upsets the law of competition and by the forces of monopoly controls the field of production. It is not my purpose here to detail the frightful process of concentration. To do so would be to burden my remarks with stupendous figures and to confuse the mind with facts that almost pass belief. Let me, rather, invite a consideration of the situation in its moral phase, casting aside all questions of expediency and of circumstance and looking only at the matter from the standpoint of right reason. Concentration in itself is not a bad thing. It is bad only when it involves something besides mere concentration. A thousand men working together can do more than a thousand times as much as one man working alone. It is only when men work together in large numbers that the enormous advantages of a division of labor are possible. And in like manner the concentration of capital is in the direction of economy. It is possible enormously to increase the efficiency of capital by massing it, as in a mighty steamship or a huge factory or a great mill. It must be borne in mind that money is not capital. Capital is wealth used in the production of more wealth; and money is not wealth, it is merely the representative of wealth, a tool employed for the facilitation of exchange. And it does not matter in the least what sort of money it may be so long as it passes current. The small open boat used in carrying goods is capital, but the small open boat is a less efficient means of transportation than a great steamship; and it is an advantage to the world when a hundred owners of small open boats get together and build a mighty leviathan of the deep into which thousands of tons of freight may be packed and safely carried across the multitudinous seas with an expenditure of labor far less relatively than was required in the hazardous ventures of the sloop and the schooner. The harm is therefore not in this massing of capital in noble ships and great factories and huge mills. It must be looked for elsewhere. And we shall find it, perhaps, in the special privileges with which certain aggregations of capital have surrounded and buttressed themselves. These special privileges appear in many forms, but they all possess a common character; they involve the use of a private taxing power, and whether they wield this in the shape of a tariff which enables them to avoid competition and sell their products at an arbitrary figure, as in the case of the Steel Trust, or whether they wield it in the shape of royalties exacted for the use of natural opportunities, as in the case of the Hard Coal Trust, which until lately was also shielded to an extent by tariff laws, the effect is the same. They are enabled to command service without rendering service; they fix prices at what traffic will bear; their extortion is limited only by the ability of the people to sustain it. There may be pretenses of cheapening commodities, as in the case of oil; but commodities controlled by monopoly are cheapened in price only by their debasement in quality. Coal oil is cheaper per gallon, it is true; but it is also true that it is lower in standard; its illuminating power has been decreased. And the same is true throughout the whole list of trust articles. If prices have been nominally lowered, they have been relatively increased by the act of adulteration or debasement. The trust always takes everything it can get. NO CORNERING OF THE NORTH WIND. It should be observed that trusts do not attempt to corner the north wind. They seek to get control of things that are limited in quantity, and so every really effective trust in the long run must be one that in some form is a landlord. Take the Paper Trust. This trust for years was protected from forBut eign competition by a tariff on manufactured paper and by a tariff on wood pulp, which is the raw material of paper. the Paper Trust would soon have gone to the wall had it been The tariff certainly aided it solely dependent upon the tariff. in victimizing the publishers; it enabled the trust for a time to increase prices by 33 per cent. Yet if the tariff had been its only bulwark, its career would have been as short lived and as disastrous as that of the famous Oatmeal Trust. It will be remembered that when the Oatmeal Trust put up the price of its commodity a hundred or possibly a thousand mills in all parts of the country awoke to the fact that they could grind oats as easily as wheat and corn, and just at the moment the trust was flushing with its success the independent manufacturers flooded the market with their product and the trust went to the wall. Its disaster taught other trust managers a lesson which they were not slow to learn, and now every trust which can hope to be more than temporarily effective as a taxing power is in control of something more than tools and machinery. Thus the Paper Trust set out to gain control of the sources of supply; it acquired practically all the spruce timber in the United States, and, in addition, it secured control of all the water power available to the timber supply. It was thus able to dominate the market until the tariff barrier against foreign paper was torn down by a Democratic Congress. Independent mills could get neither the wood nor the water, and they were thus utterly unable to enter into an effective competition. Yet had they then been permitted, as they are now permitted, to import