"It would seem good for everybody to have railroad transportation removed almost or quite wholly from the sphere of competitive business. The public is not benefited in the long run. by rate wars between great trunk lines. Joint traffic agreements of a pooling nature may indeed be contrary to both the letter and spirit of the interstate commerce act; but the actual maintenance of non-competitive rates and a certain amount of co-operation in the distribution of business, is not only better for the holders of railroad shares, but it is also better for the shippers of goods and the traveling public than rate-cutting, secret rebates, and the administration of railroad systems in a spirit of warfare against other systems. "For many years the railroad systems of the country have been going through the stage of financial reorganization as a penalty for their reckless and improper methods of the '60's and '70's. The clear tendency of the times is to knit together yet more closely the whole texture of the country's railroad system. is not at all impossible-so swift is the movement nowadays of industrial and financial combination-that all the railroad systems of the country might, in the not very distant future, be amalgamated into one great corporate whole. Nor is it to be taken for granted without careful thought and study that such a consummation would be deplorable. The legislative power to regulate railroad rates has become established in practice and is firmly upheld by the decisions of the courts; and the state Henry D. Lloyd in "Wealth Against Commonwealth": "The private ownership of public highways has introduced a new weapon into business warfare which means universal dominion to him who will use it with an iron hand. This weapon is the rebate-smokeless, noiseless, invisible, of extraordinary range, and the deadliest gun known to commercial warfare. It is not a lawful weapon. Like the explosive bullet, is not recognized by the laws of war. It has to be used secretly. Nothing so demolishing was ever so delicate and intangible as this, for its essence is but a union of the minds of a railroad official and some business friend, bent on business empire. The model merchant, fortunate in having a friend willing to so use a power sovereigns would not dare to use, walks the public way, strong in his secret, and smiles with triumph as all at whom he levels his invisible wand sicken and disappear. Men who hunt their fellow men with this concealed weapon always deny it, as they must. To use it has always been a sin, and has been made a crime in every civilized state. In almost every one of the meteoric careers by which a few men in each trade are rising to supreme wealth, it will generally be found that to some privilege on the railed highways, accompanied by the rebate, is due the part of their rise which is extraordinary. From using railroad power to give better rates to the larger man, it was an easy step to using it to make a favorite first a larger man, then the largest man, and finally the only man in the business. From being competitors, like other men, in the scramble, they get into the comfortable seat of control of the prices at which the farmer must sell cattle, and at which the people must buy meat. Many other men had thrift, sobriety, industry, but only these had the rebate, and so only these are the fittest in the struggle for existence." also possesses the power of taxation. It is not easy to see, therefore, how the community can be in danger of losing its liberties through the further reduction of the railroad network of the country to a complete and unified system under one harmonious control." "Why do we hear as much as we do about the relief to trade in government ownership of railroads? From Address of National Anti-Trust Conference, Chicago, Feb. 12, 13, and 14, 1900. "The privileges created by railway franchises are complex in their ramifications, and when concentrated in private hands are incalculably potent. So concentrated, they have enabled a favored few to monopolize most of the resources of this richly endowed land, and by creating a distinct privileged class have served to disturb the equality of American citizenship. Through discriminations in rates and terminal facilities they have furnished the basis of nearly every great commercial trust with which the people to-day are cursed. The coal trust is vitalized by railway privileges; the oil trust could not have acquired its power without them; the beef trust and the grain elevator trust depend upon them; they make the steel trust flourish; and from express combinations down to newspaper agencies, from hack rights at depots to freight discriminations, a host of minor trusts suck in all the vitality they have as monopolies from railway privileges. Those privileges must be abolished. But they cannot be abolished by restrictive laws. No less important an official than Chairman Knapp, of the Interstate Commerce Commission, testifying before the Industrial Commission, has sworn that notwithstanding the restrictive and penal clauses of the interstate commerce law, railway discrimination is universal. In the nature of things it must Marshall M. Kirkman, second Vice President Chicago and Northwestern railway, in "The Science of Railways": "Private control of railroads is governed by economic conditions of trade and must conform to its laws; government ownership or control is desirable only so far as it can adapt itself from hour to hour to the changing vicissitudes of trade. Government cwnership must be both creative and adaptive. Only the wants of business can be considered; action must not be hampered by questions of public