"Where large management is more economical and productive than small management, we shall find large concerns or none at all. Business, even in those lines where there is partial monopoly, is carried on with too narrow a margin of profit to endure any but the most economical methods. To control the abuses without destroying the industries is a matter of the utmost difficulty." A. T. HADLEY. "A dispassionate view of the subject will, in my opinion, convince a competent person that the general economic function of a corporation is to perform steadily, cheaply, and permanently, a service which an individual can only perform briefly, and with comparative inefficiency." C. S. ASHLEY. "Thus is the problem of Rich and Poor to be solved. The laws of accumulation will be left free; the laws of distribution free. Individualism will continue, but the millionnaire will be but a trustee for the poor; intrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done for itself. The best minds will thus have reached a stage in the development of the race in which it is clearly seen that there is no mode of disposing of surplus wealth creditable to thoughtful and earnest men into whose hands it flows, save by using it year by year for the general good. This day already dawns." ANDREW CARNEGIE. VI. COMBINATIONS OF CAPITAL. THE Conditions of to-day afford opportunities and inducements for the combination of capital unparalleled by any past era, and yet, equalizing forces have grown powerful in a corresponding proportion. Corporations are by far the most common forms of capitalistic combination; but as they are considered in another chapter the present study will be given more especially to those modern commercial phenomena, popularly known as trusts and corners. The former are usually concerned in the manufacture of product, as well as its disposal, and the latter more exclusively in the manipulation of market values. Railroad consolidations, which are essentially great combinations of capital, are also noticed elsewhere. It is not easy to consider the conventional trust or corner from a single stand-point. There is the ethical, which is somewhat distinct from the economic view. These shade into each other in indefinable degrees, but are not identical. While the working of natural economic law is mainly considered, its ethical relations are intimate and should not be overlooked. Not only from a humanitarian but from a purely moral stand-point, all combinations which make an effort, whether or not successful, to force abnormal values, deserve condemnation and that only. The writer desires to emphasize this conviction because, while he attempts to show that they are "cabin'd, cribb'd, confined," by Natural Law, and have not a tithe of the harmful power-except to those who invest in them—that theorists have credited them with, at the same time he utterly denies any supposed defence of, or excuse for them. Let us regard the question as settled that all attempts to impose artificial prices for products are morally delinquent, even when technically legal as tested by legislation. The immorality is in the intention, whether it be wholly or partially successful, or an entire failure. But in any case where a trust or combination is formed for the purpose of greater economy, or cheaper production, and with the aim of selling its product at fair and not abnormal value, it has good reason for existence and is ethically sound. There is perhaps no economic topic upon which there has been more unintelligent and superficial reasoning than upon combinations of capital. Theorists, including many clergymen, with good intentions, but ignorant of the practical laws of business, have vastly overrated the power of combined capital. Let us try to arrive at the truth, for that cannot be unfriendly to labor. It is everywhere and always a saving force. There is nothing that more surely clouds it than a sentimental pessimism. In a brief study of combinations of capital, as related to inherent social and economic forces, we will begin with the modern trust. Such combinations have been painted in lurid colors as dangerous monsters; but in reality, owing to natural limitations, no one but the stockholder need fear them. He is the victim of flaming prospectuses, unsound principles, and of an inordinate ambition to gain by a "short cut." The adverse experience of thousands, who have imagined that combination could override such an antique law as supply and demand, is very uniform. Many excellent financiers, so considered, have utterly over-estimated the power of combination, and realized loss through investments in trusts, instead of expected gain. But the trust principle may be employed in accord with Natural Law and the public interest. To increase production, cheapen processes, and improve quality by systematic consolidation is lawful. A great university is an educational trust. Instruction in specialties, scientific experiments, and thorough research are all more exhaustive than would be possible in half a dozen small disconnected colleges. Likewise, factories, even though located apart, by becoming a unit may sometimes introduce new economies so as to better serve society in serving themselves. But with the great majority of trusts now existing, as well as many which have come to an untimely end, the above enumerated objects are secondary or incidental, while the supreme motive is to impose abnormal values upon product. How many well-laid schemes of this kind schemes that looked so formidable as to excite apprehension have dissolved through the working of silent but immutable forces! Their collapse, or disintegration, was purely a question of time. Their sanguine projectors, who thought it possible to raise a few square miles of the ocean above the general level, have exchanged a financial loss for an educational experience. A trust, even if inflated, may run smoothly for a short time, but presently some unlookedfor competition or monetary stringency dries out the "water" that gives it proportion, and it shrinks to its normal leanness. When the collapse comes the law of reaction brings its value down, temporarily, nearly as much below as it has been above the normal level. It is true that during the recent era of industrial combination much profit has been realized in the organizing process of trusts. Suppose half a dozen factories, more or less, engaged in the same line of production, have a normal value of a million of dollars. They are consolidated into a trust and capitalized at three millions. If the original projectors are able to find confiding and visionary investors who will buy their stock at par, they have made two mil |