Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-03-08
A THREADBARE PRETENSE.

|
Commenting on a remark that there have
never been $50 many combines and trusts as
now," the New York Sun makes the follow
ing assertion:
Yet they have only just begun to be born.
Running an. entire department of production
or manufacture upon the plan of harmonious
cooperation governing a trust. leads to 8 de-
gree of economy hardly ever hoped for in old
! fashioned business; and so far as experience
shows, in the long run the consumer gets his
share of advantage. The world of combination
is still In state of mere chaos.
This is one OF the stock arguments in
favor of the trusts 1t has been repeated
| till it is threadbare, And yet every thor
! ough investigation of the methods of the
/ trusts shows that it is entirely without toun-
dation in reason and in fact, and is simply
plea in favor of the trusts manufactured
originally by these organizations to suit the
occasion.
The argument is without foundation in rea-
| son because the trust or other corporation is
| net only unsuited to serve the purposes of
! business efficiency or economy. and is wholly
unnecessary for those purposes, but it takes
| away the inducements for the exercise of
! those qualities and substitutes methods
which make economy impossible. There is
nothing in the mere organisation which in
| duces number Of independent concerns to
surrender their autonomy to pool or trust,
since the corporation laws permit any de-
gree of organization and cooperation in
single Independent, corporation that is neees-
sary to produce the highest results. The
greatest inducement TO efficiency and econ
omy is the knowledge that the concern which
realizes those qualities most thoroughly will
win the highest success, while the one which
makes no effort for them will be wiped out
of existence. A competitive system creates
that inducement in the highest form. If
the trusts or combines are successful they
wipe out that inducement, and substitute q
system of restriction and monopoly which
makes economic production impossible.
These fundamental principles show their
operations in the history of every big trust
and combination that has ever approximated
success. The most convincing demonstra-
tion of the falsity of this profession of econ
omy is found in the fact that if trust does
not control practically the whole of any
industry, itis failure. If there was any
approach to the economy claimed the trust
that combines mere tenth or fifth of the
production would by its superior economy
wipe out the competitors. But the fact that
there is no such economy sends the trust
which cannot control nine-tenths of any
industry into immediate dissolution.
Another telling commentary on this pro-
fession OF economic production and improved
methods by reason of large capital, is fur
nished by the fact that the trusts and COM
bines never bring any capital into the busi-
ness. They simply unite the old capital
in the shape of existing works, and run
them by the old methods, SO far as technical
operation is concerned. The Sugar Trust,
when it had combined practically all the
existing refaeries did not put in any new
capital or new appliances; for it had no
need to. But when Claus Spreckels built a
refinery to run against the trust he adopted
the newest appliances and most approved
methods in order to compete on the most
advantageous terms. Competition is the
force which requires improved methods and
its absence invariably leaves matters at a
standstilL
When the combination is organized in a
trust or pool its methods are invariably un-
economic. 1t is not economy to burden an
industry with fictitious capital two to four
times its bona fde value; yet that is what
every trust has done. 1t is not economic
production TO arbitrarily condemn the capital
and labor, engaged in any industry to en-
force idleness, for one-quarter to oue-half
the working time, which is favorite
method of al! these combinations. 1t is not
economy to buy pipe lines and tear them up,
or to lease refneries TO make them stand
idle; nor can We see any remarkable degree
OF intelligent cooperation in paying trustees
immense salaries to appear before investi-
eating committees and testify to the igno-
rance of fundamental matters in connection
with their own business; which Is among
the signal performances of both the Standard
Oil and Sugar Trustees. Nor is there very
gratifying economy in the policy of trustees
taking the earnings of the combine and
losing it in stock speculation-an achieve
ment of the Cotton Oil Trustees, which the
trusts lawyers found to be entirely per-
misslDle under the trust organization.
Cooperation to secure greater business
economy is a good thing; and there was no
restraint on it under what the Sun calls
"oId-fashioned business" But the allega-
ton that the trusts or combines to prevent
competition secure such economy is a shall
low pretense. They are organized to permit
the perpetration of uneconomic methods, to
the end that their managers can secure ex-
cessive profits by the suppression of compe-
tition.
LAZINEss VERSUS OPPORTUNITY