Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-04-20
AGAINST COMBINES
Effect of the Recent Merger
Decision.
FOOD FOR THOUGHT
WILL BE DISCUSSED IN CONGRESS
NEXT WINTER.
Much Interest in the Policy to Be
Adopted by the Bureau Of
Corporations.

The decision in the merger suit is giving
considerable food for thought to public
men, The courts decision in the case OF
the Northern Securities Company is sure to
give rise to interesting discussions in Con-
| gress and to propositions for additional leg
islation in view of the new phase the trust
| question has taken on because Of that de-
| cision.
| What the trusts themselves will propose
| in order to meet the Interpretation of the
/ law that it is very generally believed Will
| prevail in the United States Supreme Court,
| because Of the unanimity of opinion CT
/ the four circuit court judges who passed
l upon the merger suit, is still matter for
| speculation. But men in Congress are al
| ready endeavoring to size up the situation
| as It will be presented to Congress. This
| decision not only stands in the way of COM
binations of railroads, but Is believed by
| many to apply to industrial organiza tions
| also. and it Is confidently believed that
some means will be sought to nullify it's ef-
| feet
The Public Objection.
| 1t is suggested that practically the sole
objection on the part Of the public to COM
binations Of all sorts Of transportation, in
dustrial and commercial agencies is based
| suit in an increase of the price of such
service to the public. The public believes
| that when once power to increase prices Is
secured by an elimination Of competitive
| forces then there will be an abuse of that
] power by making the cost to the shlpper
| and to the consumer as high the traffic
| or the market will stand. 1t is believed
| there will be only one fear on the part OF
| the managers of such great corporations
| to prevent such increases. which will be
| that If the price is placed too high 1t Will
| be prohibitive. What the prohibit1ve price
| in transportation or trade Is has not yet
been established in most lines OF activity.
In a general way it is said that price
| becomes prohibitive as soon as 1t results
! In a material decrease in the trade But
| the corporation will not be interested in
| the decrease in trade until that decrease
| with the higher prices is so great as to
| affect the net profits. There Is another
| safeguard for the public, which Is the
| danger to the corporation OF creating COM
| petition under even the most adverse cir
| cumstances by the stimulating effect Of the
| higher prices.
| the consumers is feared, it is quite gener-
| ally acknowledged that economies do
| suit from such combinations, the complaint
being that the economy is made for the
| benefit of the capital involved, rather than
for the public at large. The suggestion is
made that If some way were devised by
which the public could reap the benefit Of
combination popular objection to it would
| be largely appeased
Bureau Of Corporations.
| A method by which this can be done is
subject very likely to receive considerable
attention on the part of legislators. The
| power of the bureau Of corporations of the
| new Department of Commerce is now be-
leved to be sufficient to allow that bureau
| to ascertain accurately the cost of manu-
featuring any commodity The same could
be done by the interstate commerce COM
mission in relation to the business of inter-
| state railroads. 1t Is suggested that If 1t
| can be ascertained what the cost has been
| in the past it might readily be possible,
| through the instrumentality Of national
| tions with the restriction that the ratio be-
| tween the cost of the product and the price
at which 1t Is sold shall not be increased
| under combination. 1t Is said that If 1t
| should be proved practicable to carry out
| such a plan the result would be that the
| public would receive a large share of the
| benefits of economies incident to combina-
| ton.
Applying this principle to Transportation
| In the case of the railroads affected by the
| merger suit, 1t would be the duty Of the
| interstate commerce commission to ascer-
tain the cost of transportation by the Great
Northern and by the Northern Pacific roads
under present conditions Of competition, or
| by having the traffic carried by two roads
with entirely separate management. If un-
der national incorporation act these roads
were permitted to consolidate, then the
| economy incident to that consolidation
would be ascertained and the price to the
| public for such transportation would be de-
| creased to the same extent that the cost
had been decreased. While interstate
transportation companies would come un-
der the control of the interstate commerce
| commission, other forms of industry would
In the same manner be brought under the
| bureau of corporations of the Department
Of Commerce.
A Subject for Discussion.
While this suggestion may be regarded
as vague in the manner of its practical
| execution, 1t is believed to contain a CEN
| trail thought of such Importance as to
| make it a subject for discussion. The
| economies of large combinations have been
| put forward on many occasions as suffi-
| cient justification for their existence The
combinations have been opposed largely
| on the ground that they have in so many
cases been found to be the means for in
| creased prices. If plan could be devised
py WINCH without question, these econo-
| mics could be reaped by the public 1t is
| thought by many that 1t might not be i'm
| possible to create a common ground on
| which the consumer and the producer
| might stand.
The course that will be taken in the con-
| duct of the bureau of corporations is be-
| ing looked forward to with the greatest
| interest by students of the trust problem
| 1t will probably be some months before anv
policy In the conduct of that bureau is
| put into effect. The bureau is now receiy-
| Ing voluntary statements from various in
| surance companies in line with the pub
| licity features of the law. Insurance COM
| panfes are showing a strong inclination to
| cooperate in the execution of this law
| But when 1t comes to classes of corpora
! tions that will not wish to make known
l their business the experience of the bureau
| may be different While the law empowers
| the Department of Commerce to do many
! things in securing information in relation
to corporations, its execution will be dis
| cretionary rather than mandatory Infor-
nation concerning corporations may be
! called for in the discretion of the commits
| sioner of corporations, who shall have
power and authority to make, under the
| direction and control of the Secretary of
| Commerce and Labor, diligent investigation
| into the. organization, conduct and man.
! agement of the business of any corpora
| tion,' etc. After the organization of the
| bureau has been fully effected and Secre-
| tarY CortelYou has taken oyer the entire