spruce logs from Canada, where spruce abounds, they could have given the trust most serious trouble. WHERE THE STRENGTH LIES. The Steel Trust finds its strength in the ownership of ore beds. The same is true of the Copper Trust. The Hard Coal Trust is obviously a child of landlordism, fed and nursed until the passage of the Underwood bill by a tariff on soft coal. The Lead Trust, the Beef Trust, the Standard Oil Trust, the Sugar Trust, and, above all, the Railroad Trust, in the final analysis, are all founded upon the monopoly of certain limited natural opportunities. It is true that some trusts which own no natural opportunities flourish and would continue to flourish were the tariff repealed which protects them in greater or less degree even under the new schedules from foreign competition. But it will be found that in every such case the trust in question is a collateral or dependent of some trust which does control certain natural opportunities. The Beef Trust is largely the offshoot of the railways; it flourished on the discriminating freight rates which it was long able, and which it may still be able, to command; and this trust was not only able by its relations with the railways to extort tribute from the consumers of meat, but was also able in many cases to depress the prices of stock upon the hoof. The strength of a monopoly is in its taxing power. Never in the service it may render. Always in that which it may withhold. Thus it happens that a monopoly which to-day can levy but a trifling tax upon the public is to-morrow able to impose a crushing burden of tribute. Take the gas monopoly of Chicago, for an example. There was a time years ago, at the time the monopoly was first granted, when the cost of service figured in the rates charged. Later, the charge was fixed entirely by what the consumer would bear. Prof. Bemis was able to show beyond any possibility of dispute that the tribute exacted from the consumer in the good old days of unrestrained and unregulated monopoly was at least 50 per cent of the price charged. In other words, the consumer paid 50 cents for gas, including a fair profit on the investment, and 50 cents for tribute. Can good citizenship tolerate the exercise of such private taxing powers? Is it not bound to protect itself and the public against all exactions save service for service? It is easy to say that monopoly gives service for service, but it is hard to prove. Monopoly may and often does exact royal tribute from industry without rendering any service at all in return. Examples of this might be multiplied, but one case from Michigan, cited by the commissioner of labor of that State in one of his reports, will suffice. STORY OF THE COLBY MINE. The illustration relates to the Colby mine, and the history of this mine is interesting and instructive. It will stand as an admirable type of a thousand other cases which enforce the point which I desire to make. This Colby mine cost the owners $1.25 an acre. They never spent a cent upon it for improvements, but they leased the privilege of taking out the ore on a royalty of 40 cents a ton to the Colbys, who in turn leased it to Morse & Co. for 52 cents per ton royalty. Morse & Co. contracted with a Capt. Selwood to take the ore out and deliver it on the cars for the sum of 873 cents per ton. Capt. Selwood in his turn got a capitalist who owned a steam shovel to dig the ore and put it on the cars-all that he had contracted with Morse & Co. to do-for the sum of 123 cents per ton. This was in the year 1885; and the ore, which was as easily dug as gravel from a gravel pit, brought loaded on the cars $2.80 a ton. Out of this $2.80 a ton the share of the mine owner was 40 cents a ton; Colby's, 12 cents; Capt. Selwood's share, after paying 12 cents, as above mentioned, for the work of production, was 75 cents; and the remainder, or $1.40 per ton, was at once the share and profit of Morse & Co. In the year in question there was mined 84,312 tons. At $2.80 a ton delivered on the cars ready for transportation it brought the sum of $236,073.60. Let me recapitulate: 84,312 tons, at $2.80 per ton---- Owners' royalty, at 40 cents per ton-- Capitalist's share for capital and labor in production_. Total $236,073. 60 33, 724. 80 10, 539.00 118, 036. 80 63, 234.00 10, 539.00 236, 073, 60 Mr. BARTON. Mr. Chairman, will the gentleman yield? Mr. BARTON. Will the gentleman state where that mine was located? Mr. BAILEY. In Michigan. I copy this from the report of the labor commissioner of Michigan. Up to the close of the period covered by the report from which I have quoted the total output of this mine was 1,116,418 tons. Since then the output has probably been increased, but the figures are not available. Nor do they matter for the purposes of this argument. What I wish to observe is that this mine has given something more than a comfortable living to each of four beneficiaries who performed absolutely no service in exchange for it. Mr. GORDON. Will the gentleman yield? Mr. BAILEY. I should like to yield. Mr. GORDON. I want to ask the gentleman what is the product of that mine? Mr. BAILEY. Iron ore. The only person who did any work was the capitalist, and his share, for the capital and labor employed in mining and placing the ore on the cars, was less than 5 per cent of the total value of the product. In other words, monopoly claimed and got 95 per cent of