NOTEBOOK “β” (“BETA”)

HEYMANN, COMBINED ENTERPRISES

Hans Gideon Heymann , Combined Enterprises in the German Large-Scale Iron Industry , Stuttgart, 1904
(No. 65 of Munich Economic Studies ).

A summary of data (for the most part rather fragmentary) on the advantages of large-scale production, especially “combined” production, i.e., uniting various successive stages....

| good example!! | | | “The representative of the Krupp firm told the iron Enquiry Committee (Minutes (1878), p. 82): ‘I do not think that a plant producing 20,000-30,000 tons (annually) can stand up to one producing 100,000-150,000 tons.’ Twen- ty-five years later Carnegie considered that twen- ty times as much as 150,000 tons was neces- sary. ( The Empire of Business , New York, Doubleday, Page and Co., 1902, p. 233): ‘Concerns making one thousand tons of steel per day have little chance against one making ten thousand’” (p. 232, note). |

| a condition for cartels.... | | | | The growth of capital and its “immobilisa- tion” (N.B.) is one of the most important conditions for monopoly and cartels. | “Combined enterprises often belong to more than a dozen cartels, as Völker’s interesting table shows”... (249)....

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| | ? Völker? Iron cartels? December 1903 (where?) (p. 256).... | | —? |
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| “We see ... everywhere the same spectacle in the production of finished goods. Pure enterprises perish, are crushed between the high price of raw material and low price of the finished product, while the com- bined enterprises earn enough profit from the high prices of materials, and they find sales thanks to the low prices of finished goods; for the big plants avoid excessive prices for fear of inevitable subse- quent reductions, whereas the small ones in good times want to push up prices wildly. Exactly the same policy is pursued in America by the big Steel Corporation” (256). | |
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| | | | N.B. |
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Now competition has been done away with. There remain two or three dozen big plants. At the head are Thyssen, Lueg and Kirdorf (261). “Two gigantic associations”: the coal syndicate and the steel syndicate ((87.5 per cent of steel output)) “must rule over the whole”.

— — — Monopoly of the means of production. The land has been bought up (coal and ore).

| “The head of the concern controls the principal company [literally: the “mother company”]; the latter reigns over the subsid- iary companies [“daughter companies”], which in their turn control still other subsidiaries [“grandchild companies”], etc. In this way, it is possible with a comparatively small capital to dominate immense spheres of production. Indeed, if holding 50 per cent of the capital is always sufficient to control a company, the head of the concern needs only one million to control eight million in the second subsidiaries. And if this ‘inter- locking’ is extended, it is possible with one million to control sixteen million, thirty- two million, etc.” [1] (pp. 268-69). | | | better than in Liefmann and earlier |

The summing up:

| | “There remain, on the one hand, the big coal companies, producing millions of tons yearly, strongly organised in their coal syndi- cate, and, on the other, the big steel plants, closely allied to the coal mines, having their own steel syndicate. These giant enterprises, producing 400,000 tons of steel per annum, with a tremendous output of ore and coal and producing finished steel goods, employing 10,000 workers quartered in company houses and sometimes owning their own railways and ports, are the typical representatives of the German iron and steel industry. And concentration goes on further and further. Individual enterprises are becoming larger and larger. An ever-increasing number of enterprises in one, or in several different industries, join together in giant enterprises, backed up and directed by half a dozen big Berlin banks. In relation to the German mining industry, the truth of the teachings of Karl Marx on concentration is definitely proved; true, this applies to a country where industry is protected by tariffs and freight rates. The German mining industry is ripe for expropriation” [2] (278-79). (The concluding words of Chapter 5 in the book.) | |
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| N.B. | | |

See p. 108.

Heymann ’s statistics:

Twenty-four combined enterprises (these 24 include—Krupp, Stumm, Deutscher Kaiser (Thyssen), Avmetz Friede, etc., etc., all “leaders”).

| Their output: | | thousand tons | (1902) Total for Germany |
| --- | --- | --- | --- |
| Iron ore | 6,934 | 17,963 |
| | | (+?) |
| Coal | 13,258 = 12.6% | 107,436 |
| Pig-iron | 5,849 | 8,523 |
| | (+?) |
| Steel | 8,215 | 7,664 | (?) |

| | thousand tons | (1902) Total for Germany |
| --- | --- | --- |
| (in oper- ation) | | Blast furnaces | 147 = | 58.8% | 250 |
| Open-hearth furnaces | 130 = | 38.8 | 335 |
| | No. of workers | 206,920 | ? | ? |
| Capital | 581.4 | million marks |
| + | Reserves | 121.9 | million marks |

Growth of large-scale production in the German iron industry

| Pig- iron | | | Enterprises in operation | | | Output (mill. tons) | | | Workers (000) | | | Output per worker (tons) | | | No. of workers per enterprise |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | % | | % | | % |
| 1869— | 203 | 100 | 1.4 | 100 | 21.5 | 100 | 65.6 | 105.8 |
| 1880— | 140 | 69 | 2.7 | 194 | 21.1 | 98 | 129.2 | 150.8 |
| 1900— | 108 | 53 | 8.5 | 605 | 34.7 | 162 | 245.2 | 321.7 |

End of extracts from Heymann .

End.

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Notes:
[1] Ibid., pp. 227-28.— Ed .

[2] See present edition, Vol. 22 pp. 198-99.— Ed .