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Supreme Court has adopted. But all evasion is ineffective. Trickery is but a temporary subterfuge.

When a problem is acute and actual, the solution must be genuine and final.

If the evils of monopoly are to be eliminated, there are only two effective ways:

One way is to destroy the evil and with it the monopoly, which creates that evil.

The other way is to separate the evil from the monopoly and destroy only the evil.

One way is to prevent combination, and the other way is to permit combination, but prevent extortion.

One way is to compel business to compete against its will and contrary to its advantage, and the other way is to allow business to combine and to obtain the full advantage of combination, while compelling it to share that advantage with the public.

When considering the one alternative of destroying combination, we must weigh carefully the two most vital reasons for not destroying it or attempting to destroy it.

One of these is the convincing reason against substituting an inferior method of production for a superior one, against compelling a wasteful and cumbersome method to be employed in place of an efficient and economical one.

The other reason is the impossibility of doing anything so contrary to nature and to natural development, so opposed to universal advantage and advancement.

How can we benefit by replacing organization with disorganization, system with disorder, harmoniouscoöperation with conflicting individual effort?

A faculty for organization is a measure of mental development.
A capacity for systematic effort is an evidence of business ability.

Combination is the expression of greater experience, better knowledge, and higher intelligence, the result of education, the effect of gradual appreciation of certain fundamental principles and the transmission of those principles into practical operation.

Combination means economy. Combination means efficiency. Combination means system and simplicity, the elimination of unnecessary cogs in the business machinery.

Combination means increased production and decreased effort. Combination means stability, permanence, confidence, certainty, and every able business man knows it.

As a consequence, the Big Business of the country will positively be conducted in combination, either open or secret.

If government persecutes combination, it will make combination secret.

If government recognizes and allows combination, it will make combination public.

If combination is secret, it cannot be regulated or controlled.

If combination is public, it can be regulated and controlled in the interest of the public.

The inevitable, unavoidable, inescapable conclusion is that combination should be permitted, should be compelled to be public, and should be regulated in the interest of the public.

Then how is it to be regulated, and what is to regulate it?

Not combination itself, because combination will not regulate itself unselfishly; not the public, as a body, for the public has not the knowledge or organization to do it, but the government, the common representative of both the consuming public and the business interests.

Whenever business demands of government the right to combine, then business must concede to the government the power to impose conditions that will compel combination to operate for the public good.

If the combination constitutes a merger or monopoly extensive enough and powerful enough to fix prices, then the government must require that the prices fixed shall not be unreasonable or to the detriment of the public.

Thus the advantages of combination will be secured, not only for the producer, but for the consumer.

Thus cheaper production will mean cheaper prices; thus the advantages of combination will become general, for the public will receive its fair share of them; thus combination itself will become popular, for it will mean not a burden upon the public, but a benefit to the public.

I have discussed in this article the regulation of prices rather than the limitation of profits, because the two are but different forms of the same proposition.

The limitation of profits is as advanced a step as the regulation of prices, but not as practical a process.

The regulation of prices in no way interferes with or discourages economy or efficiency of operation, compactness of organization, or any of those business advantages to promote which combination exists and is to be allowed to exist.

On the other hand, limitation of profits removes one of the main incentives to economy and efficiency in the perfected system possible under combination and necessary for cheap production.

If business (no matter how economically and efficiently it may be conducted) is limited in its profits, then, inevitably,less attention will be paid to the economy and efficiency that make for cheaper production and cheaper prices.

But if business be merely restrained from charging an exorbitant price for its products and allowed to appropriate as profits all that can be created within that price by economy and efficiency, then economy and efficiency will be maintained at the highest degree of perfection and the full advantage of combination will be developed and secured.

The regulation of prices, then, secures for business a larger opportunity and for the public a greater and more definite benefit.

Inasmuch as the regulation of prices is merely an enlargement of powers already possessed by the government, it would be well in providing for the regulation of prices to adhere as closely as possible to the means and machinery already employed by the government.

The regulation of prices is merely an extension of the idea involved in the regulation of rates.

The regulation of the charges of monopolies created by governmental grants and franchises is merely extended to include the regulation of the charges of other monopolies equally powerful and equally important to the public welfare.

The Inter-state Commerce Commission is empowered to fix railroad rates.

A sufficient enlargement of the number and a sufficient extension of the powers of that commission would form a body able and fitted to deal with the problem of more general rate or price regulation.

When a member of Congress, I introduced bills giving the Inter-state Commerce Commission the power to fix railroad rates, creating the Inter-state Commerce Court, and proposing a Federal Incorporation act.

An elaboration of the machinery necessary to perform these recognized functions of government would be sufficient to enable the government to perform without derangement or difficulty the enlarged functions involved in the control of combination and the regulation of prices.

The Department of Commerce and Labor, with its agents appointed from every state and representing it in every state, as provided for in the Hearst Federal Incorporation bill, would possess in its records all the facts relating to the size, character, and condition of every Federal corporation.

The Inter-state Commerce Commission, increased in numbers and divided


into various departments, would deal with extortionate charges and monopolistic abuses in various lines of business.

The Inter-state Commerce Court, increased, if necessary, in numbers and divided into divisions, would review and enforce the findings of the Interstate Commerce Commission.

I would add to my original Commerce Court bill, however, a clause providing that the justices of this court be appointed for twelve-year terms, and that onethird of these justices end their terms during every presidential term of four years.

