The commoner. (Lincoln, Neb.) 1901-1923, November 01, 1913, Page 7, Image 7
"W I'HJffVT?' tpnyt The Commoner November, 1913 measure. The chief characteristic of modem in dustry, to-wit, the great size of industrial units and scale of operations, is the direct result of a legal enactment and the result of a fiction created by law, to-wit, the creation of a legal person, the corporation, which legal enactment completely revolutionized the economic develop ment f society. . Man was created before industrial society, industrialism as a society came into being, was fostered, and was developed by law because of the needs of men. Civilization would be a lie if, after bringing these institutions into being for the purposes of benefiting society and men as a whole, it did not have within itself the powerto deflect by law the course and development of the thing that it had created, so that such force and development should continue to be of benefit to men, arid "not a Frankenstein to destroy the liberties of men. Our theory of government is wrong, our very hope in religion is unfounded, if we must concede that we are not the masters of our' own destiny, and if we can not so shape evolution in industry, by the conscious applica tion of man-made laws, that the benefits of such evolution shall 'accrue to all men, and if such laws shall not decree that the few men Who are trustees for society, and wlio should be fairly and abundantly compensated to the extent of the service they render, should also be prevented from putting their feet in the trough if they be come animated by the fundamental greed that lies in' human nature. Those opposed to monopoly and its regulation by government maintain that such a condition is abhorent to the fundamental principles of demo-, cratic government; that even were such regula tion of prices "possible, the cure advocated would induce greater evils than those sought to be remedied. It Is conteudod that such a situa tion would irrevocably lead to a socialistic state, to government ownership of all industrials, and. with 'it that there, would "come death to individ ualism, and the' gradual smothering out of those, springs in human nature, initiative and love of independence, which, it is maintained, are re sponsible for al the advances In our civilization and in airlines .of human effort, and which, it is contended, are- the very rock, and foundation, upon which democracy is established. ,, ' SIZE DOES NOT MEAN ECONOMY The premise assumed, that economy in produc tion is coincident with" continuing increase in size, is attacked as being unsound. It is sug gested that the size in many industrial organiza tions is abno'rmal, and was developed iiot by the natural law of the industry and economic evolu tion, but by an unnatural force foreign- to the industry, to-wit, the desire and motives 'Of men to make a fraudulent promotion profit and to engage in stock-jobbing exploitation of the public. The dividend history of these great in dustrials, it is contended, demonstrates that the economies claimed did not materialize; that a large' percentage of these exploitations have be come egregious failures. Again, it is main tained that in the last analysis the efficiency of any large industrial organization is dependent upon the brain and personality of a single man; that economies in production and distribution are effective to the extent that a single person ality can extend its influence and its control through an organization; that oy the very nature of things there is a limit physically to which a personality can so extend Itself through an organization, ' and that a time must come when that organization becomes so extended that subordinates become insulators of energy rather than transmitters of energy from the fountain personality directing and operating the organization. By reason of the extent of such an industry, it is maintained also that the com ponent parts, to-wit, the subordinates in organ ization, become less effective and less efficient, due to the bureaucratic nature of the very sys tem itself. It is contended, moreover, that the experience in many lines of industry demon strates that while an increase in the volume of production brings about an increased saving with each unit of increase in size, nevertheless with each succeeding increase of unit in size the in crease of saving becomes a smaller amount than the preceding unit of saving; and therefore that such increase of saving is a constantly diminish ing factor as the size increases, and that there fore a point is reached in increasing such pro duction at which further enlargement in size brings no further increase in saving, and after which waste would result, and after which the line representing the saving could be repre sented, not by a descending curve but by a rising curve indicating loss and not gain. Experts In factory management, and economy and effi ciency engineers, commonly maintain that a factory may be too large for economical produc tion. To illustrate further, a factory might be able to produce fivo thousand watches a day at a certain price, and by increasing the daily out put by a thousand watches each day, up to six, seven, eight, nine, ten, eleven, twelve thousand watches per day, might Induce a saving in the cost per watch. Such saving with each thou sand of Increase, however, would be less and less; until finally, when, let us say, fifteen or sixteen thousand per day is reached; it would be gravely doubtful whether there would be any Increase in saving, and whether, in fact, there might not be additional cost rather than economy. It is further maintained that after a certain unit of size Is reached, a point of maxi mum efficiency is obtained, after which further enlargement induces, not economy, but waste. EFFICIENCY OF THE TRUST Here, then, are two conflicting contentions upon a proposition that is vital in the final cor rect solutidn of this problem. If an ever-in-" creasing capital, integration and organization induces an ever-increasing lowering in coat of production and distribution, it might well be maintained that the logical monopolistic unit arising therefrom was the ultimate economic fact In industrial evolution, and that govern ment should recognize the situation frankly, and so regulate these units as to bring to the con suming public the benefits and advantages of such condition. Or, in the alternative, frankly take the position that while monopoly can in duce certain economies in production and distri bution, nevertheless there are incident to such a system evils that are so much greater than the advantages incident to mere lowered cost that, in spite of the latter, the attitude of goyern ment will be against pitch a situation. On the other hand, if it is a fact that economies in large-scale production continue only up to a certain point in enlargement of operations, which might be called a point of