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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. ,.
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' ' ' 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
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