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

By WILLIAM RANDOLPH HEARST.
(From Hearsts Maya zine, December. 1917
tn HERE are two compelling reasons
for careful thought and intelligent
legislation in regard to combination.
One reason is found IN the fact that
combination is continually increasing in
spite Of the utmost efforts Of its opponents
TO end Il.
The second reason Is found in the fact
that combination displays quito 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 ths
advantages of better organization more
effective operation and cheaper produc-
ton.
The Disadvantages Of combination arise
mainly from the misuse Of the power Of
combination. which has developed into
monopoly.
If, then, combination is inevitable and
in the main desirable, we must by care
full thought discriminate between the ad
vantages and Disadvantages Of eombina
ton, and by Intelligent legislation permit
the legitimate development Of the sdVan-
taqes Of combination and prevent the mis-
use of the power of monopoly.
The growth Of combination along harm
full lines OF coercion and oppression, or
along even the legitimate and beneficial
lines Of natural development is likely
eventually to result in monopoly
As a matter Of fact, the ultimate aim
of combination usually is virtual monop-
oily, and a Trust may be described as a
combination that has reached the stage
of virtual monopoly.
ovERcAPIrALIZATIoN 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 tho
movement to remedy Trust evils Is the
prevention OF oVeroapita zation, which in
a way stimulates and neeessitates trust
oppression, coercion and extorton
A Trust that capitalizes it's monopois-
tic power to overwor< and underpay It's
employees must oVerWork and underpay
its employees in order to pay interest on
its capitalization.
A Trust that eapitallzes its metropolis
tic power to coeroe it's agents and it's RI
walls must coeroe its agents and its rivals.
A Trust that capitalizes its monopolis-
tic power to extort high prices will and
must practice its 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 overcaptalizaton OF this power.
A Trust that capitaizes its power to
coerce snd extort is evil; but Trust
which overcapitaIizes these powers is
sw,indle.
A Trust that Is capitalized beyond the
value of Its properties is capitalized for
purposes of coercion and extortion, but
Trust which is capitalized even beyond
the value OF its monopolistic powers to
coerce and extort Is oVercaptalized for
the purpose of swndling the public, and
will inevitably swindle the public.
The only way 10 prevent the evil and
inevitable results OF illegitimate capitai-
cation of this kind is to prevent this kind
of ilegitimate capitalization.
GOVERNMENT SUPERVISION NEEDED.
Either the continued existence or the
collapse of such a 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
overcspitalization, as many corporations
as possible, and all corporations IL pos
slble, should be induced to submit their
pima of corporation to governmental au-
thority.
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 TO capitalize