Felix Somary’s review examines the Prussian statistical bureau’s investigation of joint-stock companies for the business years 1899 and 1902. He welcomes the renewed inquiry but questions whether its categories explain the transition from prosperity to depression. His methodological criticism connects the measurement of corporate wealth with industrial development, financing, and stock-market valuation.
The review opens with a broad indictment of financial statistics:
Die Statistik des mobilen Vermögens läßt heute noch sehr viel zu wünschen übrig; auf wenigen Gebieten des Wirtschaftslebens sind die Methoden, nach denen gearbeitet wird, so primitiv und die Resultate so dürftig wie auf diesem.
English translation: The statistics of movable wealth still leave very much to be desired today; in few fields of economic life are the methods according to which work is done so primitive and the results so meagre as in this one.
Austria’s income-tax and balance-of-payments studies offer comparatively strong models, although its corporate and securities-price statistics also need improvement. Prussia, formerly a pioneer through Engel’s investigations, has fallen behind. Somary cautiously credits the Berlin statistical congress of 1904 with prompting renewed action. Yet institutional renewal does not itself resolve the tension between administrative purposes and scientific explanation:
Ein bedauerlicher Grundzug der preußischen Statistik seit dem Abgang Engels ist das Überwuchern des Verwaltungsmomentes über den Anforderungen der Wissenschaft.
English translation: A regrettable fundamental trait of Prussian statistics since Engel's departure is the overgrowth of the administrative element over the requirements of science.
This diagnosis governs his criticism of the inquiry’s accounting principles. Recording companies’ position at a particular year-end does not isolate the economic results of the business period. Profits carried forward blur the distinction between boom and depression, while identifying shareholders’ net profit with dividends substitutes distributions for a fuller assessment of corporate performance. Excluding liquidation and bankruptcy losses makes the results for 1902 appear unduly favorable. The statistical snapshot thus obscures failures essential to understanding a crisis. Somary regards these choices as a retreat from methodological advances:
Sehr viel von dem großem Fortschritt, der namentlich durch das Auftreten Körösys erzielt wurde, wird dadurch ohne zwingenden Grund aufgegeben.
English translation: Very much of the great progress which was achieved, notably through the appearance of Körösy, is thereby given up without compelling reason.
Nevertheless, he extracts substantial evidence of industrial expansion. Of the 2,554 companies counted in 1902, 1,295 originated in 1891–1902, despite the simultaneous growth of limited-liability companies. Incorporation dates, however, cannot simply be treated as dates of economic creation. New companies may reorganize existing businesses, while older enterprises may substantially increase their capital. Capital increases in established firms therefore provide a stronger indication of consolidation than foundation counts alone. Banking and coal mining show considerable expansion beyond founding capital; printing and textiles suggest stagnation within the joint-stock sector.
Somary’s interpretation of indebtedness likewise rejects undifferentiated aggregate judgments. Corporate debt rose by 34.4 percent between 1899 and 1902, but borrowing need not indicate distress. Bonds can attract cautious investors to enterprises with stable markets and predictable earnings. Comparable debt burdens become more dangerous where production and sales are uncertain. Financial ratios acquire explanatory meaning through the economic conditions of particular industries.
The reported excess of profits over losses fell from 11.3 to 7.2 percent, with the latter figure still inflated by omitted liquidation and bankruptcy losses. Sectoral comparisons suggest that strong cartel organization helped preserve earnings: coal mining maintained nearly unchanged returns, whereas machinery, metals, electrical industry, and brickworks suffered sharply. Somary treats this relationship cautiously, recognizing other influences and the resilience of consumer industries. Inadequate returns and increasing debt emerge as characteristic signs of depression. The expansion of preference shares familiar after crises in Britain and the United States is largely absent in Germany, with exceptions such as lime and cement.
Listed shares pose a further interpretive problem. Their yield declined from 6.2 percent in 1899 to 5 percent in 1902, contrary to Somary’s expectation that greater post-crisis risk premiums would raise yields. He tentatively connects this anomaly with limited German capital holdings, which had constrained speculative exploitation of the preceding boom, while calling for explanation of substantial sectoral discrepancies.
Somary concludes by praising the inquiry’s synthesis and its value beyond Prussia. His qualified endorsement rests on a demanding conception of economic statistics: figures become explanatory through appropriate accounting periods, inclusion of failed enterprises, and distinctions among industries and financing structures. Administrative completeness cannot substitute for an account of economic change.
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