The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-07-14
FAILURE OF INDUSTRIAL CON-
BINATIONs

The announcement that the American
the next meeting of the shareholders is
accompanied by the statement that the
reasons for this action are that the COM
pany's earnings have not been commen-
surate with the expectations of the stock
holders owing to the stimulated COMPETE
ton of Independent plants, and that the
business is one which cannot be as sue
cessfully conducted under a combination
as by Independent concerns. Such reasons
indicate that not so much is to be gained
by combination as promoters have led
shareholders to believe.
The New York Times says that there
are number of trusts among those hastily
organized during 1898 and 1899 which have
made the discovery that the lines of bust
ness they undertook to control are more
economically and more profitably con-
Quoted under the conditions obtaining be-
fore the consultations were effected. Some
have already dissolved, others are arrang-
ing to do so and many more would do so
If there were any way of liquidation that
did not involve bankruptcy. In most in
stances excessive capitalization has more
from a combination of competing works.
The prices paid in money, bonds and pre-
ferred stock have in most cases been very
much above the earning capacity of the
plants. The prices paid and the commits
sions paid promoters and bankers have
been so large that in many cases it would
be cheaper to create new plants than to
purchase back those sold to trusts. In
many instances those who sold have built
new and better plants for the money re-
which have undertaken to control certain
branches of production has fallen the
necessity of purchasing weak plants at a
high price until they are burdened to bank
ruptcy. On the other hand, those who sold
have built better and cheaper plants and
can make money where the burdened syn
dicates cannot.
Thus it would seem that two years ex-
perience has gone a long way to disspate
the fears and alarms of those who have
seen in the so-called movement to organize
trusts the control of all manufacturing
by few great syndicates. This so-called
industrial evolution appears to be but an
experiment that is failing. Consolidation
has not in all instances cheapened produc-
ton nor has it lowered the cost of distribu-
ton to give either producers or consumers
any decided advantage Combinations have
not been able, as has been claimed for
them. TO adjust production TO the demand
for goods and to regulate or steady the
price. The trust has taken advantage of
the apparent opportunity 10 put up prices
until consumption has been checked and
then to make unexpected cuts in order 10
dispose OF accumulated stocks. In two or
three instances combinations made for
mutual protection have become fierce COM
petitors. Meanwhile the growth OF new
and independent plants has disappointed
all expectations founded on the assurance
of promoters that such competition would
be impossible because Improbable.
At the present time the combinations
which can rob the people by making ex-
orbitant prices seem TO be confined to cor
porations which for limited season can
control some article of prime necessity. like
ice or gas. In . given locality. The sugar