maximum e'fll clencv and that further .enlargement induces waste" Instead of economy, theji there would be established as a scientiflp act ,that monopoly was not scientifically the last word in Industrial evolution, but that the fict which government should take cognizance of was that the true principle of, government attitude to business should be ;a recognition of competitive units and. the regulation thereof. . FACTS NOT THEORY TO DETERMINE So therefore, at the center of this problem there is a question of fact, to be determined if possible. There is now no governmental or other agency engaged In attempting to get scien tific Information with reference to this fact. ' It' is characteristic of the quality of mind of the ' president of the United States that he should desire facts upon which to base a judgment. It is the intent and purpose of the bureau of corporations, acting under the direction of the president of the United States, to make a survey of the industrial field and an intensive investiga tion of this subject. We shall enter Into this investigation with the sole intent of working out, in a scientific and fair-minded, spirit, the facts absolutely as they are. So vital and so fundamental is this problem that to attack it in any other spirit would be criminal. What Is needed is light; not heat. The problem bristles with difficulties; it seems a tremendous under taking. It will demand an increased appropria tion from congress to enable us to have the men and means at our command. The resif ts of this investigation may not coincide with all that we hope to procure. Wo can, however, obtain some facts that will at least contribute to a correct interpretation of industrial conditions as they exist. We ask for the sympathetic cooperation of the business men of this country. This problem reaches down to the fundamentals of govern ment itself, It is a problem that will tax the greatest minds of this generation and the. next. In its solution there lies a challenge to the con structive genius of the financier, to the Imagina tion and the heart of the captain of industry. In its solution there lies a compensation greater than can be found in private fortune; for in it lies service for the children of men yet unborn. In its solution there Is a call to all up-standing, thinking, patriotic men, be they manufacturer, consumer, financier, statesman, or toiler, to aid in preserving conditions which shall safeguard the liberties of men, and which shall insure such a relationship between government and industry that thoro shall bo freodom of opportunity ni fair moasuro of prosperity for generations men yet unborn, who are to live in this country of ours; that thoro may be an industrial freed oik founded in this country which shall enduro upon the cornerstones of efficiency, Justice, forbear ance and tolerance; which shall enable tboso of our children, who comes long after, to he men not slaves; either to un industrial hierarchy or; to a governmental despotism. Partisanship Run Mad Either Senator Cummins has decided to rctfr$' from public life or ho has concluded that tuV beneficiaries of protection are tho only ones who need to bo consulted by a senator from low.' ' HIb bitter attacks upon tho president are Wlth-j' out excuse. The senator himself was for a shorn time Inclined to question the motives and good faith of those who profit by protection. In fact, undor the inspiration of tho late Sonator DolU ver's leadership he came near being an insurrec tionist on the tariff question, but he has rcturn,e4 to his wallow in tho mire. No standpat senator representing a stronghold of protected interests . has assailed the president more vehemently or . misrepresented him more unscrupulously, HI virulence at last roached a point wherp the. democratic senators felt it necessary to robukfj t him and they did it so effectually that, however, the fires may burn within, he will probably here- . after use a rhetorical smoke consumer. A fow years ago he spoke at a banquet where he was quoted as making, in the exuberance of his republicanism, some very partisan remarks Since that time he has bent and swayed under the influence of the progressive winds, but If. on,,... can judgo from his recent speeches, he seems to think that the storm is over. After all he ha said against the Payne-Aldrlch tariff law and in favor of an income tax, ho wound up by voting to keep that law on the statute books and to de-t, feat an income tax ranging from one to seven per cent He. calls the president a "dictator," but what; about the Wall street Influences that have domi- nated the republican r; party tor a genoratlon.?' Heilias no- words of condemnation for them Jusfc now, but exhausts his vocabulary on a president who has put the White House on the side of the people But can he lead the progressive repute -Means of Iowa back into the Wall street fold? .-, W. J. BRYAN. ,. r.' f ' ' ' WtfOflfdSTTE Every member of either house who refrained, from, trying ,to embarrass the demo rats on thp tariff bill deserves credit, but to one man fall -' the greatest share pf glory for Independence, u, cause it cost hiin most. Especially did ena.far '. La Folletto'ojdtuation require strength of char!, actcr; not only had he always been a republican, but he had, since the Roosevelt split, core to ha ) looked upon as likely to dominate the party i ' tho future. As progressiveness seemed nee dad to save it from the destruction, La Follette's in fluence had suddenly been multiplied. In voting for the democratic tariff, he gave a final proof that no consideration can prevent him from fol- lowing always his conviction. This man ha fought the straight fight all- his life. Often the sacrifice has been great, iii' has given tip friends, money, comfort, party prai.e, easy ad vance. He has stood abuse and suspicion' Nearly always tho country and his party Jiave come around finally to La Toilette's position. This last proof of patriotism may annoy the re publican senators for the time being, out it will probably mean that La Toilette's influence, ere over them, will be strengthened in the end; ins cause a man who is so experienced, strong, far sighted, and fearless is badly needed by the party now. Harper's Weekly. President Caldwell of the investment banker association said in his speech opening the second annual convention of that body at Chicago rr cently that good stocks and bonds are dowa la price because the administration at Washing Un, investors believe, will not give the corporation! square deal. All that the administration, actia through its regulatory bodies, has sought to 4 is to restrict those corporations which perforat public services to a reasonable return ,jm the actual capital invested. Translated, that meaa to give the people who pay the Interest on. boadfn and the dividends on stock a square deal. Mr. Caldwell seems to want more than a square deaU U wl , H tSfca?.