the product and capital and labor divided between them 5 per cent. The difference represents the value of a private taxing power. It represents what privilege demands from the toiler for access to natural opportunities. It represents the difference between natural wages and the wages fixed by legal restrictions. Now, I wish to inquire how we, as Democrats, can sustain so glaring a perversion of natural law? Under just conditions, ought not the product go to the producers? What possible title in morals can the men who get 95 per cent of the product of the Colby mine show to that product? They have performed no labor; they have rendered no service; they have expended no capital; they have done nothing whatever but stand between labor and capital and the natural opportunity. Did they make the iron ore? Did they create the demand for its use in the production of steel? Certainly not. They simply forestalled the opportunity and waited the time when labor and capital were so pressed by necessity that they would yield 95 per cent of their joint product for the bare privilege of access to the ore bed. If this is true of ore mining, if monopoly taxes labor and capital 95 per cent for permission to produce, can we doubt that the same is true in coal mining, in silver mining, in lead mining, in lumbering, in quarrying, in all the various fields which have become subject to the forestaller? And if monopoly has learned the trick of levying a private tax upon capital and labor, compelling them to yield an enormous tribute for which no conceivable return is offered, can it be supposed that industry in general, that capital and labor in other lines, in manufacturing, in building, in commercial pursuits, in printing and merchandising and personal service, are exempt from exaction? If labor and capital in ore mining must pay 95 per cent of their product for bare opportunity, what do you suppose steel workers pay, what do you suppose clerks and small tradesmen pay, what do you think bricklayers and carpenters and blacksmiths and painters pay, what must teachers and musicians and preach ers pay? Or to put it in another way, if labor and capital could freely engage in ore mining and retain their entire product undiminished by a private tax, how long would labor consent to work for the wages it is now glad to accept? For it should be remembered that this Colby mine is no isolated instance. It is typical. It illustrates the whole system of monopoly production under which we are working; and it is inconceivable that ore miners alone would consent to yield 95 per cent of their product as tribute while coal miners and lumbermen and steel workers were required to yield relatively less. HOW WAGES ARE DETERMINED. The truth is that on the average throughout all industry wages are determined, not by the product, as they should be, but by what monopoly leaves after it has taken its tribute. This any man may see who has eyes to see. And when you have been told, as we are often told, that wages of labor have advanced, the statement is made in clear defiance not only of the fact but of right reason, as one may readily perceive if one will but stop to consider that in the last analysis wages are governed by what may be obtained by the application of labor to the best free land in use. That the best free land in use must be very poor indeed is shown in the fact that in agriculture from a third to half the crop is willingly paid by tenants for the use of appropriated land; and since labor in the primary industry secures but half its product, less taxes, can you for a moment believe that labor in the secondary or more elaborate industries is relatively more fortunate? The reverse is probably if not demonstrably true, as must appear when we consider that in agriculture alone comparative freedom of opportunity is left. Farming is still free or largely free from trust control, yet even in farming the independent farm owner is fast disappearing, the tenant farmer is taking his place; and even the tenant farmer is giving away surely, if slowly, to the farm laborer. It were supreme folly to attempt to destroy the trust, in so far as it marks a mere tendency to concentration. As was said before, there is no necessary harm in concentration. The evil grows out of concentration plus monopoly. And it has been asserted that no monopoly can long exist without some special grant of privilege. There are patent monopolies, but these can exist only for a limited period, and can therefore play no very serious part in the great economic drama. The tariff will enable its beneficiaries to rob the people up to the point where internal competition is invited, and this in turn invites combination. But suppose that every concern in the whole country engaged in the production of a certain commodity were to enter into a combination which would throttle competition and enable the producers of this commodity to sell up to the full tariff limit, what would hinder others from setting up in the same business? The combination would speedily break of its own weight unless it were the possessor of some valuable natural monopoly. WHY RESTRICTION FAILS. We have been dealing and we are proposing still further to deal with trusts by restrictive measures. These measures in the past have been abortive. Is there any reason to believe that new measures of restriction will afford better results? |