TRUST 



5893 



TRUST 



send out one salesman who sells all its products, 

 than it was formerly for the individual concerns 

 which entered the combination each to send 

 out salesmen in competition with the others. 

 A large organization, again, is able by its very 

 size to fill large orders on short notice, and thus 

 hold the favor of its customers. It can afford 

 always to keep a complete stock, where the 

 smaller independent concern can keep only a 

 partial stock. Another advantage is the oppor- 

 tunity to please a customer by carrying a stock 

 of allied or by-products. To manufacture them 

 mlly :i saving, and to sell them, a profit. 



same principle is seen in daily operation in 



department stores of great cities, although 

 such stores are by no means trusts. 



(3) Disadvantages. The disadvantages or 

 evils of an industrial system dominated by 

 trusts are serious. From the fact that a com- 

 bination is able to effect great saving in manu- 

 facturing and in marketing, it might be sup- 

 posed that lower prices of finished products 

 would result; on the contrary, these have usu- 

 ally been kept at their former levels and occa- 

 sionally have been increased. Again, instead of 

 paying larger wages out of their increased re- 

 turns, the great trusts have even forced wages 

 lower than would be possible in smaller, inde- 

 pendent corporations. A strike in one plant 

 may be met by closing down the plant affected 

 and filling all orders from some other factory. 

 The very greatness of the trust has been a 

 weapon with \vhi ch to coerce labor, and labor 

 has found it necessary to organize in opposition. 

 Another serious evil is the loss to investors 

 which frequently results from stock manipula- 

 tion either before or after the organization of 



trust. So pronounced is this evil that the 

 tors of some great trusts are noted for the 

 skill with which they gamble in the stock mar- 

 rather than for the success of their or- 

 ganization. Trusts have also been known to 

 resort to bribery of public officials, thus de- 

 moralizing the government. 



a this statement of the evils of trusts it 



not be understood that all trusts are 

 are "good" trusts and "bad" 



a the bad trusts making unfair use of 

 and advantages. The Interna- 

 tional Harvester Company is perhaps the best 

 example of a good trust, whose heads have 

 really considered themselves trustees not only 

 for their stockholders and their employees, but 

 for the general public. 



MI' thr most : .- repeated 



always been that 



are, or would like to be, monopolies, and that 

 they discourage business activity and inde- 

 pendence among individuals. It is estimated 

 that over one-fifth of the total industrial capital 

 of the United States is controlled by trusts. 

 But a monopoly is not, in and of itself, con- 

 sidered a bad thing. For example, most people 

 are agreed that all the telephones of a large 

 city should be under one management, and 

 also all street railways. In some other indus- 

 tries, such as sugar refining, a virtual monopoly 

 is not so obviously desirable, but it has certain 

 advantages. The real question to be consid- 

 ered, however, is not whether trusts are good or 

 bad, but whether anything can be done to re- 

 strict their powers to legitimate channels. If 

 the small producer can rest assured that the 

 trust will compete fairly, there is no reason why 

 he should not continue his business without 

 danger. 



(4) Trust Legislation. Public opinion has 

 sometimes exercised a little influence on the 

 great trusts, but the only permanent control is 

 through legislation. Great Britain and other 

 European countries have laws on the subject, but 

 they are, on the whole, not so hostile to large 

 combinations as is the United States. A Cana- 

 dian act of 1910 recognizes combinations as nat- 

 ural and legal, but it provides remedies for 

 abuses. At the request of six persons a Cana- 

 dian court must consider any abuses complained 

 of; if there seem to be good grounds for the 

 complaint the cpurt reports to the Dominion 

 Minister of Labor, who organizes a board of in- 

 quiry. The board has full powers to get all 

 necessary evidence, and its findings are made 

 public. Six remedies are offered: (1) the in- 

 fluence of public opinion; (2) removal of tariff 

 advantages; (3) cancellation of patents; (4) 

 revocation of licenses; (5) withdrawal of sub- 

 sidies; (6) fines and imprisonment, if the find- 

 ings of the board are ignored. Thus there is a 

 remedy suited to almost every conceivable case. 



In the 1'nit, d States a sharp line must be 

 drawn between trusts doing a business wholly 

 within a state and those operating in several 

 states. Nearly every state has, since 1880, 

 passed special anti-trust laws prohibiting agree- 

 i units or combinations in restraint of trade or 

 tending to create monopolies. Every state 

 possesses certain powers over a trust, because it 

 alone can grant the right of incorporation; it 

 may impose any terms it pleases as a condition 

 to doing business within its limits, provided 

 always that mich - do not int. 



with interstate commerce. And now the heart 



