The daily telegram. [volume] (Clarksburg, W. Va.) 1901-1926, 1914-02-20
TRLJSTS
Are Discussed by the Commits
sioner of Corporations in
His Annual Report.
d AaseeIArap raEssl


in itself the seeds of It's own decay
That question Commissioner Jo-
seph u. Davies, OF the Bureau OF Cor
porations, declared, in his annual re-
port made public today, 4 federal in
vestigation now under way hopes to
answer.
In u review OF a working program
for the bureau Commissioner Davies
points out that aside from an econo-
mic study of the trust question, retail
price maintenance is one of the aues-
lions to be taken up. Trusts, their
aIficfenSy and reforms, however, are
TO comprise the principal work for
the coming year. The need OF some
federal body for the purpose OF in
yestigation and publicity in trust af-
fairs, whether 1t be the bureau of
corporations as now organized, or
commission as proposed in the pend
ing Admin 'stration bills in Congress,
Commissioner Davies, emphasizes.
In his report he discusses the
monopoly question at length, saying
in part:
.'The question is whether the trust
form of organization is really eftic-
lent. If il be found that smaIIer com
petitive units in industry can produce
comm ODDITIES more cheapIy, or even as
cheapIy as monopolistic units, and
that they have other and 3. n
vantages than those claimed for the
monopolistic or trust system, then
the problem Is finally settled in fav-|
or of the competitive system, and the
chief argument for the regulation OF
monopoly is destroyed. This is a
scientific question of fact, and 1t is
the plan of the bureau to investigate
this question.
while from a government nofrt
of view there are various aspects OF
the trust question WutE.I ~ --~.--
Importance, such as the relation OF
trusts to popular government and
their effect on the social and econom-
ic conditions of labor, there are two
aspects of it which are peculiarly
within the domain of the bureau,
namely. the effect upon the cost OF
production and distribution and the
effect upon the price to the consum-
er.
1T is contended 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 reduc-
ton in cost is accompanied by lower
prices to the consumer and does not
involve reduction in wages or an
impairment OF the conditions of Ia
Dor.
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 advan-
tages of cheaper production and dis
tribution. It is commended, on the
other hand, that the source and ORR
gin of monopoly is found chiefly in
the desire to exploit the general pub
lie by stock-jobbing schemes for the
Immediate profit of the promoters, or
for the purpose of obtaining control
OF the market and exacting unduly
high prices from the consumer.
Many large combinations have
failed and demonstrated their
economic ineficfency. Combinations
which have obtained control of the
market and it is admitted. have pros
Derad. 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 increase II
size of operations does not result II
an increase in economy and efficiency
but rather in loss and waste, so tina
the maximum efficiency is not at
tanned by large combinations, but in
stead by concerns of moderate size
If this latter contention be true, then
as has been said, the monopolistc sys-
tenn contains in itself the seeds OF its
own decay.
~,
the superior efficiency of large com.
binations contend that this claim i
made merely as q blind for the pur
nose of selling watered stock They
saw that such organizations are eStat
Ifshed for the purpose either OF get
ting control of the market and exact
ing excessive prices from consumers
or OF issuing large amounts OF wat
cred stock for the purpose of sellinf
such stock to the public. In the mrs.
case. it is argued such combinations
are not concerned with the promotion
of greater efficiency but merely WITH
obtaining a monopoly; in the second
case they are chiefly concerned witt
selling the stock, and as they can not
claim TO the general public that !
has a great value due to monopoly
thew are Obliged to find another sell.
ing argument. namely, superior ettic-
"of almost equal Importance witt
the determination of this question
of comparative efficiency is that OF
the price policy of such large INDUS
trial combinations as have achieved
! substantial control of the market
Those who aIlege that such industrial
enterprises result in greater econom'
and efficiency in production often
overlook the equally important ques-
tion whether or NOT they absorb al
the benefits OF such economies in in
creased profits without concedtng any
share thereof to labor in higher
wages or to consumers in relatively
lower prices or improved quality OF
9 1nNo n tim 0f