Omaha daily bee., 1897-03-14
THE cHAR7SFfR or TRUSTS

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THE CHARACTER or TRUSTS
The report made TO the New York leg
%islature by the 4mmittee which in
vestigated the trusts Is the most com
plete and instructive statement of the
character and methods of these combina-
tons that has ever been made. 1t
does not find the examinations of CAPT
tai which are cSmnfonly designated as
trusts altogether evil or inimical to
the public welfare, but it finds in their
policy and METHODS much to condemn
and to demand remedial legislation. The
report makes a distinction between COM
binations of capital under one manage
ment for strictly business purposes, in
volving economy in the several stages
which result in the final distribution of
the product to the consumer" and the
trust. The latter is defined to be an
aggregation brought about for the pur-
pose OF operating against the natural
law of supply and demand, destroying
competition by combination and unfair
methods i'm order to secure control of
both product and market, or permitting
competition only to the. extent of refpt-
ing the charge of absolute monopoly.
Combinations of capital as interpreted
by the committee move with the natural
law, says the report, while the trust is
designed to md does operate against
the natural law.
Combinations defined as trusts are ac-
c%ompanied by an enormous capitaliza-
ton, the sale of stock being made gen
orally through the channels of specula-
ton, and they are followed by the clos
ing and dismantlement of factories, the
discharge of laborers and the concentra-
ton of the business of many separate
organizations into a few of the many
factories controlled by the combinations.
They substantially control production
and are able to fix prices, while also
controlling, by a system of factors
agreements, the means of distribution.
They discourage any attempt by mod
crate capital to embark In n competitive
enterprise. AS to the alleged advan-
tages of trusts, it is admitted that large
economies must of necessity result, but
IllO COlluiltlcc ouhu hollilhS L justly
the claim that the gets the
benefit of this. Even In the case Of
sugar, which costs less now than be-
fore the organization Of the trust, the
price of the raw material has declined,
owing to largely increased production,
to a greater extent than has the price
Of the refined article. In other cases
combination was immediately followed
by an advance in the price of the
product. 'In fact" says the report,
''there is nothing upon the record which
indicates that the combination itself eff
fects any reduction in the price to the
consumer and that the latter was con-
sidered with reference to any share in
the profit, all elements of economy being
credited either to the upbuilding of the
earning capacity or the capital stock"
The combinations do, however, force
down the price of the raw material. The
alleged advantages of more perfect
product, better wages and more con- |
slant employment OF labor, the commit
tee found nothing to justify, the facts
so far as labor is concerned showing !
that it suffers both in wages and en-
ployment from the combinations and of
this there can be no doubt. A system
that suppresses competition and closes
factories cannot be beneficial to labor.
1t is admitted that the stability of price
to the consumer is attained, but the |
question is whether the fixing of a sta
BILE price operates to the advantage of
the consumer.
The disappointing feature of the re-
port is the statement that state legiSla-
ton is not adequate to control or regu-
late the trusts, but this is qualified in a
way that at leasts permits the states to
deal with the combination to IN extent
to curtail their monopolistic character.
The conclusions of the committee seem
to leave no doubt that it is within the
power of the state legislatures to make
restrictions which will limit the powers
of the trusts and of all combinations in
restraint of trade, as has been pointed
out by the supreme court of the United
States.
So they are seriously talking of intro