United States. Dept. of Commerce and Labor United States. Bureau of Foreign Commerce.

Consular reports, Issues 196-199 online

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extensive purchases on English and Belgian accounts, the 3 per cent German
stocks quickly rose to par. This led to the apprehension on the part of
German capital that the conversion of the 4 per cent stock into stocks at a
lower rate of interest was but a question of time, and as, since 1894, German
industry has experienced a very material improvement, a considerable jwr-
tion of German public stocks have changed hands and gone abroad, while
the proceeds have found employment in industrial stocks.

Before proceeding to these new enterprises, it may not be uninteresting
to look at the vacillation of the various above-named stocks. The Kingdom
of Bavaria has already undertaken the conversion into 3^ per cent of her 4
per cent loan, amounting to about $375,000,000, and only the small fraction
of about $15,000 has not acceded to this conversion. It goes without saying
that a large portion of the stocks has changed hands and has found invest-
ment in stocks bearing a higher rate of interest. These conversions will be
imitated by Wurtemberg, Prussia, and the German Empire, and thus the
following public stock, bearing at present 4 per cent, will have to submit to
a reduction in the rate of interest of one-half of i i>er cent, viz:

Bavaria, about 1270,000,000

Wurtemberg, about 90,000,000

Prussia 895,000,000

German Empire 112,000,000

Total 1,367,000,000

This means for the owners a loss of interest of about 27,000,000 marks
per annum, apart from the loss of interest which accrues to the capitalists



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GERMAN CAPITAL AND GERMAN INDUSTRY.



537



from the conversion of 4 per cent annuity stocks and debenture stocks of
mortgage banks, loans of cities and counties, etc., which either have been
or will yet be effected. This latter loss may be estimated at the same figure.
The rates of exchange of the German loans were :



Year.



X878.
1879,
1880,
1881.

i88a
1883,
1884.
X885,
1886.
1887.
z888.
1889.
1890.
X89..
1899.
1893.
1894.
1895.
Z896.



4 per cent
loan.


3 J4 percent
loan.


3 per cent
loan.


94.75

95

97.8
100.9
X00.9
X01.3
X01.9

«03.7

104.4

xo6

107.9

108.95

107.4

>o5.3

105.9

106.8

106

105.8

103.8






























1




100.9
103.4
103. X

98

98.9

99-9
100.8
104.6
X04.4
103.5






87

85.95
86.95
86.1

95-75
99.6
98.x



The increase of German exportation, especially to the United States,
caused in 1894 an improvement in industry, chiefly in textile, ceramic, and
machine manufactures. The conclusion of the Russo-German treaty of com-
merce caused an even greater rise in the quotation of industrial shares — the
iron industry and, as a natural consequence, the collieries mainly receiving
benefit therefrom. Shares in breweries, whose production is continually on
the increase, are also favored. Even in the Rhine district, beer is more and
more taking the place hitherto occupied by wine, and it is also pushing the
cheap brandy (Schnapps) to the wall in the eastern provinces of Germany.
Electrical-engineering works improved materially, as shown in the quotations
of these shares, as well as in those of electric tramways and of the old-
fashioned street railways. Cycle works showed a decided upward tendency,
but have during the last year declined somewhat, probably in consequence
of the overproduction in other countries. In this connection, it may be of
interest to record the fact that a retailer of this city ordered one hundred
American bicycles, which will be placed upon the local market as soon as
the cycling season commences. Not only did the quotations of joint-stock
companies then in existence rise rapidly, but a large number of new joint-
stock companies were formed, usually, however, from private concerns which
had long been in existence. The public showed a preference for the shares
of these new companies. The emissions were signed so many times that the
emitting banks were frequently unable to accept more than i per cent of
the amount signed for.



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538



GERMAN CAPITAL AND GERMAN INDUSTRY.



There is another reason why German capital likes to participate in new
German industrial concerns. According to the new German law, objects
purchased from private parties can only be placed in the assets of the joint-
stock company at the value actually paid to the previous possessor. The
buyer of shares, therefore, knows that the profit of the emitting houses lies
only in the premium paid ; besides, through the statements published by the
concerns in question, the buyer gains an insight into ail points relating to
the sales and profits of the concern during the time it was in private hands.
In this way, German capital has indirectly reaped great benefit from the
growth of German industry.

