To return to the lumber company that owns timber, mills and yards, many intelligent men will argue it has the right, moral and economic, to sell (a) timber, (b) rough lumber, or (c) finished lumber, at any price it pleases, at cost, if it pleases, for the express purpose of driving out of business a competitor in the particular line.

But not so many intelligent men will insist it has the right to use its resources to take contracts for putting up buildings at less than the cost of erection for the purpose of driving out of town all carpenter contractors and controlling that work for itself.

And still fewer intelligent men will urge that it has the right to establish a paint shop and do painting for less than cost in order to control that trade; and still fewer that it has the right to start a household furnishing store and sell household goods at less than cost to close up all other stores in the town; and still fewer that it has the right to sell groceries, clothing, automobiles, jewelry at less than cost for the purpose of controlling all those trades.

Yet one thing leads to another and no logical line of demarcation can be drawn. If the saw-mill can own its own finishing factory and make and sell below cost the interior finish of a house, there is no reason in the world why it should not sell furniture and carpets below cost.

In short the supposed "right" to sell anything below cost cannot be made to turn upon whether the particular article is or is not related to some other article made or handled by the same man or company.

If a steel company that owns mines, furnaces, mills, and fabricating companies can put up a steel building at less than the cost of fabrication to control the fabricating industry, it can build brick or wooden buildings at less than cost, it

can make and sell flour at less than cost-in short it can use its resources and the profits it makes in certain departments to demoralize as many different businesses and ruin as many different competitors as it pleases.


Let us bring the matter home to the individual.

A man owns a tract of land, he is lucky enough to strike oil, over night he becomes a millionaire many times over, he feels an ambition to be the biggest man in the adjoining town, he starts out to control every enterprise in the town— the bank, the saw-mill, the lumber-yard, the coal-yard, the woolen mill, and the principal stores.

There are plenty of towns where things like this have happened.

Some of the owners have no desire to go out of business, they will not sell. He uses the money he is making from his oil-field to start rival establishments and he sells at cost and less than cost until he either ruins his competition or compels them to accept his terms.

For the present he has the legal, but has he the moral or economic right to do this?

Your answer to that question will depend upon whether you have any philosophy of trade beyond stereotyped traditions and superficial current notions-whether you think or only think you think.

There is a feeling that this sort of competition is not right, the sentiment against it is growing in spite of arguments to the contrary, in spite of traditions, in spite of all the theories of the economists of the last century.

The reason why this sentiment is growing, why convictions are changing, is because within the last twenty years

combinations have exercised those supposed rights ruthlessly to compel competitors to sell out or go out of business.

If a coterie of men wished to buy up a number of plants and form a combination, or if a large corporation wished to buy up certain smaller competitors the mode of procedure was first to make an offer, then if the offer was not accepted, start a ruinous competition by selling at cost and less than cost until the weaker company was forced to beg for terms.

So many thousands of men and hundreds of towns and localities have been disastrously affected by just this "competition" that it is not surprising the feeling against it is strong.


Many remedies have been proposed for the trust problem-federal incorporation, federal supervision, federal regulation of prices and profits, dissolution, but after years of close association with competitors of the trusts, who are also large buyers from them, the writer has never heard any very loud demand for most of these remedies.

Dissolution-no one who has any knowledge of industry wants that. Federal regulation of prices and profits is dismissed as chimerical. Federal incorporation or supervision-yes, if you please, but then what?

What is to be the practical result of any step proposed? That is the question put to every theorist on the subject.

The man who has his fortune, his business, his livelihood at stake wants a practical answer, he wants to know how the proposed remedy will affect him.

Again and again the writer has heard from independents who are fighting for existence against the trust the one cry: "We don't care how big the trust is or how many departments it operates in competition with us. We can

take care of ourselves. On an even footing we can always get business away from it. All we ask is fair play."

The one way to get fair play is to insist no company shall do business in competition at a loss. Compel every integrated company to show up the operations of each department in such a manner there will be no chance for unfair competition, and if it appears it is selling its own departments material at less than it charges buyers, compel it to rebate to every customer the excess-or three times the excess by way of punishment.

Those demands if carried cut would mean a vast and beneficial extension of the open price policy and a solution of the trust problem with a minimum of interference with individual initiative and freedom.

The machinery required would be simple as compared with some of the elaborate schemes now before Congress. The precise steps to be taken are discussed in the last chap






For the labor spent and capital invested, no two enterprises yield the same returns. That being true, it would seem to follow that in no two enterprises should the share received by labor-wages,—and the share received by the owner-profits-be the same-unless labor prefers to accept a fixed and uniform wage and relinquish all claim to an interest in the business it has helped establish.

But labor is not willing to do that. As has been shown, the trend of modern thought and recent legislation is toward the assertion and recognition of labor's claim to an equitable interest in the industry.

The only consistent theory of workmen's compensation and pension laws is that the industry-not the employer owes the laborer something.

The only logical theory at the basis of the strike and fight against "scabs" is that employees have certain rights to secure which they may not only strike but prevent others from taking their places.

The labor movement is based upon the fundamental notion that labor has a proprietary interest in whatever it helps create, and while this interest is not explicitly recognized by employers, it is implicitly admitted in the settlements of most labor controversies.

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