which ends either in the victory of one of them or else in a fusion of the two. In either event there arises a new syndicate, uniting both branches of production. It is obvious that such a union can be effected in the case, not merely of two, but of three or of ten branches of production. Such enterprises are termed “compound” (or “combined”) enterprises.
In this manner syndicates and trusts do more than organise individual branches of production; they consolidate into a single organisation various kinds of production, uniting one branch with a second, a third, a fourth, etc. Formerly, in all branches, the entrepreneurs were independent of one another, and the whole work of production was dispersed in a hundred thousand petty factories. By the beginning of the twentieth century, production was already concentrated in the hands of huge trusts, each organising many branches of production.
Unions of individual branches of production came about in another way besides that of the formation of “combined” enterprises. The reader must now consider a phenomenon which is of even greater importance than “combined” enterprises. We refer to the dominion of the banks.
First of all it is necessary to say a few words about banks.
It has already been pointed out that when the concentration and centralisation of capital had advanced to a considerable degree, there arose a need for capital which could be employed for the immediate establishment of large-scale enterprises. This need was one of the causes of the development of joint-stock companies. The organisation of new enterprises required larger and ever larger quantities of capital.
Now let us consider what the capitalist does with the profit he receives. We know that he spends part of it upon his own immediate needs, in the way of food, clothing, and so on; the remainder, he “saves.” The question arises, How does he do this? Is it possible for him at any moment to expand his business, to devote the “saved” part of his profits