After the War (1914-1918) the considerable number of railways still in existence as separate bodies were compulsorily grouped by Act of Parliament into four large systems. The second world war promises to lead to further unification, necessitated in order to protect the railways from road transport competition which was growing rapidly in the years before 1939.

Leaving the railways and looking at the progressive elimination of small competing firms in industry generally we have the findings of two official bodies which reported in 1919 and 1927.

The Committee on Trusts reported in 1919 :–

“We find that there is at the present time in every important branch of industry in the United Kingdom an increasing tendency to the formation of Trade Associations and Combinations, having for their purpose the restriction of competition and the control of prices.” (Report. Page 2).

“ . . . . Trade Associations and Combines are rapidly expanding in this country, and may within no distant period exercise a paramount control over all important branches of the British Trade.” (Report. Page 11).

The Committee on Industry and Trade reported in 1927 as follows :–

“The progress of the industrial revolution in Great Britain during the earlier half of the 19^th century was marked by increasing freedom and fierce of competition in industry as old restrictive regulations were swept away and as transport enormously improved . . . during the last quarter of the century there was a marked trend towards the limitation of competition in many ways.” (Third Report, p. 68).

The Report went on to say this about “associations for allocating contracts” :–

“Such associations exist in certain industries where work is allocated by tender. The Association decides which firm is to receive a particular contract and it is arranged that other firms either do not tender or tender high. In some cases it is arranged that the members of the Association shall each be allocated a particular area.” (Third Report, p. 71).

It is true that many of the associations formed by competing companies to eliminate competition do not last a long time. They are constantly breaking up and being re-formed. Often their initial success is, in the long run, a direct cause of their undoing because, by raising prices and consequently profits in the industry concerned, they give an additional stimulus to outside monied groups to enter that field in competition with the associated companies, or to seek to produce cheaper substitutes for the article in question. An example of a “cartel” that broke up was the Mercury cartel formed by Italian and Spanish groups. The Manchester Guardian gave the following account :–

“A group of producers concluded a high-minded cartel to stabilise supplies and prices and then proceeded to screw down supplies and screw up prices. This went on merrily until somebody grew tired of it. A search for mercury was started overseas, and within a year or two the supposed monopoly was exposed as a bluff. The United States is now probably producing not much less than Italy, and a large output has been developed in Mexico and Canada. Preparations are being made in China for the development of large mercury deposits. Never again will the Italo-Spanish cartel recover its restrictive grip.” (Manchester Guardian, 8 March, 1944).