The San Francisco call., 1904-09-04

tion and conduct of the trust in its
present form belong the tendency 10
unscrupulous promotion. overcapitaliza-
tion and bad management
The trusts savings must be real and
legitimate II that form OF combination
is TO be JUSTIFIED economically, says
Montague In the discussion Of what
the savings Of combination are he
makes This strong point: EcoPe-ii@- =
the marketing OF product, resulting
from restricted competition, are saw
inEs par excellence 10 be distinguished
from savings in the production Of out
put resulting from concentrated CAPT
tai Thus does Montague defend the
trust. in that II makes possible this
real increment Of gain:
The prevention Of ruinous compsti-
ton and OF industrial war, the saving
Of enormous sums which vain eompe-
tition among middlemen IS everywhere
losing between producer and. consumer,
the economy 70 the manufacturer of
large scale bargaining with his banker,
with his employees and with the pro-
ducers Of raw materials. and. finally,
the usual economies Of production on
large scale--all these savings show tlle
new form Of business organization fthe
tr-ust0 70 be more economical and con-
sequently TO be more efficient than the
old"
The control Of output and OF the mar
ket the author admits TO be the great
est tr1st evil. BY Tightening out small
er competitors with great show Of
capital the trust naturally has the pow
e 10 fix its own price upon the COM
modify controlled But. says the writer:
In the persistence with which COM
petition against a trust continues. in
.he quickness with which that c0nFeii-
ton increases when opportunity. for
profit under unusual prices appears.
and in the ever-present possibility OF
competition which meets a trust al
every turn in its policy. lie the safe
guards against the abuse Of this great
power
In detailing the part played by pro-
moters and underwriters in the forma-
ton Of the trust and the direction of its
initial policy Montague follows lines
made familiar by recent revelations in
the financing Of the shipbuilding trust
and United States Steel. Overcapitali-
zstion and the floating Of watered
stock, though II harms 10 one save the
shareholders in the trust, gives TO that
form Of combination a rapidly growing
element OF actual fraud The true basis
OF capitalization should be the earning
power Of the combination. a proper
capitalization is that which SO adjusts
the amount Of securities TO the earnings
as 10 make the stock sell for its face
value"
After reviewing TO some length ..e
history Of antitrust legisl- lion, the au-
thor closes his volur-e with q critical
resume Of the practicability Uf the
many measures advanced for the con-
troll OF the monooolies- Constitutional
amendment, disturbing the present bal
ance between Federal and State com
rnercial regulation in favor Of the one
or the other. would. IN the opinion Of
the writer, but strengthen the organ
izations aimed al through the confusion
arising out OF the matter Of court ju-
risdiction- The enlargement Of the
power of Congress over interstate COM
merce 10 the extent Of putting q
ouietus 10 the interstate traffic of
overcapitalized and dangerous mo-
nopoiiss meets this question, What is
decentralization. when is monopoly
proved, and where is interstate COM
mercer
BY enforcing publicity in interstate
trading corporations" says Montague.
in his suggestion for remedial meas
ures, assuming that the trusts are
demonstrably engaged in interstate
commerce, the whole evil arising from
the form Of modern trust organization
might be corrected. BY strengthening
the interstate commerce act 10 prevent
freight discrimination the whole evil
of practical monopoly might be correct
ed. These last two remedies carry in
themselves the cure Of most trust Ills
Trusts Versus the Public Welfare"
by H. c. Richie, is an inspired philip
pic. as the title suggests Believing
that combinations Of capital for the
restraint Of competition and the public
veal are irrevocably ant1 onistic. the
writer has supplied his lack OF exact
scientific knowledge on the subject with
a wealth of invective and pseudo logic
Of the street orator variety that makes
his book interesting from one point Of
view, even II not from the one the
author would choose.