New-York tribune., 1901-04-09
CHARLES r.. FLINT ON TRUSTS
TESTIMONY GIVEN BEFORE THE INDUS
TRIAL COMMISSION.

Washington, April s.-Hearngs on the question
OF combinations of capital begun by Indus
trial Commission to-day and probably will be
cluded this week Professor j. w jerks of Cor
nell University IS conducting the examination OF
witnesses.
Charles r. Flint. of New-York testified to-day.
lie said the reasons which dictated these cOmbina-
uons were economy. desire to transform unmar-
ketaole properties into securities of value 10 pro-
vide against the effect OF death or disability of
managers and to avoid the disastrous results of
war between separate concerns in the same indus
try. These combinations Mr. Flint said effect
considerable reduction In the amount of stocks car
rfed, resulting in a saving In interest. insurance
and shop wear. Combinations avoid the effects of
oVerproduction by regulating the production to the
actual requirements of the country. In his opinion
the only danger to International trade now
OF of tariffs. He advocated with some quail
fcations such a modification of tariff policy
would tend to freer trade.
The large consultations. he said. are in a posi-
ton TO gain advantage through centra lized
manufacture and any legal discrimination against
trusts In general would be most disastrous the
laboring interests and might Industrial
panic He regarded any worldwide combination
in any industry impossible. but If such combi-
nation should be formed he believed that. other
conditions being equal. the manufacturing Of tn"
particular class of goods would be done in the
countries where the merchandise could be produced
the best advantage with relation 10 the market
for It. He apprehended a danger In extending the
reciprocity idea far.
Mr.. Flint said that unless industrial combinations
favored by franchises patents they are sub
ject 10 the rule that the lowest price makes the
market" He contended that there has never been
such prosperity among workmen as exists to-day
Asked to what community OF interest existed be
tween employer and empoye Mr.. Flint replied that
there is a growing feeling among the workmen gen
orally that they benefited by the conditions
which grow out OF the industrial combinations. The
ultimate result OF industrial combinations was usu-
ally reduction in prices. although this does not
always follow. The most successful industr1als
recognize the value OF large volume and low prices
He cited evils of combination the danger of les
sening the personal interest OF superntendents and
others possible improper direction and decentrah-
zation of ownership. In many lines OF industry he
believed combinations inadvisable. Unless
substantial economies we're secured by them. he be-
Neved it better for business to be run independ-
entity. He produced figures on forty-seven indus
trials. including Standard OIL and found the
earnings on their capitalization average over per
cent and on the present market price over II per
cent indicating he suggested. that the profits Of
these combinations being widely distributed
4 similar computation regarding thirty-seVen rail-
roads. ne said showed average earnings OF =. per
cent on market prices and trife more than that
on the par value of securities
In most cases, according to Mr.. Flint. saving
IS effected by reduction in the number Of trav-
eng statesmen. The United States Rubber Com
pany. for instance had reduced the number OF It's
travelling statesmen - per cent. The Rubber
Goods Manufacturing Company effected smaller
saving because rs policy has been to sustain 10
greater extent the individuality and independence
of !ts component concerns. The only material saw
ing effected in purchases of raw material was
where concerns could buy large proportion OF
the worlds product
Speaking of the organization of the United States
Rubber Company he said 1t started in 1897
-, Ihed acquiring
rubber properties Mr. Flint to invest this
amount. The profits OF the promoters were limited
TO . per cent Of the total issue. this amount TO
cover charges Of lawyers and accountants
Referring 70 the Rubber Goods Manufacturing
Company, Mr. Flint said the company always kept
within It's original plan Of making the amount OF
its preferred stock equivalent TO or less than the
amount of tangible assets Each mem6er i or me the
Si00 in preferred stock and $50 IN common stock
Tor fhe and Soodw The common stock is
issued on the basis OF earning capacity Of per
cent. The promoters now obtain any amount they
Are the promoters guaranteed 10 10 per cent Tho
purchasing OF the various plants is entirely in their
Taking up the starch industry Mr.. Flint said
that the National Starch Company CONTROLLED about
all the box starch made in the United States Mr.
Flint said he was large starch ekporter ana @ tna{
he had no discretion as 70 what starch ne should
buy.
The combinations. he said had not been able TO
keep down the price Of the raw material but ahfg
rubber The price of the raw material had shown
a marked Increase, but consumption also had in
creased rapidly. About half Of the worlds prod,
net of raw rubber was consumed in the United
States There was active competition In the
rubber goods industry except business protected
by patents where specially valuable trade
mark existed. Manufacturers abroad were looking
constantly for secrets in the processes used by the
combination in the United States, and the demand
here was rubber goods made in the United
States. The tariff gave the rubber manufacturers
little concern.
The witness said that American skilled labor was
more efficient than that OF Europe. Machinery
here however doing the work of pauper labor
abroad in many cases.