u 



THE HARDWOf^D RECORD. 



fast that tboy had kind ^i n-i in.- nm "i 

 tliiiiK**. they coiu'IikUhI to soil. Atid thoro 

 wKs Ix'^itiniiii; tt> lu' lri>ul>U> with the liilior- 

 luB I'tMipIo, too. Troulilo about liours and 

 waBf.-i. and tliore wa.-sn't so uuioli pleasiiro 

 In pokln); about tho plant any more, for 

 often Ihi'y felt that the men were hostile 

 or threatening. So they sold out and look 

 their money and moved to California and 

 the tru.-;! took i>ossesslon. 



You see. this was one of the first trusts 

 tu be organized and It has had time to fall. 

 They will all fall In time — at least all that 

 were over-capitalized in the orKanlzlng. and 

 most of them were. For even when a trust 

 is organized at a fair valuation of the 

 property taken in, it has lis work cut out 

 to comiiete witli the individual. It has ad- 

 vantages, it is true, but it has disadvan- 

 tages also. 



A. tnist can save something in operating 

 tr.xpenses no doubt by combination; but 

 there isn't anybotly about the trust who 

 will work all day in the shop and then sit 

 up until midnight posting the books. And 

 there isn't anybody about a trust whose 

 ■wife will wear a shabby coat another year 

 s(f that there may be money enough to put 

 in a new machine. That's the kind of com- 

 petition a trust has to meet, and it makes 

 strong competition. The trust may be able 

 to hold its own if it has no watered stock 

 to p;iy dividends on — but if it be weighted 

 down with a load of over-capitalization its 

 name is "mud." 



_ So this trust failed and the great plant 

 is idle; and the great booming "whistle" 

 that for so uianv vears called the hun- 

 dred.s of employes to work, or sent tueiu 

 throii''ing happily through the giant gates 

 vhcn the work was done, is stilled: and the 

 expensive machinery, everj' piece of which 

 was bought and placed and started with 

 pleasure and triumph and joy, is rusting 

 away in idleness. And from the uncanny 

 stillness and desolation of the great plant 

 it would seem that there is a curse upon it. 

 And there is — the curse of a vicious, rotten 

 system. 



You see, something might be done if the 

 plant belonged to anybody in particular 

 This man may own a. few shares, and that 

 man a few, and so on. They are filed 

 away in a pigeonhole or stored in the bot- 

 tom of some old trunk, maybe, and forgot- 

 ten nine-tenths of the time. 



The plant as it stands has some value, 

 but it isn't iive cents on the dollar of what 

 it cost the stockholders. And, as you 

 know, stockholders liad about as soon keep 

 a stock indefinitely as to take five cents on 

 the dollar. And so the plant remains idle 

 and will remain so for many years proli- 

 ably. 



For the American people have learned 

 liow to build trusts, but not how to take 

 them apart nor what to do with the pieces. 



But they will have to learn. 

 * * ♦ 



Every once in a while, the history of the 



human race show.-. - .• iii.m comes upon 



till' world's stage who has a great talent, 

 anumntlng. In some cases, to positive ge- 

 nl\is, for fooling people. lie can nnikc 

 them believe that black Is white, that 

 water will run up hill and that truth Isn't 

 truth at all, or that you don't want to be- 

 lieve more than half of It even if it Is. 



When Morgan came upon the scene there 

 were a whole lot of peoi)le who believed 

 that In him they had a fooler. And after 

 he had made some little reputation in that 

 line they capitalized him, as It were, and 

 through various syndicates and pools they 

 backed hini in his projects for fooling tho 

 peoiile. 



His chief achievement so far has been 

 the billion dollar steel trust. lie found 

 that trust partially organized. Away back 

 before Morgan's career began in a large 

 Avay. Carnegie had pretty nearly put a lot 

 of slower people in the steel trade out of 

 business. And these weaker brothers had 

 united in a small way to protect them- 

 selves from the thrifty, driving Scotchman. 

 When these various minor plants found 

 they could not make money because of be- 

 ing badly located, or out of date, or, for' 

 one reason or another, three or four of 

 them would combine their losing ventures 

 into a larger losing venture. And when 

 they combined each party to the transac- 

 tion was allowed at least twice what his 

 plant was worth. In fact, if he got any- 

 thing at all for it, he got more than it was 

 worth, for a plant that can't be operated 

 except at a loss is of no value except for 

 junk. 



