September 8, 1^8f^





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l08^





"What Can aucl Cannot be Done witii Trusts.

We were mistaken in t.aying that the Commercial Bulletin ^\■as
one of the daily journals wliich had joined in the hue aud cry
agamst Trusts. Ou looking over its files we find that tliis inijiortant
matter has been iuteUigently and wisely considered, so that the
articles publishfid arc in marked contrast to -what the Sun calls the
" flapdoodle" of the Tiuiss, Herald. World. Et'ening Post and tho
other journals which have been raising such an unreasoning clamor
over this new development in the employment of incorporated
wealth. The following extract wiU give an idea of the position of
the Bidletin regarding Trusts. Onr readers would do well to com-
]>are it with the appeals to ijopular prejudice in the other daily
journals:

The suggestions thus far made for legislation to regulate Trusts have
beeu almost wholly de\-oid of merit. "Whether it is to bo charged to tbe
complexity of tbe ]U-ohlein, or to the incompetence of our legislators, it is a
fact that six months' agitation of tiie Trust question has not led to the
introduction of a bill or presentation of a suggestion which affords the
slightest aid in tbe solution of tbe problem. Nearly ten months ago, the
President in bi.s annual message to Congress suggested tbat the existence ol
a Trust to licep up piiccs in any article pi-otected by the tarifl afforded
3]rima facia evidence that tbe duty ou that article was higher than neces¬
sary to enable tbe domestic pi'odncoi-s to command the market at a profit.
Tbe President's recommendation suggested a positive Une of poUcy toward
the Trusts, but one which would he diflieult of execution aud which the
framers of the Hills' bill did not attempt to fully follow out. Tbis sugges¬
tion, however, ivas partial in character, and at the best dealt only with
Trusts operated under tbe tariff. No recommendation since made, how¬
ever, has gone so far in tbe direction of prescribing a line of action. Ths
propo,jitions to subject all Trust products to a prohibitory internal revenue
tax, or to impose fines and imprisonment upon tbose who deal in tbem, are so
manifestly unconstitutional and unworthj' of an eulight<;ned and progi-essivo
country tbat they need not be seriously discussed. Because tbe Trust is capa¬
ble ol abuses it is proposed that arbitrary powers should bo usurped to crush
it it out of existence. It would be as reasonable to prohibit the movements
of raih-oad trains because au occasional accident occurs, or to suppress
ail issues of mouey.lieeanse of the danger of counterfeiting. Advocates of
pi'ohibiii.-ry legislation show themselves indifferent to tbo limitations of
governmental powers, or iguoraut of the natural laws which have produced
and established the Trust ns an advanced development of commercial pro¬
gress. Every advance in methods of production or distribution has encoun¬
tered antagonism, and much of the opposition uow directed against tbe
Trust is such as has opposed every step in commercial evolution, and has
i-esisted every improvement hi luetliods and every ad\-nnce iu organization.
As tbe first step in the study of the Trust problem, it is important to i-eeog-
nizo the Trust as tho natural ontgi-owth of irresistible tendencies and as an
agency wbicb wheu ouoe established is henceforth indispensable. When
we have come to recognize tbe Ti-ust as the successor of a long lino of
impi'oviiig aud expanding forms of organization, and bave learned to
realize that society must be protected iu the enjoyment of its benefits and
guai-ded from its abuses, just as ui the case of the individual, tbe fli-m, tbe
corporation, or any other couti-ibutor to the world's wealth and pai-ticipaut
in its work, wo will bo better able to consider wherein the Trust may
demand such restriction.          *         *          *         *          *         «

In establishing the responsibility of Trusts and defiuing them, and iu coi--
recting such legal ine on si s-t en cics as give the Ti-usts nndue advantage, the
law-making power w-ill have gone far toward solving tbe Trust problem
and lueetiug tbe popular demaud, while it will not have departed from a
strict consti-nction of its delegated powers. Tbe effort to abolish tbe Trusts
is as vain as it is unjustified by Constitutional authority or sound economic
lirinciples. The effort to cripple tho Trust aud to reduce its cheapening
powers so as to enable less efficient rivahi to compete is as foolish as it mus-t
be inolfectual. If such a course is to be attempted we should have to go all
the way through the commercial scale aud restrain all superior agencies so
tbat tbo inferior miglrt be enabled to compete on even 1x!rius. Prohibitory
laws, 01- laws designed to curtail tbe powers of Trusts in cheapening produc¬
tion, are destuied to failure. Sueb laws would be evaded or annulled^
Legislation must allow of the highest development of organized offoi-t in
benefitiug producer and cousunier, and must aim only at regulation in the
sense in which aU huuian agencies arc regulated by laws, the true object of
which LS to develop powers of good and to restrain powers of evil and abuse.

The Bulletin goes on to urge that laws should be so framed as to
X>rotect the community against the abuse of Trusts, Like all human
institutions theii- jiowers are liable to be used to exploit the con¬
suming public. This danger should be guarded against: but the
fact should be recognized that Trusts are a natural evolution from
previous ti-ade conditions ; and their action in checking unwise
competition and in gettin,g rid of unnecessary middle men is, on the
whole, a great advantage to society. Tliis is tlie gi-ound which The
Record and Guide has taken all along.





