An outstanding feature of the international trade in non-ferrous metals before 1914 was the importance of German companies. This chapter aims at an explanation of the factors which contributed to the German metal traders’ international success. After the examination of the German metal traders’ expansion abroad, special attention will be paid to vertical integration and long-term contracts, which appear to have been an efficient alternative to full-scale integration. Moreover, the German metal traders’ attitude towards cartelisation will be examined, as it had a considerable bearing on their business. To begin with, their management will be described.
Intermediation between production and consumption—which is considered the basic definition of trade (cf. Casson, Chapter 2, this volume)—rested overwhelmingly on:
Aron Hirsch & Sohn, Halberstadt;
Beer, Sondheimer & Co., Frankfurt/Main.
Aron Hirsch & Sohn was founded in 1805 by Aron Hirsch. Metallgesellschaft was incorporated under the leadership of Wilhelm Merton in 1881 as the successor of the firm of Philipp Abr. Cohen. Beer, Sondheimer & Co. was established in 1872 by two former assistant managers (Prokuristen) of the firm of Cohen.
In 1913, there were more than 550 companies engaged in the non-ferrous metal trade in Germany (Prinz 1984:173). Yet, most of them remained insignificant compared to Metallgesellschaft, Aron Hirsch & Sohn and Beer, Sondheimer & Co., which seem to have dominated not only the national, but also the international stage. 1 They were able to gain such importance at the expense of their competitors because of their superior organisational, financial and technological capabilities. There were only a few serious competitors to them, like the London-based Brandeis Goldschmidt & Co. and the giant American organisations (Adey 1930:38, 39, 43). 2 The German metal traders’ dominance might well be illustrated by the fact that the British Government issued the Non-Ferrous Metal Industry Act (1917) explicitly in order to oust