The object of this provision is to allow the President of the United States, the chief elected representative of the people of the whole United States, largely to alter the character and complexion of the Commerce Court during his term of office, in conformity with the principles and purposes entertained by the citizens at the time of his election.

In two presidential terms, the character and complexion of the Commerce Court could be completely altered fully to harmonize with the principles and purposes of the people as expressed by the successive elected representatives of the people.

In these days of insolent assumption of legislative functions by the courts, some such provision is necessary to restrain their arbitrary appropriation of power, and such a provision might indeed be applied by a constitutional amendment to the Supreme Court of the United States, if unconstitutional assumption of legislative functions by the Supreme Court should make further constitutional restraint necessary.

In any event, such a provision applied to the Commerce Court would tend to obviate the present unsatisfactory situation where an Inter-state Commerce Court is mainly engaged in upsetting and reversing the necessary acts of the Inter-state Commerce Commission, performed in accordance with the needs and demands of the country.

With the justices of the Commerce Court appointed for limited terms, as above described, and with the members of the Inter-state Commerce Commission, the Secretary of Commerce and Labor, and all his representatives removable at the pleasure of the President, the people need only elect an honest and able President to secure an able and honest conduct of all the important affairs with which these courts and commissions would have to deal.

Matters under the control of these courts and commissions and subject to serious difference and dispute would be submitted as issues in presidential elections and so decided.

Business would be conducted, as it should be, under a generally wise and judicious control and in the best interests of the whole people, who, after all, make business possible and make possible the success of every business.

Any systemization and organization and reasonable regulation of business along these lines would be a boon to business.

It would replace disorder and disorganization with order and organization.

It would replace uncertainty with certainty.

It would replace perplexity and confusion with definite knowledge, and, finally, it would replace ignorant, irregular attack with intelligent, systematic regulation.

Business should prosper, not only because of such assured conditions, but also because of the fullest freedom to adopt combination and modern methods conducive to cheaper production.

The public should be equally benefited, for they would participate in the prosperity and get the benefit of cheaper products in cheaper prices.

Under such a scientific system of combination, brought to a pitch of highest efficiency, the greatest amount of wealth would be created; and under reasonable regulation by government, the division of wealth would be just and equable and impartially advantageous to all.

Constructive Trust Control


Bruce Wyman

Professor of Law in Harvard University, Author of "Public Service Corporations."

* Control of the Market," etc., etc,

EDITOR'S NOTE.-Last month The World To-Day took up the decision in the Tobacco Trust case and demonstrated its futility as a method of trust control. This month the Standard Oil dissolution plan is discussed by various authorities, who agree that it comes no nearer meeting the requirements of the situation. “In every branch of the oil business we have numerous corporations without entangling alliances now,” says Professor Wyman of Harvard University, “but they have the same owners as before and the same men are in their management in one company or another. Will these owners set about it to ruin themselves; will these managers have nothing to do with their former associates ?”

T is one of the paradoxes of the time in those businesses where the situation is

that, while every praise is accorded to such that competition will not longer work
those leaders in any business who effectively.
bring about noteworthy progress in From my point of view, therefore, the

industrial efficiency, there is appar-. present outcry for the destruction of all the ently nothing but universal execration for trusts indiscriminately is simply futile. The those who have founded the great concerns present campaign for the dissolution of all in any industry. And yet it seems clear aggregations of capital I consider as unthat in certain businesses you cannot have intelligent as the terrorist propaganda. the highest degree of industrial efficiency I do not believe that the law should any without the greatest possible concentration. longer attempt to destroy all of the trusts. Where monopoly is thus natural, I am pre- Neither do I think that we should make an pared to wager that there is necessarily entire change in the law and be content simply something good in it, potentially, at all to regulate all of the trusts. I believe that events.

there are good trusts and bad ones, although Whether this be altogether beyond dis- it may be difficult to draw the line between pute or not, I feel sure, at least, that the them. That is, I would have the Sherman monopolies that have been developed in law remain on the books substantially as it certain industries are permanent, whether is, so that the recent victories against illegal one likes them or not. And, consequently, combinations might be followed up; but I I believe that it is high time that we should would have new legislation by which legigive up the hopeless attempt to destroy by timate concerns might no longer be worried. law all aggregations of capital, and that we It may be hard to distinguish illegal aggranshould adopt in its place the promising dizement from legitimate growth, but this program of the regulation by law of these will be no more difficult a line to draw than inevitable monopolies. Indeed, I am not that which divides illegality from legality afraid to say that I believe that efficient in many another matter. Indeed, I think regulation is the real solution of the trust that the distinction between natural monopproblem, because I see in many of the oly and unnatural monopolization should trusts much that can be turned to the com- now be sufficiently clear, if not to busimon good. I think it is time that we should ness men themselves, at least to their face the fact that monopoly is inevitable counsel.

It must be admitted that there are many monopolies still flourishing which have no economic justification, and for which there can be no legal defense. In the history of the

rise of the trusts, we

read of these ruthless cam

appears all too frequently. No one can defend such policies; we need not discuss them further. Where these circumstances.appear, no mercy can be shown. But these are unnatural monopolies, or, at all events, this is illegal monopolization. Some of these trusts could never have gained their control of their markets without such predatory competition. If they still have control of their market, it can only be because they are maintaining their monopoly by unfair tactics and gaining thereby extortionate prices. By the solution I propose, such discriminatory practices would be prevented and such over-charging would be checked. It would then be a case of the survival of the fittest, and only the economically advantageous trusts could survive.


John D. Rockefeller as he is to-day, and a recent view of the site of his first oil well

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