policy or administration needs. Superiority of private control over that of a government is due to the greater incentive of the former; to the desire of gain, the fear of loss. Productiveness of property requires that it should adapt itself to every need; that its management should be far-seeing, prudent and wise. Government management is lacking in immediate concern; it is mechanical where it should be inventive; indifferent where it should have the fear of loss before its eyes; extravagant where it should be economical. Superiority of private management over that of government is not due to any natural superiority of the employes of the former over the latter, but to the fact that the former are impregnated with the spirit of the owner; are subject to his commanding presence, practical experience and exacting methods." be so. Railroad monopoly can no more be regulated by restrictive law than railway engines can be held in check with cotton twine. The only posible method of abolishing railway privileges is the abolition of private ownership of railways." A pregnant saying is ascribed to Roswell Miller, late president, now chairman of the board of directors of the Chicago, Milwaukee and St. Paul Railroad: "Unrestricted competition is the death of trade; restricted competition is the life of trade." In the case of the Trans-Missouri Freight Association before the supreme court, the railroads held that the economic benefits of competition did not result in the railroad business, and that with them the law of competition worked hardship. The public was better served by agreements to make and keep reasonable rates, and Congress could not have meant by the anti-trust law to force railroads into disastrous competition. But the court decided it could not sanction this economic proposition, and declared the peculiarity of railroads made them specially subject to the anti-trust act. George Gunton, editor of Gunton's Magazine, at Chicago Conference on Trusts: "How do large corporations affect the interest of the farmers? There is probably no class in the community who derive more benefit from the economic improvements of large corporations than do the farmers. All the great improvements in tools, architecture, sanitation, domestic appointments, art, literature and general refinement, are the products of industrial centers where large capitalistic enterprises abound. Every form of commodity outside of food, which enters into the farmer's life has been immensely improved and greatly cheapened by the efforts of large corportions. Transportation, which is an important item in the farmer's economy, has been reduced 50 per cent during the last twenty-five years, as will be seen by the following table: "While the farmer has received all the advantages produced by large corporations in lower prices of everything he buys, and lower transportation, the price of what he sells has undergone very little fall, and of many products no fall at all, and some have even risen.' "Trusts have railroads by the throat, but a remedy may lie in pooling contracts."-Gen. Aldace E. Walker, Forum, May, 1899. CONCENTRATION OF INDUSTRY IN THE UNITED STATES. XIX. What does the organization of trusts imply? It implies an earlier stage of industrial development when labor and plant are being concentrated. Has this concentration been going on in the United States? Steadily and irresistibly. How may it be shown? It may authoritatively be shown from the testimony of the United States census, and, in this instance, from an article in the Yale Review, for May, 1898, by Wm. Franklin Willoughby, Department of Labor, Washington. What are the three facts we shall discover in the following census data? We shall discover that, by concentration, the number of factories grows less, the number of hands in each factory grows more, and the value of the product of these greater factories-of this concentrated production-grows greater. How may we show the industrial concentration of thirty years up to 1890, the year of the last published census? "A manufacturing establishment, according to the definition of the census, is any place in which products are manufactured during the year to the value of $500. In the following table is shown, for all manufacturing industries combined, the number of establishments, the number of employes and the value of their product, as reported at each census, 1870, 1880, 1890, with a calculation of the average number of employes and value of product per establishment: Establishments. Employes. 5,349,191,458 21,101 9,056,764,996 13.88 28,071 Does concentration seem to throw out labor or increase the demand for it? From this table, of value, as showing the most general features of the problem, it will be seen that, while the number of establishments increased scarcely at all during the decade from 1870 to 1880, or but 0.54 per cent, the number of employes increased 31.49 per cent, and the value of the product 57.79 per cent, and that while the number of establishments increased from 1880 to 1890 but 27.27 per cent, the number of employes and the value of the product increased over twice as fast, or 65.77 and 69.31 per cent respectively. How does concentration show itself in forty years of manufacture of American textiles? "The manufacture of cotton, woolen and other cloths is not only one of the most important industries of the country, but is, par excellence, a manufacturing or factory industry. This important group of industries we are able to trace during four successive decades: (At census of 1870 the value of fabric was given instead of value added to the material by dyeing and finishing, as at other census.) |