INDUSTRIAL COMBINATIONS.
[ Address by Charles R. Flint to the Illinois
Manufacturers' Association , at their annual
dinner , on "Chicago Day , " Tuesday , October
9,1000. ]
A combination of labor is a trades
union ; a combination of intelligence
a university ; a combination of money a
bank ; an industrial combination is a
combination of labor , intelligence and
money , popularly miscalled a "Trust. "
Combination is coincident with civiliza
tion. Savages have little power to com
bine , because combination depends upon
trust in our fellow man , and in primi
tive life it is fear that rules.
In the evolution of industrial life , one
of the first steps was to subdivide pro
duction into trades. Each did what he
could do best , settling accounts by an
exchange of products. Later those , en
gaged in the same trade formed part
nerships , then corporations , and finally
consolidations of corporations.
Against this march of industrial prog
ress there has always been opposition.
There have always been those who ,
appealing to special interests , to the un
successful , the discontented and the
misinformed , have endeavored to obtain
political favor by opposing progress , by
endeavoring to prevent the natural , and
mutually beneficial , cooperation be
tween capital and labor.
Today there are men of intellectual
refinement and pleasing personality
far removed from the centers of finance ,
commerce and industrial activity , who
read of industrial life , but who are not
in it ; who are studying the history of
industrial progress , but are not making
that history , and yet , as Bismarck
said , "cursed with the dangerous gift of
oratory , " they are advocating theories
in business and finance that , if adopted ,
would shake the very foundations of
our industrial existence. They are half
thinkers , because they think without
the facts. They remind me of General
Grant's most amusing after-dinner
speech to the newspaper men of New
York. He said : "A feeling of awe
comes over me when I realize that I am
in the presence of men of such marvel
ous capacity. Your rapidity of con
ception , your unerring judgment , seem
supernatural. When I was before Richmond
mend , surrounded by men who had
made a life study of military tactics ,
when , after days and nights of deliber
ation a plan of campaign was finally de
termined upon , one of you would get
down to your office late at night and.iu
a few minutes dash off an editorial tell
ing how we were all wrong , and point
ing out what we ought to do. Your
remarkable versatility was shown in
formulating legislation , and you were
peculiarly strong in interactional diplo
macy where the existence of state
secrets made it impossible for you to
get at the facts. " * * * *
Industrial Leaders.
The men of sound judgment , leaders
in the industrial wars for the supre
macy of the American farmer , the
American manufacturer and the Amer
ican wage-earner , should not be dis
turbed by the clamor of those who are
not in the struggle , and therefore can
not appreciate the actual conditions ,
and whose leadership , if accepted ,
owing to their inexperience , would con
duct us to inevitable disaster.
"The tendency of modern trade is to
ward consolidation , because the admin
istration of the largest mass is the cheap
est. " Centralized manufacture per
mits the highest development of special
machinery and processes. The factory
running full time , on large volume , re
duces the percentage of overhead char
ges. Direct sales on a large scale mini
mize the cost of distribution. Centrali
zation of manufacture and distribution
reduce aggregate stocks , and therefore
save in the shop wear , storage , insur
ance and interest. Consolidated man
agement results in the raising and fixing
of the standards of quality , the best
standards being adopted ; in avoiding
waste and financial embarrassment
through overproduction ; in less loss by
bad debts through comparisons of credit
and in securing the advantages of com
parative accounting and comparative
administration.
Industrial evolution , which is as in
evitable and as unalterable as the law
of gravitation , has attained its , as yet ,
highest development here in the United
States. Every unprejudiced man must
recognize its advantages , and that it is
because of them that we are taking so
important a position in the world's mar
kets , increasing our national wealth ,
furthering the welfare and increasing
the prosperity of our people.
The Young Man Absalom.
Highly developed organizations re
sulting in enormous volume of business
have increased the necessity for intelli
gence , and as the supply of brains is not
equal to the demand , therefore the
price of brains is high. The turning
over of individual businesses to combin
ations has caused the retirement of old
men to the advisory board for judgment
and has made way for young men for
action. You ask , "What chances have
our young men ? " While you are ask
ing the question , those of ability and
energy have already started on a career
of successful industry. If the student
will leave his books and the orator the
stump and go to our factories , to our
great farms , to our mines , to our lines
of railway they will find ten times
as many men receiving over $3,000 per
annum as there were thirty years ago.
Mr. Schwab , of Pittsburg , is a type.
He started as a stoke driver of the en
gineering corps ; today , though under 40
years of age , he is president of the larg
est iron company in the world , and I
can point out a hundred successful men
today where yon could not have named
ten under old conditions.
But it is said , they are dependent.
Dependence upon each other is , how
ever , the condition of civilization. The
very word civilization implies commun
ity life , and community life means mu
tual dependence. Complete indepen
dence is found only in the wigwam of
the Indian. There the young man
builds his own house , makes his own
clothes , gets his own meat , and keeps
bis bank account , if he has any , in his
pocket. The best opportunity he has
for distinction is in showing superior
prowess in hunting , or superior strength
in paddling his own canoe. In civilized
life , interdependence is more profitable
than independence. Your young man ,
instead of paddling his own canoe , can
command one of those great combina
tions , which is doing so much to bene
fit the world , the steamship. The fact
of the man on the bridge being depen
dent on the engineer , who is running
the powerful machinery below , does not
prejudice him any more than the en
gineer is prejudiced by taking his orders
from the man on the bridge ; each gives
the other his opportunity.
But let us not spend more time in
considering who will take care of these
young men of high aspirations and
superior intelligence ; they will take
care of themselves. The Almighty has
given the greater power to superior in
telligence , and as Samuel 3. Tilden , one
of Nature's great monopolists in the do
main of intellect , has said : "You can
not substitute the wisdom of the Senate
and Assembly for the plan of moral gov
ernment ordained by Providence. "
Maximum Wages , Minimum Profits.
Let us now consider the interest of
the workingman in this economic evolution
lution which has produced the perfect
machinery and giant factories , support
ed by great aggregations of capital rep
resented by shares which enable all to
become investors. It is a fundamental
fact that the man of superior ability
cannot accumulate for himself without
giving to the wage-earners an opportun
ity to earn the larger share , and it is
always an increasing share.
The tendency is today to a minimum
of profits and to a maximum of wages.
When profits become abnormal , they
invite competition , and are immediately
reduced ; in which case , the consuming
world is benefited solely. If they are
not sufficiently abnormal to invite com
petition , then labor demands a larger
share of the profit , in the form of
increased wages and it is either volun
tarily or-necessarily agreed to ; in which
case , the body of wage-earners reap the
advantage. And , inasmuch as the body
of wage-earners is the great body of the
community , it necessarily reaps the ad
vantage in any case. Employees know
almost as promptly as do the employers ,
whether a mill is earning an extrava-