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parative statements of results are as helpful to the individual managers of the separate plants and as much contributing factors to their personal success and development as they are to the profits of the combination.
As the system of industrial combination develops, it seems now that there will be many of these positions to be held by subordinate superintendents, which will be equally satisfactory from the financial point of view as the headship of small establishments, and which in most cases will afford an opportunity for enterprise and independent judgment not materially less satisfactory, while, on the other hand, there will be created some positions which are far greater prizes in the industrial world than could ever be found under the former system of competition; and yet experience has not so far shown whether or not favoritism instead of excellent work may fill many of these places. Eventually, under the pressure of comparative accounting and publicity, there seems little doubt that merit will win most if not all of them.
To those, again, who are of the opinion that the large corporations often compel their employees to engage in practices which are not in accordance with the strictest morals—for this complaint is sometimes made-it may be said that one is as seldom urged to do wrong by his employers as by the system under which he works. The pressure of competition against the individual producer not infrequently leads to misrepresentation regarding credit and to dishonorable practices in methods of manufacture and sale of goods. How many of our taxpayers deal fairly and openly by the State? The system of combination may, and does indeed in many cases, lead to wrong acts on the part of individuals. If our eyes are open, we may see that it is questionable whether the competitive system leads to fewer. There is much to be done in the way of improving our standards of business morals; and yet it is probably not too much to say that on the whole, whatever the form of our present industrial system, they are improving, in spite of the many evil practices which we see.
A high standard of business character probably never before counted for so much as it does to-day.
In estimating the extent of both the economic and social effects of industrial combinations it is essential to note that their activity is limited now to only a part of the industrial field, not more than 25 per cent. at most; and there seems no likelihood that they will in this era,
if ever, cover it entirely. So far, at least, they have proved to be most successful, with apparently a degree of permanence, only in those industries which require much capital for successful prosecution; in which the product is uniform in its nature and the
productive work of a routine character; those in which the product is bulky and there is a wide distribution of freight; or those in which other somewhat similar characteristics of a special nature, such as very expensive advertising, patents, etc., serve to encourage the combination of capital.
On the other hand, there have been few combinations, as yet, in agriculture with the exception of those engaged in the distribution of the product, such as the California Fruit Growers'Association, coöperative cheese and butter associations, and others of that type. It is true that there has been an occasional corner of wheat in some one market. In some of our larger cities there have been combinations which to a considerable extent have controlled the supply of milk in their particular vicinities. There is a large combination in the manufacture of flour, but that controls only a small proportion of the market. Speaking generally, food products of all kinds that come from the farm and from the small producer are largely beyond the control of the combinations, though the production of dressed beef seems to form an exception in the opinion of some observers.
So, again, in lines of manufacture in which little capital is needed to start a successful establishment, although there may be large combinations, competition against them is so easy that they comparatively seldom secure control of a very large proportion of the market, and the evils from them to the community can be only comparatively small.
The great mercantile establishments known as department stores have been considered by some as analogous to the great manufacturing combinations. In the main, however, they are quite different. Their chief advantage is that they bring goods of various kinds into convenient proximity to meet the needs of the purchaser. In some instances they have doubtless driven out of business many small retailers. On the other hand, their overhead charges are high; it is difficult for them to give the most careful supervision to their clerks and from the nature of the business they cater to the great mass of the general public. Specialists in different fields will usually serve better the needs of individual buyers who are themselves experts and wish the best service. Many of the great department storesin spite of noteworthy exceptions—have not been finan. cially successful, and there need be no fear that they will secure a monopoly of general trade, convenient as they often are, nor that the small man of ability who really knows his field cannot compete against them.
Similar observations can be made regarding the chain stores, especially those dealing in drugs and tobacco. They have the advantage in large working capital which enables them to secure good locations and to buy in large quantities. They are doubtless managed with more skill than are many of the small competitors. But in this case also an individual who is really expert in the field, by his greater interest in his work and the more clearly personal touch in dealing with others, if he has a reasonable amount of capital will find that his advantages will often fully offset those of the chain store.
When goods produced are of such a nature that a person can stamp his individuality upon them-as in all work that is essentially artistic, including even millinery and fashionable tailoring-or when individual work is required in production, it seems clear as yet that there can be no monopoly that will be dangerous to the community, or any monopoly at all, without government aid and support, which can materially affect the life of the community. The monopoly of genius is individual, and cannot be affected by a combination.
Experience only can show the limit of the field of combination. There can, however, be little doubt, on the basis even of our present experience, that its field is considerably more limited than has been thought by many during the past decade, and that there still remains opportunity to find his place for each one who is capable of independent work. On the other hand, it seems equally true that, whenever the nature of the industry is one which is peculiarly adapted for organization on a large scale, these peculiarities will so strengthen the tendency toward a virtual monopoly that, without legal aid and without special discriminations or advantages being granted by either the State or any other influence, a combination will be made, and, if shrewdly managed, can and, after more experience in this line has been gained, probably will practically control permanently the market, unless special legal efforts better directed than any so far attempted shall prevent. Even when the combinations exist, however, the social effect, while in certain directions exceedingly unpleasant, especially to those who are in competition when the organization begins its work, is yet not all evil. The great corporations afford greater scope for individual power and independent management than has been ordinarily supposed, although they are practically certain to bring most positive injuries to society, unless they can be kept under social control. Despite the fact that the public control has been greatly strengthened of late years, there still remains much to be done both in the way of defining more clearly the field and methods of action of the combinations, and in freeing them from unjust and unwise restriction where these have been carried too far. Although, as has been shown, their power is much more limited in the long run by business conditions than has been supposed by many, and although, as their methods become better known, their influence