Hutchinson gazette., 1899-02-16
THE GROWTH OF TRUSTS.
THE WEAR 1903 SHOWS AN EN-
oRMouS INCREASE.
rho Newly Combined Concerns Have m
Aggregated capitalization Of More
Than a Quarter OF Bullion Doll
lars.

ucphrJminb STORES ana hphrlhohb
houses arc now the rule In cities, and
are producing great economic and socl-
al results, Everything 10 being done
on n large sculc and by syndicatcG
Even nsh are caught and canned by
Byndicates and combines About the
only important industry In which gem
uine competition still exists Is that of
agriculture
The new concerns incorporated dur
Ing the twelve montha will be seen TO
have ah aggregated capitalization OF
more than quarter OF II billion dol
lars, This, OF course, Ia very differ.
ent thing from capital Of that
amount, and represents merely the
quantity OF paper certificates In the
form OF shares which these trusts have
caused TO DO printed and hope TO dis
pose Of TO the public Since the open
ing OF the new year the number Of new
trusts incorporated or projected has
multiplied, and the reactionary effect is
seen the dispatches from state capitals
announcing the introduction Of legisla-
ton intended to check their growing
power
The common law makes every com
bination that is In restraint OF trade,
and therefore contrary to public policy
crime, In addition, we have had no
end OF particular statutes passed by
state legislatures and by the general
government against trusts. But stat
ates, the decisions Of the courts and
the efforts OF the federal government
itself have all proven inadequate to
check the tendency of capitalists to
consolidate for the purpose Of abolish
ing competition. But stronger law
than the statute law and one which
cannot be evadcd has doomed many Of
the trusts TO odissolution in the past and
will operate with like effect upon many
Of those being organized today, and
that is the natural law of trade,
The prolific parent Of the trusts has
been the protective tariff, which, by I'm
unhealthy stimulus to the establish
ment OF industrial facilities in excess
OF demand, hps driven the manufacture.
crs in self-defense to avoid destructive
competition by these agreements for
the curtailment Of excessive produc'
tion. But the trouble with the trust Is
that, like It's parent, the protective
tariff, it by establishing artificial con-
ditions and artiacully maintaining
prices offers premium TO others bet
ter equipped to enter into the same
field.
Take, for instance, the Nail Trust
established few years ago A very
high duty upon nails had excluded the
foreign product and guaranteed to the
domestic manufactures price which
tempted Others TO enter into that busi-
ness. When the Trust was formed IL
for time controlled the output and
was emo bled TO exact from the domestic
consumer prepos,erously high prices,
while Mt the same time II was export
ng vast quantities to be sold in Europe
~ less than half Of the charge eXncted
from the customers at home. What
followed us q result Of this? New nail
mills sprang up all over the country
and competed for the abnormal prices,
and presently the output was too large
to be controlled by the Trust. which
promptly went TO smash, leaving the
persons who invested In It's shares to
mourn.
This is typical OF the experience OF
vast number OF the trusts. The Cor
dage Trust is still remembered with n
Bhudder by investors and spectators
The fate of the Whisky Trust, the Wall
Paper Trust and no end of others
teaches the same lesson. For time
one of these companies may hold the
public at its mercy, unless the law in
terferes to disturb its operations, but
in the long run the exaction Of an arti-
fetal price is certain to invite competi-
ton, and this is the beginning of the
end.
In theory the combination OF large
number Of individuals or companies en-.
gagged in the same line of trade or in
dustry, is commendable so long as there
is no attempt TO create monopoly with
power to dictate prices OF products or
commodities. The tendency now for a
quarter of a century has been toward
lower prices, and the margin Of profit
In nearly all lines of business is so
small that 1t becomes necessary TO
manufacture or trade on a very much
larger scale than formerly in order to
realize anything like the returns here
tofore obtained. In actual practice,
however, it seems impossible. to avoid
over-capitalzation of the trusts
In the first place each individual or
corporate owner Of u plant naturally
appraises his property at very extra