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

By WILLIAM RANDOLPH HEARST.
tFrom Hearsrs Magazine, December 1917
. HERE are two compelling reasons
for careful thought and intelligent
legislation in regard to combination.
One reason is. found in the fact that
combination IL continually Increasing IN
spite Of the utmost efforts Of Its opponents
to end It.
The second reason is found in the fact
that combination displays quite as def
mite advantages az 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.
II. then, combination is inevitable and
in the main desirable, we must by care
fui thought discriminate between the adj
vantages and Disadvantages Of eon1bna-
ton, and by intelligent legislation permit
the legitimate development Of the advan-
tages Of combination and prevent the mis-
use Of the power Of monopoly
The growth Of combination along harm
ful 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
combination that has reached the stage
Of virtual monopoly.
oVERCAPlTALlZATIo FORBIDDEN.
The conspicuous evils of the Trusts are
oppression Of employees, coercion OF
agents ana competitors, and extortion
from the public.
Another evil Of Trust conditions Is the
capitalization Of the power to Cypress, to
coeree and 10 extort
An essential and initial step In the
movement to remedy Trust evils IS the
prevention Of overoapitalization, which in
a way stimulates and necessitates trust
oppression, coercion and extortion.
Trust that capitalizes it's monopos-
employees must overwork and underpay
its employees in order to pay interest on
it's capitalization.
Trust that captalizes its metropolis
tic power to ooeroe its agents and it's ri
walls must coeree its agents and its rivals.
A Trust that eaptalizes ito ronopols-
tic power to extort high prices will and
must practice it's monopolistio 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 coorce and extort, and that is
the overcapitall2ation Of this power
A Trust that capitazes its power to
coerce and extort is an evil; but a Trust
which overcapitalizes these powers is a
swindIe.
A Trust that Is capitalized beyond the
value of It's properties is capitalized for
purposes of coercion and extorton, but a
Trust which is capitalized even beyond
the value of its monopostic powers to
eoerce and extort is overoapitaIized for
tho purpose of swndlins the public, and
will inevitably swindle the public.
The only way 10 prevent the evil and
inevitable results OF ulegtlmate capitali-
cation OF this kind is to prevent this Kind
Of Legitimate capitalization.
GOVERNMENT SUPERVISION NEEDED.
Either the continued existence or the
collapse OF such Trust Is a calamity
and the punishment Of it's 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
overcapitalizatior as many corporations
as possible and all corporations if pos.
sihIe, 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