El Paso herald. (El Paso, Tex.) 1901-1931, 1914-02-20
FEDERAL INQUIRY
PROBES TRUSTS
Benefits or Injuries Of Mo
nOpoies VIII Be Deter
mined, Davies Asserts.

Washington, D. c., Feb. 2O.-A fed
eral investigation now under way Will
answer the question Of whether or not
mOnOpolies are beneficial, and whether
or not the monOpOhstic system con-
rains within itself the seeds Of decay.
This is a leading statement OF
Joseph z. Davies, commissioner OF the
FEDERAL bureau of corporations, IN his
annual report.
In review Of a working program
for the bureau commissioner Davies
points out that aside from an economic
study Of the trust question, retail price
maintenance is one Of the questions
to be taken up. Trusts their efficien-
cy and reforms, however, are to COM
prise the principal work for the COM
ing year. The need Of some federal
body for the purpose Of investigation
and publicity in trust affairs whether
1t be the bureau Of corporations as
now organized, or a commission as
proposed in the pending administration
bills in congress, commissioner Davies
emphasized.
In his report he discussed the mo-
nOpoly question at length, saying in
part:
Is Trust Form Efficient
1.-THE question is whether the trust
form Of organization is really efficient.
If it be found that smaller competitive
units in industry can produce commod-
tiles more cheaply, or even as cheaply
have other and greater advantages
than those claimed for the monopolis-
tic or trust system, then the problem IS
finally settled in favor of the COM
petitive system, ard the chief argu-
ment for the regulation Of monopoly
is destroyed
Prices Higher or LOwers
at IS commended by some that with
the increase in the size of industrial
enterprises there goes a reduction in
the cost Of extraction, manufacture and
distribution, and that such reduction
in cost is accompanied by lower
price to the consumer and does not
involve a reduction in wages or an
impairment of the conditions OF labor.
Even if these claims were true the
question would still remain, of course,
whether the evil resulting from large
combinations would not be greater
than the alleged advantages of cheaper
production and distribution. It is con-
tended on the other hand, tnat the
source and origin Of monopoly IS
found chiefly in the desire to exploit
the general public by stock jObb1ng
schemes for the immediate profit OF
the promoters, or for the purpose OF !
obtaining control Of the market and
exactin'g unduly high prices from the
consumer.
"Nanv large combinations have
failed and demonstrated their econom-
ic inefficiency. Combinations have OBJ
admitted, have prOspered. But this is
alleged to be due to their mOnOpOlistic
position, and not to superior efficiency.
According to those who hold this view
there is a point beyond which the IN
crease in size of operations does not
result in an increase in economy and
efficiency, but rather in loss and
waste.
Price Policy Important.
"Of almost equal Importance with
the determination of this question OF
comparative efficiency is that Of the /
price policy Of such large industrial |
combinations as have achieved sub /
stantial control of the market. Those (
who allege that such industrial enter !
prises result in greater economy and /
efficiency in production often over
look the equally important question
Of whether or not they absorb all the !
benefits of such economies in increased /
profits without conceding any share |
thereof to labor in higher wages, or |
to consumers in relatively lower prices !
or improved quality of goods, etc. The I
determination of the facts in respect !
to this question also might not be such !
as to establish broad congratulations /
or conclusions, but the Importance Of !
having the facts is none the less OBJ /
ViOuS."