CHAPTER IX THE GROWTH AND EFFECTS OF COMBINATION THE iron, steel, and engineering trades do not exhibit the same tendency to the formation of large combinations which we have seen to be so prevalent in the textile industry. The Textile Machinery Association, which has been already noted, is, of companies lately floated, the only one which approximates to the Bradford model. Since the spring of 1899, however, there has been a movement among the makers of wringing and mangling machines, who have suffered considerably from undercutting. The trade is almost entirely localised at Keighley and Accrington, and therefore presents certain facilities for fusion of interests. Nevertheless, competition does not reign unchecked in many of the branches of the iron industry. Selling associations, which regulate the selling-price of many manufactured or semi-manufactured articles, exist in fair abundance. 1 Although no actual association has yet been definitely established, we understand," says the Iron and Steel Trades Journal "that an informal agreement has been come to by the Lancashire finished iron-makers that meetings shall be held regularly to consider prices, together with other matters affecting the trade, and at the meeting on Tuesday an arrangement was arrived at that the minimum basis price for 1 14th May 1898. bars delivered in the Manchester district should be £5: 15s. per ton. Other trade combinations are, we understand, also under consideration. The iron and steel boiler-tube manufacturers are endeavouring to form an association for the regulation of prices, which of late years have been very much cut up by competition. A similar combination amongst the better qualities of steel plates for boiler-making purposes is also being pushed forward, negotiations being in progress with a view to securing the adhesion of the leading houses both in England and Scotland." Seven months later the Iron and Coal Trades Review1 could say that " we have now in operation agreements or understandings as to prices in the rail, ship-plate, boiler-plate, bar iron, and other branches of the iron and steel trades of this country by means of which prices are fairly well maintained and cutting is largely prevented." Two years later the Consultative Council of the Iron Trade of Great Britain was formed, concealing under a high-sounding title a federation of the various combinations of bar-iron manufacturers and kindred industrials. Its primary object is the regulation of prices, or at least to ensure the raising or lowering of prices by common agreement in the different districts. Some important manufacturers, however, hold aloof from it. The iron industry includes many very large firms, there being at least thirty with a capital of over half a million, while in engineering alone twenty-four firms have a subscribed capital of 14,245,000. Many of them show a high degree of integration of industry. Thus Bell Brothers, Limited, are ironmasters, coalowners, coke-manufacturers, ironstoneowners, and firebrick-manufacturers; Pease and Partners, Limited, own collieries, ironstone mines, limestone quarries, blast furnaces, coke ovens, firebrick works, and chemical works; the Weardale Steel, Coal, and Coke Company carries on the same businesses as the other two firms, and in addition manufactures steel ingots and finished iron and steel, 1 16th December 1898. and builds and repairs railway waggons. Few firms hold such an all-powerful position as that which Messrs. Nettlefolds obtained in the screw trade by the fortunate purchase of a patent and the drastic application of competitive methods. Nevertheless each department of the iron, steel, and engineering industries is dominated by a few firms who hold the world's trade, while by their side flourish a number of smaller firms who attend to the minor demands of the localities where they are situated. These local firms are quite within the power of the large businesses, which, for example, by the threat of withholding orders, compelled many unwilling firms to join in the lock-out of the engineers in 1897. Where the number of competitors is reduced to a manageable figure, it is always easier to bring about a combination, but there is not much likelihood that there will be any great movement in that direction so long as the iron and steel trades continue in their present exceptional condition, with every workshop crammed with orders and prices and profits steadily rising. What we do see happening is, first, the partial disappearance of the personal element by the transformation of large firms like Galloway's, Doxford and Co., and Laird Brothers-to take three recent examples -into public companies; and secondly, that the large