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Real estate record and builders' guide: v. 17, no. 428: May 27, 1876

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Real Estate Record AND BUILDERS' GUIDE. Vol. XVII. NEW YOEK, SATUEDAY, MAY 27, 1876. No. 428. Published Weekly by THE REAL ESTATE RECORD ASSOCIATION C. W. SWEET...............PBESIDEfn; AND Tbeasdbeb PRESTON L SWEET...........Secbetaby. L. ISRAELS.........................Business Manager TERMS. OJVE YEAR, in. adv.aiice....$10 00. Communications should be addressed to C SV. STREET, . Nos. 345 and 347 Bboadwat. THE EATE OF COMBINATIONS. During our paper money era a nuir.ber of combinations came into being for the purpose of controlling prices and taxing the community. They were quite successful during that excep¬ tional period. But there seems to be some law operating in human society which works against any device or arrangement by which an exceptional profit is charged for any description of human labor. Political economists have pointed out that any business which pays more tban a fair rate of interest is tolerably sure, in time, to come to grief, because it provokes rival¬ ries, encourages extravagance and waste, and in time the exceptionally profitable business be¬ comes exceptionally unprofitable. A marked instance of tbis change is shown in the famous coal combination. The anthracite region com¬ prises only a small patch upon the surface of the map of Pennsylvania. Some five railroads and transportation companies have access to this limited area of country, and all the conditions seem to exist for a combination which would put the business entirely in the hands of the corporations which own the mines and control the transportation. Then there was much to be said in favor of some such combination, and indeed the com¬ panies were partly forced into it, for they had an exceptionally large demand during the win¬ ter season and a small demand durii.g the sum¬ mer season, xhis led to fluctuations in prices which were ruinous" to any regular industry. The price of coal varied so greatly that foresight was out of the question, and the business became a mere gambling operation. All these points were very clearly stated in the address to the public by Mr. Franklin B. Gowan, President of the Philadelphia and Eeading liailroad. He headed this combination, and his argument seemed irrefutable that it was best for all con¬ cerned that the railroad companies should own the mines, dictate the prices paid for labor and fix the late that should be paid for coal. But unfortunately the only interests represented in the councils of this combination were those of the companies themselves, and the temptation to fix a high rate and maintain ii, was too great to be resisted. The combination of capitalists fought the combinations of working-men and beat them. They succeeded in reducing the price of labor to the lowest possible limit. They have also succeeded for several years past iu keeping up the price of coal at far higher rates than those which obtained during the war and up to 1871. But evidently something ails this combination. All the four railroads have been losing money; their stocks are falling in the market with great rapidity. Only one of the four operating roads is known to be paying expenses. The Delaware and Lackawanna, the Consolidation Coal, the Eeading, the New Jersey Central and every other company, saving alone that owned by the Pennsylvania Coal Co., have passed their dividends, and have lost heavily by the failure of small coal operators to meet their engagements with them. Their stocks have de¬ creased 20 per cent on the market, though they have succeeded in keeping up the price of coal. This has led to bitter complaint from manufac¬ turers, who say that in. these hard times, when everything was needed to help manufacturing industry, a figure was put on coal which made the starting of the furnaces in the iron working region out of the question. In fact, any associated enterprise which in" volves more than one business is in very great danger of coming to grief. Mining is one busi¬ ness by itself, and railroading is quite another. The tendency of all industry in modern times is towards this specialization of functions, and not towards their consolidation. The same men who are energetic and wise in railroad matters would very likely be found at fault in their judg¬ ment in dealing with mines and other allied indus¬ tries. It is now announced that ten great india- rubber manufacturers of the country have entered into a combination for five years, for the purpose of preventing any competition in the prices of rubber goods. This corporation proposes to fix its price, not to deviate, and each of the ten com¬ panies to be confined, as far as possible, to its own local trade. It is safe to say that, as in the case of the coal combination, this monopoly will in the same way be broken up. It is .'an un¬ natural state of affairs, and however prosperous it may seem at the beginning, is sure to develop inefficiency and waste, just so far as the profits exceed a fair interest upon the money invested. We judge the day cannot be very far distant when the great sewing-machine combination will also come to grief. The managers indeed have admitted for some time past that the business as a whole did not show a profit. As is well under¬ stood, the whole sewing-machine business of this country is virtually a part of one great combina¬ tion. These consolidated companies not only manufacture the various machines, but they wholesale, job and retail them. In other words, the makers of the machines have endeavored to get rid of the intermediaries with the public which other trades find so.indispensable. If the theory of the coal companies, the sewing- machine people and the india-nibber com¬ bination is correct, then society is all at fault in recognizing the usefulness of the whole¬ saler, the jobber, the retailer and the broker, and the proper way to conduct business would be to convert everything into a monopoly. We refer to these matters, because it' is doubtful whether we can ever have a real revival of bus i ness until these great and unwholesome com binations ara broken up. If the consumers had a voice in the councils of these combinations there might be some hope for .them; but it is asking too much of human nature to suppose that people who have a monopoly of any de¬ scription of goods should not endeavor to profit by it to the very utmost. The end of the coal combination cannot be very far off. The india- rubber combination is tolerably sure to come to grief in time, and the condition of the sewing- machine industry will not become wholesome until free competition takes the place of thepref- ent unnatural alliance between rival companieF, and their practical conspiracy against the sew¬ ing women of America. ------------------♦ <^» «------------------ EAILEOAD TO PITTSBUEGH. The project for a new air-line railroad between New York and Pittsburgh is rapidly assuming shape. By direct communication with that point ninety miles could be saved on all western bound Ireight. Such a road, if it repaid simply the interest on the money invested, and the management were under restraint as to combi¬ nations with other lines, and restricted from charging exorbitant rates, would be of immense benefit to the trade of New York City. We have no faith, however, in organizations for such a road, which are similar to other railroad schemes. Such a line should be built either by by the city of New York or by the States through which the line will run. It would reduce freights from the West at least one- half, and would be a perpetual restraint upon the roads which centre in New York. Such a road would restore to New York aU the business which has been drawn away firom it by the efforts of the people of Baltimore, Boston and Philadelphia. The projectors of this con¬ templated road may as well understand that it is idle to get up an organization for the purpose of being bought out, or to be built by the ex¬ travagant issue of bonds, or any of the older methods of manipulating stocks for the benefit of individuals rather than of the community. New York urgently needs such a road. Its cirnstruction and proper management would add 20 per cent, to the price of every lot on New York Island. It would pay. our property- holders alone to build such a road and run it entirely in the interests of this city, without any reference to profits; but we do not see any means by which this can be accomplished; and we suppose that if euch a road is projected it