PUBLICITY AND COMPETITION. 17) "If it were possible for Mr. Purdy to buy up all the flour mills in the United States and refuse to sell bread for less than $100 a loaf, his 'rights' as a business man would not last longer than a feather in Vesuvius. He would be overridden and trampled down by the larger question of human rights. The government would have the right to investigate. "Restriction and monopoly of production should be sufficient warrant for the government to institute inquiries and conduct examinations for the benefit of the people." This is rhetoric, but not reason. It betrays much of the "blood to the bridle" style of oratory, but no accurate knowledge of the power that moves industrial forces. Competition cannot be killed unless it is killed naturally. Water power is not developed by attempts to cause water to run up-hill. Competition is not killed by raising, but by lowering, prices. How long does the Journal suppose it would take Mr. Purdy to acquire control of the production and distribution of bread if he were to proceed on the basis of raising the price every time he bought a flouring mill or a bakery? For every competitor bought out a dozen new ones would enter the business to cut to a reasonable limit the high price he had established. His high prices would have no more stability than figures written in the sand of an ocean beach where every incoming wave would wash them out. Publicity of the price would 178 PUBLICITY AND COMPETITION. be the only thing required to induce this competition. It would not be necessary for the government to institute inquiries and conduct examinations for this. Competition can be killed only by reducing prices. If Mr. Purdy, through superior skill, the use of more efficient mechanical means, or the command of larger capital, could create advantages not possessed by his competitors, and thus reduce prices to a point that would leave him a profit, but none for his competitors, and did it, he could kill every one of them. If he had the ability to-day to deliver a loaf of bread to every consumer in the United States at a less price than anyone else and did it, he would have an absolute monopoly of the bread-producing business. His "rights” would be defended by every bread eater because to destroy his rights would be to raise the price of bread. No one would want that done. He would be revered as a benefactor of his race, having actually caused two blades of grass to grow where but one grew before, and divided the benefit with the people. There would be no demand "for the government to institute inquiries and conduct examinations for the benefit of the people." Mr. Purdy, not the government, would have the power to and would be benefiting the people. Competition is war. The most important factor in warfare is the ability to keep the enemy in ignorance of one's strength, equipment and plans. There could be no real war if each opponent were compelled, through a false use of the power of publicity, to dis DETROIT HELD BY THE THROAT. 179 close all of these facts. Under such conditions the generals would simply arrange terms of surrender, the weaker to the stronger. There will be no competitors when there are no business secrets. Guided by the information gained by such publicity, all competitors will combine. This will be the death of competition. Competition and publicity are incompatible. DETROIT HELD BY THE THROAT AGAIN. We should think the city of Detroit would have a very sore throat by this time. According to the representations of some of its newspapers and reform agitators, one corporation after another has had "the city by the throat" for ten or fifteen years. The gas company, the electric lighting companies, the street railroad companies and the telephone company have all had a turn at that throat. Although this has been going on so long, the people of the city seem never to learn how to protect the city's throat from the grasping corporations. By looking over the files of the local papers a few years back, it will be seen how sure the political leaders of the people were that competition was a true remedy for monopoly. Instead of protecting the investment that had been made in good faith in an electric lighting plant and offering the company an exclusive contract on the basis of cost of service plus a reasonable profit, the wise politicians granted a competing franchise and made a contract for public 180 DETROIT HELD BY THE THROAT. lighting with a competing company. In the course of time this contract expired. It was then found that the new company was a worse monopoly than the first, and that the sure way of downing the monopoly and 'cutting the price in two was to establish a municipal plant. This was done and a mortgage of some $700,000 has been placed on taxpayers' property to pay for it. After six years of experience it is found that more money must be invested to keep the plant in satisfactory working condition and that the public lighting is costing as much, or more, as done by the city, as it would cost if bought by contract from a private company. THE TELEPHONE MONOPOLY. History is repeating itself in the case of the telephone monopoly. Politicians and reformers were sure a few years ago that they had solved the problem of the telephone monopoly by granting a franchise to a competing company. Great was the rejoicing when the new company commenced business. and cut prices. But the rejoicing did not last. A natural law, superior to the edict of politicians and the opinions of reformers, has asserted its supremacycompetition cannot be maintained where combination. is possible the competing telephone companies have combined. Now come the politicians and the reformers with their last resort remedy, advocating the establishment of a municipal telephone system via the commission route. Having reached their limit DETROIT HELD BY THE THROAT. 181 in mortgaging taxpayers' property for public purposes, it is now proposed to incorporate the Detroit Municipal Telephone Company, to establish the plant and operate it in trust until such time as the city may see its way clear to acquire possession of the property. A franchise is to be granted to this company, which, together with the physical property, is to be mortgaged to secure funds with which to establish the system. It may be taken for granted that this franchise will be liberal in its terms, to make the bonds attractive. This comes dangerously near the scheme for acquiring the street railroads, with which Governor Pingree and his associates stirred up the city about a year ago. There is one good feature about itit may save the taxpayers from being mortgaged again. Some want to make a co-operative scheme of it. They want subscribers to purchase the instruments they use and pay for connections. This, it is innocently represented, would cut down the cost of the system. It would do no such thing. The cost of the system would be unchanged. The subscriber would. pay a part of the cost instead of the company. That would be all the difference this change would make. Some argue that everybody who wants cheap rates and better service would have a motive in subscribing for the stock. This argument was used in Michigan forty years ago, when a seductive promoter visited business men in many towns to induce them to |