2. Great combines of capital in business and especially in industrial trusts are receiving the closest attention of the thoughtful. Some regard them as the necessary result of successful and enlarging business. Many others regard them as hostile to the public good and are anxiously seeking a means of restraining their great and increasing power.
These were at the first associations of manufacturers who co-operated to maintain prices. In the competitive system there is a constant pressure on the part of the consumer for lower prices. The manufacturer who is conscientious and a model employer, seeking to maintain prices sufficiently high to afford him a profit and living wages for his employes, must ever be resisting this pressure. They united for this purpose and were benevolent and just in their design. But the manufacturers were paying tribute on borrowed capital. They must meet the demands of interest on their debts and also the wages of their workmen. Between these two they struggled to secure for themselves comfortable wages. The capitalists, seeing the advantage of this co-operation and the resultant profits, undertook and accomplished the combination of their capital to secure for themselves the profits at first sought for the operators and their employes.
These great combines are the natural result of successful business with the practice of usury. They threaten evil.
The purpose and plan of the present trust is to increase the increase of the capital; to make the capital more productive; to bring larger returns for the wealth invested.
(a) They are not organized for the benefit of the laborer. The object is to decrease the cost by producing with less labor. The less the labor, other things being equal, the greater the returns for the capital invested.
(b) They are not organized for the benefit of the consumer. When they do favor the consumer it is only incidental and generally temporary to meet competition. They make no pretence of being benevolent in their purposes. They are organized for the purpose of business gain.
(c) These capitalists combine their interests because they can thereby secure a greater return from their investments than they can by operating separately. They combine that they may mutually increase the rate of interest or dividends on their capital. This is the motive that draws them into coöperation.
The learned and benevolent statesmen, teachers of economy and reformers, have not suggested an adequate remedy. The remedy is not far to find. Do away with usury and they will fall apart like balls of sand; the cohesive power will be gone; the centralization will cease and the wealth will speedily return to the various individuals from whom it was gathered. This remedy may seem heroic, but it is a specific and is the simplest of all possible methods.
3. How to secure a just distribution of the great advantages from improved machinery, new inventions and new discoveries, is a problem that is engaging the best thought of many of the wise and good. That the present distribution is inequitable and unfair; that it gives the capitalist an undue advantage over the laborer; that it aggravates the difference in conditions, seems generally admitted.
An improved machine, owned by a capitalist, enables one man to do the work that formerly required ten. One man is employed and the nine are in competition for his place and there is no advance over the wages before the machine was introduced. The owner of the machine secures the gain. His wealth is greatly increased while the laborer plods on with his old wages. With the new machine the one man produces what ten men did before, but the product of the nine are credited to the machine and becomes the capitalist's gain.