New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-10-21
THE TRUTH ABOUT TRUSTS"

If1E truth ABDUL 1hCCIC'
COMBINATIONS THAT ECONOMIC COST OF
PRODUCTION AND LOWER PRICES
NOT MoNoPoLIEs.
To the Editor Of The Tribune,
Sir Mr.. Hanna says there no trusts In the
country. Mr. Bryan says there all kinds Of
trusts. and that they all bad. Here is differ
ence OF statement with a vengeance! Both are
honorable men. and neither. we are sure, would
knowingly make a false statement even for party
advantage. But what the people to do when
such eminent disagree in points of fact? Is 1t
simply misapplication OF terms, does Of the
gentlemen understand the subject and the other
| not? Something IS certainly wrong somewhere.
With all due respect both TO Mr. Bryans sin
cerity and ability, he may not have had sufficient
actual experience in practical affairs to be the best
judge OF subject involving only the workings Of
purely business system. His zeal. enthusiasm and
earnestness are manifest but. unfortunately there
is such a thing as q fanaticsm which is born Of
conviction! Mr. Bryan and those who follow him
evidently fancy there is 'nisger in the woodpile
about these so-caed trusts; but instead of setting
about dispassionately TO find and release the
niger" they proceed 10 set fire the woods for
miles around
To those practically familiar with the formation
of trusts and the changes Industrial conditions
which have brought them about, there is nothing
mysterious strange about them Perhaps if 1t
were explained little more clearly to the people
AT large that these modern "ocopuses' are nothing
more less after all, than ordinary corporations
grown large, that they are in the monopo-
lies OF old English times long held to be Illegal
there would be less confusion over them.
Mr.. Hanna, himself a business man and under
standing the workings of the system. says broadly
| there are no trusts. He means there are none in
the sense Of the agitators charge and he is right;
| ana yet II still might be well state Just how
these horrible things have come about what their
purpose is, and why they almost a COM
nlefcla necessity. 1t is all simple. 1t seems
mat the depression following the panic of 1898 de-
Veloped the fact that production had outrun con-
sumption in almost every department of industry
and that an adjustment must take place. In nal k
ing this adjustment IL found that great saw
inSs could be made through consultations of col
lateral lines of business So If such savings could
De made in bad times, the increased economies only
became accumulated in good times. Hence the we'll
ngh universal rush into combinations since the
business revival after 1896.
SO much for why they have been formed and
'leF purpose. The next and really the only cues
uon is the effect on the public. Is not the public
Denehted through the saving of expense I'm the
manufacture and distribution of products and
from the waste OF overproduction we'll by son
OF these combinations? If n dozen firms or corno-
rations engaged in the same line of business can
When brought together under one MANAGEMENT do
| the whole business with little more than the ex-
pehse OF one, the saving in the end benefits the
community at large. II a New-York manufacturer
shlps his product to distant State, and into the
territory OF another manufacturer equally well
situated to produce that article, the excess
| cost OF transportation is economic waste. and
! therefore ultimately a public loss.
When Mr.. Rockefeller built his independent nine
| me across the State of Pennsylvania cheapenine
Ine cost OF transporting oil to market certain rail-
Foads may have suffered loss Of revenue but the
PUBIC was permanently benefited thereby. With
out large aggregation of capital he could not have
zone this and many things of a kindred nature in
! the development of his huge enterprise He has
grown rlch, 1t is true, and many others engaged
/ EtTnu horr1
Standard Oil Company but e ce eTed nam boSv by the
from to the e aEGi han of e es6s
Mr. s.a nf th of years Of this commercial
A ta r ago by member of the Lexow Committee
nton n ms company had reached point when PEG
contrarV the belG no 10 bpy ne replied: On the
nhttng Company is. and has been since lis organi-
Lowest low possible price. for phlanthropic reasons
Dg' because III good business The average price
formation Of scaed Sugar Trust Was 50 seT See
8ea a since then the price has averaged less than
ST. cite these two Illustrations simply because the
SSIanoara OIL Company and the American Sugar Re
any of the ohePs and ff beca1s n for
Wat Ln a, IN the beginning they both contained
Say Say II IS possible they may have contained illegal
them and Standard Oh company at ieasgf aibn has
nova eSst Inc form Of its organization to meet the
the evidence Will show that even should the NAM
Va SilSSs companies indeed OF
PSIaton. pc so unwise TO attempt q mononoiv
VI , my prodnct and try TO raise prices unduly il
NouId meet with abundant checks by Inviting com
PeulIoh' IN fact the memorable law OF the trust
10 TeouCe prices of the articles dealt in 10 the
lowest that VIII bring a reasonable profit becauss
- HaS Deeh Iound that greater profits come from
ihIse safes on small margins than small sales on
!aIse margins ANY intelligent manufacturer viii
Ten you that large volume is the secret OF success
nowadays. These large combinations are ali worked
| on inc theory Of maximum output with ninimum
me savings in the cost OF manufacture brought
ABOUT by these industrial combinations the Iniiad
states would not to-day occupy Its COMMANDING
| posltlon IN the foreign trade Of the world
so, Whatever the evils which may ACCOMPANY tho
| operation OF the new system, we think the facts
snow tIey are only such necessarily Incident
| 10 any forward movement that they are only tenn
| porary In the very nature Of the case and rhat
the aim OF our legislation should be to limit and
control the evils as far may be- rather thar
treat the whole system without excuse or tusf-
ness ana 70 save by every possible economy is fugt
as essential 10 the public to the Capitalist Sue
cessfuI business in any line inevitably Invites com
petition, and trust which should demand an nm
reasonable proht would soon find It's last Condition
worse than its first.
One example Of this will suffice: The collapse OF
me Wire Nail Trust (end this a real trust Az
II attempted monopoly a signal Instance az
this. That trust, by the way, must moi he con-
SSonlpany-nis SCALED by some the Wire Trust FOR
ne Two concerns are entirely different-and yet
should the present company attempt the methods
OF the ola IL would only be TO invite disaster Whsn
me old combination was formed II had for a Short
uine complete monopoly of the wire nail bust