THE MEANING OF CORPORATIONS AND TRUSTS. 301 



theoretical justification for the existence of our democratic form 

 of government that is, that the best interests of the constituent 

 individuals are best served by placing in the hands of their 

 chosen representatives certain functions which can be better per- 

 formed for the individuals by those representatives than they 

 could be performed by the individuals for themselves. 



When an employer announces a rate of wages, an employee 

 has the right to work at that rate or not, as he may choose that 

 is, he has the right to contract for his services. But if the mana- 

 ger of a mill, a mine, a factory, or other large establishment em- 

 ploying a great number of workmen engaged in the same kind 

 of work, announces a reduction from the established rate of 

 wages, what is the effect upon the individual workman if entirely 

 dependent upon his individual resources in the negotiations inci- 

 dent to this individual contract ? He may continue to work at 

 the reduced wages or not, as he may choose, but to seek work at 

 another establishment is often impracticable, especially if necessi- 

 tating removal to another locality. To remain without work, even 

 for a short time, entails ill-borne loss. The result is that a por- 

 tion of the employees may leave, but the majority find it prefer- 

 able to accept the reduction, especially those who have acquired 

 homes in the vicinity, and live wrapped in the web of attachment 

 woven by the associations of the home, the neighborhood, and the 

 community. The contract for a rate of wages between the em- 

 ployer and the individual is, therefore, one in the negotiations for 

 which the employer has an advantage so tremendous that his 

 decision is practically the mandate of a despot, and, as upon the 

 rate of wages practically depends the employee's subsistence, the 

 amount of necessaries, comforts, and luxuries he can procure for 

 himself and family, the employer oftentimes has greater power 

 over the manner of life and the happiness of his employees than 

 the Constitution accords to Congress and the President of the 

 United States. When this power is used to reduce wages, work- 

 ingmen have frequently but little means of knowing whether the 

 reduction is forced by the conditions of production and distribu- 

 tion, or whether it is an arbitrary attempt to swell the employer's 

 profits. The conditions of their lives are such that they can not 

 know much of the cost of plants, appliances, material, and the rela- 

 tion that wages bear to the cost of production or to the expense of 

 distribution. In any event, the strong promptings of immediate 

 self-interest impel them not only to resist any reduction, but to 

 endeavor to obtain, from time to time, an increase of wages, a 

 general betterment of condition ; and as individual assertion is of 

 little or no avail in resisting reduction or obtaining an increase, 

 the natural result is that the workingmen in a particular line of 

 industry endeavor to obtain by combined action that which they 



