The Montgomery advertiser., 1903-01-07
ARGUMENT or KNOX.
He Gives His Views to Messrs. Hoar
 and Littlefield.

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 and Littlefeld.
 Washington, Jan. 6.--Attorney General Knox has addressed identical letters tc Senator Hoar, Chairman of the Senate Judicary Committee, and Representative Littleheld, Chairman of the sub-commit- tee of the House Judiciary Commissio on giving his views on the subject of trusts These letters are in reply to communica- tions sent him by Senator Hoar and Mir. Littlefield asking the views of Mir. Knox The letters embrace three subjects, the questions which have been decided by the courts, the questions which are pending in the courts and suggestions respecting further legislation.
 Under the latter head Mir. Knox says:
 'In view of the wide experience of the committee in dealing legislatively with legal and economic questions venture upon the line of suggestion with much hesitation and feeling that the utmost the committee desires in this respect Is that some concrete thing be set down that may be considered in connection with other views that may be presented as to what must be done in the short period allowed for consideration, during the life of this present Congress. think 1t proper enough to briefly premise such suggestions as I shall make for fm- mediate action by statement of some of the reasons upon which they are based.
 Should Be Regulated.
 ''The end desired by the overwhelming majority of the people of all sections of the country is that combinations of capt. tai should be regulated and not destroyed and that measures should be taken to correct the tendency towards nlonopoliza- ton of industrial business of the country. I assume a thing to be avoided. even by suggestion, is legislation regulating the business interests of the country beyond such as will accomplish this end.
 'In my judgment. a monopoly in any industry would be impossible in this country, where money Is abundant and cheap and in the hands or within the reach of keen and capable men if com petition were assured of fair and open field. and protected against unfair arti- flcial and discriminating practices.
 1.-TWO or more persons or corporations cannot by any combination or agreement between themselves either contract or ex- pand the rights of others to engage in q similar business. The utmost they can do Is to discourage the disposition to do so by restricting the opportunities, or by se- curing to themselves some exclusive fa- cilities or the enjoyment of some common facilities upon exclusive terms.
 Small Enterprises.
 'If the law will guarantee to the small CT producer protection against piratical methods in competition and keep the high ways to the market open and available to him for the same tolls charged his powerful competitor. he will manage to live and thrive to an astonishing degree. Individuallsm in production has its ad- vantage as well as combinations. Small individual enterprises not uncommonly spring up and thrive within the~shadow of larger ones. though enjoying none of the supposed advantages of the control of the sources of raw material, fuel and transportation facilities, yet realizing large profits per ton of output because of the close economies possible through di- rect, personal, interested management.
 Indeed. 1t is true that the great con- cerns whose stocks have been gathered in by the holding companies (the 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.
 Value of Rebates.
 T believe the rebates and kindred ad-
 
 operators in the large industries of the country as against their competitors in many instances amounted to a sum that would represent far greater amount than the interest upon the actual money invested in the business of such opera tors.
 If substantialiy all of a given busi- ness is controlled by one company, the more threatening to potential competition does this inqulty become and with greater dmidity does such competition approach the field. In some respects the holding company is weaker than It's independent rivals. It 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 supply. represented in high capitalization.
 This capitalization, in almost every case of holding comapny, represents far more than the aggregate intrinsic value Of it's constituent companies. The method of computing values, for purposes of con- centration, has invariably been upon earning power and rebates have fre- quently swelled earnings so that enorm- ous volumes of capital represent nothing but unfair advantage obtained over rivals.
 The situation is much improved in respect to the transportation discrlmina- tons within the last two years. This is the result. first of a determined effort upon the part of the government to ap- ply existing laws in an effective way against discrimination; and second, to the fact that some of the higher minded railroad managers of the country have exerted their large influence in the direc- tion of equable dealings with the ship pers of the territory which they serve.
 Independent Capital.
 Whether 1t is a consequence of these influences or a mere coincidence, 1t is nevertheless stated on high authority to be fact that the embarkation of new capital in enterprises in competition with the supposedly trust controlled industries within the period probably equals the capital of the trusts. The effect of cer- tainty of protection against depredatory competition can be safely predicted to increase this figure.
 ''The country Is filled with men whose lives have been devoted to industry, who have developed and made profitable the properties now possessed by the trusts at prices far in excass of the cost of modernized duplicates, who will not long remain idle when assured that their capi- tai and experience can be securely em- ployed in the business to which they were trained.
 'Too much has been conceded in public discussion to the trusts in this respect. Organizations in one State to control pro- duction in other States of commodities consumed in all the States are. as a rule, devices of shrewd men to capitalize for their own benefit the country's prosperity. They are begotten in prosperous times.