of God entitle them to take a separate and equal station among the nations of the earth.

And these Filipinos, as President McKinley says, and as Otis says, "are a people," and so entitled to be independent.

I have no right to feel any peculiar pride in the action of any ancestor of my own in those great days which tried men's souls, and when all true Americans thought in that way, although I should be disgraced and ought to hide my head from the gaze of men if I were to depart from those principles. But I have a right to feel a just pride in and to boast of something much higher than my personal kindred. I am a son of Massachusetts. For more than three score years and ten I have sat at her dear feet. I have seen the light of her beautiful eyes. I have heard high counsel from her lips. She has taught me to love liberty; to stand by the weak against the strong when the rights of the weak are in peril; she has led me to believe that if I do this, however humbly, however imperfectly, and whatever other men may say, I shall have her approbation and shall be deemed not unworthy of her love. Other men will do as they please. But as for me, God helping me, I can do no otherwise.

I am faithfully yours,

GEO. F HOAR.

CHAPTER VII.

TRUSTS AND THE DEMOCRACY

The National Convention at Chicago in 1896 adopted this platform as embodying the doctrine of the Democracy on "Trusts and Pools":

We

"The absorption of wealth by the few, the consolidation of our leading railroad systems and the formation of trusts and pools require a stricter control by the Federal government of those arteries of commerce. demand the enlargement of the powers of the Interstate Commerce Commission and such restriction and guarantees in the control of railroads as will protect the people from robbery and oppression."

This is a sufficient statement of Democratic principles as applied to the industrial problem existing four years ago. Nor is it wholly inadequate to the situation as it exists to-day. The enlargement of the powers of the Interstate Commerce Commission is one of the principal remedies suggested by the Industrial Commission appointed by act of Congress in June, 1898, and it is conceded by all thoughtful men that the due restraint of railroads is one of the first steps to be taken toward the restriction of the trust evil.

But the past four years have been years of swift, industrial and economic change. The consolidation of railroads, though not a movement of recent origin, has proceeded with greater rapidity and upon a larger scale than ever before. The Vanderbilt and Pennsylvania systems have recently gone far beyond their original territory and are now in control of the fortunes of tens of thousands of workingmen and their families and the welfare of entire communities which four years ago knew those organizations only by their names. The centripetal movement is still in progress, at a rate which has caused thinking men to ask how soon all the great trunk roads of the continent, all the trans-Atlantic, lake and river steamship lines may be operated from a single office in Wall street.

The recent "absorption of wealth by the few" is well exemplified in the cases of the Carnegie Steel Company and the Standard Oil Trust. A quarrel between the owners of the former organization has lately brought to public view the interesting fact that Andrew Carnegie who came to America in his youth as a Scottish immigrant with empty pockets, now

owns the majority interest in a business valued on the London market at more than half a billion dollars. The Standard Oil Trust between January 1st and May 1st, of the present year, has declared $30,000,000 of dividends upon its $110,000,000 of stock. Of this egregious income the share drawn by Mr. Rockefeller, president of the trust, amounts to $100,000 a day. This from his Standard Oil interests alone, but one item of his incalculable wealth. All the sources of this man's revenue are known only to himself, but he is avowedly a large owner of the so-called American Steamship Company (subsidized) ;.of fleets of vessels upon the great lakes, carrying iron ore from his own mines to his own steel mills; of immense interests in the copper and lead trusts; of a controlling share in at least one great railroad system; of several universities and of the new $10,000,000 National City Bank in New York, which lately purchased for $3,260,000 the United States Custom House property in that city, with Mr. McKinley's Secretary of the Treasury thrown in to bind the bargain. No accurate estimate of such a fortune is possible; but there can be no exaggeration in saying that this favored son of special privilege and class legislation is by far the richest man that lives or ever has lived in America or any other country.

Mr. Rockefeller is the prototype of trustmen and the arch-multimillionaire; the final flower of the new "high finance." But neither he nor his trust is unique. The Goulds, the Vanderbilts, the Whitneys, to say nothing of several of his immediate associates in the Standard Oil trust, follow Rockefeller at a respectable distance in point of individual wealth. As to the other "industrial combinations," the Whisky Trust is capitalized at $125,000,000; the Anthracite Coal Trust at $150,000,000; the Federal Steel Trust at $200,000,000; its friendly competitor, the American Steel and Wire Trust at $90,000,000; the Copper Trust at $75,000,000,000; the Hide and Leather Trust at $60,000,000; and there are a whole brood of others which seem small only by comparison with these giants of the new finance. It will at once be seen that when the Chicago platform warned the people against the dangers of "absorption of wealth by the few" its Democratic authors had a truly prophetic sense of the immediate economic perils of the republic.

