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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (Dec. 15, 1911)
Etfrtj&fll u m $( m' 2 The Commoner. 1 1 . n (! li I- 1 1 it i IK FN ; I I"- ! it fci h K f M 1 M ! H If; i . i! The Trust Question Written for tho Chicago Tribune by W. J. Bryan: Tho decisions of the United States supreme court in tho Standard Oil and Tobacco cases have brought the country face to face with tho trust question as It bas not been before. When tho Sherman anti-trust law was passed the trust development was comparatively limited. Since then consolidation aud combi nation have gone on until now, according to tho attorney general's speech at Duluth recently, nearly every great staple of industry is con trolled as to prices and terms of sale. Various efforts have been made to reach the evil through prosecutions and the people, while disappointed from time to time, still hoped for the enforcement of the criminal clause of the Sherman anti-trust law. In fact, there have been recent Intimations, with increasing em phasis, that tho criminal clause would be em ployed, but the supreme court decisions-have practically repealed tho criminal portions of the anti-trust law and left the public to rely upon civil suits. After the decisions of fifteen years ago it was supposed by the public that the law prohibited all attempts at restraint of trade, whether reasonable or unreasonable, the decisions of tho court at that time having expressly refused to construe the law so as to permit reasonable restraint. The decisions in those early cases were by a divided court, and it now seems that the trusts had no idea of accepting these de cisions as final. Efforts were made to secure a modification of tho law by act of congress, but these efforts were unsuccessful, the last being made so by an advorse report from tho senate committee, which exposed the purpose of the effort and pointed out the widespread demoralization that would be worked by the proposed change. Now, however, the court has done what con gress would not do, and the judges who joined Justice White in the opinion have tho pleasure of seeing their logic, or rather lack of logic, eulogized by all the trust magnates, the last eulogy being pronounced by Mr. Parsons, who .boasts that he organized the sugar trust, who is now under indictment. The question before the country at this time is: What is to be done? With the staple pro ducts of industry controlled by combinations, with tho court obstructing the processes of criminal procedure by a decision that renders it all but impossible to convict trust magnates criminally, what are the people to do? Mr. Gary, head of the steel trust, proposed regulation even to the extent of the regulation of prices, and this principle is Indorsed by the attorney general. The ' latter compares tho trusts with the railroads, argues in favor of regulation of prices, and puts the regulation of prices upon the same ground as tho regulation of railroad rates. To clearly understand the situation, it may be well to suggest that there are now three reme dies before the country: First, tho national in corporation of interstate industries. Second, the regulation of interstate Industries by a board of the court, which will have power to fix prices. Third, legislation which will dissolve, within a reasonable time, the private monopolies that now exist and prevent the organization of new ones, thus restoring competition. Tho first and second are really one in essence, since they simply contemplate different means of reaching the same end. Those who advocate national incorporation, expect, of course, that the Incorporation will be upon conditions which will in themselves constitute a regulation, whilo those who advocate regulation only, without national incorporation, will reach the same end in a little different way. . The objection to national incorporation is that it is intended to do away with state regula tion entirely and compel reliance exclusively upon national regulation. This is objected to and I think the objection is sound on tbo ground that tho state is left helpless in case federal legislation isnot sufficiently strict. Federal incorporation is not only objectionable but it is unnecessary. Tho federal government now has power to employ any means necessary for federal regulation without national incor poration, and whatever federal regulation is necessary ought to bo added to state regulation, and not substituted fdr it. The second plan is objectionable for two reasons: First, because it is insufficient that is, federal regulation is not a. complete remedy: The influence exerted by monopolies is so great that tho people would bo in a constant battle with the great corporations to see which would elect offlcials through whom control would be exercised, and no one who has watched these decisions can fail to recognize the helplessness" of the masses when they have to fight a vigi lant, sleepless group of financiers who have a large pecuniary stake in controlling the govern ment. The larger the control vested in the national commission, or court, the more important it would bo for the trusts to control the selection of the mombers. If the court was intrusted with the fixing of prices it would mean hun dreds of millions a year to the trusts. No well informed citizen need be told that with so largo a sum at stake the trusts would bo active in overy congressional, senatorial and presidential election. It has been suggested that the regulation of prices would be socialistic, and there can be no doubt that its tendency would be in the direction of the ultimate ownership by the government of the industries themselves. When the country decides that competition can not be r" stored that monopolies are a permanent development of industry then the people will be face to face with the socialistic issue. The attempt to control water companies in the cities resulted in so much corruption and so much extortion that the cities have almost all entered upon the municipal ownership of waterworks. They are going through the same experience with lighting companies, and they will have the same experience with street car lines and telephone companies. If franchise-holding corporations were con tent to furnish water, light and street car ser vice upon a business basis' and at reasonable rates the public would prefer private ownership. But human nature seems too frail to be trusted with the enormous power that monopoly gives to those who possess it. They are not content with that which is just and reasonable, and in their effort to secure more they resort to means which Bhock the public conscience and at last compel municipal ownership. The railroad companies partake so much of tho character of monopolies that public owner ship of them has been dtscussed