Evening star., 1901-04-09
CHARLES R. FLINT TESTIFlES
EXPLAINS FINANCING OF GREAT
COMBINATIONS OF INDUSTRIES.
Ee""omy Dictates Cembinatioa.-anI
Not Been Able 10 Keep Down
Price Of Crude Rubber.

Charles r.. Flint, treasurer Il the United
States Rubber Company, and a leading fac
tor in a large number OF corporations tes-
tified before the industrial commission yes
terday regarding the financing OF combina-
tions. He said that the reasons which
dictated these combinations were economy;
a desire to transform uumsrketable prop
critics into securities of value: TO provide
against the effect of death and disability
Of management, and TO avoid the serious
and disastrous results OF war between sep
arate concerns in the same industry. These
combinations, said MIR. Flint. effect a con-
siderable reduction In the amount of
stocks carried, resulting In a saving in in
terest. insurance and shopwear. Combina-
tions avoid the effects of overproduction
by regulating the production TO the actual
requirements of the country. In most
cases, he said, q saving Is effected by a
reduction In the number Of travelling sales-
men. Detailing the organization OF the
United States Rubber Company. he said IL
was initiated in 1892 bv parties subscrib-
ing S1,500.Oo0 for acquiring rubber proper
ties. Mr.. Flint was 10 invest this amount.
The profits of the promoters were limited
to per cent of the Total issue. this per
cent to cover charges OF lawyers and ac-
countants.
Plan of Issuing stock.
Referring to the rubber goods manufac-
turing company's organization. Mr.. Flint
said that the company always kept within
its original plan of making the amount OF it's
preferred stock equivalent to or less than
the amount of tangible assets. Each men,
ber of~the syndicate received In exchange
for 500 In cash, S1Jo in preferred stock
and $50 I'm common stock for the value sup
posed to be represented by patents, trade
marks and goodwill. The common stock
is issued on the basis OF an earning ca
pacity of per cent. The promoters now
obtain any amount they can, subject 10
these conditions. They have no suaran-
tee. The combination had not been ADJ"
to keep down the price OF crude rubber
The tariff gave the rubber manufacturers
little concern.
Taking up the starch industry Mr.. Flint
said that the National Starch Company
controlled about all of the box starch made
in the United States. The goodwill or box
starch is controlled by the trade marks.
Mr.. Flint said he was large starch ex-
porter, and that he was left no discretion
as to what starch he should buy.
Mr.. Flint stated that In his opinion tho
only danger to international trade now was
that of a war of tarins. lie advocated
with some qualifications. such modif1ca-
ton of our tariff policy as would tend to "A
freer trade. The large consultations, he
said. are in position TO gain an advantage
centralized manufacture, and any
legal discrimination against trusts In gen.
eral would be most disastrous TO the labor
ing interests. and might create an indus
trial panic He regarded as impossible any
worldwide combination In any INDUSTRY.
but in event of its practicability and of tho
effecting of such combination he be-
lieved that other conditions being equal.
the manufacture of the particular class of
goods would be done In the countries
where the merchandise could be produced
to the best advantage with relation to the
market for it. He apprehended a danger
in extending the reciprocity idea too far.
Lowest Price Makes the Market.
Mr.. Flint said that unless Industrial
are favored by franchise or
patents they are subject to the rule that
the lowest price makes the market He
that there never has been such
among wor1men as exists to-
day. Questioned as to what community OF
interest existed between the employer ana
empIoye, Mr.. Flint replied that there is a
growing feeling among the workmen gen.
orally that they are being benefited by the
conditions which evolve out OF the indus
trial combinations. Generally speaking, he
said. the ultimate result of industrial COM
binatious was reduction In prices, though
this does not always follow. The most
successful Industrials recognize the value
of large volume and low prices. He cited
as evils of combination the danger of les
sening the personal interest Of superfnten-
dents and others, possible improper direc-
ton and decentralization OF ownership. In
many lines of industry he believed combi-
nations were inadvisable. Unless substan-
tial economies We're thereby secured he be-
lieved il better for parties to run business
He produced figures on
forty-seven industrials. not including the
Standard OIL. and found the earnings ON
their capitalization averaged over Z per
cent, and on the present market price OF
the industry over II per cent, indicating,
he suggested, that the profits OF these
were being widely distrib-
uted.
A similar computation regarding thirty
seven railroads. he said. show average
of 4s4 per cent on market prices.
and q tri1e more than that the par