The citizen-Republican. (Scotland, Bon Homme County, S.D.) 1???-19??, 1914-03-12
EFFICIENCY Of BIG
TRUSTS QUESTIONED;
SOLUTION IS near
Inquiry May Show that the Monopo.
lies Contain Within Themselves
the Seeds of Their
Own Decay.

lol, -. ", SpeClAl.-DOSS tIo
~monopolistic system contain in itslef
the seeds Of its own decay?
That question Commissioner Joseph
y. Davis, Of the bureau of corporations,
declared, In his annual report mad
pubic today, a federal investigation
now under way hopes to answer.
In a review Of a working program for
the bureau Commissioner Davis 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 efficiency
and reforms, however, are to comprise
the principal work for the coming year.
The need Of some federal body for the
purpose Of investigation and publicity
IN trust affairs, whether it be the
bureau Of corporations as now or
ganized, or a commission as proposed
IN the pending administration bills in
congress, Commissioner Davis en-
phasiZed.
In his report he discussed the
monopoly question at length, saying in
part:
The question is whether the trust
form OF organization is really efficient.
II 1t be found hat smaller competitive
units In industry can produce COM
cheaply as m~onopolistic units, and that
they have other and greater adj
vantages than those claimed for the
m~onopolistic or trust system, then the
problem is finally settled in favor of
the competitive system, and the chief
monopoly is destroyed. This is a
scientific question Of fact, and it is the
plan Of the bureau to investigate this
question.
While from a governmental point Of
view there are various aspects Of the
n Nyncfso rr-I $50 -
portance, such as the relation Of trusts
to popular government and their effect
on the social and economic conditions
OF labor, there are two aspects Of 1t
which are peculiarly within the domain
OF the bureau, namely, the effect upon
the cost Of production and distribution
n the effect upon the price to the
consumer.
ut is contended by some that with
the increase in the size of Industrial
enterprises there goes a reduction in
the cost OF extraction, manufacture,
n distribution, and that such re-
duction in cost is accomplished by
lower prices to.the consumer and does
not involve q 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 pro-
luction and distribution. 1t is contend
I'd. on the other hand, that the source
md origin Of monopoly is found chiefly
ii the desire to exploit the general pub
ic by stock jobbing schemes for the
immediate profit of the promoters, or
or the purpose of obtaining control of
he market and exacting unduly high
ices from the consumer.
Many large combinations have failed
ID demonstrated their economic inef-
tuiency. Combinations which have OBJ
!Hed control of the market and. it is
Omitted, have prospered, but this is
! LEGGED to be due to their m~onopoliStic
Nsition. and not to superior efficiency
4cording to those who hold this view
ere is a point beyond which the in
ease in size Of operations does non
suit in an increase in econom ana
5liciency, but rather in loss and waste
y that the maximum efficiency is MOI
ttained by large combinations, but III
tead by concerns of moderate size. Il
MS latter contention be true, then, as
as been said, the monopoiistic system
ontains in itself the seeds of it's own
ecay.
again, some of those who dispute
he superior efficiency Of large COM
Dinations contend hat this claim is
made merely as a blind for the purpose
Of selling watered stock. They say
that such organizations are established
for the purpose either of getting con-
troll of the market and exacting Excess
sive prices from consumers, or of is
suing large amounts of Watered stock
for the purpose of selling such stock to
the public. In the first case, it is
argued such combinations are not con-
cerned with the promotion of greater
efficiency but merely with obtaining a
monopoly; in the second case they are
chiefly concerned with selling the stock,
and as they can not claim to the gen
eral public that it has a great value
due to monopoly, they are obliged to
find another selling argument, namely,
superior efficiency.
"Of almost equal Importance with the
determination Of this question of COM
parative efficiency is that of the price
policy of such large industrial combin-
ations as have achieved a substantial
control Of the market. Those who al
lege that such industrial enterprises
result in greater economy and eff
cheney in production often overlook the
equally important question 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 in rela-
lively lower prices or improved quality
of goods. etc. The determination Of
: the facts in respect to this question also
q might not be such as to establish broad
congratulations or conclusions. but the
> Importance Of having the facts Is none
the less obvious"