New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-05-23
INDUSTRIAL COMBINATIONS.

The future Of new combinations cannot be
predicted, as some suppose, from the failures
OF many trusts which preceded them New
conditions may bring new results. The facts
which help to cast light on the future are not
many, but are highly suggestive. one Is that
every combination Includes works differing
widely I'm efficiency. Those formed In self
defence to limit competition were forced TO in
clude the works whose competition was most
dangerous The great number formed for the
sake Of promoters profits would not have been
able to secure public subscriptions to capital
had It not been possible TO show that they
would control large share Of the business
and therefore were obliged TO take in concerns
Of less than the highest efficiency. What Is
likely 10 happen when twomnute trotter is
harnessed with an omnibus horse? Will the
less efficient concerns be shut up? Then the
more capable will have TO earn on excessive
capitalization both for themselves ana FOR the
concerns closed.
The problem may be slmplihed by supposing
that the tnplate combination was formed Of
concerns OF which half could produce with
profit at 81 80 a box the price last year, and
the other half could not all produce with
profit ut less than 81 % box, the present
Of three hundred mills when there were none.
nobody can prevent the starting OF others now,
and with the finest devices yet employed, for
hands can be found who Will disclose every
thing The dispatches state even now that
three important concerns near Wheeling are
about to put up tInplate mills. New concerns
spring up which can produce. let 1t be sup
posed. at So 50 a box and the combination has
to choose between meeting them with all IFS
product. losing money on half its works or
closing up the weaker. II II does neither the
new concerns make big profits, which they
promptly put into more works. Continued loss
of 81 45 a box on much Of It's production would
soon ruin any corporation. Closing of works
enough to make room for the new competitors
would leave them large profits which they
would put into more mills
All the time the mills at work have to earn
for themselves and for those idle. II new con-
Germs produce enough to shut out quarter OF
the combinations product the rest with re-
duced price and profits have to earn something
for the whole stocks outstanding which means
! lower dividends for the best works. IL only
8 cents box was realized az profit by the bet
ter half Of the works when the price was
81 80. the decline from 81 % to that price would
cut off all but q thirtieth Of their earnings, and
they have besides TO pay losses on the halt
whose production costs from cents TO 81 %
n box more. The Standard OIL the Sugar and
other combinations have all been forced under
such circumstances TO pay competitors what
they asked for their plants. and thus enable
them afterward to put into the same business
more capital. There Is no end possible except
bankruptcy, or such a reduction OF price as
will prevent the starting Of more competition
But that means paying perpetually for losse,
on plants which cannot produce so cheaply. OF
else closing these and paying interest on their
inflated stocks.
A great majority Of the trusts and comblna
tons formed hitherto have gone down In bank