But by issuing and selling and putting 

 up for collateral a lot of stock and bonds, 

 these larger losing ventures were enabled 

 to run along for a time. And just when 

 they were about to collapse Mr. Morgan 

 came in and brought them all together into 

 one grand trust, taking up the watered 

 stock in the smaller trusts with the stil' 

 further diluted stock of the new trust. 

 Everything depended, of course, on getting 

 Carnegie in, and he was got in, as is well 

 known, by paying him fully double the 

 value of his plant. 



Then the great, unwieldy, waterlogged 

 craft was set afloat, and being favored by 

 a spell of remarkably good weather and 

 favoring winds in the most prosperous 

 limes in the history of this prosperous 

 countr.v, it has managed to float for a fev.- 

 years. But in spite of favoring winds and 

 fair weather the time has come when the 

 old hulk will float no longer. 



You see, the time has come to transfer 

 the gold brick to the people, and the people 

 won't have it. And I don't wonder, for it 

 is the cheapest, brassiest-looking gold brick 

 ever put on the market. 



And it seems that Morgan isn't a fooler 

 after all. So far he has only fooled those 

 who believed he was a-fooler and who put 

 up their money to back him in that belief. 



Steel stocks are low because steel stocks 



are not «..mii iiunii. Nobody knows what 

 the actual value of the steel trust's tangible 

 projjcrly Is. and nobody has coulhlence 

 enough III his knowledge even to hazard a 

 guess. It has some tine projicrty in the 

 Carnegie iilanis and others, but it Is a well- 

 known fad that nuiny of their jilanls are 

 valueless. A manufacturing plant will go 

 out of date in ten years, in these times, as 

 everybody knows. And a great portion of 

 the small fciuiidatlon of real property ui>oii 

 which the maniinoth strui-luii- of walen-d 

 stock has been erected Is absolutely worth- 

 less. .\nd even its finest plants are de- 

 teriorating rapidly, for It is impossible from 

 the very nature of a trust that It can keep 

 u]) Willi (lie progress of the individual. 



And of the men at the head of the steel 

 trust there is not one In whom the jx-ople 

 have confidence. They know enough of 

 Morgan and his crew that they will take 

 their word for nothing. In floating any 

 large enterprise and selling its securities 

 among the people all depends on getting 

 the people's confidence. And Morgan hasn't 

 the confidence of the peo|ile of this coun- 

 try. They are too well educated and intel 

 ligient to believe in him or his rotten 

 schemes. He has only succeeded in win- 

 ning the confidence of his multimillionaire 

 backers and they only had faith in his 

 power to fool the people. That he could 

 ever make the knock-kneed, pigeon-toed, 

 pot-bellied, blear-eyed steel trust a success 

 as a practical working business proposi- 

 tion nobody ever believed. 



And there is where you have got to 

 get down to with any kind of a business 

 proposition. You've got to have a manu- 

 facturing plant where it will produce goods 

 that may be sold at a profit. And to do 

 tliat no plant can have any dead weight to 

 carry. It is hard enough to keep up with 

 the strenuous pace of modern life without 

 any handicap. And that the steel trust, 

 with its assortment of more or less value- 

 less plants and its staggering load of over- 

 capitalization, could ever be made a win- 

 ner, nobody above the grade of an idiot 

 ever believed. The only thing that kept it 

 from going to the bottom like a stone in 

 the early stages was the unexampled pros- 

 peri t.v of a few recent years. 



• * * 



And as is usual in such cases the man 

 who lias posed as the ma.ster, and wliose 

 shadow was thought to overshadow the 

 earth, proves to have been nothing but a 

 )(uppet. to move which a lot of greedy, 

 keen-e.ved little fellows pulled the string. 



Morgan has been the stool pigeon of a 

 lot of confidence men. They have heralded 

 him as a gi-eat wizard of finance who could 

 take one bad dollar and another bad dollar 

 and by combining make three good dollars 

 of tlioni. Of course they knew he really 

 couldn't do this, but they believed he could 

 make the people believe he could. 



* * » 



There has been a new breed of financiers 



