The Saint Paul globe., 1899-11-28


cIusiOn of Competition, Closing
Doors of Opportunity to Capital
and Labor.
At the meeting of the Minnesota Con-
gregational club last evening, at the
Park Congregational church, the subject
discussed was Trusts" Prof w w
Folwell. of the state university, read the
principal paper, and in the discussion
which followed Gov. Lind, c. W. Hack
EFT, ]. c. Reed J. w. Perkins and others
participated Prof. Folwell- said in part
In the first third Of the century ma
chine production and the factory sys-
tenn extensively displayed the little shop
industries; but the scale was small and
the market local. Large production came
IN, with the railroad itself a conspicuous
illustration Of that principle. The deVel-
opment OF large production was the re-
suit OF complex of cooperating causes.
The close of the fOrty-year period pre-
ced1ng the panic of 1873 saw large produc-
ton everywhere intrenched and trium-
phant; The little shop, store and factory
naQ disappeared, the roadside artisan
had been transformed in the operation.
The panic of 1873 awoke the country to a
new fact, that the large production had
been oVerdone. that the power of our
motors and machines engineered by men
who Vatnly trusted that the consumer
could never fail had been turning out
more goods of many kinds than the peO-
pie would pay for and consume Too
much labor and capital In machine pro-
auction, cut-throat competition and rate
cutting had brought about a state of
things which was intOlerable. The first
experiment toward relief was co-Opera-
tion. These associations soon came to
be called pools, and frequently ATTEMPTED
to reward the faithful of their members
quents by penalties. When at length the
Judiciary declared pooling to be in re-
stralnt OF trade and therefore illegal
there were few to mourn at the funeral.
We are now about the end of the 7O's
The old evils persist; excessive competi-
tion, unstable prices, men bitterly worn
out with the fight in the Industrial
arena.
BIRTH OF THE TRUST.
The, second experiment begins on
principle new to the generation but not
10 history. The trust proper was thus
born. Its essence a small body of men
dominated by promoter. called the trus-
tees to whom individual proprietors as
signed their: plants and stockholders their
shares, receiving in exchange trust GER
tlfcates. A large majority of the exist
Ing establishments, sometimes raising TO
80 per cent, were taken into the fold: the
remainder, the less vigorous, were left TO
fate easy to foresee and which they
soon met: These trustees managed the
whole industry as If they We're the ac-
tuaI proprietors. They regulated the out
Pus' assigned territory and fixed prices
and had them fixed by agreements They
closed many establishments embraced in
the trust.
The sugar trust needed but one-fourth
OF the existing plants to supply the whole
Unted States with refined sugar The
WnLiskY truSt shut up sixty-eight out of
eignIy dlSullerieS The trust was imme-
diately. silently and remorseIessIy effac-
tive. Production in many great lines was
requced TO accord with the demand and
prices were held up TO a level on which
very satisfactory dividends could be dis
tTlputed. Extortion was not necessary
snCt snd trust mannagers DID not commonly re-
sort TO 1t. Nevertheless the trust was
obnoxious. The small operators who had
not been frozen out raised a storm of de-
nunclatlon and the people responded to
their appeals. MonOpOlies are always
odlous and these trust monopOlies, be-
cause secret and Irresponsible were eS-
Reciaiiy SO. About the beginning of the
w the courts became persuaded that
trusts were Illegal. and trusts in the r
proper form disappeared like the morning
new, new only to reappear in the new form of
glant corporations. Giant corporations
nave replaced the illegal and obnoxious
trusts, but the people, perhaps unjustly,
delight to refer to them by the old and
odtous name. There are many variants
N the organization of these corporation
out one feature is never lacking. That a
SMALL CLIQUE CONTROLS
the central body and through it all the
satellites. Where newly formed and not
merely reorganized trusts they pursue
the same policy of taking in large ma
lority OF previously independent concerns
and leaving the remainder to their ia re
The result is practical monopOlizatfon of
the particular industry. AS if to render
such organization and policy easy, certain
states have enacted general corporation
laws OF extraordinary Hberality New
Jersey probably leads all in her hos
Pltallty. Her laws require but one resi-
uenC director; place no limit on canitaliza :
ton; exempt stockholders from iia biItL,
tor corporate debts; authorize stock is
sues on the basis of property rights: "a II
LOT no pupncauon of reports and i'm
pose lowest taxes Under the comfy he
tween states guaranteed by the ma
uonaI constitution, corporations legally
Incorporated In any state may DlIrsue
their lawful business anywhere II ie
therefore not strange that New Jersey
has become the home of corporations
some 1900 combinations with an aggra.
gate capital of $4,000, OOOO OOO have beer
organized under her laws. Of this mum.
Der ia, all having the character Of trusts
with capitalization of So, ,OOO. 900. 600 We're
incorporated in the fiscal year which
ended ended Sept. Is, 1889. At least 200 New
5eo 56GS ooo oGoorporatons with capital Of $5,-
VgO,OOO,OOO, have the character of trusts
NO complete enumeration of trust cor
porauons has yet been made, but it IS
0t2G5 ma3ufac cf,Tng That out d few Of the leading
nave yet to assume that organization
a clear understanding of the Character
OF trust corporations is absolutely neces-
sary in this discussion 1t is piibiW Ta
marked by their members and friends
mat the trust IS simply a new advance
along line of economic progress : "a &c
steady and certain as the stars in tbeiS
courses. That it is the operation of Ger.
tain laws Of trade whose wheels will
grihnid grind to powder all men and institutions
winch do not promptly get out of the
way. The trust corporation is indeed tbe
outcome Of an evolution, but NOT on that
line along which large production was
pulIt up in this country. Cheap nrod'Ic-
ton by means of motors and machinas
science, assorted labor and exnert r1a,9I
agement had eliminated before tba +r',n,
was born. The trust since its Origin aIG
development has been in the ''i1O
FIELD OF DISTRIBUTION
THE market, not the shop. has been a..
sphere Of action. The trust is an econonS
Sic, and not a political institution. sIire
senough. It's great end and aim Is gair
for the proprietors,. and what is more
sure gain. profit incorruptibie. undefI.
ed and that fadeth not away To insure
this profit two means are employed. The
nrst, monopolization. Practical monopo1
ization Of the whole plant and appara+ns
OF an industry of the regulated prodnct
and the agencies of distribution AncfI
larry to this the destruction of all com.
petition in the purchase of material: The
employment of labor, and the sale Of thf
product. With such a dam across tht
stream of an industry 1t IS easy to main.
tain level Of prices, as sure as anything
In this world can be to show a balance
on the right side of the ledger. So fal
Rs its line of things is concerned tht
trust abolishes the market