The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1901-06-04
PROF. BULLOCK ON TRUSTS.

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with it's dead level of mediocrity.
We believe that socialism would de-
stroy the needed incentive to indus
try and enterprise, and would result
ina corroding sluggishness, a general
dry rot, of Che social fabric. Neither
do we believe IL trusts, mOnOpOlies,
the purpose of which is to destroy
the very law of competition against
which socialists rail. And more
than two years ago, at the beginning
of the great brust movement, (fOr
until that time giant trusts such as
we have to-day existed in only a few
lines of industry the writer predicted
that the growth of socialism would
keep pace with the growth of monop-
oily hence, that the interests Of cap
ital, no less than those of labor, de-
manded the enactment of conserve
tive anti monopoly laws.
The same view of the question is
taken by Prof. Charles j. Bullock,
of Williams College, who contributes
to the June Atlantic Monthly a e
markably ~forceful and logical essay
on ''Trusts and Public Policy" The
article covers nearly ten pages of the
Atlantic, and in this editorial we car
notice only a few of the points which
it contains.
One of the strongest is that in
which the author disposes of the oft
repeated statement that monopolies
lower prices, the Standard Oil Com
pany being invariably cited as an ex-
ample. Says Prof. Bullock:
Zone still meets the reckless asser-
ton that the trusts have not ad
vanced prices, but the simple fact is
that, in almost every case investi-
gated, combination has been followed
by an advance in charges. It must
be remembered that the only Safe
basis for a conclusion upon this
point is a comparison of the margin
between the cost of materials and
the price of the finished product.
Thus, while the prices of refined oil
and sugar have shown a downward
tendency, the margin Of profit Orer
the price of crude oil or sugar has
shown a tendency to increase"
Prof. Bullock also argues that it is
not -aa0oon-- 70 nO-%-N1 +hn nn+irn
supply of any product in order to
maintain a monopoly; that this can
be done almost as effectuallY with
20 or so per cent. of those engagedin
the industry as with 100 per cent,
and that the show of competition
kept up by those remaining outside
enable the monopoly to work to bet
ter advantage.
The problem of watered stock also
receives attention, the Industrial
Commission being quoted as saying
that with most trusts a capitaliza-
ton of two or three times the cash
value is considered conservative. Yet
we expect that most readers will be
surprised at the undoubtedly accu-
rate statement of Mr.. Bullock that
st would be a very considerable
understatement of the truth to say
that, in general, ove n half of the
capitalization of these combinations
represents nothing more substantial
than water"
Just at this point the views of
millionaire Russell Sage, as given in
the May North American Review
may prove interesting
"TO me there seems to be some
thing very much like sleight-of-hand
in the way in which industries are
doubling up in value, as at the touch
of the magician's wand. Here we
have a factory-a good, conservative,
productive Observation-Disclosures may
be turning out anything from toys
to locomotives. It falls into the
hands of the CONSULTATIONS, and
where it was worth $50, 600 yester-
day, to-day it is worth $3.50, OOO-at
least on paper. X \ X The man
who owned the factory could prob
ably not have borrowed over SO, 900
on it. Now, however, when the $780,
600 plant is chan ed into a stock
issue of $3.50, 900, bankers and fnan-
ciers are asked to advance $50, 900 on
what is practically the same prop
erty, and many of them, from all ac-
counts, make the advance. x K K
A reaction must come as soon as the
banks realize the situation. A prop
erty is not worth $4,000 one day