The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1897-05-07
"IndustriaI Combinations. !"

cided stand against the evils growing
out OF the organization of trusts" yet
this is what he does. In a paper in the
Forum for May Mr. oliver presents the
Clearest array Of those evils that we
have seen, and offers to the opponents
of industrial combinations some ra-
tional and timely advice.
At the beginning he divides into two
classes combinations in restraint of
trade-transitory and permanent. As
typical of the former class he mentions
''pools"-that is, agreements among
producers in a given line to divide pro-
duction among the constituent MEM
bers in proportion to capacity, each
member to contribute to a common
fund which goes to pension the weaker
plants or to suppress outside competi-
ton, For obvious reasons pools are
short-lved. Differences over percent
age allotments kill the most of them.
Internal friction and Jealousy sacrifice
many of the others. And, finally, ex-
tortionate prices, by inviting competi-
tion, end the remainder. The fate of
the steel rail pool is one which vivid
ly illustrates these arguments. 1t was
the strongest pool" ever organized yet
despite its immense capitalization and
virtual monopoly of a staple product,
it proved unable to survive a crisis in
general business The conclusion OF
Mr.. oliver is that pools" are their
own worst enemies, and that no legis-
lation is necessary to their extinction
since they carry with them independ-
ent of legislation, the seeds of their
own destruction,
Coming, though, to industrial con-
sOlidations of a permanent nature, a
more difficult problem is presented. Mr..
divers enumeration of the advantages
arising from such unification of energy
and control and such economy in pro-
duction and distribution is exceedingly
thorough, but space forbids more than
reference to it. His principal points
may be indicated by means of an IL
lustration. Let us suppose there are
ten plants in the United States en-
gagged in the production of a certain
commodity. They represent an aver
age investment of 100000. Each has
it's corps of officers and statesmen; each
spends large sums in advertising; each
has to spend other large sums in i'm
provements simply to make sure that
the others will not get ahead; and each
has to buy raw materials at the mercy
of the seller. They combine. One or
ganization manages the whole number
| Of plants. Executive and advertising
expenses are reduced: uniformity pre-
walls and the consolidated industry is
in shape to dictate terms to the pro-
| ducer of raw materials. 1t Is clear,
| consequently, that in union there is not
| only strength but marked economy.
| Wisely conducted combinations-as for
example the Standard Oil company
divide these advantages with the pub
| lie and do not operate primarily with
a view to speculation in stocks.
But, alas, all combinations are not
| thus prudently conducted. Some Ito
| carry out our previous illustration in
| stead of uniting ten plants worth 500,
900 each on a consolidated basis OF
| 81 ,000,0 and being content with the
| profits secured through economical
| production and distribution, mark up
| the capital stock to $1,000, 900, $4,000, 900
or even $5,OO0OOO, and increase prices
so as to provide dividends on the in
| fated stock. Right here is where Mr.
| divers paper merits close attention.
1t being practically impossible to abol-
| ish combinations in trade, his sugges-
| ton is that an effort be made to regu-
late them. Concerning methods he
| says:
| / would propose either to enlarge the
| duties of the Interstate Commerce COM
mission, or to create a new tribunal with
ample powers to investigate the methods
| of corporations associations, or indi-
| viduals engaged in the manufacture or
| supply fU articles of general or public use
Upon the complaint or elation of any citi-
| zen, sCttIng forth that such corpora ton
| had obtained a substantial monopoly of
| any industry, and by reason thereof was
| expressing the public by extortionate
| charges or unjust regulations as to trade
it should be the duty of this tribunal to
| summon the parties and, after a full hear
| ing, to award damages to teh party in
| jured to punish the delinquent by u
| heavy fine, and to certify it's decision to
| the governor of the state in which it was
| recommendation
the withdrawal of its charter privileges.
| This, of course, would involve legisIa-
| tion by the various states as well as by
| congress; but l feel certain that If CON
| gress would take up the matter in earnest
the state would not be slow to follow. |
would also provide that the fine should be
| increased with each succeeding offence.
so that industrial corporations would soon
find from experience that it is better to
be satisfied with a fair profit than to ex-
| tort unearned money from a helpless
public. / would likewise make it a mis-
demeanor, punishable by fine, for any
| manufacturer, corporate or otherwise, TO
| attempt to fix the price at which his Gus
| toner should sell his goods after he had
once purchased them, or in any other way
| to interfere with the free movement of his
products after they were out of his pos
session.
Since consolidation through incorpor-
alton can be effected only by grace OF
the government 1t is evident that the
government has the right, legal and
moral, to intervene when its favor IS
being abused. Mr.. divers plan Of ac-
tion is doubtless open to objection; but
for all that, it represents the nearest
approach yet made to a practical So
luton of the problem at issue-a prob
lem which it is conceded must soon be
solved in one way or another.
Representative Wheeler of Alabama
Is of the opinion that the Democrats
three years hence can drop the silver
issue and get together on the tariff
Perhaps they can. But small good II
| xtrilI do hn 4,