Let us admit all the good there is in aggregated capital. Let us take the trust advocates at their word that industry should be left free of all meddling, repressive or restrictive legislation. Is there, then, a common ground upon which we can meet? To think so is to delude ourselves. For their objection is not so much to mischievous laws of this sort as to interferences with things as they are. Their plea for laissez faire is hollow and insincere; true laissez faire would render every combination of capital innocuous for evil; there would be no mammoth aggregations of wealth in the hands of single individuals and no plethoric incomes.
The law of competition, let the Socialists prate as they will, gives only to those who earn. But from the denial of this law (of competition) flows all existing inequality in the distribution of wealth. There are, it is true, great swollen fortunes, which seem unconnected with these artificial laws of monopoly. Some of these, while clearly not the result of greater enterprise or greater ability, seem to be due to cunningly arranged devices independent of existing monopoly laws. But this is so in appearance only. There are no such made-to-order arrangements of industrial combination that can be used for extortion. Competition is too keenly scrutinizing for such arrangements to go undetected. The inevitable day when imitation shall overtake them can only be permanently postponed by seeking the shelter of monopoly.
Some of these gigantic fortunes are the result of stock speculation. But these are incidental, and are the profits and losses of the gambling fraternity—a game really played with the counters of monopoly, like “chips” in a poker game, and the transference of which from one to another enriches or depletes the finances only of those who play. They do not concern the man who refrains from taking part in the game, and whether it be played with railroad stocks or industrials is no great matter. If these gamblers sometimes use the moneys on deposit in public institutions—as Mr. Lawson has asserted they do—that also is another question, though a momentous one.
With the dissolving of these giant combinations which would result from the removal of the laws of monopoly would disappear the great host of gamblers and stock jugglers. The great fortunes that result from the granting of legislative favors would also disappear, since there would be no longer any legislative favors to grant. And so with many other unjust possessions. And with them would be banished forever much that corrupts our social and political life.
[1] In his definition of a trust Mr. John Moody, author of the “Truth About Trusts,” says: “When men form corporate organizations, or make agreements, they do not form monopolies. They may take advantage of monopoly in one way or another, but they do not create it. The monopoly itself is a social product, which exists with the consent of society, and men in business take advantage of it where found, just as they take advantage of other factors for the purpose of achieving their ends.”
[2] Charles M. Schwab, in his testimony before the Industrial Commission at Washington in excuse of the apparently excessive capitalization of the Steel Trust, estimated as the approximate valuation of plants, mills, machinery and transportation properties the sum of $380,000,000, but the value of the ore, coal, natural gas and limestone properties he put at the enormous sum of $1,100,000,000.
[3] This is vaguely recognized by the trust advocates and those who have written on the subject. Professor Jenks, who is one of the most temperate and discriminating, says: “So far as the industrial combinations are the result of special advantages granted to individuals or corporations, whether by the state or by others, it is probable that in most instances the evil effects would be lessened, if not completely removed, by the removal of such discriminating powers.” Which is barely more than an involved method of stating that the removal of a cause will also result in removing the effect.
[4] Undoubtedly the control of patents is an effective source of monopoly in very many instances. Some of the large combinations have succeeded in obtaining control practically of all the patents used in certain lines of manufacture. That this is a potent source of power one instance alone may suffice to prove. Professor Jenks tells us that all of the barbed wire made in this country at the present time, as well as the wire fencing, is in the hands of the American Steel and Wire Company because that company has all the valuable patents, with one or two exceptions, in those lines of manufacturing.