The morning call., 1893-05-11
THE WEAK SPOT IN THE TRUSTS.

The collapse of the American Cordage
trust probably indicates the rock on which
trusts are destined TO go to wreck. The
COrdage Company was a combination Of
all the manufacturers of rope and Irvine.
with view TO establishing monopoly OF
the cordage market. 1t never succeeded in
getting all the rope walks into the COM
bine, but il got SO many Of them in that it
was able to raise the price Of all the
products of hemp, and to compel cousum-
ers to nay the advanced price. Not con-
tent with this, in order to facilitate trans
ters OF interests in the trust it put its
stock on the market, where 1t became an
active fancy, with fluctuations enough TO
satisfy the most insatiate gambler. After
time the promoters of the trust became
more interested in the ups and downs of
the stock than in the manufacture Of rope;
they neglected the proper business of the
trust. They got into debt. and finally got
tangled up to such an extent that the only
way ont appeared 10 be by the road of
a receiver,hip. This. of course, viii in
YOlYe liQui dalton and the dissolution of
the trust.
The fatal flaw in the trust system is the
impossibility Of securing for a great COM
bine involving interests footing up in the
millions the same careful, prudent far
sighted management which successful In
dustrials employ in their own business.
No business viii run Itself. All businesses,
however simple, require somebody to run
them. II that somebody does not under
stand them, and is not familiar with the
dangers to avoid and the economies to
practice, it is odds the business Will net a
loss, though under better management it
always Melted a profit. Aud the larger
the business he more difficult it is to find
any one who can handle it. Men who
make money year in and year out with
capital OF 500, 900 often 20 to pieces when
they are charged with the administration Of
million. The wider the surface over which
the skill Is spread the thinner it must
be. The trusts are all based on the theory
thattney will be conducted with the same
caution and attention to details as were
displayed by tue members OF the trust in
their several shops; bnt. in fact, the cau-
ton and the attention diminish in the ratio
Of the increase of the field in which they
are employed. Ola Commodore Wander
biit used to say that there were as few men
IN this country who could manage a S20.-
G00.000 property as there were soldiers who
could handle $4,000 men in the field.
Placing the industrial stocks on the
Stock Exchange was another mistake. On
that mart operators are as often bears as
bulls. 1t is the most natural thing in the
world for a director of trust who sees the
business OF the trust declining to sell his
holdings and to short his own stock The
accounts Of the recent panic in Wall street
show that cordage was slain by members
of its own household, who had sold out
and were waiting to fill short contracts.
The time has passed. however, for
withdrawal of the trust stocks from the
market So long as they are there holder
oan convert his interest into money in
few minutes, and the convenience of this
arrangement is too great to be thrown
away. The industrial" stocks will con-
tinue to hold their place on the list, and
many of them will meet the fate of cordnge.