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

(From Hearsts Magazine. December, 1911
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 It's opponents
TO end It.
The second reason is found in the fact
that combination displays quite as den
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 cheaper produc-
ton.
The disadvantages Of combination arise
mainly from the misuse Of the power OF
combination which has developed into
monopoly
", then, combination is inevitable and
in the main desirable, we must by care
fuI thought discriminate between the ad-
vantsses and disadvantages of eombina-
ton, and by intelligent legislation permit
the legitimate development Of the advan-
tageS OF comDinatlon ana pToVe"t tno
use OF tho power of monopoly.
The growth Of combination along harm
full Iinez 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 Trust may be described as a
combination that has reached the stage
Of virtual monopoly.
ovERcAPITALiZATIo 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 oVerespitalizaton, which In
a way stimulates and necessitates trust
oppression, coercion and extortIon.
Trust that capltalzes Its nonopolis-
tic power 10 oVerwork and underpay its
employees must overwork and underpay
It's employees in order to pay interest on
its capitalization.
A Trust that oapitazes its metropolis
tic power to ooeroe its agents and Its ri
walls must ooeroe it's agents and its rivals
A Trust that oapitaizes it's monopolis-
tic power to extort high prices will and
must practice It's monopolisto 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 overeapitalization OF this power
A Trust that eapitalizes it's power to
ooerco and extort is an evil; but . Trust
which overespitazes these powers is a
swindle.
A Trust that is capitalized beyond tho
value of its properties is capitalized for
purposes of coercion and extorton, but a
Trust which is capitalized even beyond
the value of it's monopostio powers to
eoerce and extort is overcapitalized for
the purpose OF swindling the public, and
will inevitably swtindle the public.
The only way TO prevent the evil and
lneNlldple results OF lteRltlmate Capttan-
zation 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-
srable as that may be. is not so much a
requirement the prevention of the
formation OF such enterprises
Both tho capitalization Of the power TO
plumber and excessive capitalization for
purely speculative purposes can be pre-
vented and must be prevented.
To prevent illesltimate and injurious
overespitalization. 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