The new exchange law provides that from July i, 1896, the shares of
newly formed companies can be quoted at a German stock exchange only
when such companies shall have existed in the form of joint-stock companies
at least one year. New industrial papers have been very sparsely quoted
since that time, which aids in the classification of the many new shares.
German stock exchanges are rather flat just now, which is partly due to the
sweeping measures provided by a law which will go into effect on January i,
1897, and which will no doubt hamper trade; also, to the exceptionally high
state of the money market. The latter fact is explained by the heavy de-
mands made by overtaxed industry, and by the withdrawal of money by the
United States. As soon as the state of the stock exchange has improved, it
may be assumed not only that the shares in German industrial concerns will
rise still further, but that German capital, particularly that of southern Ger-
many, will turn again to sound American railroad securities, since the various
commercial crises have passed, and, above all, since the American nation has
in so striking a manner spoken in favor of sound money.

The following is a parallel table showing the rates of exchange of some
industrial German shares:



Industries.



>893.



Iron and coal works.



Arcnbcrg | 427.5

Bochumcr Vercin 128.x

Concordia 80. 25

Harpcn 136. 5

Hibcrnia i»5-9

Massen

l.aurahuetic

Courl



Breweries.

Dortmundcr Acticn

Dortmundcr Union

Dorimunder Loewcn

Frankfort Braucreigcs...

Brauerei Roederhof.

Brauerci Schulthein

Brauerei Wickuelcr

Brauerei Rcichelbracu..



37-25
iia

55.7

318
236
M3
54.8
118.75
227
>55
•163



1896.



Industries.



1893.



1
us 1


160


2x0


164.x 1


176.4


i3'-5


>58.3


M4



475
3*7
216.9
130 25

258
280
210
»95 5

►1895.



Machines.

\ Bielefeld-Maschinople

Saechsische Webstuhl ,

Goerlitzcr Maschineufab

Falkenstein

Trebcrtrocknung Cassel. ......

Street railways.

Breslau

Cas.scl

Nuremberg-Fiinh

Berliner Pferdebahn

Other industries.

leserich Asphalt

Koenigsjeit Pottery

Kahia Pottery

Allgemeine F.lectric Work**..
Schuckcrt Elcctrjc Works....
Adler Bicycle Company



1
152-75


171


xis.as


ti55.«


*i35-5



119.
36.

lao.
940.

fiiS.

X38.
ti65

>39-
ft 40
•x55



1896.



338

363

921.5
207.5
871

187

xSo

185
389



170-5

213.75

287

»34

238.25

a39-5



ti894.



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AGRICULTURE AND INTERMEDIATE TRADE IN GERMANY. 539

Of course, there might be a long hst of unsuccessful enterprises. This,
however, does not seem to prevent German capital from showing particular
favor to German industry. Only a few months ago, a factory within this
consular district manufacturing steel balls for cycles, founded a few years
ago by two mechanics with a few thousand marks, was purchased for about
^150,000 and turned into a joint-stock company. The shares of this new
company, which are now quoted at 261, were signed ten times within a
week.

There are few flourishing factories in Germany whose proprietors have
not received offers from banking firms making a speciality of this kind of
business to turn their establishments into joint-stock companies. The
demand for such industrial enterprises is explained, as shown in this report,
first, by the low rate of interest on public stocks, second, by the unfortunate
experience of German capital with foreign stocks, and last, but not least,
by the enormous development of nearly all branches of German industry
during the last ten years.

LOUIS STERN,

Bamberg, December ^, i8q6. Commercial Agent,



AGRICULTURE AND INTERMEDIATE TRADE IN GERMANY.

In one of my previous reports on the German hop trade, I called atten-
tion to the fact that the intermediate trade in this important product had
severely sufl*ered by the tendency of a large number of planters to sell their
crop to the brewer directly, dispensing with the wholesale dealers in the
hope of putting the profits of the latter into their own pockets.

Incited by the propaganda of the German Agrarians (a party hostile to
trade and whose representatives in the German Reichstag are nearly all large
landed proprietors belonging to the nobility of the Empire), other branches
of industry show the same tendency. It is known that a large number of
manufacturers of textile goods, whose products were formerly sold to whole-
sale merchants, now either deal with the retailers or in some cases even with
the consumers direct. These tendencies, which if successful would cause a
complete revolution of trade, gave rise to a lengthy treatise from the pen of
an eminent writer on national economy, which was recently published in a
German monthly magazine called Aus Handel und Industrie (Commerce
and Industry). The following extracts therefrom are given here, since many
of its arguments find analogous application to the state of things in the
United States:

Attention has lately been called by hotspurs in agricultural circles to the alleged harm
wrought by the intermediary trade. It reduces, it is said, the meager earnings of the agri-
culturist by appropriating a profit without being itself productive. The intermediaries have
been called the "parasites of agriculture," and the abolition of the intermediary trade (called
"Zwischenhandel" ) has been represented as a most desirable object. The farmer wants to
sell to the consumer direct and gain for himself the profit which the dealer pockets. This
is to be one of the methods for improving the agricultural situation.



