Congressional Serial Set

Mr. Spalding endorses this opinion. He believes that it is natural for men to charge all that they can get. The combinations also, in his opinion, diminish individual effort and deprive the individual of the opportunity of rising. He also is of the opinion that their overcapitalization is a serious evil. Overcapitalization, in fact, is mentioned by many witnesses as one of the prominent evils, as has been noted in the section on capitalization.

Mr. White is of the opinion that large corporations labor under the disadvantage of being unable to cater to the whims, the prejudices, the ignorance, or the tastes of individual customers. A combination must manufacture certain standard goods whose production can be systematized, whereas the individual producer may meet any whims or prejudices of his customers, so long as they will pay for them.

The closing of factories has been spoken of by some as an evil, although by others it is mentioned as a benefit, inasmuch as it forms a means of saving at times in the cost of production. In most of the combinations it has been found advisable to close some establishments and to transfer the workmen to other branches of the work. At times a special locality is thus made to suffer severely. A similar result is found, of course, in the discharge of traveling men. It has its evil side as well as its beneficial effect that comes from the lessened cost of production. In many cases it has been found that where these men have been discharged, work has been found for them in other departments of the business, although, of course, there are a good many individual exceptions. Mr. La Taste testifies that, speaking generally, he thinks the combinations have discharged a great many traveling men, and that, on the whole, the sentiment of the traveling men throughout the country is against the combinations. They think that they are injurious, not merely to them as a class of workingmen, but also to the interests of the public generally.2

REMEDIES.

Of the later witnesses that have been heard, the larger number are of the opinion that comparatively few, if any, legislative remedies are needed. The witnesses whose inclinations are strongly toward free trade are of the opinion that the removal of the tariff on goods controlled by the combination would be the best, or at any rate the most nearly practicable remedy. Mr. Stockwell, secretary of the Massachusetts State Board of Agriculture, says that in every case of a large combination or trust the world's market should be opened to this country. 3

Certain other witnesses, not themselves apparently free traders, seem to indorse this opinion to a certain extent. For example, Mr. Flint is of the opinion that one of the possible evils to American industry would be a tariff war on the part of the leading European countries. He would, in consequence, recommend that certain changes be made in the tariff, and that "in revising duties the fact of these large consolidations being in a position to gain advantages in manufacture should be taken into consideration," in order to check the danger of a tariff war on the part of European countries. He is, however, opposed to any legislation that would discriminate against trusts in general without discriminating, and is opposed to any general revision of the tariff. Most of the manufacturers object to having the tariff interfered with.

Hon. Robert W. Tayler says that the Babcock bill, which proposes to remedy the evils of trusts by removing the tariff from trust products, is objectionable because such legislation would destroy the possibility of manufacturing by independent plants the goods now protected under the tariff, and would simply put strength into the large combinations. The passage of the Babcock bill would be to the advantage of the United States Steel Corporation more than to that of any other concern or person. He suggests the same result regarding tin plate.

5 Pp. 601; 603–604; 607-608.

Probably more of the witnesses think that something could be gained in the way of greater publicity regarding the business of the combinations. For example, Mr. Campbell thinks that corporations whose stock is sold to the public on exchanges should be under Governmental control. He would be willing to have the regulation go even further than a mere publicity of accounts. Mr. White believes that the State has the right to say how the combinations should be regulated, and thinks it possible that some tax might ultimately be placed on what would be considered excessive earnings, the actual earnings to be found out by a complete system of Governmental inspection of accounts. Mr. Flint also favors a proper system of auditing and accounting to regulate the issuing of securities, but thinks that affairs of trade are in the main best regulated by natural laws.

Mr. Chapman thinks that it is possible that the amount of capital stock ought to be limited in certain cases, but sees no way of doing this by legislation, and believes that generally it is unwise to attempt to control business by legislative enactment. Mr. Waterbury and Mr. Grimwood both think that legislation is unwise; that a combination which does not benefit the public will be destroyed by competition.

Some of the witnesses speak distinctly against even any special degree of publicity. Mr. Schwab, for example, thinks there ought not be publicity regarding the business of corporations, and that though the stockholders are entitled to certain statements, even those should be somewhat limited. Mr. Taylor thinks that any legislative interference seems to involve a restraint of trade, to lessen competition, and would therefore be unwise.5

Mr. Gunton advises that, if possible, the combinations be put under a national charter, and that they be forbidden to make special low cuts in certain localities to ruin competitors.

Two or three of the witnesses go considerably further and along the lines that meet with less general acceptation. For example, Mr. La Taste thinks that the system of single tax on land values would be a remedy."

Mr. Hillyer thinks that the Sherman law should be rigidly enforced, and that the tariff should be removed; there should be Government ownership so far as municipal combinations are concerned; and, if necessary, the Government should itself ultimately go into the business of manufacturing the products manufactured by the trusts. He would be ready now to have the United States Government control the railroads, telegraphs, and long-distance telephones.

Mr. Campbell thinks that the corporations whose stocks are sold on the exchanges should be under Government control, as does Mr. Landstreet.

Mr. Campbell believes that corporations should also be prohibited from making contracts with purchasers of their goods to the effect that the goods of other companies should not be handled. He would like, if possible, to make such a law national, but is certain that it should be made in the different States."

Mr. Spalding thinks that trusts are a national question; the remedy must be a national one. He believes that it is practicable to enact national legislation which will forbid any trust to put down prices so as to destroy competition or to put them up to a point of extortion. Legislative regulation of prices should not go further than that. 10 He thinks that trusts might be abolished by Congress by a law similar to that which broke up the lottery business. They might be forbidden to use the mails or be forbidden to ship their products across State lines. If a trust should build a plant in every State to supply the wants in that State in order to evade the above-mentioned law, that would do away with many of the offensive features of the combinations. The trusts should certainly give publicity to their operations, and he would favor any method of dealing with them which could constitutionally be adopted, either under the power to regulate interstate commerce or under the taxing power."1