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be fairly high and profits fairly large. In case, then, any new competitor of the capitalistic class comes into the business, by agreement of both parties, prices would be cut to his customers, if necessary, and laborers in that line of industry would refuse to enter into his employ. On the other hand, if laborers in that industry were to increase beyond the normal demand of those in the combination, they would be opposed by the laborers already employed, and the employers in the organization would refuse to give them work. This plan to regulate competition, known as the “Birmingham Alliances,” seemed to work successfully for some time. But in 1900, owing to strikes and independent manufacturers, the alliance was dissolved, and later efforts to make such a combination have failed. While this plan has been proposed, and in the judgment of many justified, both in theory and in practice, most efficiently by Mr. Smith, it is nevertheless true that in this country, in Chicago at any rate, similar combinations in one or two lines of industry have been effected, though not complete in form. Some trade agreements continued from year to year between large companies and the trade unions have in part the same effect. The “forgotten man” in this case seems to be the consumer, inasmuch as the rate of profits and the rate of wages being both fixed by interested parties, although called fair, are likely to be higher than in many cases would be considered fair by the consumer.

An attorney of one of the prominent Trusts said some little time ago that, in his judgment, the ultimate outcome of the combinations of capital would be that their profits would be restricted, either by governmental action or otherwise, to a normal rate of 5 or 6 per cent., and that after this profit was paid the surplus arising from the savings of the combination would be divided between the laborer in high rates of wages and the consumer in low prices. He was not at all clear as to the forces which would bring about this result, beyond the fact that in some way public opinion would restrict closely the profits of the employer to what most people believed to be a fair rate. It, however, seems to be an easier step to secure a combination of employer and employee at the expense of the consumer than of the employee and the consumer at the expense of the employer. If the employer is to be closely restricted, it must doubtless be through legislation.

The late legislation by Congress in the Adamson Act (1916) upheld by the courts (1917) seems to indicate an inclination on the part of the trade unions to exert a more direct influence upon the Government to intervene in their behalf than has been noted heretofore. The statements of the leaders of the unions, however, that President Wilson practically forced this law upon them, and their agreement with the railroad companies in opposition to President Wilson's advocacy of compulsory arbitration of labor disputes, seem to indicate that such legislation will not be common, but that the great combinations of labor and those of capital will in the main settle their relations by mutual bargaining and agreement.



HATEVER may be the effects of industrial

combinations upon prices, or wages, or profits, VV or investors in stocks, it is thought by many that they have a more subtle, and perhaps on that account more dangerous, effect upon our political and social organization and upon the morals of individuals.

It is a matter of common rumor and almost of common belief that the railroads and the large industrial combinations are able to influence to a material extent the acts of our legislatures and even the decisions of our courts, although these charges now are less common than they were ten years ago. This influence is thought by many to constitute their chief menace to theintegrity of our institutions and the welfare of the country.

It is doubtless true that in many cases large sums have been paid by corporations to affect in some way or other the actions of legislatures. The officers of the corporations or their friends, if they speak at all on the subject, are likely to say that “strike” bills have been frequently introduced in the legislatures for the especial purpose of threatening their interests, in order that certain of the members may be paid to withdraw the hostile bill; and that it has been found both cheaper and much more effective to pay the very few people who employ this blackmailing plan than to attempt to defeat the hostile bill by fair argument. It seems also to be true at times that a bill which may be entirely proper and even beneficial to the public in its nature, but which also favors particularly the interests of some of the larger corporations, may be opposed by the party leaders or byindividual representatives, until an amount of money has been paid either to party managers or to enough individual members of the legislature to secure the passage of the bill. A few years since, a bill which was said to be entirely in the public interest, as well as in thatofoneof the largecorporations, could be passed in the legislature of one of our larger states, it was reported, only by the payment of $150,000 to the leader of the party in power. Some of the larger corporations, business men say, expected a few years ago to set aside for such uses a considerable sum to be charged to business expenses. It is encouraging to believe that the public investigations made by several state legislatures, notably, perhaps, the insurance and municipal government investigations in New York together with the pressure of public opinion, have greatly lessened this evil of bribery and undue interference in politics; but that it still exists is hardly to be denied.

Before a committee of Congress, Mr. Havemeyer a decade or two ago testified that the American Sugar Refining Company contributed in some states to the campaign fund of the Republican party, in others to that of the Democratic party, the intention being to stand well with the dominant party in each state. It was presumed that this custom was followed in order that, through the influence of the dominant party, both hostile legislation might be warded off in case of need, and measures, which, on the whole, were favorable to the interests of the company, might be more carefully considered perhaps than would otherwise be the



While it is probable that many individual cases of this kind occur, and that corporations, both in selfdefence and for the sake of furthering their own interests, do at times buy members of legislatures, it is likewise probable that the prevalence of this custom is not a little exaggerated by many people, and especially by certain sections of the press. It is certainly true that the character of individual legislators and their faithfulness to their trust are considerably better than is commonly assumed in popular discussion in the newspapers.

Again, direct frauds in weighing sugar subject to customs duties were proved against the American Sugar Refining Company. This fact, however, does not weigh especially against the great combinations as such, however severe it may be against the former officers of this company. Similar frauds are doubtless even more numerous in the case of individual smugglers or of small companies. That is a matter of personal character—not of business organization.

But if we grant that corruption of the legislatures and even of the courts on the part of the large corporations is not infrequent, does it follow that the corporations should themselves be destroyed, or that they are chiefly to blame? Certainly no distinction can be made in this regard (although in other respects, as Mr. Bryan properly showed at Chicago, differences are clearly to be noted) between the capitalistic combinations

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