The trusts. What can we do with them? What can they do for us?

Preface

The problem of the trusts is a momentous one, and yet it is unqualifiedly a new problem. The oldest of them (the Standard Oil Company) is eighteen years of age, but the great majority of these gigantic combinations have been established since 1897. Furthermore, those of most recent creation seem animated by somewhat different purposes than their prototype; and they present new problems or new phases of old problems.

There cannot be any doubt that the trusts are filled with great dangers to our industrial, social, and political system. To say that these dangers are "awful" is no misuse of the word. The great advantages of mammoth business organizations should not be overlooked. Such organizations are necessities in the present condition of American industries. They seem to be the only effective agencies whereby we can develop our much needed foreign markets, whereby we can dispose of our surplus products, and thus give constant employment to our workers and toilers. Much of our anti-trust legislation has overlooked this fact. There is, indeed, a danger that in our attempts to stop monopolies we may cripple our productive energies and stifle enterprise and bring our country into a condition of industrial degradation and into bankruptcy. To obtain, however, the most that can be obtained from trusts, to achieve the highest degree of success that can come from the use of trusts, it is absolutely necessary that we guard against their becom-

IV

Preface ing monopolies. The greatest, the speediest, and the most efficient remedy, — the one that should be first employed, — unquestionably is publicity; but it may be doubted if that is entirely sufficient, either theoretically or practically. Anti-trust laws which forbid monopolies, which endeavor to prevent all combinations that restrain all competition, which fix the punishment that shall be meted out to those who violate their provisions, which denounce as illegal and criminal all combinations that are formed for the purpose of raising prices or that actually do raise prices, — these laws are demanded not only by existing conditions, but by principles of right and justice. Anti-trust laws that aim to kill the great " octopi " that have reached out and gathered in all of the establishments in certain industries, not because of any economic superiority in these giant combinations, but because they are fed and pampered and nourished and sustained by special privileges, — anti-trust laws that aim to kill these " octopi " by the abolition of these special privileges, appeal not only to our sense of fairness, but to our common sense. They are likely to be most effective remedies. Their enactment and enforcement will in all probability kill many of the trusts and will surely do away witfr most of our trust evils. Similar laws requiring publicity of all those affairs of our giant corporations, which affect the public, and laws forbidding over-capitalization and also forbidding unfair " cut-throat " competition, give promise of speedy and lasting relief. Care must be taken, however, that we do not " kill the goose that lays the golden egg." Care must be taken that, in ridding our barn of rats, we do not cause the barn to be burned.

The book which is here presented to the public is in the nature of a study. It is our belief that the anti-trust legislation which has been enacted up to the present time, namely, that form of legislation which, in terms, has for-

Preface v

bidden any and every combination of competitors, however great or small might be the combination; and which has forbidden every restraint upon competition, however reasonable or unreasonable such restraint might be, and however direct or indirect a result of the combination it might be, — this anti-trust legislation is ill-advised and is likely to be injurious. It clouds and obscures the real danger and the real evil. We must restrict and restrain and curb and limit; and there are some things which we must prohibit and prevent and make criminal and penal; but it is absolutely necessary that we know when to prohibit and when to limit; when to prevent and when to restrict.

In our first chapters we have endeavored to show the phenomenon of trusts, the existence and the mighty growth of industrial combinations, their various forms, and the economic and legal differences between them, their respective rights and liabilities before the law. We have sought in succeeding chapters to show the extent to which gigantic organizations of industry are an outgrowth of the conditions of modern competition, and have tried to set forth, fairly but fully, the great wastes of competition, and the great advantages as well as the disadvantges of the trust system. We have defined monopoly, not only as the term has been used for centuries in English jurisdiction, but as it has been modified by modern industrial conditions. We have endeavored to show the awful evils and dangers of monopoly, — of that absolute or sole power of sale of any article, — the complete and dominant control of any industry, — which is properly called monopoly, regardless whether it is the Tesult of a special and exclusive ' legal right conferred by the sovereign or whether it is a power incidental to gigantic size. The effect of potential competition — its strength, its weakness, its limitations — is fully considered. Subsequent vi Preface

chapters treat of the effect of trusts upon the wage-earners, especially those who are banded together in labor unions: also of the relation of trusts to displaced labor, and to the farmers. While there is unquestionably an underlying and an unceasing tendency towards larger and larger industrial organizations, we attempt to show in the chapter on "Trusts and Special Privileges " that in very many, if not in a majority, of the cases, trusts are the results of special privileges. The evils of over-capitalization form the subject of another chapter. The relations of the tariff and of expansion to trusts are also exhaustively discussed. That important phase of the question, the social phase, which is so often overlooked, has been considered in a chapter entitled " The Man and the Dollar," with special reference to Wm. J. Bryan's famous speech at the Chicago Trust Conference. The scope and extent of legislative powers over trusts, the constitutional limitations and restrictions, are also reviewed.

The momentous questions arising out of trusts, notwithstanding their comparative newness, have so far been the subject of denunciation rather than of consideration. There has been action rather than consideration, and legislation rather than discussion. So great are the dangers, on the one hand, of no action, and, on the other hand, of rash and improper action, that we feel that the proper character of a book upon the subject, at this time, should be that of a study or an inquiry, rather than a dogmatic treatise. The spirit of observation and of investigation is the spirit in which we can best approach the immense task of solving the trust problem. In that spirit we have endeavored to write this study of the great question of the day,— the great question of the age.

Wm. Miller Collier.

Auburn, N. Y., July 4th, 1900.

Table Of Contents

CHAPTER PAGE

I. The Day of Great Things 1

II. What is a Trust? 21