firms unite in twos and threes, apparently in order to ensure the concentration of a greater mass of ability on every branch or the work, and also because in engineering the firm which has the greatest range of capacity is most likely to succeed in the struggle. In 1897 Armstrong and Co. absorbed Whitworth and Co., raising their capital to £4,210,000 in the process. In the autumn of 1899 they took £30,000 of shares in Robert Stephenson and Co. (capital 750,000), an engineering and shipbuilding company, undertaking also to dock all their war-vessels in a new graving-dock being built by the latter. Vickers and Co., the armour-plate manufacturers, in the course of the same year bought up first the Naval Construction and Armament Company, and later the Maxim-Nordenfelt Guns and Ammunition Company. Their share capital is now two and a-half millions, and in addition a million and a-quarter of debentures have been issued at 104. In the summer of 1899 two important amalgamations took place. The Thames Iron Works Shipbuilding and Engineering Company bought up the engineering works of John Penn and Sons, Limited, and floated the united businesses with an issued share capital of £600,000 (since increased to £700,000) and £200,000 in debentures. John Brown and Co. of Sheffield, the wellknown manufacturers of armour-plates, shafting, and other marine specialities, and owners of the most extensive collieries in South Yorkshire, iron mines in Spain, etc., bought up the works and business of the Clydebank Engineering and Shipbuilding Company. The assets of the former company amounted to 1,854,000 and of the latter to £1,038,000; after the amalgamation the paid-up share capital of John Brown and Co. was 1,852,500, the nominal capital being £2,500,000. The South Durham Steel and Iron Company is an amalgamation of two firms in Stockton and one in West Hartlepool, effected in December 1898 and floated in March 1900 as a public company, with a capital of £650,000 (100,000 not issued) in shares and £300,000 in debentures. The works employ 5000 men, and "the Company's production of steel and iron plates for shipbuilding is more than one-half of the whole output of the North-East coast." This is one of the many co-related companies in which Sir Christopher Furness takes a prominent part. Another giant undertaking has been created by the purchase of Lord Wimborne's properties-the Dowlais Iron Company and Guest and Company, comprising collieries, blast furnaces, steelworks, rolling-mills, etc., and a large interest in iron mines in Spain-by the Patent Nut and Bolt Company of Birmingham in June 1900. The valuation of the Dowlais undertakings is £1,530,000, and of the Patent Nut and Bolt Company £1,000,000, while the capital of the new company, now called Guest, Keen, and Co., is £3,000,000 (one-third in debentures), of which 470,000 is reserved for future issue. The engineering firms of Furness, Westgarth, and Co., T. Richardson and Sons, and W. Allan and Co., united late in 1900 to form Richardsons, Westgarth, and Co., with a capital of £1,050,000; Furness, Withy, and Co., shipowners, taking 50,000 shares. About the same time a more modest concern was floated, James Dunlop and Co., ironmasters and colliery-owners near Glasgow, with which was amalgamated the Calderbank Steel Company, steel manufacturers and colliery-owners, the joint capital being £550,000. The influence of the textile combinations is probably to be observed in the flotation of Fairbairn Lawson Combe Barbour, Limited, of Leeds and Belfast, which is an amalgamation of the three largest manufacturers of machinery for preparing and spinning fax, hemp, and jute. The capital issued is £1,100,000, of which 300,000 is in debentures. It is also reported that negotiations are well forward for a fusion of three firms in the vicinity of Glasgow which are the largest makers of bakers' and confectioners' machinery in Scotland. The Scottish tube trade has undergone several amalgamations, and the two most powerful firms are A. and J. Stewart and Menzies, Limited, share and debenture capital £1,050,000, and Wilson's and Union Tube Company, share capital £200,000, leaving four or five other firms in the Glasgow district. Lastly, Bolchow, Vaughan, and Co., iron and coal masters, whose paid - up share capital is £3,218,000 and debentures £223,750, early in 1900 bought the North Shelton Mine and six blast furnaces from the Shelton Iron, Steel, and Coal Company, paying the purchase price, £215,000, out of their profits for the preceding year. These movements may not appear so important as the combinations in the textile industry, nor are they from the standpoint of organisation; but as far as the consumer is |