of the competitors. When unfair and illegal methods of competition are employed, such as the use of discriminating rates on railroads, or any dishonorable practices, the above discussion does not apply. Such unfair and illegal methods put the question rather into the field of criminal law or social ethics. Such practices are under no circumstances to be justified or defended. But aside from the effect of the avoidance of bankruptcy on the part of numbers in the community, it is often urged, and that with much reason, that under the present system of production on a large scale, an individual cannot start independently in business, unless he has large capital or is in some way personally in favor with the managers of the larger combinations. We have, therefore, in the community, it is said, a few magnates in productive activity, together with multitudes of men of sound judgment, capable of managing large enterprises independently, who are reduced to the position of employees their individuality dwarfed, the development of their manhood checked-all this, of course, to the detriment of the State and of society.

So far as this contention is true (and there is much truth in it), it is perhaps the most serious objection that can be made to the present system of industrial combinatio It is a well-known fact that the high officials in our large insurance companies, in our railroad systems, in our banks, and in other great industrial enterprises, do give opportunities at times to their children and their friends for advancement in the direction of industrial enterprises which could not so readily at least be secured by others. On the other hand, it is doubtless true that if these scions of the industrial

magnates show themselves incompetent, they often will be soon removed from their positions, or dropped into others of less responsibility, or held permanently in positions involving little power of final decision, while the more capable men who have earned their positions take their places. If such a course is not taken, the rivalry of old or new capital will soon make itself felt. The savings of combination before mentioned will be more than offset by the losses arising from incompetent management, and the combination will fall before its smaller rivals. That this tendency in great corporations toward nepotism is strong cannot be doubted. There is reason to believe, however, that the variety of interests and the pressure of opinion within the combination have been and will be sufficient to hold such a tendency within safe limits. Moreover, the same evil is found, possibly to an even greater degree, in the small institutions.

Again, the late popular demand for efficiency in business methods has led in very many cases to a much closer study of costs of production in many fields and has thus so clearly pointed out the inefficient man, whoever he may be, that his position has become less

secure.

On the other side, however, of this vital question, there are one or two matters for consideration. Many men are now trying to work independently who are industrially fit only to work under direction. Any careful business man or observer of business conditions can probably name among his acquaintances men who, good workmen perhaps, are fit to be carpenters or machinists or tailors while working under the direction of

others, but who wish to become and at times do become contractors, or who open stores of their own where they are in positions of financial responsibility as heads of establishments, and who, whenever they secure such independent positions, invariably bring disaster upon themselves and consequent discomfort to their families and loss to their creditors. There can be no question that, from the strictly economic point of view at least, the endeavor of these men to manage a business independently, when they are fit only to be workmen under the direction of others, is a distinct evil. Unless the waste is needed to enable society to select the business leaders, or unless men who work under the supervision of others are deprived of their individuality, the loss is probably great enough to overbalance any gain which society derives from their attempts at managing a business for which they are not fit.

The fact should not be overlooked that persons holding subordinate positions are usually granted much more independence in work than is often thought. In a large mercantile or manufacturing establishment the heads of departments ordinarily have full discretion in the management of their departments as long as they prove successful. Their employers look for results. They are given general directions in order that they may fit properly into their places in the great organization, but they have full discretion as regards the details of management, and in most cases have as great opportunities for showing their originality and for testing their powers of combination and organization as it would be possible for them to have in managing with entire independence a much smaller business.

When a number of small railroads are brought together into a large system, a number of presidents of railroads lose their positions as presidents to be sure, but most of them are retained as division superintendents, managing the same lines of road which before they managed as presidents, employing for the most part the same men, receiving as good pay, and being given almost if not quite as much discretion as before in the general management of their roads. It is true that they must report to a superior, but it must not be forgotten that as presidents of the roads they also reported to their directors, and that their work was subject to criticism even before the combination was made.

Indeed, comparatively few men in important positions at the present time are entirely without responsibility to others. The president of a railroad reports to his directors; presidents and professors in universities, superintendents of schools, heads of practically all governmental departments, are subject to control, and more or less subject to direction. The art of managing one's superiors by tact, honesty, and excellence in service is also an art which develops individuality, perhaps to even as great an extent as the power of acting with entire independence, owing responsibility to none, excepting perhaps to one's creditors through the action of a court. A wise superintendent of schools, to show his power over his trustees, said to a friend some time ago that they had never refused any request that he had made. His thoughtful friend replied, "Then you have been exceedingly wise in making your requests." The wise executive officer has little difficulty with his superiors, and one cannot say that his individuality is in any

way weakened by the fact that he is held responsible by those superiors.

The weakness of most employees is, that they do not attempt to think independently in their work, and that they make no effort to exercise original power in the performance of their duties. There are few positions in which independent thought (not, of course, independent action without consultation) will not count. The employer is rare who will not trust to the fullest extent any employee who shows himself fully worthy of confidence, and who will not give him every opportunity to develop original independent power. Of course the fact is not overlooked that much work is largely routine, but the statements are not too strong when one speaks of opportunities for independent thought under the competitive system as compared with those under the combinations. Under both, the great majority are not expected to do much planning.

The advantages coming to the combination and to the individual manager of a plant from comparative accounting that shows the results of each plant's work in comparison with those of all the other plants are very great. When the central office from its tabulated weekly returns sees that plant Number 1 is falling behind in labor costs, that plant Number 2 is improving its by-products per ton, that plant Number 3 is falling behind in quantity of finished product per ton of raw material, etc., the president and board of directors are able to point out to the managers of the respective plants their strong and weak points with a precision and a degree of effectiveness that cannot well be matched in general competition. Such detailed com