XVIII
James Riley's information, while causing Gorham some concern, was not the matter which gave him the greatest anxiety during the days he passed away from his office. The fact that Buckner was in town was not altogether surprising, and his maudlin comments need not necessarily be seriously considered. In addition to the commission he intrusted to young Riley, Gorham also set in motion the wheels of his own secret-service department, feeling confident that he would soon learn all the facts. The conduct of the current business of the Companies, complex as it had now become, appeared to be advancing steadily along the lines which he himself had laid down for it, and he saw no reason to think that his temporary absence was causing the slightest disarrangement of the delicately adjusted machine upon which depended the continued momentum of the business. This interested him particularly, as he considered that the crowning point of his successful formation of the Consolidated Companies would not be attained until his actual contact with the business was not required.
But great enterprises do not expand themselves without the jealous watchfulness of other competing or interested organizations, and Gorham's daily reports contained an increasing number of references to the efforts being made by these to harass the Consolidated Companies with governmental interference. Senator Kenmore had by this time become the chief spokesman of the Companies in Washington. Since his first exhaustive examination into its affairs, his doubts as to the possibility of conducting so mammoth a consolidation along conscientious lines had been dissipated by the absolute straightness of the course which Gorham steered. His influence had been exerted frequently in behalf of the Companies, and each time the success which thus came to the corporation carried in its wake advantages to the people, just as Gorham had promised. The Senator had become one of Gorham's stanchest admirers and supporters, and the president of the Consolidated Companies in turn relied fully upon him. For several weeks Kenmore's correspondence had suggested certain unrest in the Senate concerning trusts and consolidations, so when Gorham received from him an urgent summons to come to Washington at once, it left no room for doubt as to the necessity which prompted its sending, and obliged him for the present to abandon his idea of rest.
Gorham found Kenmore awaiting him in his office, and the Senator, with characteristic directness, came to the point at once.
"Some one is starting up another scare on monopolies and combinations, and is making the Consolidated Companies the target. Do you know anything about it?"
"Does it come from New York State?" Gorham asked.
"Yes; the junior senator is at the head of it."
"He is a Tammany man."
"Yes."
"Brady made him, and now he is collecting his fee. The Consolidated
Companies hit Brady hard in the Manhattan Traction deal, you remember.
How much headway has it gained?"
"Enough to be dangerous; that's why I wrote as I did."
"It can't be dangerous while we have the people so strongly with us, but it might become troublesome. Whom do you want me to see?"
"The President. I have made an appointment with him half an hour from now. The Senator from New York has touched him a bit by demanding why he is haling the other great corporations into court, and leaving the Consolidated Companies to grow larger and stronger without opposition."
"Have you discussed the matter with the President?"
"No; I thought it best to let you present it as a whole. Come—we shall find him ready for us."
The President received his callers in his office. He was a great President, and as such realized, as some of his predecessors had not, that the country of which he was the chief executive was constantly outgrowing the legislation which had been wise at the time of its enactment. He realized that as expansion comes conditions change, and these changed conditions necessitate the exercise of a far-seeing and a far-reaching judgment in administering the law in its spirit rather than always in its letter; but the experience he had gained in the White House had taught him the difficulties which beset his path in living up to his convictions. Gorham had been frequently called to his councils for advice upon various subjects, and the President was familiar with the Consolidated Companies in conception and operation.
"We are accused of discrimination, Mr. Gorham," the President explained, after the first greetings. "You and I have discussed the Consolidated Companies upon various occasions; I have watched its operations carefully, and I am free to say that my early apprehensions have thus far proved groundless. I believe that I have acted conscientiously in pushing the investigations and prosecutions against those combinations which are really a menace to the country; but there are some who disagree with me, and flaunt the Consolidated Companies in my face as an evidence of insincerity on my part. I have asked you and Senator Kenmore to meet me here this afternoon, to talk over the question quite informally with the senator from New York and with the Attorney-General."
"I appreciate the opportunity, Mr. President," Gorham replied, quietly.
"Then we are all ready for the discussion," said the President, touching a button. "They are waiting—I will send for them."
Upon the arrival of the others, he repeated to them what he had said to Gorham, and then, settling back in his chair, became an interested listener, leaving Gorham and the senator from New York as the principal disputants, with Kenmore and the Attorney-General joining in the argument from time to time.
"Do I understand that Mr. Gorham speaks for the Administration in this matter?" asked Senator Hunt, with some asperity.
