(p. 752) that "the number of manufacturers is being steadily reduced." Another very rough indication may be taken from the defective statistics of textile factories. Lumping all kinds of factories together for all the textile trades, we find that in 1870 there were 6692 spindles, 89 powerlooms, and 133 workpeople per factory, whereas in 1890 there were 7461 spindles, 114 powerlooms, and 151 workpeople. These figures at least show that the growth has not been confined to the period when great inventions were made every day.

The ordinary economies of large businesses-in management, in supervision, in organisation, in the use of costly machinery, in better control over sales, in avoiding expensive advertisement, in domination of the raw material markethave all played their part in achieving the elimination of the small maker and trader. But competition between the giants of manufacture and commerce has continued with redoubled vigour, receiving an increasing impetus from the pressure of foreign competitors; and we can observe two further movements towards concentration, one which may be called the integration, the other the congregation, of industry. In the former case the trades ancillary to the main industry are added to the factories which they serve. The cobbler no longer sticks to his last. Nowadays, a manufacturer makes in his own workshops the subsidiary articles which he would formerly have ordered from independent makers, and saves the intermediate profits. A great engineering company boasts that it can turn out a battleship ready for sea "in every respect"; a large mustardmaking firm prints its own labels; a railway company not only carries on its natural business of traffic, but builds its own engines, waggons, and carriages, does its own upholstery work, prints its own tickets, and, after mangling its employees, provides them with artificial limbs of its own manufacture. The movement goes still farther and aims at the suppression of the middlemen between the manufacturer

and the retailers. Where the retailers are few and deal on a large scale, this elimination can be brought about with advantage; but where the dealers are small and numerous, the maintenance of an army of travellers and agents eats away the saving. In some cases, notably in the liquor trade, the manufacturer strives to convert the retailer into a mere agent; and in Liverpool, for example, 90 per cent or more of the licensed houses are the property of some six or seven large brewery firms. Other industries of recent growth, like the cycle and sewing-machine trades, can even dispense with the retailer and sell directly to the consumer ; and the farming and fishing industries make sporadic efforts in the same direction. Retailers, indeed, are becoming alarmed at the progress which manufacturers are making in direct trading; and at the conference of the Ironmongers' Federated Association (which includes forty associations and six hundred members) on 26th April 1900, a resolution was carried urging the withdrawal of support from such manufacturers. The movement extends backwards as well as forwards, and we can see the manufacturer striving to get the extraction of the raw materials into his own hands. This is most notable in the case of large iron and steel smelters, who have their own mines from which they raise the iron and coal which they require; in Germany the ironmasters are buying up mines to free themselves from the control of the Coal Syndicate. Some large grocery firms possess their own tea and coffee plantations. We seem, in fact, to be on the eve of a vast integration of industry which will place all the processes of production, from the extraction of the raw material to the retail sale of the finished product, in the hands of the same set of persons, who face the consumers with no intermediate agents. Another form of integration of industry to which the jointstock company system lends itself is exemplified by the following extract from the prospectus of Pease and Partners :

"Several of the directors of the Vendor Company are also

directors of or shareholders or partners in other important companies or firms on the East and West Coasts, in which they hold a considerable, and in some cases a preponderating, interest, and trade contracts have been for many years entered into, and are now subsisting, with such other companies and firms, to the mutual advantage of the parties to such contracts."

The second phenomenon, which we have called the congregation of industry, is to be observed chiefly in retail businesses, where the sale of all kinds of products is carried on in the same establishment. This movement began with "the Stores," founded in imitation of the co-operative societies; then came their gigantic rivals Whiteley's, Spiers and Pond's, and others; and now they are copied on a smaller scale by the "Bon Marchés" of the minor suburbs. These institutions have been the most deadly rivals of the small traders, who for a long time in this country sought to induce the Government to purloin the profits of the Stores by an illegitimate application of the Income Tax Act. The same movement and the same counteraction is now going on in Germany, where a grandmaternal Emperor is trying to come to the assistance of the Prussian shopkeeper by stopping the march of economic progress with penal taxation. There is, however, this distinction between integration and congregation of industry, that the former aims at the suppression of middle profits, while the latter seeks to attract a large amount of custom by purveying for a vast variety of wants.

Notwithstanding these developments, competition still hustles competitors along the down grade, and we find, for instance, the Stores suffering from their suburban rivals. There is a steady exertion of economic pressure, beginning with the consumer and concentrating on the manufacturer. The consumer in regard to the retailer is in the strong position of not being bound to buy from any particular person or at any particular time, whereas the retailer must

have a steady flow of sales or shut up shop. The customer again has not got the technical knowledge requisite to determine the qualities of competing articles, or even to discriminate between the real and the imitation, between linen and linenette, and must either trust to the often doubtful guarantee of a well-known name or brand, or else take refuge in selecting the cheapest article. Nay, if he is a person of small income-and these after all constitute the immense majority of the population-he will find it convenient to buy a cheap article if it only lasts half as long as a better article at double the price, for of necessity his individual payments must be small. Retailers are thus driven to a constant reduction of prices in order to secure custom, and at this point in the industrial field we find competition to be keenest and bankruptcies most numerous. The shopkeepers in turn are the customers of the wholesale dealers, and occupy the same strategic position which the consumer occupies towards them. They beat down the prices at which they purchase their supplies, or if they deal on a sufficiently large scale they go direct to the manufacturer and play him off against the dealer. Finally, the wholesale agents transfer the pressure to the manufacturer, and there it tends to stay, forcing down wholesale prices and diminishing the profits of production. Not that manufacturers are content to be squeezed, but so long as they compete they can make no resistance. Their first thought is usually to make a cut off wages, but public opinion and the well-filled war-chests of the trade unions interpose an obstacle. They pertinaciously seek out new markets where the wicked may cease from troubling and profits may accumulate, but the agile foreigner makes his entrance through the open door and profits vanish. Besides, the surface of the globe is limited, and the dread of international complications induces the Foreign Office to interfere with British enterprise in Morocco and elsewhere. Scarcely any industry in this country can command a good profit unless

it is protected by a patent or trade-mark, but new inventions speedily make the old ones obsolete, and proprietary articles are displaced by others which take the public fancy.

Driven from their last entrenchments, the producers are compelled to make common cause against their common opponent the consumer. Competition is good enough so long as profits can be extracted from the pockets of fellowcompetitors; but when that becomes impossible, competition ceases to be good. After all, men are in business not to exhibit the "natural" laws of economics but to make an income, and it is a poor consolation to a bankrupt to know that he has been overwhelmed by a stream of tendency. The century-old fight between Competition and Association has ended in the competitors stealing the enemy's ammunition. Competing manufacturers now associate themselves together to limit the workings of competition and to oppose a barrier to the decline of profits. This is the dominant feature of British industry to-day.

Combination of manufacturers takes many forms, but in all of them it represents a tendency towards monopoly. Either one man, a section of a trade, or the whole trade in union strives to obtain a complete command over the market. We have long been familiar with employers' associations, which aimed at controlling the conditions of labour and influencing the legislature, and the successes of these organisations have helped to teach manufacturers the advantages of union. Further lessons have been obtained from attempts to secure a temporary domination of the market, but those "rings" and "corners" have always been of short duration, dissolving as soon as their object had been obtained. Some of them, like the Cotton Corner, have been defeated by the aid of the operatives, who were willing to work short time; others, like the Flour Corner, by the refusal of the co-operative societies to join; others by sheer miscalculation, as in the case of Mr. Leiter, who, after amassing a paper profit of five million dollars in "cash wheat," conceived