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the death of a trust manager is certainly worthy
of consideration.
The watering of stock is not only indefensible,
but it -contradicts the arguments made by inter
ested parties in defence of trusts. The favorite
contention of promoters is that consolidation
makes production more economical, and, therefore,
tends to lower prices. But nearly every corporation
tbat attempts a monopoly proceeds to capitalize
tho expected savings, thus giving to the stock
holders the advantage promised to the consumers.
If a corporation plans to control any product,
and estimates a saving of one million by the dis
charge of travelling salesmen, it figures that that
amount will pay fivo per cent interest on twenty
million dollars, and it immediately increases the
stock to that extent. A prospectus issued by the
International Steam Pump company shows that
the properties bought were estimated at less than
twelve million dollars, while, the company was
capitalized at twenty-seven and a half millions.
The earnings for tho preceding year were esti
mated at one million two hundred thousand. The
prospectus adds, in conspicuous type: "A conser
vative estimate of tho advantages derived from
consolidation is believed to be one million three
hundred thousand over the present earnings,
which would make a total of future net earnings,
with the estimated earnings based on ten months
of the year's business, of two millions five hundred
thousand, or six per cent on the preferred stock,
and over eleven per cent on the common stock of
the new company."
The Many Cannot
Inflate Values.
The farmer is not able to inflate the value of
his farm; the merchant is not able to inflate the
value of the goods upon "his shelf; tho laboring
man cannot put a fictitious value upon his ser
vices. But a monopoly is able to collect dividends
upon watered stock, and to secure Interest upon
money never invested in the business. Why should
it be tolerated? Why should a fictitious person,
called a corporation, be granted privileges or be
permitted to enjoy immunities denied to the nat
ural citizen?,! It is inevitable that the ordinary in
dividual, whether customer, merchant, or employe,
must feel the evil effects of over-capitalization. If
a farmer realizes only a small profit when he sells,
but is compelled when he buys to pay the manu
facturer a large profit, it is evident that he will
fall behind in the race for a competency. If the
merchant must sell at a profit fixed by competition,
and buy at a price fixed by monopoly, and upon
terms regulated wholly In the interests of the
manufacturer, he will have to bear all the vicissi
tudes of trade, and will find himself at a great
disadvantage. Tho managers of the corporations
will be Interested in keeping the stock at par, and
in dull times there will be a perpetual contest be
tween wages and watered stock.
The same number of the North American Re
view which contains Mr. Sage's article contains
replies thereto by Mr. Hill of the Great Northern,
Northern Pacific and Burlington Railroad combi
nation, Mr. Schwab of the Steel trust, Mr. Flint of
the Rubber trust, and Mr. Logan of the Envelope
trust. But Lho testimony given by these gentlemen
must be taken with that allowance -which is al
ways .made for the testimony of witnesses. pecun
iarily Interested.
"V
App'lcatlon ot
Every Day Rule.
In discussing the result to follow from the es
tablishment of industrial combinations for the sup
pression of competition, one can only apply the
rules which are seen in operation every day. Hu
man nature does not change much from genera
tion to generation; selfishness is at potent an in
fluence today as it was a century ago. Advance
ment is not secured by the elimination of selfish
ness, but by restraining excessive manifestations
of it
The , . Commoner.
First, extortionate prices to the consumer will
prevail. The same greed which leads trust mag
nates to issue stock in excess of tho money in
vested will lead them to make the dividends as
large as possible, and tho same greed which leads
them to Increase tho dividonds will lead them to
repeat stock inflation indefinitely.
Second, industrial monopoly Is likely to re
sult in lessoned wages and in increasing friction
between employers and employes. The larger the
corporation the moro complete tho separation of
the employe from the manager of the corporation,
and the less the sympathy between those who toll
and those who fix tho wages.
Third, the enhancement of the price of trust
made articles must" in the long run lessen the de
mand for the product by lessening the ability of
consumers to purchase. This in turn means cur
tailment of production and a diminished derriand
for labor.
Fourth, under a system of monopoly all loss
can be thrown upon .the laborers. Under competi
tion the factory often runs at bare cost, or even be
low cost, because suspension of work. might mean
tho scattering of tho employes to other centres of
industry. But when a corporation has control of
tho market, it can close down without loss and
leave tho employes in Idloness until the surplus is
worked off at a high price. Thus a high wage per
day, when there is employment, may mean a small
annual income.
Fifth, monopoly is likely to result in deterior
ation of the product.
Sixth, the opportunity to make onormous prof
its by market fluctuations is apt to lead the man
agers of monopolies to speculate at the expense
of the ordinary stockholders, and suggests, a
method of influencing public officials far moro
potent than any form of direct bribery.
Seventh, monopoly provides a few places -with
excessive salaries, but denies to a multitude, of
competent and deserving men the possibility, of
Industrial and financial independence. It crowns
a few with laurels, and condemns tho masses to
hopeless servitude'
Eighth, as imperialism substitutes a sullen
subject for a bold and self-assertive citizen, so an
industrial monopoly converts the ambltipus and
progressive artisan Into a timid and servile de
pendent. Ninth, with a complete monopoly we may ex
pect that the control, descending with the stock
from father to son, will create an industrial aris
tocracy, as hostile to liberty as the landed aris
tocracy which was overthrown, by our forefathers.
