembering that whatever evils may appear will be enhanced in the case of companies under the screen of anonymity.

Writing in the Times of 12th September 1896, Sir Edward Fry formulated the following weighty indictment:-"If one inquires whether the morality exercised in the conduct of business in this country is satisfactory or not and answers this question from the sources of information open to the public, I fear that the answer must be in the negative. Let me enumerate some well-known facts. 1. Over-insurance of vessels. We know the efforts which have been made to check this evil, but he would, I fear, be a sanguine and credulous man who believed that the evil had disappeared; and when one considers how nearly this sin approaches to the crime of murder, this consideration is startling. 2. The bad and lazy work too often done by those in receipt of wages who give not their best but as good as they think fit. 3. The adulteration of articles of consumption-to check which a whole army of inspectors and analysts has been called into existence and has to be maintained, and yet much probably remains to be wished for in this respect. 4. The ingenuity exercised in the infringement of trade-marks and the perpetual strain exhibited by rival traders by some device or other to get the benefit of the reputation or name of some other maker or firm. 5. A whole class of frauds exists in the manufacture of goods by which a thing is made to appear heavier or thicker or better in some way or the other than it really is. In these cases the first purchaser from the maker is often as fully cognisant of the truth as the maker himself, and the deceit is designed to operate on the ignorant ultimate purchaser. Lastly, but not least, bribery in one form or the other riddles and makes hollow and unsound

a great deal of business, including transactions in which the professions of engineers and architects are interested. Sometimes the bribery is effected by the payment of a single sum, more often under the name of a commission or by way of percentage; sometimes pickings are secured under the form of a royalty on a worthless patent or stipulations as to the firms from which articles are to be obtained for use in the work to be done."

An interesting commentary on this indictment is afforded by the German Law against Unfair Competition, passed in 1895, which shows that Sir Edward Fry's charges cannot be limited to one country, but describe features common to trading all over the world. It runs: "Whoever undertakes in business intercourse to create an appearance of a specially favourable bargain by incorrect statements as to the condition or the price of goods, the origin of goods, the possession of awards, the quantity of stock, or the reason for the sales, may be sued and compelled to cease making these false statements. Whoever undertakes by public notices or communications addressed to a large circle of readers, by knowingly making false statements as to the condition, price, or origin of goods, the possession of diplomas, or the reason for sales, to create the appearance of a specially favourable offer, is to be punished by a fine not exceeding fifteen hundred marks, or by detention or imprisonment not exceeding six months." These provisions would strike severely at those numerous tradesmen who habitually sell certain lines of goods below cost price in order to attract custom, or whose glaring bills announcing the "Sale of an Immense Bankrupt Stock" are an offence to the eyes of passers-by. Such practices indeed are punished under the German law; and more, the shopkeeper who advertises "small profits and quick returns," or that his large stock enables him to sell at reduced prices, must be prepared to prove his statements if he desires to avoid coming before the courts.

Bribery is perhaps the most serious form of dishonesty

both in its widespread character and in its deleterious effects on commercial morality. The London Chamber of Commerce appointed a Special Committee to inquire into the extent and nature of the evil, and that body, after obtaining information from chambers of commerce, trade associations, and the general public, presented its report in March 1899, coming to the following important conclusions:"I. Your committee conclude from the evidence before them that secret commissions in various forms are prevalent in almost all trades and professions to a great extent, and that in some trades the practice has increased, and is increasing, and they are of opinion that the practice is producing great evil, alike to the morals of the commercial community and to the profits of honest traders. 2. Bribes in all forms, including secret commissions, owe their existence sometimes to the desire of the donor to obtain the assistance of the donee; sometimes to the demand expressed or implied of the donee that the bribe shall be given. 3. In the first class of cases your committee have reason to believe that the bribe is often given unwillingly and with a pang of conscience, as the result of the keen competition in trade, and in the fear, too often well founded, that unless given other less scrupulous rivals will obtain an advantage; many cases have come before your committee in which traders have believed (often, though not perhaps always, without reason) that their entire failure to obtain orders has been due to the want of a bribe. 4. The second class of cases are those in which the recipient extorts the bribe from those who have established business relations with his principal. This practice is rendered more effective and oppressive by a combination between the blackmailers. The servant or agent who demands a commission and fails to receive it not infrequently warns his fellows in the same position in the trade against the honest trader, who thus finds himself shut out from dealings with a whole circle of firms."

It is not necessary to comment on these statements. Sir

L

Edward Fry and the London Chamber of Commerce have laid bare a mass of corruption the heinousness of which can no longer be concealed. Its destructive effect on the "natural" law of supply and demand cannot be questioned; or if it is true, as the Inspector-General in Bankruptcy has pointed out, that a few reckless traders can paralyse the ordinary working of the commercial system, the much greater mass of dishonest dealing must have a many times more baneful result. These illicit tricks and elaborate frauds have brought competition to the lowest depths of degradation, involving even traders who would fain be honest. This view behind the scenes of modern trade may be fitly closed with the words of Herbert Spencer : 1 "It has been said that the law of the animal creation is, 'Eat and be eaten'; and of our trading community it may similarly be said that its law is, 'Cheat and be cheated.' A system of keen competition carried on, as it is, without adequate moral restraint, is very much a system of commercial cannibalism. Its alternatives are, Use the same weapons as your antagonist or be conquered and devoured.''

1 The Morals of Trade, p. 50.

CHAPTER VIII

THE GROWTH OF COMBINATION IN INDUSTRY

THE history of competition, so far as we have traced it, has disclosed a persistent movement towards reduction of prices and profits. With each fall the struggle has become more keen, manufacturers striving to make up for the lower rate by a larger turnover, and the consequent over-production has led to another decrease. Competition, like the scorpion of fable, is stinging itself to death. The straining after a larger output, the demand for more productive machinery, the search for labour-saving processes, all require larger increments of capital, and there is a steady growth in the size of the business unit. Of course, no statistics can be given to show the amount of the change, but it is a matter of general knowledge. On all sides evidence is at hand, showing that the great mass of the trade and manufacture of the country is passing into the hands of a diminishing number of people. The growth of the joint-stock company system is one such proof; the figures of the bankruptcy returns afford another. To take one trade only, the Boot and Shoe Trades Journal of 27th May 1899 remarks (p. 767) that "any one who has carefully studied the financial columns of the Journal during the past year must have been impressed with the large proportion of small retailers who have been compelled to consult their creditors and compromise for the payment of their debts"; and the editor adds.