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"They are not unmindful of the fact that fluctuations in price, even of very large extent, depend upon circumstances which are extremely obscure, very difficult to foresee, and, perhaps, impossible to prevent. The association will seek to confine its operations within those strictly legitimate limits which govern any wellmanaged industrial enterprise; and it is hoped that the magnitude of the interests involved will permit it to form a better judgment as to the course of trade than can be done by any single member. . . . It is anticipated also that, without endeavouring to thwart the natural course of trade and of prices, a careful and continuous survey of the market, such as can be undertaken by a large combination of owners, may curtail, if not entirely prevent, those losses to which the trade has from time to time been compelled to submit. . . . The rise and fall of prices are, it is believed, largely beyond the control of any organization, even one as powerful as that now contemplated; but the careful watching of the changes may permit the members of the association to minimize or guard against dangers which they cannot altogether prevent."

The Association lasted only a year, though 80 per cent. of the owners joined it. The history of the North Eastern Association of Millers (1900-1901) shows the internal weakness of such bodies. Mr. Rank, of Hull, at the annual meeting of the National Association of Millers, 3rd May, 1901, said:

"In arranging for fixed prices it will be seen that the worst-equipped and most unfavourably situated mills must be considered, and must, of course, make a profit; therefore the larger mills must perforce work at such a margin of profit as shall, and indeed does, invite outside competition."

Still worse is dishonest competition from within. He went on :

"The miller whose word is his bond has to suffer, whilst some seem to be seeking every means for evading or overriding the spirit of the agreement. They give way to things that are demoralizing to themselves and to their travellers. Millers have in some cases substituted a better class of flour, which has been invoiced and charged at the price of the grade below it. They have wilfully and systematically allowed some people more discount than the rule permitted; they have allowed cartage to customers when the millers themselves have performed the cartage, and have offered to invoice flour at the net price after deducting the rebate, and then again allow the rebate as though it had not been taken off when the invoice was settled; and a very common form of underselling has been the invoicing of rough stuff, such as maize, oats, barley, and meals, etc., at such prices as showed a distinct loss."

Here every method of placating opposition had been tried the fixing of prices by a majority, allowing a minority of two to veto an alteration, and the imposition of penalties for breach-but all failed. It may be noted that in the milling trade it has been found more successful to trust to the honour of the members, as in the Liverpool and London Associations, than to enforce compliance by fines-a noteworthy divergence from German practice.

Weakness does not, however, exclude the possibility of tyrannical conduct. Messrs. Denny & Co., of Dumbarton, last November disclosed an attempt by the Scotch Boiler-plate Association to boycott all purchasers who did not deal exclusively with the associated firms; and at the same time that association was prepared to supply boiler-plates for shipment abroad at £1 per ton below home prices. These practices savour unpleasantly of the worst American precedents. There have also

been complaints that the Lancashire Boiler-plate Association has kept up prices unduly high.

Three special forms of price associations require particular consideration.

(a) The Birmingham Alliances.-The chief features of these bodies were, first, a "scientific system of stocktaking," by which the average cost of production of all articles manufactured was ascertained. To this was added a percentage of profit, and so the standard list prices were arrived at. Secondly, an alliance was formed with the trade-unionists, who agreed to work only for the associated firms, who, in return, gave them a monopoly of employment, a ten per cent. bonus on wages, and a sliding scale based on prices. If any firm broke the agreement, its workpeople were called out and supported from a strike fund mainly contributed by the other employers; and a corps of private detectives was employed to detect evasions of the rules. While enterprising firms could retain the whole of their savings from improvements in manufacture, their less efficient competitors were kept in existence by the price list based on average cost. The union of all sections of the producers against the consumer had its natural result, and in 1899 prices and wages in the bedstead trade were double what they had been in 1891. Foreign competition was stimulated, and internal dishonesty produced practices similar to those described in the milling trade. At last three firms revolted, and the expense of maintaining their workmen depleted the common fund. In August, 1900, the Bedstead Alliance was dissolved, and the system, which at one time covered trades employing 20,000 persons, is thoroughly discredited-deservedly so, for such an "alliance" had none of the economic advantages of combination. Even when the system was in full swing, the profits of the bedstead

companies only averaged 7 per cent., showing great leakage, despite the high prices ruling.

(b) The Proprietary Articles Trade Association in the drug trade is typical of a form of organization spreading with some rapidity also in the grocery and baking trades. It was founded in 1896, and consists of manufacturing, wholesale, and retail chemists. Retail prices are fixed; and observance of the list is enforced by the refusal by all the wholesale dealers to supply any of the "protected" articles to a retailer who cuts the price of a single one. In 1902 the Association numbered 96 manufacturers and 2000 retail chemists out of 9000 in business, and controlled the price of 370 articles. The practice of selling patent goods at or below cost as "leading lines" has in this way been stopped to a large extent. The tendency of the plan is to make the retailer quite subordinate to the manufacturer, and to increase the latter's power of holding up prices. A particularly interesting variant of this movement towards the fixing of retail prices is afforded by the active endeavours of the Publishers' and Booksellers' Associations to abolish discounts and establish the system of selling books "net." This case also shows how organizations, not originally intended to control prices, are inevitably driven towards some attempt somehow to regulate their trade.

(c) The Shipping Conferences or Rings are essentially agreements among shipping companies to control freights over definite trade routes; and they practically dominate our over-sea transport. Regulation of freights is undoubtedly a commercial necessity, but the special feature of the Conference system is that a special rebate of 10 per cent. is allowed to shippers for exclusive patronage of the Conference boats; the rebate is only paid six months in arrear, and is forfeited if an ounce

of freight is in the interval sent by an independent steamer. Shippers having large sums at stake are thus bound to the "ring," which proves itself a trust as powerful as any in the United States. Nor is its tyranny one whit less than its strength. At present the Prince and Houston lines are fighting the South African "ring;" but though well-patronized, they cannot supply facilities for the whole trade, and the "ring" is not slow to use the opportunity thus offered. Customers of the independent lines are charged double rates for goods they have to ship by the Conference steamers; forwarding agents, who by special orders ship the goods of some of their clients by the Houston line are notified, as Messrs. Townsend and Mellor said, "by the ring that they will not accept any cargo from us for any of our principals except at penal rates; even the consignees are coerced to instruct their consignors to ship only by the "ring." Beyond these specific evils is the more serious fact that rates of freight appear to be fixed without any regard to their effect on British trade. Rates to South Africa are the same from British ports as from Continental ports; thus leaving German exporters the full advantage of the railway concessions made to them by the German Government. Again, while the rates from British ports are regulated and range from 22s. 6d. to 80s. per ton, freights from United States ports are subject to open competition, and vary from 10s. to 20s., even in ships belonging to the Conference lines.

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The same story may be told of all the Conferences. The Singapore Conference is composed of both shippers and shipowners, and the rights of each party are alleged to be maintained, though an extra rebate is given to

*Letter of Messrs. Townsend and Mellor in Liverpool Daily Post, January 10, 1903.

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