as a means of protecting the public from watered stock, exploi tation and extortion. But public ownership of railroads, if it comes, will not be nearly so great a tax upon the government as the owner ship of industrial enterprises. Before the people admit that competition is impossible and concede that monopoly is a necessity, they had better look ahead for mo nopoly in industry. It has none of the elements of the natural monopoly. Competition is practically impossible in the matter of water, light and street car service, and competition is being reduced to a minimum by railroad consolidation. But in the' case of industries there is no good reason for monopoly. The corporations that now control the various industries have many plants, and some of these plants are quite independent In management. The only reason for combination is to prevent competition, and the only reason for preventing competition is to secure larger profits. The trust is not an economic development any more than horse stealing or burglary. The man who holds up the passenger on the highway acts upon the same principle that underlies private monopoly. Tho trust conducts highway robbery on a more polite and more extensive scale. But there is no distinction from a moral standpoint between the trust methods and the methods of the highwayman. If the public does not see that the methods are identical, it is because the glamour of finan cial success has obscured the processes by which the victims' money is extracted. The third plan is, to my mind, the only one consistent with history, with economic princi ples, and with the publls welfare. Private mo nopoly should be regarded as indefensible and intolerable, and legislation should be enacted which will compel the dissolution of all monopo lies now in existence and make it impossible for a private monopoly to be created hereafter. The democratic platform outlines a plan, and our new form of government m'akes this plan easy of adoption. The plan is in substance, as follows: Let a license be required of interstate commerce corporations when they pecure a cer tain proportion of the trade. 51 Monopoly depends- upon the proportion of VOLUME -li;j NUMBER 49 control. A corporation that controls 5 per cent of the product in which it deals can not regu late the price or fix the terms upon which others daljusiness. If, however, it controls 95 per cent of the product, it can fix both price and terms. Somewhere between 5 per cent and 9.5 per cent the control becomes effective in the establish ment of a monopoly. As congress has complete control over inter state commerce, it can fix the percentage at any amount. Our platform suggests 25 per cent as the point at which a license should be required. But the percentage is not so material as tho principles to be applied," and tho percentage can be changed whenever experience proves that it is too high or too low. The proposed license differs essentially from national incorporation. The license system recognizes the right of the states to incorporate, and it should also 'recognize the right of each state to fix any condition it pleases upon foreign corporations doing business in the state. A license would not grant any new powers. It would simply be a restriction upon the powers already possessed by corporations. The plan proposed in the democratic platform contemplates a regulation of the corporations that take out a license with a prohibition of more than 50 per cent control. That is, a licensed corporation would be permitted to en gage in interstate commerce on such terms as were fixed by the federal law and by state laws, but would not be permitted to control more than 50 per cent of the total product. The 50 per cent limit also is arbitrary, and may be raised or lowered to conform to experi ence, the object being to compel corporations to come under federal supervision when they roach a point where they may exert a harmful in fluence over trade, and to stop when they reach a point when a harmful influence may be pre sumed. The license should require proof of paid-in capital and absence of "water," and licensed corporations should be prevented from employing any of the means which are now re sorted to for the elimination of competition, as, for instance, selling at a low price in one section and at a higher price in another. It will be seen that under the license system a change can be made at any time,,, not, only in the percentage but in' the 'conditions upon whioh the license is granted and in the regula tion applied to licensed corporations. The object of this systein is that it restores competition and leaves competition to- regulate price, terms, quality, and so fortlf. It has tho advantage also of relieving from interference those corporations which are too small to exer cise a restraint upon trade. In other words, the plan hits the evil at which it aims and not only relieves the smaller corpora tions from embarrassment but protects them from such rivals as attempt the employment of illegitimate means for the extension of their business. The plan restores competition and wards off the danger involved in regulation, which has been fpund unsuccessful and would likely be found so corruptive as to increase the demands for government ownership. The democratic plan also, avoids an Increase of federal power, such as would be involved in national incorporation, and it protects the right of the state to deal as it will with corporations entering the state. This plan has been before the country for eleven years, the principle of it having been set forth in the platforms of 1900 and 1904, as well as in 1908. The last platform, however, pre sents the plan more elaborately and introduces limitations which relieve the smaller corpora tions from national surveillance. No other plan except that proposed in the democratic platform promises any relief to the honest busi ness man who is anxious to obey the law.' We have no definition of monopoly to which a manufacturer can look for guidance, He knows now that he can restrain trade in a reasonable way the supreme court has told him that; Tiut each case will be decided upon its merits and he will not be able to learn without years of litiga tion just how far he can go without being guiljy of unreasonable restraint. Is it not time to pay somo attention to tho just demands of the honest business man and relieve him from anxiety - and expense at the same time that the country is relieved from the conscienceless depredations of the monopolist? Such relief is possible. The plan embodied in the democratic platform protects tae honest man, restrains the corporation which attempts to control business, and does it without Invok ing any new principle. There is no tenable middle ground between competition and government ownership. When- 'a j I?'. hf '