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540 AGRICULTURE AND INTERMEDIATE TRADE IN GERMANY.

It is no wonder that such expressions, uttered with the necessary pathos by agitators at
agrarian meetings are received by many as sentences of wisdom and value ; and it may not
be inopportune to emphasize the danger of such procedure, the necessity of a solid trade and
the benefit which it bestows upon agriculture. In social economy, there are, on one side, the
producers, anxious to realize as much as possible out of their products; on the other side,
the consumers, animated by a desire to obtain their supplies as cheaply as p>o5sible. It is the
task of trade to level these contrasts, to meet both parties, and to act as intermediary between
them. The dealer who lives in the same locality with the producer is directed by hb own inter-
est to look for those outlets for agricultural products of his district where he can obtain the
highest prices, in order to outrival his competitors in purchasing. Those dealers, on the other
hand, who carry the produce to the consumers, are on the lookout for those sources of supply
where they can get their goods cheapest, in order to equal their competitors in selling. By
(be meeting of supply and demand the prices are formed, and a regular supply to the consum-
ers is guarantied when trade remains in close touch with both parties.

Now, the intermediate trade is by no means so easy and simple as would appear to many
at first sight. Frequently the products of some district will not result so as to allow of their
being sold at all or at least sold to the best advantage. It is the task of trade by improving
them or by properly combining them with the products of other districts or countries to bring
them to the condition required by the consumer. It is frequently necessary to watch the most
favorable time for selling as well as for buying, and to concede to the purchaser terms of pay-
ment beyond the power of the producer. All kinds of chaises, losses on quantities, inter-
ests, etc., have to be taken into consideration ; the risk of fluctuations, the solvency of the
purchaser, the varying results of the harvests, are continually shifting the conditions of supply
and demand. The carrying out of all this requires a large amount of labor, intelligence, and
capital, which are now conveniently supplied by trade.

Now, if the enemies of intermediate trade say that the same could be done by the pro-
ducers themselves, by forming cooperative sopieties,etc., nothing can be said against that the-
oretically, since the managers of cooperative stores may also be intelligent and conscientious
business men. Practically, however, these gentlemen would be very much surprised at the
difference there is between acting on behalf of a combination and buying and selling on one's
own account It is evident and consistent with human nature that a merchant fighting for
his own existence will be more on the alert than the official of some society, however consci-
entious he may be. The dealer is spurred by keen competition to the full development of all
his energy, and agriculture is thereby benefited. The activity inherent in the widespread
commerce of to-day can never be displayed by cooperative societies. The intermediate trade
has, in the course of years, learned to comprehend its task; it is so interwoven with it that it
seems impossible to artificially organize a substitute for so widespread and delicate an insti-
tution.

But what, according to the antagonists of commerce, would be the condition of things after
intermediate trade has been done away with? The consumers will, of course, always seek to
buy as cheaply as possible. They would be very much assisted in this if the merchandise at
their disposal could be easily surveyed. As it is now, the greater part of the harvest is taken
by the intermediate trade, thus escaping the control of the consumers, disappearing for some
time from the public market to reappear again when needed. The difference would be notice-
able if the producers were to offer their products to the consumers direct. One would be sur-
prised to see what depression in prices would be produced by the great excess of goods over
actual demand. If it is argued that these consequences could easily be avoided by the erection
of large stores, etc., the fact is overlooked that the consumers would, without a doubt, he
always fairly well informed as to the quantities in stock. The fact that these would be well
known — at any rate, far better known than now — would be an important factor in fixing the
prices. In years of good crops, they would fall more slowly ; in years of small harvests, they
would rise more slowly than now, for the intermediate trade, which withholds part of the
commodities in the hope of realizing a profit and renders a review of the stocks difficult.



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FIRES AND FIRE INSURANCE IN GERMANY. 54 1

would then be lacking. The scarcity of stock often seems greater than it actually is, and it
is principally agriculture that profits by it.

