698 REPORT— 1902. 



In it I have endeavoured to show : (1) That production under a Trust system 

 would be largely increased on account of certain economies and greater returns. 

 (2) That the question of wages, so difficult even under the present system, half 

 competitive, half of combination, would not be more difficult on the whole under 

 a Trust system ; and that self-interest would prevent a reduction of wages below 

 former levels, from the increasingly clear perception of intelligent managers that 

 good labour is worth high wages, and inferior labour often ' dear at the price,' 

 though low ; that accordingly wages might, ceteris paribus, be as high as under 

 the existhig order, though Trade Unions would occupy a less strong position than 

 at present to enforce their desires by a strike, without being entirely helpless ; that 

 the_ employment of the working classes would probably be more steady, though 

 their sense of independence might not be so strong. (3) That as regards prices, 

 while the Trusts would have power of fixing them at discretion, and in some cases 

 would be much tempted to raise them beyond what competition-prices would 

 have been, that nevertheless their sense of self-interest, if not of pecuniary 

 interest, would be a check on the most important cases ; and that while there 

 would probably be a difference between competitively determined and monopoly 

 determined prices, unfavourable to certain classes of consumers, it would be less 

 than some enemies of Trusts apprehend, owing in part to the elements of monopoly 

 at work at present in determining prices. (4) That profits and the rate of profits 

 as understood by Mill, and consequently dividends or profits miiius wages of 

 manager and insurance, would be raised, and raised more because manager's salary 

 is a fixed amount ; but that some of the owners of capital would not be benefited 

 by the rise on account of the shares taken by promoters and underwriters. 



These general theoretical conclusions are afterwards compared with the results 

 of some of the more notable American experiments in Trusts, as gathered from 

 American economists, with a view to test their soundness and applicability to real 

 cases that may arise, especially in countries under a system of Protection, which 

 give a much fuller scope to the evolution of Trusts, 



2, Shi])ping Combinations. 

 By Benedict William Ginsburg, M.A., LL.D. 



The subject divides itself into two parts, the first is historical, namely tracing 

 the combinations which have already been effected, and the causes which have con- 

 tributed to their happening. Most of those of which we have had experience have 

 been consolidations of existing interests and absorptions of minor services which 

 great companies have judged likely to serve as useful feeders to their main lines. 

 The Atlantic combination now before the public is of a different character. It is 

 an application of the American trust system to the exploitation of the sea-carrying 

 trade. It involves of necessity a considerable dilution of the capital of the business 

 it absorbs. Its success, from a shareholder's point of view, must therefore involve 

 either a raising of freights to make a due return on the larger capitalisation, or a 

 considerable economy in operation to make the net profit sufficient to give the 

 proposed return. The first of these two alternatives would seem to involve the 

 setting up of a monopoly, since the Protectionist policy of the United States under 

 which the great body ot their trusts have been built up will not assist the promo- 

 motion of this enterprise. The ' through bill of lading,' of which so much has 

 been said in this connection, is not a new institution, and cannot for several reasons 

 be pressed indefinitely. In the first place its success would depend on practical 

 control of the railways to the eastward. In the second, American pride in the 

 restoration of the influence of the Stars and Stripes on the sea, if not of its actual 

 reappearance on ocean steamers, will not induce Americans to submit to large 

 increases in. the payments for carriage, since eventually in the open markets for 

 produce the American shippers would feel the effects of such increase. A continued 

 and^appreciable increase in freights would depend on the establishment of a mono- 

 poly, smce outside tonnage can be attracted to paying stations, though outside fac- 

 torjescannot be brought into competition with land businesses. The success of 



