CHAPTER V

BRUTAL COMPETITION

I

In a recent speech Senator La Follette said:

"An example of unfair and discriminatory prices is the practice so brutally employed by the Standard Oil Company of cutting prices in local markets invaded by small competitors while keeping up prices in other markets not so invaded. Another example is that of making a lower price to the purchaser who does not buy of a competitor than the price demanded if he buys also of a competitor."

Never mind the "Standard Oil Company" for the moment; in this connection it is only an epithet and epithets lead nowhere. The practices complained of are right or wrong irrespective of the parties who resort to them. Now, what are those practices in plain, un-Senatorial English?

1. That a manufacturer or wholesale dealer who finds a new competitor in a locality quoting low prices meets the local competition without reducing his prices in other places.

This practice was hoary with age before "trusts" or corporations were dreamed of, it began with the beginning of trade and prevails in every country on the face of the globe.

2. That a manufacturer or wholesale dealer makes special terms to the customer who will agree to buy exclusively from him.

This, too, has been done from time immemorial and is the practice of every ordinarily keen manufacturer and jobber.

In short, the practices complained of are the very A, B, C, of the old competition, of that "free and unfettered" competition that the Sherman and state anti-trust laws are popularly supposed to protect and foster.

II

The smallest country dealer is quick to cut his prices on the appearance of a competitor and, if he can afford it, he will cut until he has driven the competitor from the field.

The peddler who tramps half a dozen villages will sell at cost or less than cost in one village to drive out a rival and recoup his loss by charging more for his wares in places where he has no competition.

The most insignificant jobber or manufacturer in Senator La Follette's own state of Wisconsin will gladly make a specially low price to the customer who will agree not to buy of a competitor, for that is the simplest way of securing a man's entire trade.

These things, which have been done the world over from the beginning of trade, strike the popular orator as "vicious" and "brutal" only when done by some very unpopular corporation.

To the small competitor who is ruined it does not matter much whether he is ruined by the Standard Oil Company, or by a mail-order house, or by a department store. And probably more small dealers are driven out of business every year by mail-order houses and department stores than the Standard Oil Company has ruined in its entire existence.

III

But the fact that practices condemned by Senator La Follette are both old and universal does not make them fair and just. When he calls them "brutal" he is right, but they are brutal whether practiced by the small dealer in a fight for custom or by the large corporation in a fight for trade; they are brutal because they are the methods of the fighter who is mercilessly trying to down his opponent; they are brutal because they are natural, instinctive, elemental; they are brutal because they are human, and humanity in its struggle for existence is, and ever has been, brutal.

Big corporations have not made these practices one whit more brutal, they have simply made them more conspicuous, thrown them into high relief, so that the people see and understand them better. What the individual has always done instinctively and viciously, the large corporation does systematically and indifferently.

A blacksmith borrows a little money and opens a shop in a country village. To get a start he shoes horses for a little less than the shop across the street. The established smith meets the new competition and goes it one better by cutting prices to cost, for the express purpose of driving out the new man. In a few months the new man is done for, closes up shop, and goes away "dead broke,” whereupon the successful smith gets even by asking a little more than he did before, his charges being limited only by fear of inviting more competition.

That is the old, familiar, "cut-throat" competition in a nutshell.

When the individual crushes his rival by "brutal" methods the cry of the insignificant rival is too weak to be heard in Congress, but when the large corporation

crushes rivals in every state by precisely the same methods, the united cry is heard; there is no difference in the "brutality," but simply in the number affected, and numbers make all the difference in the world-about election time.

IV

But the question is broader than one of mere political or legislative, or even economic, expediency. It is a question of progress toward higher ideals in the industrial and commercial world, of the suppression of unfair, oppressive, "brutal" methods, in so far as it lies in the nature of man to suppress them. It is the question of the substitution of a new competition for the old.

It is conceivable that the time may come when even the individual-the village blacksmith-will feel that there should be, must be, some better way of dealing with a rival across the street than ruining him; but before the individual attains a moral and economic outlook so broad as that the world will have to progress far beyond its present commercial creed. Oddly enough, it is far easier to induce large producers and large corporations to make experiments along the new lines; they realize the folly of the methods of the old competition and are only too glad to try the new, to try any kind of coöperation the law will permit.

V

When one looks back with dispassionate eye over the last fifteen years-fifteen years of unparalleled financial, commercial and industrial turmoil and upheaval, the conclusion is inevitable that whatever there has been of progress in the world of trade and industry toward higher

ideals, toward franker and more straightforward methods, has been due directly or indirectly to the development and operations of large corporations, the so-called "trusts." They devised nothing new in "brutal" trade methods, but they have done things on such a large scale that the public begins to see and understand the unfairness, the oppressiveness, of common, every-day trade customs. The large corporation has been a wonderful magnifying mirror in which the people for the first time see-themselves; it has set the entire legislative, executive, and judicial world groping for remedies for economic ills that have their roots in the selfishness of the individual. Senator La Follette thinks he is after the Standard Oil Company, the Steel Corporation, the large-and friendless-combination. He will find in the end he is prodding the small manufacturer and jobber in his own state, for they are guilty of the same "brutal” practices, only on a lesser scale.

A senator who is also a scholarly writer, in an interesting book1 says:

"If a large combination can produce and sell articles at a less price than its competitors, and employs no unfair methods against them, is not the ublic benefited rather than injured?"

The question, of course, carries the assumption that the large combination does undersell its competitors, and that involves the elimination of some or all of the competitors.

What consolation is it to the bankrupt competitor to be assured he was disposed of gracefully and honorably, that no unfair means were used to effect his suppression? Might he not reply:

"What do I care about your motive? You undersold me and put me out of business-that's all there is to it." As a matter of fact the public may be a very great "Corporations and the State," by Senator Theodore E. Burton,

of Ohio.