The Whisky Trust was organized in 1887 and after having lowered prices for the purpose of eliminating competitors, it brought the prices up to as high a level as had ever been reached before. The result of this was that at the end of 1888 prices fell, owing to a reorganization of the trust and to a subsequent raising of prices by the trust in 1891, only to be followed by a corresponding fall in 1892. And so prices went on reaching a very high level at the close of 1892, only to fall back to a low level in 1893; and again to a high level in 1894, only to go down so low in 1895 as to put the trust into the hands of a receiver. By this time the Whisky Trust had learned its lesson; it learned that if it endeavored to put the price of whisky up to an undue height, new distilleries were started to profit by these high prices, and the only way of avoiding bankruptcy was to maintain the price just high enough to return profits to the trust, but not high enough to encourage outside competition.
Undoubtedly the opinion generally prevailed at the end of the last century that increase in price by the trust was not to be feared. But at that time trusts had not yet acquired the art of handling independent competitors. To-day the art has been acquired. Owing to the enormous capital they control and the enormous extent of territory they cover, they are in a position so to reduce prices in any one spot where competition becomes dangerous as to crush out the competitor in that place. They adopted this method recklessly at first, crushing out all competitors and then raising the price unduly. Now they have learned to maintain a group of competitors about them and to keep these competitors alive, keeping prices high so long as competition is not dangerous and depressing them just enough to crush out competition when it becomes dangerous.
The movement of prices since the end of last century is sufficient to demonstrate that trusts, far from reducing prices, are advancing them.
It must in all fairness to trusts be admitted that the enormous increase in the annual output of gold tends to increase prices, and it is extremely difficult to state just how much of the advance in price since the end of last century is due to the increased output of gold, and how much is due to deliberate advance on the part of the trusts. We have, however, a guide in the relation between increase of wages and increase of prices. If the advance in prices were due entirely to increased output of gold, wages ought to increase in the same proportion. But they do not.
Of the opinion expressed at the end of the last century that trusts would improve the condition of workingmen, there is very little left to-day.
From almost every point of view, trusts have since 1900 disappointed expectations. It was claimed and with every show of reason that trusts would, by their control of the market, be able to adjust supply to demand and thus avoid the gluts that produce unemployment,[104] and that although the economies they practised might result in the shutting down of some factories and the discharge of employees, in the end the workingmen would gain because their employment would be steady and because trade unions would have only one employer to bargain with instead of many.[105]
How far has experience justified these anticipations?
Far from diminishing unemployment, the reign of the trusts has resulted in the most intense and widespread depression that we have any record of.[106] Far from benefiting the unions, trusts have crushed unions out of existence. Far from raising wages and shortening hours, the employees of the Steel Trust in Pittsburg are to-day working twelve hours at $1.80 a day, and once a fortnight twenty-four hours in a single shift; whereas miners in the same district because their union has not yet been crushed by the Coal Trust, are working only eight hours at $2.36 a day.[107] And the Miners' Union has been saved from the trust only by what is still regarded by many as the improper personal intervention of President Roosevelt Oct. 31, 1902.
The conditions of labor under trust rule cannot be better described than in the Survey, an investigation published not by Socialists, nor even by persons inclined towards Socialism, but by believers in and upholders of the competitive system:[108]
"With this number, Charities and The Commons completes its presentation of the findings of the Pittsburg Survey, as to conditions of life and labor of the wage-earners of the American Steel district. The gist of the situation, as we find it, is as follows: