The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1896-05-01
PROBLEM OF CAPITAL.
Mr.. Coles Fourth Lecture in the University
Extension Course.

Mr. Coles lecture in the University
course was given at Assembly hall last
MIR. Cole said:
No adequate understanding of economic
problems is possible without some appre-
citation of the amount of capital involved
in modern industr les. Formerly, labor
was assisted by capital; now the function
of labor is chiefly directing capital
Dividing capital into two parts-the
auxiliary (Which the laborer employs in
his work., and the remuneratory (Which
supports the laborer while he is engaged
in production, 1.-THE remuneratory will
be found in many industries but a tithe
as much as the auxiliary. Man has &C.
qulred and accumulated great control
over the forces and supplies of nature,
and converting these into capital he in
creases many fold the production of
wealth. Whatever, therefore, affects the
amount of capital in community is of
great Importance.
| NosJudgment upon the value of the SER
vice OF capital is adequate unless it tax es
INTO account tie element of risk involved
In modern Investment A turn of
fashion, change of government policy,
new discovery in science, new inven-
tion In machinery, may annihilate not
only expected profits but capital itself.
New Investments are often surrounded
with great risk. AS 1t is the expectation
rather than the actual existence of profit
that determines the conversion of wealth
into capital, a rate of profit extraordinary
high is justified if the possibility of it
was needed to induce capitalists to enter
venture clearly for the public good.
Great combinations of capital result
often from the risks of business The
prosperity of each business firm is de-
pendent not only on tie ability Of its
manager, but also, in a certain degree,
upon that of competitors. An ill-judged
move by one firm often brings disaster to
its bitterest enemies as well rs to itself
union OF interest SO that the wisest
counsel will prevail among all concerned
is natural step. Moreover. the union
forms an insurance of each against the
monopoly Of special privileges and Inn
provements by the others.
Much Of the gain from the combination
of capital arises from the conduct of
business upon large scales. Too much
emphasis can hardly be placed upon this
element. Great saving arises from
cheaper purchase Of material in large
| quantities; from better utilization of
material through larger range of
methods, machines and facilities; and
through economy in purch ssing, selling
and directing agencies. Each mem Der of
a combination has the advantage of the
best knowledge of every other member.
Whether the goods produced are sold
cheaper in consequence or not, society is
richer, because the energy and capital
saved are available for other things
Combinations of capital to control the
| markets and exact tribute from consum-
ers have no such economic basis. They are
analogous to the monopoly of rich mines
discovered by accident. 1t will be found.
moreover, that com binations or capital to
force I'M duly high prices are seldom per-
manently successful unless they are
founded on natural monopoly. In such
cases it is the monopoly of things which
should be the property of society at large,
and not the combination of capital, that
brings evil Though powerful combina-
ton having no natural monopoly may
for time control the market, it cannot
long keep prices above the point at which
they would be maintained without the
combinatio on; for whenever they raise
prices artifically beyond that point large
profit can be made by any outside pro-
duoer and such will not be wanting.
One Is not accustomed to consider
crime an element in economics. Yet we
find species Of it an important element
in our discussion of capitalism. Unfor-
tunately, the great com binations are not
free from evidence of III. Many of tn en-
have been known to commit robbery and
bribery. Their facilities for such work
in bankrupting railroads. robbing stock
holders, bribing legislatures, securing
UNJUST Discrimination, and tine like, are
great. Though their economic power
| gives them this political power the
question is not properly one of economics.
Justice will not suffer any economic con-
sideration, whatever it may be, to issue
the final word in the matter of the oombi-
nations of capital if it is found that they
create moral degradation and political
corruption.
1