"I speak for the Consolidated Companies, and for that alone," Gorham replied, promptly.
"Then you will perhaps explain why your corporation, the largest trust in existence to-day, is immune, while other trusts are being persecuted to the extent of the Government's power."
"I am not authorized to answer any question which has to do with the Government," Gorham continued; "but it may be that it is due to the same reason that some of the 'other trusts' you mention are not as yet incorporated as a part of the Consolidated Companies."
"Then they have been approached?" the Senator asked, quickly.
"Several of them have approached us; but they have thus far been unwilling to accept the principles upon which the Consolidated Companies is founded."
"You refer to its alleged benevolent aspect?"
"Yes, if you choose to call it that," Gorham replied, smiling. "We prefer to call it reciprocity. If we receive favors in the form of concessions from the people, we believe it to be not only fair, but also sound business, to use these concessions not to bleed them, but for their benefit."
"In other words, the Consolidated Companies is a good trust, and the others are bad trusts?"
"Exactly."
"The Sherman Act, if I read it correctly, makes no distinction."
"But the Government does."
"And to that extent unlawfully discriminates," the Senator said, emphatically.
"What would be the effect upon the country if the Sherman Act were enforced literally?" Gorham asked.
"That is not for me to say."
"Perhaps the Attorney-General will give us his opinion," Gorham persisted.
The Attorney-General had been listening to the discussion with much interest.
"There can be but one answer to that question," he replied; "it would produce an industrial reign of terror, and yet I am frank to say that, from a legal standpoint, I believe Senator Hunt is correct in his statement that the Government unlawfully discriminates in drawing any distinction between good and bad trusts; but let me say further, that it is my definite opinion that the Sherman Act, as it now stands, is a menace to the country. That Act, literally interpreted, would break up every trust into smaller corporations. It is based on a hasty inference that great consolidations are of necessity monopolies. Even if we disintegrated a great corporation like the Consolidated Companies, for instance, into a large number of smaller corporations, we should not have solved the problem. There would always be methods by which a common understanding could be reached, and, in the disintegration, producing concerns would lose much of the efficiency in serving the public which has already been demonstrated by the Consolidated Companies. I have answered your question frankly, giving you my opinion from a legal and also from a personal standpoint."
"Was there not a time," Kenmore asked, "when the public in England was as much afraid of the formation of business partnerships as our public has been afraid of trusts?"
"Yes," the Attorney-General replied; "our own trust legislation is nothing more than a modern repetition of certain laws which centuries ago were in force in England, and were designed to prevent the formation of co-partnerships in business."
"Yet partnerships were formed in spite of the law, were they not?" insisted Kenmore, "and it was discovered that the prices of goods did not go up."
"We are digressing," the senator from New York interrupted. "As I understand it, we are concerned with the present rather than the past."
"I am glad you realize that," Gorham responded, "for it has a considerable bearing upon the situation. In the past, the public has been opposed to the organization of industry, and properly so, since it has meant the secret rebates, the limiting of output, the 'fake' independent companies, and the stealing of competitors' secrets; but to-day there is a changed public sentiment, and perhaps I may be pardoned if I say that I believe the Consolidated Companies has played its part in bringing this about. The magazines have turned from muckraking to articles instructing their readers in finance; the anti-trust orator is speaking to empty seats; and intelligent lawmakers, who once considered 'corporation' as a synonym for 'crime,' now carefully distinguish between the honest and the dishonest organization. The Administration is elected by the people to exercise the will of the people, and it is the will of the people to-day that honest combinations be permitted, in order to reduce the cost of the necessities of life."
"It is a conflict between a literal interpretation of the law and industrial progress," added Senator Kenmore, "and the law as it stands does not appeal to justice nor does it express American public sentiment. Bigness, in commerce and industry, has now come to be associated with progress. Production on a large scale is justified by its economy and efficiency when brought about through the free play of economic forces. It would be just as ridiculous to oppose the ever-increasing demand for machinery."
"To what point is all this leading us?" asked Senator Hunt, impatiently. "These one-sided arguments may be interesting to those who agree with them, but my question still remains unanswered: why does not the Government enforce the law equally against one offender as against another, since by that law both are offenders?"