The recognized leaders of the labor organizations have, so far,
wisely avoided committing themselves to any nf tbe political par¬
ties now in the field. The workingmen who follow Henry George
think that free trade is a good thing, but T, V. Powderly and liis
Pennsylvania following are of ojiinion that protection is still better.
Undoubtedly, tbe bulk of the intelligent artisan class are Protec¬
tionists. Still, so far as this Prcsidcniial election is concerned, the
labor vote will have no significance, and will can-y no weight.
There are gi-eat possibilities, however, in these labor combinations.
They are teaching themselves how to organize to effect political
results, and they will be heard trom in future contests,    That poli¬





ticians think they are a power is shown by the demagogic appeals
made to workingmen by both the Free Traders and the Pro¬
tectionists.





Our Prophetic Departmeut.

i^lNANClER—The ingathering of the harvest is properly the begin¬
ning of a new business year in tliis country. Wc have taken in our
wheat, rye, oats, barley and tbe other small grains ; our hay crop is
assured ; potatoes aud fruit will be abundant, and the promise of
the corn crop is simply wonderful. Would it not be well to think
out the business prospect in view of the yield of hay, cotton, grain,
vegetables, fruit aud our other products ?

Sir Okacle—As you say, sometime in September is the real begin¬
ning of our business year, for we depend more tbau do other civil¬
ized nations upon the products of the soil for our jirosperity. Still
we may have large crops, yet get but small return for them. . I
think we have shown the best results when the agricultural yield
was moderate but commanded high prices.

F.—It was this question of jirices which I wished specially to talk
to you about. We shall have a gi-eat coru crop, a good cotton
crop, while hay and oats have never been so plentiful. Wheat will
not be a large crop, but it will be afair one. Now, the all important
tbing is : What shall we get for our sm-plus agricultural products in
the markets of the world?

SiK 0.—It seems to me that, hi this couutry at least, we have
entered upon au era of bigiier prices. It is a noticeable fact that
tbere is a hardening of values in every dh-ection. In onr households
we find that meat, vegetables and groceries of all kinds cost more
tban thoy did six months ago. Tliis remark is true of every depart¬
ment of retail traffic. It is ti-ue also of wholesale dealings. Prices
of stocks and bonds are higher thau they were in June, wheat has
advanced twelve cents a bushel within six weeks, provisions are
dearer, cotton is firmly held, coal and coal stocks are especially
buoyant, and the price of petroleum is on tbe up grade.

F. —There is no disputing your facts. For the time, at least, some¬
thing is stimulating all the markets. Everything exchangeable bas
a higher value than it did six months or a year ago. As this is not
due to au unusual scarcity either of food or clotldug, ought we not
to try and inquire into the reason for this increase of values?

Sm O.—There is, you know, a rhythmic motion in prices as there
is in tides. They have their ups and downs. There is no disputing
the fact that the general average of prices promise to be higher next
spring than they are tbis fall,

F.—Do you regard that as a wholesome state of things ? Will it
not bear hard on the poor when food, clothing and fuel are becom¬
ing dearer day by day ?

Sir O.—The laboring classes have been lucky of late years; they
have been kept at work at fau.- wages duriug a period when bread,
meat, clothing and the other necessaries of life were very chea.p.
Of course tbey will be somewbat pinched because of the advance
in prices, but rising markets always stimulate production. This
creates a demand for labor, which leads eventuaily to an increase
of wages. It is when tilings become cheaper and there is little or
no profit ia production that work slacks off and wages are reduced.

F.—But still you have not given any reason for the present
advance in values. Of course I can understand that tbe higher
price of wheat is due to the partial failm-e of the crops in Europe,
that petroleum is enhanced in value because of the restricted pro¬
duction and the increase of exports; then I see that beef and mutton
are dearer because of tlie destruction of cattle ou the plains three
years ago; but why should minor articles such as enter into retail
trade command higher figm-es?

Sir O.—I bave an impression that the small silver certificates, the
ones, twos and fives, have something to do with this stimulus to
retail prices. The Record and Guide, very justly as I think, has
always objected to the use of paper money of small denominations,
It opposed tbe issue of one and two dollar sdver certificates, .ind has
always argued that there should be no bank notes or greenbacks' of
less denomination than twenty dollars. This would have left the
field clear for gold and silver coin in all the channels of retail busi¬
ness. The hoards of gold and silver now piled up in Ti-easni-y
vaults aud banks would be then in the hands of the people. This
would be following tbe financial policy of the most solvent and
foremost nations of Europe. It would have been a gi-eat encoiu'age-
ment to our precious metal mining industries.

F.—It is hardly worth '■ crying over spilt milk." We have delib¬
erately, as a nation, adopted an entirely different policy. We have
found ]-)aper to be more convenient than gold and sOvGr, and so we
store the latter and issue certificates on its face value.

Sir O.—Tbis fact, I fear, in part accounts for the inflation in
retail prices. We have been printing a great many one and two
dollar certificates. There are about forty million silver dollars in
cu-culatiou; there is thus a superabundance of minor coinage.
Hence the rise in jirices of everytliing connected with our daily
wants. Tbere Avas a crisis in Great Britain once, due to the over¬
issue of one pound notes by the Scotch banks. You recall the fact
that there is no other paper currency in circidation smaller than thfi