Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-01-06
TO CURB THE TRUSTS
Recommendations of Attor-
ney General Knox.
LEGISLATION ADVISED
FIRST STEP TO PUNISH DISCRIM-
INAToRY PRACTICES.
Appointment of a Commission to Ex-
anime the Whole Question
Suggested.

The recommendations of Attorney Cen
eral Knox were received by Mr.. Little
fields subcommittee on trusts of the judi
ciary committee of the House this morn
ing, just as the members of the subcom-
mittee were beginning their session. The
two hours of the session were given up en-
tirely to discussion Of the Knox state
ment 1t was in the form of a printed
pamphlet of forty-seven pages, the last fif-
teen OF which were devoted to recommen-
d&tions for legislation.
In commenting on the Attorney Generals
statements Mr.. Littlefeld said they were
most excellent. The committee, he said,
did not have time to get entirely through
the report but devoted most of the time to
the recommendations for legislation. OF
these, he said, some were new. One sug-
gested the appointment Of a commission to
examine into the whole question. Another
was that a penalty should be provided
against persons receiving rebates, as we'll
as against those who gave rebates.
Mr.. Knox first reviews the cases that
have been reviewed by the courts and those
now pending.
The Recommendations.
The recommendations respecting legisla-
ton are as follows:
Inc emu desired Dy the overwhelming ma
jority of the people of all sections of the
country Is that combinations of capital
should be regulated and not destroyed, and
that measures should be taken to correct
the tendency toward monopolization Of the
industrial business of the country 1 as
sumo thing to be avoided, even by sug-
gestion, is legislation regulating the bust
ness interests Of the country beyond such
as will accomplish this end
In my judgment, a monopoly in anv in
dustry would be impossible in this country,
where money is abundant and cheap and
In the hands or within the reach of keen
ana capable men, if competition were as
sureo OF a fair and open field and protected
against unfair, artificial and discriminating
practices.
TWO or more persons or corporations can
not by any combination or arrangement he
tween themselves either contract or expend
tne rights OF others to engage in a similar
business. The utmost they can do is to dis
courage the disposition to do so by restrict
ing the opportunities, or by securing to
themselves some exclusive facilities or the
enjoyment OF some common facilities upon
exclusive terms.
II the law will guarantee to the small
producer protection against piratical meth
ods in competition and keep the highways
TO the markets open and available to him
Tor the same tolls charged to his powerful
competitor he will manage to live and
thrive to an astonishing degree.
1ndlViduallsm in production has its adj
Vantages as well as combination. Small in
div1dual enterprises not uncommonIy spring
up and thrive within the shadow Of the
larger ones, though enjoying none of their
supposed advantages of control of sources
OF raw material, fuel and TRANSPORTATION
facilities, yet realizing large profit per ton
OF output because of the closer economies
possible through direct personal interested
management Indeed. it is true that the
great concerns whose stocks have been
gathered In by the holding companies Uhe
real trusts are themselves largely but ag-
gregations of successful smaller ones
which, one by one, have made their COM
petition so severely felt by an ambitious
rival that he has absorbed them
l believe the rebates and kindred advan-
tages granted by carriers to large opera
tors in the leading industries of the coun-
try, as against their competit in MANY
years amounted to sum that would rem
resent fair interest upon the actual money
invested in the business of such operators.
Effect Of Monopoly.
If substantially all Of given business Is
controlled by one company, the more
threatening to potential competition does
this iniquity become. and with greater
timidity does such competition approach
the field.
In some respects the holding company is
weaker than its Independent rivals 1t pays
as much. If not more, for labor. Advantage
In the saving of an intermediate profit
upon raw material and fuel is largely offset
by the enormous cost of the sources of sup
ply represented in high capitalization.
This capitalization, in almost every case
of a holding company, represents far more
than the aggregate intrinsic value of it's
constituent companies. The method of COM
putting values for purpose of concentration
has invariably been upon earning power
and rebates have frequently swelled earn
ings so that enormous volumes of capital
stock represent nothing but unfair advan-
tage obtained over rivals.
The situation Is much improved in respect
to transportation determinations within the
last two years. This Is the result, first, of a
determined effort upon the part Of the gov
ernment to apply existing laws in an effec-
tive way against discrimination, and. sec
ond, to the fact that some of the higher
minded railroad managers of the country
have eXerted their large influence in the
direction of equitable dealing with the ship
pers of the territory which they serve.
whether 1t Is a consequence of these intiu-
ences or a mere coincidence, it Is neverthe
less stated ON high authority to be a foLt
that the embarkation of new capital in en-
terprises in competition with the supposedly
controlled industries within the period
named probably equals the capital of the
trusts. The effect of certainty of protec-
tlon against predatory competition can be
safely prophesied to increase this figure.
The country is filled with men whose lives
nave DeSI ueVOIeu TO INDUSTRY, VINO nave
developed and made profitable the prop
critics now possessed by the trusts at prices
far in excess of the cost Of modernizei
duplicates, who will not long remain idle
when assured that their capital and expert
ence can be securely employed in the bus-
ness to which they were trained.
Too much has been conceded in public dis
cussion to the trusts in this respect. Or.
ganiZations in one state to control produc-
ton in other states of commodities con-
sumed in all the states are as a rule devices
OF shrewd men to capitalize for their own
tenefit the country's prosperity They are
begotten in prosperous times. Poor times
offer no inducements. They are essentially
different from the combinations effected by
producers, of their own motion, for eco
nemic reasons. Those which have been
recklessly conceived contain within them
selves the germ Of their own undoing They
have, as rule, only acquired the owner
ship of the stocks of the industries of the
country which had already attained their
gigantic stature. Their existence does not
increase the productive capacity of the
country, except high prices of products
have stimulated competition. nor have they
because Of their existence increased de-
mand as the demand for products has
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