The times., 1901-04-12
THE TRUSTS A NECESSITY
Witnesses Declare Self-Preserya-
tiOn Demands Unity.
8. V. White Tells of the Formation Of
the National Salt Company-E. :.
Chapman Gives Details of Organiz-
ing and Financing Big Concerns.

ing and Financing Big Concerns
s. Y. White. Treasurer of the Ma
tional Salt Company, gave his views be
fore the Industrial Commission yester-
day OH the subject of trusts. Mr.
| Whites statements were concise, frank
and unreserved, and at times amusing
as when he said that while New Jer-
sey was at present the Mecca for indus
trial combinations in an embryo state
| West Virginia was, after all, the hap
py home" of trusts.
The formation of the National Salt
| Company. he said, was due to the eco
nomic conditions at the time. 1t was
in fact, organized for self-preservation
| Competition was severe and vicious,
both as to prices and as to quality
| When competition held sway and as the
prices were reduced, one manufactures
! trying to undersell the other, the quail
| ty of the product became inferior and
! the packages in which ii was put on the
market were of the cheapest and most
| flimsy character.
Again, salt was shipped to distant
and most unnatural markets when the
| product in a certain locality was not
acceptable to consumers. Since the for
nation of the company reforms had
been instituted by producing a uniform
| quality of salt of standard grade in
each of the several producing districts,
and an economy effected by supplying
markets from the nearest point of pro-
| duction at the lowest prevailing freight
rate, thus doing away with the extrav-
agance of cross-shipping of freight.
BY the more intelligent and improved
| methods of manufacture and distribu-
| ton the consumer was benefited in be-
ing supplied with a better grade of
product at a lower price. The profit of
the middleman was entirely eliminated
Mr. White thought it had been proven
that such commodities as iron, coal, oil,
sugar, and salt could be better handled
and distributed by large organizations
than by individuals, because these ar
ticles could be best produced in enor
nous quantities at a minimum of fixed
charges for administration. while pay
ing the maximum price for labor. The
apparent evil of a monopoly was the
ability to fix exorbitant prices. This
was not possible, except in a monopoly
created by the Patent Office or a gift of
franchise by State. Industrial organ
izations had no protection from compe-
tition, and their success depended sole
ly upon conservative management.
Trusts were appropriately named,
Mr. White said He believed that in
time they would become the trustees
for the conservation of labor, Of capital,
and of energy, and that they would stop
waste and extravaganza. They We're
not organized for philanthropic pur-
poses, and yet they bade fair TO become
public benefactors by stopping over
production, which was the curse of Ia
borer, capitalist, and consumer alike,
and by producing a high standard of
goods at minimum cost and distributing
to consumers direct at reasonable
prices.
Trusts were not combinations of large
capitalists, but a community of small
capitalists They did not concentrate
wealth in the hands of the few, but of
the many, because of the opportunity of
the public to become partners through
the purchase of stock. A great deal
was said nowadays about the com
munity of ownership" but it seemed
that the community was really the pub
lie The list of stockholders of the Ma
tional Salt Company showed distribu-
tion Of stock at the rate Of ffty-two
shares TO each stockholder representing
about 50, 100 Of investment at the mar
ket price of the securities.
II am in favor of publicity" said Mr..
White. "Our company gives its stock
holders full and complete information.
Our books are under the supervision of
regular professional chartered account
ants, who are appointed by the board of
directors. Publicity dispels prejudice,
doubt and suspicion as to the methods
of business procedure. and as to the
financial conditions Of the corporation"
Elverton S. Chapman, Of New York,
who has been connected with the or
Ganization of various consultations of
industrial interests explained the meth
DDS of financing corporations and their
effect on the public. In the case Of the
American Smelling Company and sew
eral others, he said they were financed
on the basis Of $100 in preferred and $40
in common, the other $50 paying the ex-
penses of the consolidating. Promoters
We're always paid in common stock.
The American Smelling and Refining
Company, which handled principally
lead and silver ore. with some gold,
| controlled S5 per cent of the business
all except that of the Guggenheimers,
which it had recently acquired or was
| about to acquire. Seven pc cont Mas
| paid last year on .. ..e.--.eu stock
and the remainder of the net earnings
was carried over as working capital
| The total issue Of stock was $27, 400, 600
of each kind.
The Pittsburg Coal Company con
| trolled the output of the Pittsburg dis
trict. Pittsburg consuming some 14.0OO,-
600 tons year. In sketching this con-
Germ Mr.. Chapman showed how ex-
| penses were reduced by concentration.
Formerly there were 40 sets of officers
presidents, general managers, treasur-
ers, etc, one for each OF the 40 inde-
pendent concerns. Each had its travel
ing statesmen and was shipping here and
there, back and forth, throughout the
territory. Now It was all systematized
and run by one set of officers. The
company had 500, 600, ,0O0 per cent cum
ulative preferred stock and $32. 600 000
common. He thought the customers
| preferred the present system, as the
I