New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-02-18
ACountry Banker and His Friend
the Doctor Upset an
Economic Theory
German Traders Doing
Business in Japan
By ARCHER WALL DOUGLAS

BY ARCHER WALL DOUGLAS
CENERALIZATIONS are one Of those
" weaknesses of the human mind
that find constant expression in econom-
ic theories. They are fascinating and
misleading, and the special temptation
to indulge in them lies in their appeal
to the average man. Consequently the
creation and framing of so-called laws"
and tendencies is one of the fsvorite
amuscments and pursuits Of theoretlc
students and clustered economists. In
these days, when the foundations OF
the old economic world are rocking,
there Is no safe guide save personal
study OF existing facts. For economics
is not a science, save in scant measure,
nor even a philosophy, but rather in
telligent opportunism constantly sd-
iusting itself to new conditions. IL is
risky even to make authoritative pro-
nouncement as to the eternal verify
and abiding principle OF certain laws
when tho moving finger Of time may
write them down as mere temporary
adjustments to certain human needs.
To-day, for instance, there exists
widespread belief that concentration
and consolidation in manufacturing
and distribution are the true solutions
of the obvious overcrowding in every
line Of business and that by such means
can true economies best be realized,
much present waste eliminated and the
price of products reduced TO the con-
sumner. This was the much heralded
keynote Of the great consultations,
especially in iron and steel manufac-
lures. which followed hard upon the
Spanish-American War. Every one
knows how none Of these promises ma
terialized, that higher prices quickly
ensued and that the best plea of the
consolidation to-day is that it tends to
stabilize prices.
The Consolidation Idea
As nearly as it is possible to make
a general statement from the study OF
existing facts, all that can be said is
that the consolidation idea Of realiz-
ing economy Is, as q whole, a complete
delusion in either manufacturing or
distribution, though it seems to be the
solution Of many transportation prob
lens. Economies in the manufacturing
end undoubtedly have been brought
about, but they are more than Offset
by the increased expenses in other de-
partments, notably those of selling and
administration. Every consolidation is
loaded up with extraneOus enterprises
which are really not germane to their
business and yet which have become
fixed charges upon the organization.
In the beginning of these things it
was held that the consultations would
give better service TO the consumer,
and that because Of their efficiency they
would make the small producer I'M
necessary. They have undoubtedly
done much to raise the standard Of
quality in the things they manufacture,
but the small mantle independent
producers to-day more numerous
than ever and more firmly fixed as an
integral and necessary factor In mod
ern commercial life. Il was also held
that the consolidation, because Of its
specialization, would serve the con-
sumer far better than ever bcforoj and
would encourage specialization in all
lines, to the manifest advantage Of the
general community.
There are some facts which seem 70
deny these claims In q very practical
way. Throughout the agricultural re-
gions Of the South and West the great
problem Of the day is the future Of the
small town and city. As rule. II lives
upon the farming activities Of the sur
rounding country. save where there Is
a local coal mine or factory. or where
II Is q railroad division point It's
prosperity and les very existence de-
pend. therefore, upon close and init
mate business relations between the
merchants Of the town and the neigh
boring countryside. The solution Of
this problem Ia not an easy one. be-