Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1899-05-18
TRUSTS.
FERRELL, n. j, May Is. 1899.

CuEh&C
the attention of the deepest thinkers of the
age.
What will be the outcome of this concen-
tratioa of capital and productive energy
Where will it end z?
Will the process of concentration 60 on
until each industry becomes compactly or
ganized into vast machine that shall
crush out all industrial enterprise and
make man a mere fraction in the industrial
composiie2
1t seems so. Restrictive and prohibitory
| legislation has no effect.
In view of the many advantages of scien-
| tific organization it is evident that trusts
are here to stay in spite of legislative en-
actments Notwithstanding their evils
they are a product of modern develop
ment, and we might as well expect to 60
back to the spinning wheels and stage
coaches of our grandmothers as to look for
our industrial system to revert to the old
style of individualism and competition.
1t seems certain, moreover, that the pro-
cess of Capitalization will not stop with
each industry grouped by itself.
We have seen the railroads reaching out
to control the coal industry; we have seen
the Standard OIL Company enter into iron
and copper production and is not at all
out of reason to suppose that some of us
will live to sea all the producing and dis
tributing industries in the country COM
bined and managed under a single head.
If there is a gain in efficiency and
economy by organization in single line of
industry, why would not this efficiency and
economy be greater by combination of all
indnstries2
The DRIFT is certainly in that direction
and the logic of events seems destined to
bring il about The first great result that
we may expect from the prevailing craze
for concentration and capitalization is
financial crash that may equal in effect
the bursting of the famous Mississippi bub-
BILE in 1920
The way an industrial trust is formed
appears TO be substantially like this: A
number of the leading spirits in given
line of industry get together and say Now
there is no use in us working against one
another as we have been doing; look at the
vast sums we have lost under the compe
tative system, by advertising, by keeping
statesmen on the road and by underseIliDg
one another
By consolidating and working together,
we shall save all this expense and our in
dustry instead of being an unorganized
mob in which each individual is 10 the
others way, will become a regular army,
UNNECESSARILY more efficient because work
ing to a common end"
Each individual then sets his own price
upon bis plant and receives stock 10 the
corporation equal to that amount,-his
business thereafter being conducted under
trust management, or closed if not needed
10 that locality.
As there is practically no limit to the
amount of stock corporation may issue it
is usually watered as much as the pro-
motors think it will stand
That is to say, after each one receives
shares enough to cover the excessive value
be has put upon his plant, there is usually
large amount of additional stock issued
and placed upon the market to be sold to
the general public. This stock is popularity
supposed to represent the earning capacity
of the trust and, of course, entities the pur-
chaser to share in the profits the same as if
he had contributed factories or mines, as
the case might be.
Oae of two results must necessarily fol-
ow-either the product put upon the
market by the trust must be sold at higher
prices in order to pay dividends upon this
inf ated capitalization, or the FER cent. of
net profit is so small that little or nothing
is paid as dividends.
Inasmuch as high prices have tendency
to defeat their own ends by causing de-
creased consuml ton, the latter is generally
the case and the purchasers of stock derive
no profit from their investment
Naturally the email shareholders will
soon get tired of this and begin to sell out
for whatever they can get; and as people
are much like sheep it only needs break
in this direction to start panic among
small investors that will cause them to sell
at any price.
Then the big capitalists will quietly buy
up the shares at a fraction OF their face
value, and after the small fish are thus
swallowed by the big ores, the institution
will be run on paying basis
Meantime independent operators who
do not go into the trust are crushed and
either absorbed or driven out OF business.
until the trust has complete monopoly in
its particular line
These, however, are merely incidents in
the onward march If industrial concentra-
tlon-the process may be painful to the
victims, but it is none the less effective.
plete it is evident that the American
people will have TO accept one of two
alternatives; industrial oligarchy or State
socialism The industrial combination
will become stronger than the government.
and we shall see Plntocracy established
upon the lifeless form of the Repoblic
that shall reduce the people to a slavery
more hopeless and binding than the world
has ever seen or we shall have a State
socialism in which the principles of COM
bination will be carried out in the interests
of the whole people.
To the most of us who have never given
the subject much thought, there is some
thing distastetul in the idea of socialism.
We like to regard each individual as
being free to do as he pleases and free to
gain that reward in the world which his
brains and energy entitle him to. We
dislike 20 think of man as losing his
individuality and becoming a mere cog on
one Of the wheels of the great industrial
machine. And yet that is precisely the
position that every person employed by our
great corporations occupies now. Whether
we like the idea or not we have got to
accept the fact.
Oar trusts and monopolies embody in
their operation all the principles of social
ism except in the distribution of profits
A trust organizes the labor of the MANY
for the benefit of few; State socialism
would organize the labor of all for the
benefit OF ali-it would merely extend the
principle upon which our postal service is
operated, so as to cover the whole indus
trial field
We may sheer at socialists and call them
crazy theorists and long haired cranks who
are consumed by fierce hatred for million
aires and clean shirts. We may accuse
them of planning to take the sayings of the
industrious TO distribute among the shift
less and improvident We may, in short,
display our ignorance of the whole question
by Yituperation instead of argument but
the fact remains that it is not theorists who
are educating us to socialism, but trusts
and cont ines.
Socialists can well afford to regard the
march toward industrial Capitalization with
equaniminity they can well smile as they
see their battle fought by the very element
that looks upon state socialism with the
strongest disapproval.
Many attempts have been made to con-
duct communities on the sociaiistic plaD,
but with little success so far.
The reason for these failures seems quite
apparent.
This is practical age,-no matter how