Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-01-28
By WILLIAM RANDOLPH HEARST


Hrom Hearsts Magazine December 1910
III HERE are two compelling reasons
for careful thought and intelligent
legislation in regard 10 combination
One reason is found in the fact that
combination is continually increasing in
spite Of the utmost efforts OF hs opponents
to end IT,
The second reason is found in the fact
that combination displays quite as def
mite advantages as disadvantages, and the
necessity for preserving those advantages
is as urgent as the necessity for elimi-
mating the disadvantages
The advantages Of combination are the
advantages OF better organization, more
effective operation and cheap per produc-
ton.
The Disadvantages OF combination arise
mainly from the misuse OF the power OF
combination, which has developed into
monopoly
II, then, combination is inevitable and
in tho main desirable, we must by care
fui thought discriminate between the ad
Vantages and disadvantages OF corbina
ton, and by intelligent legislation permit
the legitimate development Of the adVsn.
tages OF combination and prevent the mis-
use OF the power OF monopoly.
The growth OF combination along harm
fu lines Of coercion and oppression, or
along even the legitimate and beneficial
lines OF natural development is likely
eventually to result in monopoly
AS matter Of fact the ultimate aim
Of combination usually is virtual monop-
oily. and a Trust may be described as
combination that has reached the stage
Of virtual monopoly.
ovERcAPlTALlZATloN FORBIDDEN
The conspicuous evils Of the Trusts are
oppression Of employees. coercion OF
agents and competitors and extortion
from the public
Another evil OF Trust conditions is the
capitalization Of the power to Cypress, to
coerce and to extort
An essential and initial step in the
movement to remedy Trust evils Is the
prevention OF overcapitalization, which in
way stimulates and neoessitstcs trust
oppression, coercion and extortion.
Trust that capitaizes it's rnonopols-
ito power to over~ork and underpay it's
its employees in order to pay interest on
it's capitalization.
Trust that eapitalizes its noonopoIis-
tic power to coeree it's agents and its RI
walls must eoeree it's agents and its rivals.
Trust that captaIizes its monopolis-
tic power to extort high prices will and
must practice it's monopolistic power to
extort high prices
Capitalization OF Trust matters. then, is
one of the abuses Of the Trusts and one
Of the incentives to Trust abuses
But there is an evil even more threaten
ing than the capitalization of the Trust
power to coerce and extort, and that is
the capitalization OF this power
A Trust that eapitslizes its power to
eoerce and extort is an evil; but a Trust
which oVeroapitslizes these powers is
swndIe.
A Trust that is capitalized beyond the
value of it's properties is capitalized for
purposes of coercion and extortion, but
Trust which is capitalized even beyond
the value of it's monopolistic powers to
ooeree and extort Is overcapitaiized for
the purpose of owindlins the public. and
will inevitably swinde the public.
The only way TO prevent the evil and
inevitable results OF Legitimate capitali-
cation Of this kind is to prevent this kind
Of illegitimate capitalization.
GOVERNMENT SUPERVISION NEEDED.
Either the continued existence or the
collapse of such Trust is a calamity.
and the punishment OF its promoters. de
sirable as that may be. is not so much a
requirement as the prevention of the
formation OF such enterprises
Both the capitalization Of the power to
plumber and excessive capitalization. for
purely speculative purposes can be pre-
vented and must be prevented.
To prevent Legitimate and injurious
overcspitallzation, as many corporations
as possible, and all corporations Is pos.
sible, should be induced to submit their
pima of corporation to governmental au.
thorty.
This governmental authority. in the in
terests Of the investing public and in the
interests OF the consuming public and in
the interests of sound business methods
and stable business conditions. should
compel every corporation 10 capitalize