New-York tribune., 1901-05-02
GREAT CONSULTATIONS
"a GRAVE DANGER" SAYS RUSSELL
SAGE; IAN ADVANTAGE" SAYS
JAMES J. HILL.

j.
I4ill president of the Great Northern Railway; c.
II Schwab. president of the United States Steel
Corporation: Charles r. Flint. treasurer OF the
United States Rubber Company; F. D. Thurber,
president Of the United States Export Association.
and James Logan. general manager of the United
States Envelope Company. Mr. Sage's article is en-
titled "A Grave Danger TO the Community, and is
in part follows:
To me, there seems 10 be something very much
like seight Of hand in the way in wlEch industries
are doubling up in value. at the touch OF the
49, cnnservatiye productive Observation-Disclosures
my he turning anything from toys 10 iocomo-
fves. Ii falls into the hands OF the consondators
and whereas il worth SO.@" yesterday. 10
day it is worth SlJO0OO-at least on paper. Stocks
are issued; bonds are put out ana leTbs PANS mar
VINO owned the factory couiG propa6y nor T6e1 RSe1
The $4,000 plant is changed into stock issue Of
$4,000 bankers and fnancieTs are askeo 70 az, az
same property, and many Of them. from all ac-
counts, make The advance .. ~ 90
me jnevita bic The Clearing House is reporting
from week 10 week an expansion "i oans htafore lt
Z als oSi,l'o ~ 80 of consolidation has only in.
A reaction must come as soon as me sk naaIHs
realize the situation A property Is not s worth
s56N5 one day and $4,000 the next simply because
a company OF men, no matter how Dig anu lihIor-
ta' al Is .eg iriy remarkable the increase which has
taken place in requests Tor loans based on lnous
money that has been advanced on - ~ ,baf
class but il is conservative estimate 20 si t.L
ctndit!one a few years ago This is apparent rom
the business offered at my ONCE rom Gay 1870 70
The volume OF money in the country Is ehureIE
.nadeguate 10 meet anything Ike the demands that
ode on collateral of This class. In fact, We
To i@Gt 1ot o 8waV entirely from the old idea OF
making the money Of the country the basis oi oi
trading instead there is thrown into the .'S hnS1
ness world to be used trading medium, lo
millions upon millions OF new stocks the rear sie
OF which is yet be determined As soon as ttIls
IS thoroughly realized may look for tr9uote;;
Peind&ng & e95y IF no Other cause brings this
condition. about it will come when the great & VOL
lie Subscription is offered Securities OF this class
always have the preference win N 1hoesaIe as
1hey must there will undoubtedly be conslderap3le
suffering and interest rates will ADVANCE sharply
f,oans on industrials will be called New loars
will be made only on prime ral!Toao saoGhs F,ss s
world will adjust itself 10 the new conditions & ior
the country IS undoubtedly in prosperous conu'-
As to the final value of these industrial con, cor,
solieafi9ns ts l.. to oraTsn aRg ciaSs !" 'e
The great success of the Standard Oil Company
s ALWAYS adduced by the believers in consolidation
whenever The scheme is attacked. II IS true that
This company has had enormous success. and that
the price of oil bringing il down gradually from
cellent management it has evolved methods for
last has added many hundTeds OF InlIlio1s 20 tre
wealth of the country II has MADE rs owners, n
IN the GaPass snS Eey 6y rh cohsumer ne 81 mas ' "
But il consolidation has produced all these tIhlngs
a feeling Of unrest and disquet. industrial and
serious results Every legislature in the land az
most has attacked it at one time or another II
has become a byword among all classes, and is
pointed 10 in every community as one Of the dan
gers OF me repuniic, INC oteI asa ~ - lie &
been the issue IN nolillcal canlpaisHs 4en VIZ s
were its competitors have accused its ohcers or
have sat in inquiry II. have risen against
H. criminal courts in many parts OF the country
have had its alleged crimes their dockets. or
course the greater part Of this agitation has been
gression when traced have been found 10 emanate
almost invariably from irresponsible sources. The
complaints OF unfair practices have been voiced m
generally by men who were driven 20 the wall IN
the market %lth concern so maenlhcehty organ
plants ought 20 he viewed by conservative men
as danger signal. Such complaints, persevered
opposes the idea EMBODIED in this great monopoly.
ana thar ii Is wilne 10 seize on amy pretext TO
make clear this opposition.
The great railroad combinations we have had
than tho industrial combinations. because they
are baseg on sounder CONSIDERATIONS iheIr STOCKS KS
1rehled. nor unduy inflated. But they are bad
Ard the people once aroused, are more powerful
than the railroad combinations IT is right and
proper that the capitalist who invests his money
pssnrs5 of orshle and fair return n is right
that railroads should have an agreement NOT TO cut
rates below fair profit making figure. But this
agreements-not in the sitting Of competition
Mr. HfWs article. entitled Their Advantage TO
the Public IS in the nature of reply TO Mr.. Sage
and is in part follows:
The point made by Mr.. Sage, that factory worth
$4,000 tomorrow. because il has been combined
with others under one managerial head. has not all
the force that might appear from the bald state
ment OF the facts as Mr.. Sage puts il A property
the way Of real esse. 6ading mt and plant It is
worth rather what II represents in earning ca
pacity: and. II. under a combination. its earning
capacity is trehled. because of the economy Of pro-
has been t-ebied even though nothing tangible has
been added 10 its material assets. Hard ana Iast
piece OF properly worth so9o today may be wcrth
s2OoO to-morrow. merely because some Improve
ment has been made in the neighborhood which
adds 10 the rental value Of the property in Ques-
uen lands showing evidences OF iron deposits
which, ten years ago could have been bought for
~, an t acre 90 1r even less are now worth $4,000 w
value. This fact is eXempiied every day In almost
would dream OF protesting against the increased
scb er oS5eSt 10 the placing Of oan at
ton and must he trea;ed as such.
douBtedy gsnena but ssSt @ TSy IS n Sn
u Is almost invariably unreasonable. That TO
say, an open proposition. the jority OF people
win declare themselves against these consolidations
danger that turks the trust-as they Still n ea
y, tnqegh II no longer Is a trust" in any sense
sons for their belief 'eN
There few men-that Is. comparatively few
in the community who can advance good reasons
Tor their oppositon They are the ones who have
stones they the middleen and the small conn
in the open market. To them consolidation has
been distinct injury This Is apparent. and under
aim aim in - busne sbs as n D0as is to DO the greatest
,rsr So car as we car non, ea ie sIeatest
benefited by the consultations. Almost every i'm,
individuals here and there. The building OF raii.
road into one new W te5ory pT,s the owner Of the
sprung up all over the country have done grave
keepers. But the community which is brought into
touch & & Tih the nc ,o outer ,S9 ord eg % new raTOsa and
she,s3p and quick traasp9ration by means q the
stage owners and sackmen are nnGed af thaf the the
balsaGe ICE S Is easily IN favor ot the imProyemepts
the workingman. The only asset he has to sch Is