It is a great mistake to think that in years of good crops the prices can be maintained by
storing the products for a number of years. Natural forces have proved to be more powerful
than men, and the same will be true in the future. Artificial prices could, hitherto, only be
made under special circumstances and could be kept up for a short time only; there is no
record of any lasting success. It is, however, certain that the attempt on the part of agricul.
ture to suppress or injure the intermediary trade would have as a consequence that the dealers
would favor foreign products.

The profits of trade are generally much overrated in agricultural circles, while the care
and trouble, the labor, the necessary capital, and the risk are undervalued. The profit rep-
resents only a return for ihe work done, and every labor is worth its reward. Competition
prevents the same from becoming extravagantly high. This profit is by no means earned by
the dealer without exertion on his part ; it has to be gained in a hard struggle against com-
petition. There is nobcdy to guaranty the dealer a return for his capital, no matter how large
the latter may be. In many cases, there are losses instead of profits.

The attacks which are being directed at the present day against the intermediate trade are
quite unwarranted and much to be regretted, since they injure both parties — producers as well
as dealers. The tasks which the latter now perform must be performed in the future, unless
producers and consumers alike are to suffer. Agriculture should, in its own interest, protect
the intermediate trade and try to promote it as much as possible, for the welfare of both de-
pends upon the same premises. Those years which have, as a whole, shown good results for
the dealers, have also proved to be good for the producers, and vice versa; years unfavorable
to agriculture always brought complaint from the intermediate trade.

Unless the overzealous in the German Agrarian camp soon learn to see that their procedure
against trade is a mistake and tends to injure their own profession, we shall soon witness the
spectacle of the two professions whose interests are so intimately interwoven fighting each
other fiercely, to the detriment of both and of the nation at large. Let us hope that the power
of calm reflection, which has been lost during the temporary depression of agriculture, may soon
return ; that agriculture and intermediate trade may oppose the difficulties of the present time
in unity and accord.

LOUIS STERN,
Bamberg, December 77, i8g6. Commercial Agent,



FIRES AND FIRE INSURANCE IN GERMANY.

In Germany, fires resulting from all causes, but esi)ecially those due to
incendiarism and carelessness, are on the increase. Germans express some
consternation at the recently published statistics of eighteen of the most
important fire insurance companies.

In spite of severe police regulations and laws looking to the introduction
of fireproof constructions and generally of a more massive style of buildings,
the increase in the number of fires in recent years has been rapid, the year
1895 being especially unfavorable in this respect. Concerning the various
causes of fires, it is striking that more than 50 per cent were due to incen-
diarism or carelessness in handling lights or fire. Under these two heads,
there were 24,786 losses in 1895, against 20,959 in 1894. This increase
(3,827 losses) is regarded as alarming.



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542 TOBACCO IN THE NETHERLANDS.

Insured property shows a much larger percentage of losses due to incen-
diarism than that uninsured, showing that in many cases fictitious values are
carried in fire insurance policies and there is a desire on the i>art of the in-
sured to realize on unprofitable property.

It is deemed advisable that Germany follow the example of France, Rus-
sia, Italy, Spain, Greece, and Portugal, and levy a heavy inland tax on
matches. Herr Blanck, director of the royal Prussian bureau of statistics at
Berlin, regards the cheap price of matches as a prominent factor in the
increase of fires, owing to the constant danger incurred in their use and
handling. From this cause alone resulted 4,639 fires in 1895, J^ore than 25
per cent over the preceding year. It is remarkable how many fires have
their origin in these small articles; nor is the general impression that chil-
dren are mostly to blame for such fires true, for the statistics show that, on
the contrary, only 1,791 were caused by children under 12 years, while the
remainder (2,858) were traced to older persons.

Herr Blanck is of the opinion that Germany should either levy a tax as
above mentioned or monoix)lize the manufacture of matches, which would
have the additional advantage of being a regular source of income to the
State. France made 20,500,000 francs ($3,958,500) from her match mo-
nopoly in 1894, and Russia 24,000,000 marks (I5, 7 12,000) from the same
source in 1893.

Other causes given for fires during 1895 were as follows: Defective
chimneys and flues, 8,306; sparks from locomotives and locomobiles, 79;
petroleum explosions, 1,392; explosions of gas and steam, 144; lightning,
990. Three hundred and twenty-five fires were attributed to spontaneous
combustion, of which 120 originated in hay, the remainder in coal, turf,
and matches, with a few in cottons, woolens, and chemicals.