Sound Principles
Apply Generally.
Whether a remedy needs to be applied depends
upon the answer given to the inquiry in regard to
competition. If competition is desirable, a private
monopoly. is indefensible. If, on the other hand,
tae suppression of competition is a thing to be de
sired, some plan must be devised to make the sup
pression complete. It would be obviously unfair
for one portion of the community to be protected
from competition while another portion was sub
jected to it. No principle can bo accepted as sound
which is not susceptible of general application. If
the people decide that competition should be sup
pressed, they must choose between private monop
oly and socialism. I do not mean that system of
socialism, now called extreme, which would place
the government in control of all the forces of pro
duction and distribution, but a still moro com
plete system, which would make the state the ben
eficiary of all service" rendered and the distributer
of all compensation.
Extinction of
Private Monopoly.
The extinction of private monopoly is, in my
judgment, both desirable and possible. Tho cor
poration is the. institution through -which the
monopoly develops, and, as a corporation is pure
ly a creature of law, the people can place on it such
limitations as may be necessary for public wel
fare and protection. The state has power to prer
vent the creation of any corporation within its
limits, or to fix the conditions upon which a cor
poration may exist. It also has the power, or
should have, to prescribe the terms upon which a
foreign corporation may do business in the state.
The distinction between the natural man and tho
corporate person is so great that the state should
have the power, if it has not now, to give its citi
zens any necessary protection from corporations
organized elsewhere. But tho stato Is not able to
furnish a complete remedy, and, without taking
away tho rights which tho stato now has, congress
should give additional protection. Tho Sherman
anti-trust law prohibits contracts entered into by
Gopaijate persons or corporations for tho limiting
of production, fixing of prico, or division of terri
tory. While this law has not, according to tho
belief of many, been enforced as it should have
beon, It U not broad enough to reach a monopoly
attempted by a single corporation. According to
tho constitution, congress has power to regulate
interstato commerce, and under this power it cer
tainly has a right to defino a monopoly, and to
provent such a monopoly from engaging in inter
state commerco. It can deny to a monopoly the
use of. the mails as it does to tho lottery. It can
also deny to it the uso of tho interstato telegraph
lines or railroad systems. It can require a corpor
ation to establish to the satisfaction of the inter
state commerce commission or of some other com
mission created for the purpose, the fact that
there is no water in tho stock, and that It is not at
tempting lo monopolize any branch of .business,
and it can provide for a revocation of the permit
01 license if tho conditions are violated. It can
fix a maximum proportion between the business
which any corporation engaged in interstate com
merce .shall be permitted to demand tho total busi
ness done in that line. It can fix tho maximum
capitalization of corporations engaged in inter
stato commerce, or the maximum dividends which
they may earn. It can require a corporation to
sell to all customers at tho same price and on the
samo terms, and it can remove the tariff from
trust-mado articles. These are a few of the rem
edies that have been discussed.
While congress cannot interfere with a domes
tic corporation, it has supreme power over com
merce between the states. The failure of con
gress to pass necessary laws, and of officials to
enforce existing laws, is due to the fact that mem
bers of congress and executive officers aro itnder
obligations to the trusts and monopolies for cam
paign assistance. The people can put an end to
private monopolies as soon as they undertake it In
earnest and not before. ,T4
narseillaise.
s
(From the French, by Itoget de Halm,)
Ye sons of Freedom, wake to glory;
.rJEIark, hark, what myriads bid you rise!
Your children, wives, and grandsires hoary
. Behold their tears and hear their cries V
Shall hateful tyrants mischief breeding,
With hireling hosts, a ruffian band,
Affright and desolate tho land,
While peace and liberty lie bleeding!
To arms, to arms, ye brave!
Th' avenging sword unshcath!
March on! March ont . M
All hearts resolved on victory or death!
Now, now the dangerous storm is rolling.
Which treacherous kings confederate raise;
The dogs of war, let loose, are howling,
And lo! our walls and cities blaze!
And shall we basely view the ruin,
While lawless force with guilty stride,
Spreads "desolation far and wide,
With crimes and blood his hands embruing?
Th' avenging sword unsheath!
To arms, to arms, ye brave!
March on! March on!
All hearts resolved on victory or death!
With luxury and pride surrounded,
The vile insatiate despots dare,
Their thirst of. gold and power unbounded, :
To mete and vend the light and air!
Like beasts of burden they would lead us,
Like gods would bid their slaves adore; -But
man is man, and who is more?
Then shall they longer lash and goad us?
Th' avenging sword unsheath!
To arms, to arms, ye brave!
March on! March on!
All hearts resolved on -victory or death!
O Liberty! can man resign thee, .
Once having felt thy generous flame?
Can dungeons' bolts and bars confine thee,
Or whips thy noble spirit tame?
Too long the world has wept, bewailing
That falsehoods' dagger tyrants wield;
But Freedom Is our sword and shield,
And all their arts aro unavailing!
To arms, to arms, yo brave!
Th' avenging sword unsheath!
.! March on! March on!
All hearts resolved on victory or death!
I - W-Mto,
