6.3. The enterprises and their financing on boundary of XIX-XX centuries.

For the period under review the typical features were: the growth of enterprises’ floor spaces; concentration of the enterprises, as horizontal (enterprises’ association of one industry), and vertical (enterprises’ association of all technological chain).

Trusts (USA), concerns (Germany) arise during this epoch. Some firms belonging more often to one branch, are united in cartels with the purpose of market’s division and elimination of a competition. Small enterprises disappear by the large firms’ absorption with the purpose of increasing of competitiveness due to use of a scale effect of production.

The size of the enterprises increases. If enterprises basically were family business before, now even if they base on the family capital (Renault), actually, they are joint-stock companies to a greater extent. The capital is divided into shares which holders are shareholders, between whom the profit is distributed proportionally to their contribution to the capital. The cost of shares is determined at the Stock exchange in compliance with supply and demand.

For the activity’s financing the enterprises resort to loans. The end of XIX century and the beginning of XX are marked by rapid development of bank system in the leading countries of Europe, in Russia and the USA.

6.4. Colonial expansion of the European industrial capital in the XIX century.

The XIX century was marked by carrying out by the great European powers, particularly, France, England, Belgium, Holland and Germany the policy of colonial expansion.

Colonization represents transformation of territory to a colony, submitting to mother country (country - colonizer).

In XIX century the European colonizers as a result of lines of the objective reasons began to consider colonies and dependent territories as objects of the capital, commodity markets and sources of raw material. Such reasons were:

• Industrial revolutions which had led to the technical and technological superiority of the European countries in comparison with other states,

• Population explosion (since the second quarter of the XIX century in Europe there is a significant growth of population, that had occasion to mass emigration in the countries of New World (the USA, Canada, Australia, New Zealand, Brazil) on the one hand, and - to the territorial expansion) on the other hand;

• Rivalry between the European countries for world supremacy.

The European domination assumed various forms according to the level of authority which Europeans above the territory possessed:

• Annexation of territory (colonization literally this term);

• Protectorate (management of territory by means of local authorities);

• Domination (domination of the European population in territory);

• Zones of influence (division of the country’s strategic and economic interests without political domination by Europeans).

Table 6.5

The social and economic consequences of colonialism

Positive Consequences	Negative Consequences
Creation of industrial infrastructure, railways, ports, development of communication on recipient areas Attraction of local inhabitants to industrial production Development of interference and mutual enrichment of cultures Creation of bases of modern education (schools, grammar schools), formation of national intelligency by training local residents	Destruction of traditional farm patterns Искусственная привязка национальных экономик к потребностям метрополий и интересам европейского капитала Artificial binding of national economies to needs of mother countries and interests of the European capital

Despite of far ambiguous consequences of carrying out of the European colonial policy (tab. 6.5) development of industrial and market connections between mother countries and the colonial countries formed directly economic.