TRUSTS THEIR OWN CORRECTIVE. 741 



were entered into, tliey proved in nearly every case inoperative, 

 from the fact that there was no power to enforce their conditions. 

 The consolidation of competing interests or the principle of 

 " division," therefore, seemed the only thing possible. This was 

 notably the position of the Michigan salt manufacturers, whose 

 association was the outgrowth of competition so fierce that many 

 of them went to the wall. It is likewise true of the whisky trust. 

 When the United States Government, near the beginning of the 

 civil war, raised the internal revenue tax on whisky by succes- 

 sive stages from twenty cents to two dollars per gallon, with a 

 considerable interval intervening between the several advances, 

 an extraordinary stimulus was given to the manufacture. 'Dis- 

 tilleries without number sprang into existence. The result was 

 that the output was far beyond the necessities of the market and 

 it was a ruinous fight for life. In less degree this was the case 

 with the cordage, cotton-oil, and bagging trusts. 



Now, it is evident that combinations so formed stand in an 

 anomalous position. Made up of both strong and weak establish- 

 ments, the resulting corporation may be more powerful than some 

 of its constituent members, but it is far from being equal to its 

 prosperous ones. It is loaded down with old factories and anti- 

 quated machinery ; it is capitalized at three or four times its 

 actual value ; and its managers are obliged, if they do what is 

 expected of them, to support this rubbish and pay a profit be- 

 sides. Were these combinations protected in the full control of 

 their market, and were their products such that the public could 

 not do without them or find a substitute for them, they might 

 count on something like success. But capital is always on the 

 outlook for prizes. It is always ready to make daring ventures 

 in the hope of large returns. The fact that any one of these com- 

 binations can make eight or ten per cent on an inflated capital is 

 clear evidence that the return for legitimate investment might 

 be much greater. So the independent operator enters the field. 

 The inevitable war of prices has been delayed a little, but the 

 delay has permitted the growth of new and powerful organiza- 

 tions against the old concerns. 



This point has been admirably illustrated in the experiences of 

 the lead trust. It was not long ago that the annual meeting of 

 the stockholders of that enterprise was held, and in the report of 

 the president appeared this significant statement : " There has 

 been, and always will be, competition in each class of goods 

 manufactured by this company. It does not aim to obtain mo- 

 nopoly." The facts are, however, that at the beginning of 1892 

 the trust had control of all the lead-works in this country with 

 the exception of two small establishments, one in Boston and one 

 in Philadelphia ; and even these were bound to it by ironclad 



