740 THE POPULAR SCIENCE MONTHLY, 



TRUSTS THEIR OWN CORRECTIVE. 



By GEORGE A. ETCH. 



THE test of a theory is to predict what will happen. "When 

 the cry was first raised a few years ago against the so-called 

 trusts, and legislation of one kind and another was proposed, there 

 were those who declared that if these combinations were left 

 alone they would prove their own worst enemies. In other 

 words, there were inherent weaknesses in the trust mode of doing 

 business which, so far as the public was concerned, took all the 

 teeth out of it. But the politicians and legislators brushed this 

 contention aside as so much " rubbish " and " mere theory,'' and 

 proceeded to attempt by statutory enactment what an early pope 

 had tried by bull that is, to stay the operation of a natural law. 

 As to how well they succeeded, the failure of the Government to 

 enforce the anti-trust law, and the rapid increase of these combi- 

 nations in the face of popular opposition, constitute a sufficient 

 answer. In the meantime the prediction, which they so curtly 

 rejected, is receiving its verification in the developments now 

 taking place among those great organizations of capital and in- 

 dustry. 



The most effective of these corrective agencies are the unequal 

 conditions brought about by the union of weak establishments 

 with strong ones and the certainty of competition. The original 

 object of the combination was to prevent disastrous competition. 

 To be sure, the apparent success of some of the chief ones has 

 dazzled the minds of business men and led to the formation of 

 others for the sole purpose of realizing larger profits at the ex- 

 j)ense of the public. But an examination of the history of most 

 of them will show that they grew out of bitter contests which 

 threatened disaster and ruin to those engaged in the industry. 

 This movement toward consolidation dates in this country from 

 the close of the civil war. The return of capital to the normal 

 channels of industry following that led to an overstimulation in 

 many branches. Up to that time the productive capacity of the 

 country had not been equal to its capacity of consumption. With 

 manufacturers it had been a race for possession. But that point 

 had been passed. Possible production was in excess of possible 

 consumption, and it became with many a question of divide or 

 fight. From the point of the manufacturers the preliminary 

 combinations which followed were open to two serious objec- 

 tions : They could not be established by contract, because the 

 common law treated such agreements as against public policy, 

 while the statute law made it a misdemeanor to enter into them. 

 Furthermore, where the law was evaded and such agreements 



