The Prince George's enquirer and southern Maryland advertiser. (Upper Marlborough, Md.) 1882-1925, 1912-08-09
Friday, August 9, 1912
PROTECTIVE TARIFF BLAMED

Ascribing the growth of trusts
and combinations to the protec-
tive tariff, John Moody, a we'll
known writer on trusts, has issu-
ed a statement in which the trusts
have grown in recent years, with
special reference to their growth
under protection. Mr.. Moody
says 5:
''At the close of 1902, trust
capitalization had leaped to S.
723, TAI, $50, represented by 1876
industrial trusts. which embrace
ed no less than 3, 1854 plants.
AT the close Of 1902 there
was widely held theory that
the trend toward industrial con-
solidation had reached its limit.
Subsequent events, however,
have proven the soundness of
this idea. For steadily, through
out every year of the past decade
trust capitalization has continu-
ed to increase. By the end of
1905, the year in which Theodore
Roosevelt began his second ad-
ministrationi the figure had risen
to S6,S43, S91, 760, and in the
year when Mr.. Taft entered the
White House a further expansion
to 1850, 004, 900 was shown.
And now, with Taft closing his
term, we note that, notwithstand-
ing the so-called trust prosecu-
tons and the enforcement Of the
Sherman law, the total industrial
trust capitalization has reached
the total of So, 066, 200, 861.
This, moreover, does not in
clude industrial concerns which
are not trusts. There are thou
sands of manufacturing concerns
which are not trusts. There are
thousands of manufacturing con-
Germs enjoying the benefits Of
the tariff which cannot be includ-
ed, strictly speaking in any of
the trusts. The Governments
Federal corporation tax report
FOR 1911 shows that the total
capitalization represented by in
dustrial concerns was about S26,
900, 900, 900. This includes the
many close corporations, con-
Germs of small capital which,
while industrial, are not trusts
in the ordinary understanding of
the term.
1T will be noted that the
growth of trusts during Mr..
Taft's administration has practi-
cally all been accomplished since
the enactment of the present
Payne tariff law. i
Industrial trusts, like fran
chise trusts and railroad trusts,
have all adopted the method,
during the past generation, of
capitalizing, not only the origin
al and current investment in the
plants and property, but also the
net profits which can be shown.
Thus, it is apparent that in the
case of those trusts which have
been built up chiefly on trriff
benefits, large part of the net
profits shown, and in some cases
tWo-thirds or three-fourths of
the profits, are the direct result
of the protective legislation which
they have received.
Industrial combinations, in
the great majority of cases, have
been found primarily for the
purpose of controlling or advanc-
ing prices to the consumer,
While the theory has been per-
sistently urged for many years
that the main purpose of combina-
ton was to reduce producing and
operating costs, and thus increase
profits without the advance
ment of prices, yet the records
show during the entire trust era
go to prove that such has not
been the case. The great en-
largement in profits has for the
most part been accomplished by
price advances and not by cost
curtailment.
Never in our history, perhaps
Except in war periods has the
price level risen faster than it
rose during the first few years
after the passage Of the Dingley
tariff act in 1897, and during the
period when trusts were forming
most rapidly. From July 1, 1897,
to January l, 1900, the cost OF
living advanced 81 per cent.
From July l, 1897, to May l, 1902,
the cost Of living advanced Al
per cent. That the trusts were
largely responsible for this great
advance is clear from the fact
that from July /, 1897, to Janu-