"Senator Kenmore, the Attorney-General, and I have endeavored to answer your question to the best of our ability," Gorham replied, "and I, for one, regret to have failed in my endeavor. We all agree, I am sure, that the Government has a plain duty to perform, but we do not understand that duty to be the prevention of honest and beneficial combination. The Consolidated Companies has led the way in seeking publicity and preserving equality, and in insuring public participation in the benefits accruing from the combinations which it effects. If other trusts do likewise, I have no doubt that they will be as 'immune' as you have been pleased to call the Consolidated Companies."
"Are you prepared to deny that, in spite of this 'benevolent' aspect of which you boast, the profits of your corporation are greater than those of any trust in the world?"
"I have never made the comparative analysis which would be required to answer your question," Gorham replied; "but I do say without fear of contradiction that no organization ever gave back to the people so large a percentage of its earnings. It may interest Senator Hunt if I outline the principles upon which the Consolidated Companies was conceived."
Gorham's voice was a strong asset. Its low, clear tones carried without apparent effort, and there was a firmness and sincerity in every spoken word which always secured attentive hearing.
"The public," he said, "has long since become accustomed to mergers and consolidations, and has naturally associated with them the strangling of competition and the creation and enjoyment, on the part of a few, of the conditions of monopoly. But business exploits such as these are, in a measure, things of the past, and cannot be repeated. Great industries can no longer hem in their rivals, or stifle and cripple them to the extent that fields, which by natural law are free to all, become the field of one. The people have at last risen against this, and consolidations will only be tolerated when confidence is established that the masses will be benefited. When the scheme of the Consolidated Companies first became known, it was bitterly opposed by the public, who saw in it nothing other than a new and more gigantic octopus, to feed upon its very life-blood.
"From the very beginning, both from principle and from what I consider to be sound business sense, I have endeavored by word and act to convince the public that the Consolidated Companies intended to serve its best interests, and our unprecedented success is the best evidence I could offer that I have, at least in part, succeeded. Our stockholders are men in high positions of trust, and they cannot continue to deliver contracts to us unless we make good our promises to execute those concessions to the advantage of the people. To-day, wherever the Consolidated Companies is known, the public looks with approval upon favors shown us by its officials, and this in itself is an asset to our corporation of untold value. Bread, coffee, and other daily necessities are now obtainable cheaper than ever before in the history of the world, because the Consolidated Companies has made them so. Transportation charges, wherever we have obtained the franchises, have been reduced twenty per cent.; lighting costs, both gas and electric, are fifteen per cent. cheaper in those cities which we control; government loans placed through us are from one to two per cent. lower, thus substantially reducing the rate of taxation. We have prevented war in at least two instances, and thus demonstrated the possibilities of our power in preserving universal peace. For the Government to interfere with our work because of a technicality would result in an international calamity."
"Are you now speaking for the Administration, Mr. Gorham?"
"Now, I am speaking as a private citizen."
"If the Attorney-General agrees with me," added the President, joining in the discussion for the first time, "I think I may say that Mr. Gorham's views as a private citizen are shared by the Administration; on the other hand, I agree with the Attorney-General in the position which he takes regarding the conflict between the legal and practical bearing of the Sherman Act. There is only one way to solve the problem, and that is to modify that Act so that a distinction can be made between those consolidations which advance the country's prosperity, and those which are operated solely for personal gain to the detriment of all except the few directly interested. You may report back to your constituents, Senator Hunt, that the Administration will refrain from further action in this matter for the present, and will direct its efforts toward securing amendments to the Sherman Act which shall make it possible to draw a distinction between good and bad trusts, as you call them, without discrimination."
The President rose, signifying that the conference was ended, and Gorham left the White House in company with Senator Kenmore and the Attorney-General. The latter wore a serious expression upon his face.
"The President took the only logical position," he remarked to his companions; "but I tell you, gentlemen, that there is not the slightest possibility of passing any bill through either house which can accomplish the results we all desire."
"In another twelve months," observed Gorham, "granting that the Companies continues to make history as it has, the people themselves will prevent their representatives from interfering."
"Provided nothing occurs to raise a doubt as to the integrity of the
Companies' motives," added the Attorney-General, suggestively.
"How could such a doubt be raised?" Gorham was incredulous.
"By having some official in your corporation act in defiance of the principles which you have upheld."
"We have a five-years' record to fall back upon."
"Yes; but as the Companies grows larger the risk increases."
"And the careful surveillance increases in like ratio."
"There are human limitations, Mr. Gorham," laughed the Attorney-General.