Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1903-09-03
EAR ASSOCIATION ON TRUSTS.
Advocates That They Be Suppressed by Taxa
ton or Government Competition,

national bankrupt law, and then discussed
the trust question. He said it would have
to be settled by the lawyers; if they did
not, the demagogues would. If combina-
tions continue, competition will cease, and
commercial jurisprudence will evidently be
entirely changed. The committee, he said
had reached the unanimous conclusion thai
modern industrial combinations should bt
stayed.
The report says the subject Of trusts j!
the most important question now before thu
American bar 1t says combinations arr
rapidly driving out of business the small
dealer and the small producer. These two
classes heretofore have furnished the larges
number of petitioners, but now industrial
combinations Of gigantic magnitude, TOT
large for a bankruptcy court to manage
and too rich to need ever be called before
it, have been submitted. The report adds
s'The modern combinations primary
object is to control trade and commerce il
plain articles of production, and substitute
more or less perfect monopoly in the plact
of more or less free competition. Il
changes entirely the basic principal of com
mercial relations between man and man
and if they are to continue to grow an6
develop in the future as in the past will
render necessary most important changes
in the principles of our commercial laws.
Coordination as an economic force i:
fast coming to take the place of competition
The producers are combining, transporta
tion companies are combining, tradesmer
are combining, workmen as well as EN-
ployees are combining, every thing seems
to be combining in some form of combina
ton, and everybody seems to be a com
biner. The competition that still remains
is fast disappearing. Workmen are refus
ing TO compete for jobs, labor unions are
enlarging the spheres of their activity, and
extending their operations.
''The union of the employees is still
stronger and more far-reaching than the
union of workmen We are now having
combinations of combinations. The United
States Steel corporation is a combination Of
a dozen heretofore competing producers
who themselves were combinations of still
other producers, and these, in turn, often
combinations of still others. To trace them
back to their beginnings is like discovering
all the multitude of sources that 90 to make
up the volume of the swollen Mississippi.
"The property which the Amalgamated
Copper company now controls was once,
perhaps, thousand mining claims, each
one very likely owned in common by halt
dozen miners. The department store trust
has combined the business of hundreds Of
merchants, some portions Of which they
acquire by purchase and others in some
other way. 1t is estimated that the Stand
ard Oil company has taken, by contract or
by force, the business of 10000 corpora
tions and merchants in all parts of the union.
The few present great railroads lines of the
country have been formed by the combina-
tions of hundreds of smaller lines, some
extensions Of one another, and others COM
peting lines.
''The ambition of the shipping trust
perhaps the pet project of the great Ameri,
can combines, has been to control all the
ships that sail the ocean. A hundred years
ago there were hardly two ships owned by
the same individual or corporation, and
even fifty years ago there was scarcely q
ship-owner, individual, or corporation thai
owned a half dozen ships.
mo one knows but that within the next
ten years greater than J. Pierpont Nor
gan will arise, who will combine into one
organization all the industries Of the land
so that the workmen who works for wages
can find but one possible employer and the
purchaser of wares but one possible seller
The steps toward the formation of ont
universal industrial corporation which shall
crowd out all other corporations and assume
to itself all the industries Of the land have
been already more than half taken. 1t is
not so far to go from now to that end, al
we had to go to reach present industrial
conditions.
"A monopoly is economically desirable
that is for the monopolist. The United
States Steel corporation can produce nC
matter what it sells them forts good;
cheaper than the elements out of which thu
combination is composed ever produced
them. The Standard Oil company is econ
omically holy, for it pays 40 per cent. divi
dends. The sugar trust is economically
correct, for whereas the individual sugal
refners lost money on small capitalization
the sugar trust pays big dividends on a large
capitalization. The railroad combinations
are economically impregnable for they pay
IF Mr.. Morgan's shipping trust and Mr.
Schwab's shipbuilding trust are failures
they are exceptions to the rule. We can
not therefore rely on natural forces, OF
the laws of supply and demand, or OIL
economic considerations, to limit the growth
of modern combinations. If they are un
desirable, if the people of the American
nation would be better off without them OF
with limitations put upon them, they mus
put those limitations on by the action o.
their legislatures, their congress, and theil
courts. The American bar must act, and
the American Bar Association must TAKE
the lead. If the Northern Securities cor
poration had been allowed to go on the
next thing to follow would naturally have
been a United States securitis company,
which would hold the majority Of the
stock of every railroad where the American
flag flies"
The report proposed the following RENE
dies =
''First-We can tax them to death; or,
if that is too radical remedy, we can tax
them until their growth and enlargement is
impeded. There are constitutional pro-
visions requiring direct taxation to be uni
form, and in view of these provisions it is
probably impossible to discriminate in the
matter of direct taxation against corpora
tions holding large amounts of taxable
property. There is, however, a franchise
tax imposed by most of the states upon
corporations at the time of their corpora
lions and annually thereafter. This fran
chise tax is in almost all states in some way
graded so as to tax the small corporation at
a higher rate than the large one. The first
million dollars pays a higher rate than
millions. In our Judgment the
graduation should be continued, but it
should be a grading up instead Of down.
We would leave, perhaps, the first hundred
thousand free and the first million cheap,
and raise the rate with each succeeding
million. The United States corporation
now has capitalization of something over
one thousand millions. The graduation stages
might be slow and easy enough to please
the most conservative, and yet result in a
taxation of 10 per cent on the last hundred
millions. How long would the United
States Steel corporation continue under that
system of taxation
''Second-We can compel them to render
better and cheaper service. If the COM
bination of the Northern Pacific and the
Great Northern railroads is a great enough
public disaster to have warranted the atten-
tion which it has attracted, it could have
been prevented much easier than by hun
dred Sherman antitrust laws. by a single
United States statute that required any
engaged in interstate COM
merce to reduce its rates so per cent to and
from every point where competition has
been prevented by combination, merger,
common control, or agreement Congress
Gan enact that any corporation or individual
that engages in Interstate commerce must