Imágenes de páginas
PDF
EPUB
[ocr errors]

ground that they each employed more than ten thousand wage earners throughout the United States. Twenty-seven of these eighty-six leading industries reported that more than half of their total product value was produced in plants producing each above $1,000,000 worth of products annually. Such plants in copper smelting and refining produced 99 per cent. of the national output, in rubber boots and shoes, 92.2 per cent., in iron and steel rolling mills, 91 per cent. and in petroleum refining 88 per cent. The exact records of $1,000,000 output plants in the remaining twentythree leading industries, showing this especial concentration of capital range from 51.3 per cent. for shipbuilding, 51.8 per cent. for silver ware and silver plated ware and 52. 9 per cent. for cotton goods, up to 80.7 for railroad cars, 82.2 per cent. for wire, and 85.8 per cent. each for iron and steel blast furnaces and for slaughtering and meat-packing. Such figures demonstrate that big business is the ruling type to-day in United States manufacturing

Steady centralization of capital, steady evolution of larger and always larger scale production, has been an important aspect of the industrial story of the United States for more than a hundred years. This steady centralization had gone on for three quarters of a century before the first Trust was formed. The whole Trust movement seems to be possibly the most important, certainly the most striking phase of this apparently natural, impersonal, inevitable centralization, resistlessly impelled by man's search for the most economical means of production. Given the factory as a main proposition in the book of modern indus

trial evolution and the Trust is but a hundred year corollary.

The facts set forth in this chapter show:

1. That a wide centralizing movement has been proceeding during the past century and a half in which human society has been adapting itself to its environment as modified by the coming of the factory.

2. That a detail of this wide centralizing movement has been a steady increase, throughout the past century, in the capital, the number of employees and the value of the annual output of the representative manufacturing plant in leading lines of industry.

These same facts suggest that the Trust movement is but a recent stage of this century old tendency to increase the size of manufacturing units and that the Trust is therefore a normal product of the industrial evolution consequent upon the use of modern powerdriven machinery.

The chief aim of business organization, on its productive side, is that it shall get given results with less and less expenditure of human effort. This endless search for means to cheapen cost of production was best illustrated by the inventions of such men as Watt, Hargreaves, Arkwright, Crompton, Cartwright, Whitney, Fulton and Stephenson in the century following 1750. The capital of the typical manufacturing plant has been steadily increased since 1800 in this same endeavor to cheapen the cost of production. The industrial combination which brings many large scale manufacturing plants under one control, the combination which we have nicknamed The Trust, may be but a recently discovered means of further cheapening the cost of production. If a careful analysis of the facts of Trust production should show that Trusts are cheapeners of cost, then the suggestion of this chapter that Trusts are entirely normal products of industrial evolution will have become a demonstration, Such a proof would be a demonstration not only that Trusts are a normal product of evolution, but that unless more than counterbalancing evils necessarily result from them, they are a desirable product, which is far more important, for only careless optimism assumes that all normal products of evolution are desirable. The third chapter will examine the claim that Trusts are a means to lessen the cost of production.

CHAPTER II

COMPETITION: ITS NATURE

T IS impossible to understand why there has been so strong a tendency toward the formation of

industrial combinations, unless one first sees clearly the economic conditions out of which they have arisen. A brief study of the competitive system is therefore placed in the foreground.

It has been a common assumption among economic writers that competition is free, and that there is no element of combination among dealers or manufacturers. Most writers, of course, have been well aware of the fact that in actual business dealings this assumption is not true, but it has seemed wise to make it and to take it as a basis for argument in their deductive reasoning. Too many of them, unfortunately, in their conclusions have forgotten that free competition was mere assumption, made for logical reasons. The most vigorous opponents of industrial combination have in like manner, tacitly at least, often made the same assumption; but it is so far from the truth in the actual business life of to-day that its adoption is certain to lead to misunderstanding regarding the nature of industrial combination.

The “friction" of competition is most readily noticed in the retail trade. Careless customers, ignorant of prices, call for goods which please them, and often purchase without striving to get the lowest price. Others, from habit or feelings of friendship, deal regularly with one merchant without comparison of his prices with those of his rivals. The convenient location of his store, or his pertinacity in soliciting custom, often enables a dealer to sell for more than the lowest market price, so that competition, from the point of view of price, is far from being free, or at least from being efficient.

A more or less formal understanding among dealers also checks the freedom of competition, and, in fact, introduces an element of combination quite similar in kind, though less in importance, than that found among large manufacturers. In many small cities there exist butchers' associations, grocers' associations, associations of hardware dealers, of druggists, etc. Usually without formal contract these organizations substantially maintain a general level of prices throughout the city, besides furnishing to all of the different members the opportunity of reading trade papers, of learning the condition of the wholesale markets, and calling to their attention other matters of common interest in addition to giving information regarding the business rating of customers and often assisting in making collections of bills overdue. In such cities and villages a trader from the outside, particularly if he attempts to peddle his goods from house to house, is sure to be met with united action of all the dealers. And customers whose desire to save leads them to buy from mail order houses or themselves to visit the near-by cities to purchase goods are noted and common influence is brought to bear to check these tendencies. Industrial combination has begun.

« AnteriorContinuar »