This unprecedented aggregation of wealth belongs to the few years which will be known to posterity as the trust epoch in our history as a nation. The economic movement which has resulted in the absorption of so many industries in the form of trusts, belongs in great part to the

period immediately following the late war with Spain. Indeed it may be regarded as the logical outcome of the spirit which animated the money world and its complacent tool, the McKinley administration, during the latter part of that conflict. There had been trusts before. The Standard Oil trust was formed in 1882; the Sugar trust, the Whisky trust, the Anthracite Coal trust, to say nothing of the railroad pools and combinations, were well established in our economic system before the dawn of this new era. But the great majority of these new industrial combinations have been formed within the past two years.

The word "trust" itself, to which the trustmen so strenuously object, is no longer a strictly accurate definition of these combinations. The original trusts were so-called by reason of the legal (or rather illegal) form under which they were organized. The shareholders of various enterprises assigned their shares to one trustee, taking trust certificates in exchange therefor and in lieu of ordinary profits. Such was the original "trust." It no longer exists, because it has been declared unlawful, but the name still survives in the popular mind and doubtless will continue. If it has become odious and a term of reproach, the trustmen themselves best know the reason why.

The present trusts are simply huge corporations formed by merging a number of smaller corporations or firms. The special requirements of this particular form of high finance have given a new conspicuity to the States of New Jersey, Delaware and West Virginia. When it was found impossible under existing laws to perfect this form of organization in manner necessary for purposes of monopoly, these commonwealths came to the front with special legislation, calculated to make the way of the trust organizer easy and his expenses light. Thus it has come to pass that a large majority of trusts in the United States are organized under the laws of New Jersey (which was first in the field), and that State applies the pieces of silver for which it has sold its honor to the payment of its current expenses. Nor is it without interest that the State of New Jersey, the home of Mr. McKinley's running mate, the late Vice-President Hobart, is the commonwealth which the President has honored above all others in the bestowal of offices of high trust and emolument.

At the close of the war with Spain the "war spirit" of plunder and adventure was in the air. The money power with good reason felt surer than ever that it could control legislation and shape the administration to its purposes. A combination of financial events had released a large

amount of capital for investment in any securities bearing on their face even a tolerable guarantee of soundness. At this juncture the Promoter took the field. The Promoter is a new character in finance and deserving of the greater attention, because to him is largely due the present importance of the trust problem. It was he who discovered the new "trust. idea" which in brief is this: If all the factories producing a given line of goods unite under one convenient corporate charter, they can enjoy a monopoly and all that that implies, fix the price both of their products and of the raw material; regulate wages; reduce the expense of distribution, sale and advertising; dismantle "superfluous" plants and discharge "unnecessary" labor; control the field of consumption, and in a word realize in the aggregate much greater profits than all together could possibly earn as individuals. Finally, the Promoter pointed out that in these pleasant circumstances it would be possible to issue an amount of stock practically unlimited, and to place this stock with a confiding public, at that time only too eager for investments of almost any character. Of course the Promoter himself was not working for his health. He expected a reward for his services, but would obligingly take it from this over-issue of the stock.

The manner of the Promoter's procedure may best be illustrated by a single instance. The American Writing Paper Company, consolidated into a trust of twenty-seven plants, with options on several smaller ones. The twenty-seven mills cost the Promoter not much more than $7,000,000, and the former owners considered that at this figure they were getting fancy prices for their property, else presumably they would not have sold. A reasonable cash value for the mills, including the good will, may pos sibly have reached $5,000,000. The trust was floated upon a capitalization of $42,000,000, rather more than six times the value of plants as fixed by the enthusiastic Promoter. This capital was made up of $17,000,000 bonds, $12,500,000 preferred stock and $12,500,000 common stock. From the proceeds of the bonds $2,500,000 was placed in the treasury of the trust as working capital. The Boston bankers of the new organization published a prospectus in September, 1899, in which after stating that the combination of the twenty-seven mills represented 76 per cent of the entire output of fine writing paper in the United States, said: "The combination of these companies will naturally result in extensive advantages, improvements and economies, and our best advices from competent men indicate that the net earnings of the new company