The total number of fires in insured property in the German Empire (and
in German companies) during the year 1895 ^^ 47»2i7, an increase of
7,793 over 1894. The number of policies written against these losses was
59,974. The year was a very bad one for German fire insurance companies.

The thirty German fire insurance companies had in 1895 an income of
124,360,000 marks ($29,597,680) from premiums on policies, giving a net
profit of 2,555,000 marks ($608,090), or 3.62 per cent. The premium re-
serve account amounted to 46,761,000 marks ($11,129,118).

THOS. EWING MOORE,

Weimar, November jj, i8q6. Commercial Agent,



TOBACCO IN THE NETHERLANDS.

The tobacco sales began April i and ended November i, 1896. I give
herewith a brief review of the average prices received and number of bales
imported of the crop of 1895.

This review covers not only Sumatra tobacco, but also Java, Borneo, and
Mexican tobacco.



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TOBACCO IN THE NETHERLANDS.



543



A company known as the Cultum Maatschappy, Santa Rosa, has recently
been established with a capital of 1,000,000 florins ($400,000) and controls
tobacco plantations in Mexico.

This year, 1,380 bales of Mexican tobacco have been sold in Amsterdam.
The average price received was 1.25 florins (50 cents) per half kilogram (i.i
pounds). I also give a statement of the value of the Sumatra crop since the
beginning of the culture in the year 1864.

SUMATRA TOBACCO.
Imports of Sumatra tcdacco at Amsterdam, Rotterdam, and Bremen.



Yrom the district of —



Deli.



Langkat..



Sold at—



Amsterdam...
Rotterdam....

Total...



Amsterdam..
Bremen..



Total..



Amsterdam..



Serdang

Assahan do,

Bedaga > do



Padang .,



Viwaloe

Palembang...,

Batu Bara

Tamiang

Pagoerawan..
Sundries..



do

Rotterdam....

Total..

Amsterdam..,

do ,

do

do

Rotterdam....
Amsterdam ..
Rotterdam...,
Bremen. ,



Total..



Grand total..



Quantity.


Approximate average
sale price.


Per half
kilogram,
Dutch cur-


Per pound.

United
States cur-




rency.


rency.


Bales.


Cents.


Cents.


79,535


97


35i


21,529


87


31I


101,064


95


344


-







50,178


97


35i


' 94»


"5


4it


51, "9


97i


35i




— _^ - j


16.393


92i' 335


10,99a


59 2>|


7,836


74 1 26t


6,606


78? aSJ


2,309


78 1 aSJ


44,136


78i a8j


486


75


27i


484


63


22t


260


82


29i


65


69J


25i


2,144


524


>9i


1,806


31


"I


28')


32


"1


a, 497


32


"i


8,028


3»i


"8


204.347











No. 199 7.



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544



TOBACCO IN THE NETHERLANDS.



At an average price of 90 cents (Dutch currency) per half kilogram (32^
cents United States currency per pound), the value was about 28,325,000
florins (Ji 1,330,000). The 1895 crop from the respective estates of the
Dutch Sumatra tobacco companies was as follows :



Owners.



Deli Maatschappy

Tabak Maatschappy Areudsbui^^

Senembah Maatschappy

Nederl. Assahan Tabak Maatschappy

Deli Batavia Maatschappy

Amsterdam Deli Company

Deli Cultum Maatschappy

Tabak My. Franco Deli

Rotterdam Deli Maatschappy..

Medan Tabak Maatschappy

Langkat Tabak Maatschappy

Deli Tabak Maatschappy

Deli Langkat Tabak Maatschappy

Serdang Tabak Maatschappy

Padimg Tabak Maatschappy

Sumatra Cultum Maatschappy

Langkat Cultum Maatschappy

Amsterdam Sumatra Cultum My

Tabak Maatschappy Sakocda



Quantity.



Bales.
52,142
11,914
11,886
10,992
10,930

9»99o i
7,224

5,277
4,700
4,081
3,485
3,M7
2,278
2,169
1,598
i,>83
>,i37
75a
508



Per half
kilogram,

Dutch
currency.



Cents.
100



Online LibraryUnited States. Dept. of Commerce and Labor United States. Bureau of Foreign CommerceConsular reports, Issues 196-199 → online text (page 74 of 82)