The Prince George's enquirer and southern Maryland advertiser. (Upper Marlborough, Md.) 1882-1925, 1902-05-23
THE INDUSTRIAL
COMBINATIONS

If the promoters and managers of indus
trial combinations lived to the arguments
by which they seek to justify their NAM
moth consultations, the public would
have little cause to complain. Trusts, it
is alleged by the advocates and defenders
of combinations, are not oppressive mo-
nopolies created for the purpose of exact
ting eXorbitant profits from consumers.
1t is contended, on the contrary. that the
concentration of industries under one
control results in the cheapening of the
cost of production. Economies are prac-
tieed under the system of concentrated
industry which would be impossible
under other conditions. "Ruinous COM
potion" is eliminated; there is no waste
of raw material; manufacture is reduced
to an exact science. These changes in
our economic system, it is maintained,
add to the general welfare by reducing
the cost of living Is this the fact Have
the trusts redeemed their pledges
Industrial consolidation is now on trial
in the United States. Notwithstanding
the fair words and promises of those re-
sponsible for the destruction Of competi-
ton the people are growing more and
more skeptical about the advantages
which concentration will bring to con-
sumers. Defenders of the combinations
point to the low price Of oil as an evil
dence of the benefits which the control of
great industry by a trust will bring to
consumers. Compared with the cost of
oil many years ago, present prices are,
indeed, very low, and consumers have no
complaint to make on that score. Judging
by the enormous fortunes made by the
oil magnates, however, there is solid
ground for the assumption that those
who, control this industry exact larger
profits than the cost of production war
rants. The public does not know what
ratio the price it pays for oil bears to the
cost of producing it. 1t does know, how
ever, that the corporation which monopo
Lies the industry divides $40,000,000 of
dividends annually. 1t would be justified
in concluding, therefore, that a further
decrease in the price of oil would be
practicable if the oil company were salts
fed with smaller dividends. While oil
may be cheap when compared with the
prices which prevailed years ago, it may
be dear when compared with the cost of
production under modern conditions.
The sugar company controls, accord
ing to its president, more than half Of the
refining business in the United. 1t is
protected by tariff from the cane sugar
producers of Cuba and the beet sugar
produ GERS of Continental Europe. 1t is
not an absolute monopoly, but it tolerates
no competition within the territory which
it has set apart for itself. If sugar were
admitted free of duty consumers in the
United States would be greatly benefited.
Notwithstanding all the economies prac-
ticed by the sugar company, its scientific
methods of production and the advan-
distribution, Americans are compelled
to pay much more for sugar than the
British consumer. The company alleges
that the tariff on European sugar equa-
Lies the difference between the high
wages paid in the United States and the
low wages paid abroad. The theory is
that the American consumer, through the
tariff, makes the American workingman
more prosperous. The fact is that the
sugar company pockets immense divi-
dends. Only the managers know what
the cost of production is and to what ex-
tent the prices charged for sugar repre-
in the business.
Recently proceedings were instituted by
the United States Government against
Western meat packers on the ground that
they had entered into conspiracy to
raise the orice of meat to consumers. The
law officers of the Government are said
to be convinced that the alleged beef COM
bination has manipulated the market to
the injury of the consumers In the re-
port of the National Industrial Commits
sion, summarized in the Sun of February
10 last, Commissioner Phillips alleged
that monopoly of coal carrying rail
roads had, by discriminating rates, in
creased the cost to consumers of anthra-
cite over 81 a ton. Mr.. Phillips asserts
that "nine-tenths of the anthracite coal
deposits is owned and three fourthS of the
yearly product is mined by eight lines of
railroad that are substantially in entire
union of interest" 1t is evident that the
coal combine-the consolidation of min
ing interests and railroads-has not light
ened the burdens of the public. Mr.
Morgan's steel monopoly has not, so far
as known, advanced excessively the price
of street. There was no excuse for such
an advance, as the tariff insures the steel
combine handsome profit on its prod
ucts. But the company, it is alleged d, has
sold steel in Europe much cheaper than
in the United States. If it could cut
prices for the foreigner, why should it
not reduce the cost to American buyers
of its products
Before these combinations commend
themselves to the American people they
must show that the prices which they
demand for their products represent only
a reasonable profit They may be able to
prove that their charges are not rs great
as those which prevailed years ago undtr
the competitive system. That is not Il
fair standard of comparison. The true
standard would be the actual cost of pro-
duction in this age of improved machinery
and better transportation facilities. Does
the price which the combination charges
for its products bear fair ratio to the
cost of production If that is the case,
the consumer cannot complain. Ii the
combinations profits are out of proper
ton to the cost of production, then con-
sumers do not enjoy the decrease in
price to which they are entitled, although
they may pay less for the products now
than they did years ago, when individual
competition prevailed and there were no
industrial consultations baltimore Sun.