The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. TUESDAY, MAY 28, 1907. THE AMERICAN OCTOPUS.

Auckland Star, Volume XXXVIII, Issue 126, 28 May 1907, Page 4

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

TUESDAY, MAY 28, 1907. THE AMERICAN OCTOPUS.

For tte cause fht,t imcks assistance. For the wrong that needs resi»ttne», For the future in the distance, Ani the good that we can tio.

President Kopsevelt, if nothing else, is a beld man, and he has already taught the Trusts that his threats against them are more than brave words. He has bound himself by solemn and public, pledges to administer the law without fear or favour, and he has done far more than any other individual in the United States to restrain the evils inseparable from the excessive overgrowth of wealth and its concentration in a few hands. The proceedings that he is now institutingagainst the Harvester Trust and the Tobacco Trust are entirely in keeping with the policy he has hitherto followed in dealing with the " combine " question. But his difficulty has always been, not only to obtain specific evidence of breaches of the law, but to get the caae against the Trusts stated in terms that .will shut out all chance of evasion ov subterfuge. It is no exaggeration to say that the greater part of the immense wealth of America and the best half of the legal ability of the States have been combined for years past in a systematic and persistent attempt to defeat the purposes of the law. The Trusts have poured out money like water to protect themselves against interference, and they have engaged scores of the ablest and most in.genious members of the American Bar to give their operations a plausible appearance of legitimacy. The charge of "re straining trade" is exceedingly vague < and wide, and it must be almost equally difficult to rebut or sustain. But nothing but some such general plea as this would suffice to cover the far-reaching and widely diversified methods of com-bine-commerce, or afford much prospect of bringing the organisers of the Trusts* within the scope of the law.

In attacking the Harvester Trust, President Roosevelt has chosen a thoroughly typical example of the constitution and methods of the American combine. This trust was formed out of the Deering, McCormick.. Champion, Osborne and other well-known companies of agricultural machinery manufacturers: the object being to secure the largest possible share of the world's trade in these lines. The trust is only five years old, but over two years ago one of its Australian representatives stated that it controlled nine-tenths of the world's agricultural implement markets, and that it was "out after the other tsnth." By 1905 the trust was making a yearly profit of forty million dollars on its capital of 100 million dollars; and according to an eminent American LiWyer, eighty per cent of its gains was sheer plunder, "secured by methods that would shame a footpad, and are wholly criminal in the eyes of the law." And it was further charged that the Harvester Trust, "by methods of extortion, constriction and law-breaking, so dominates the market as to compel what opposition is struggling against it to do business at a loss." .

The methods pursued by the Harvester. Trust in dealing with the railway freight problem afford convincing proof of the truth of these charges. The American law against rebates on railway charges is stringent enough; but many of the trusts have proved that it can be evaded. The Harvester Trust bought two railways for itself—purchasing the Illinois Northern outright and buying a controlling interest in the West Pullman road. It then arranged its system of distribution and carriage in such a way that whatever railroad the cars transporting its wares from the central depot should finally travel over, they must first run over a mile or so of the Harvester Trust's own lines. For shunting on that small section a failcharge would be, three dollars a car; but the Illinois Northern—which is the Har- , vester Trust disguised—compels all other railway companies carrying the trust' ' goods to pay twelve dollars a car. Thus (on every shipment, of'its gocd* the Harjvester Trust really n rebate of I nine dollars a car. This matter was j fully argued before the Roosevelt Inter--1 state Commerce Commission in 1904, and I the Commission reported, that the deI fence was a mere play upon -words; for 1 the Illinois Northern Company was manii festly "guilty of. an act by which an i advantage is given anil a discrimination . is produc.l in favour of. the Harvester j Company." >uch an act is, of- course, }illegal; but even the deerefc ofc * coorfc

cannpt always be enforced in America against the overwhelming influence and wealth of the trustjs. A further illustration of the methods, of American "'high, finance" may be takeß from- the Harvester Trust's dealings with one of the private companies which attempted to compete with. it. The -well-known Osborne Harvester Company at first refused to come into the combine) and tried to fight ita powerful rivaL The Harvester Trust, having secured its heavy railroad rebate, employed large numbers of agents bound by contract not to sell for any other firm. To "freeze out" all rivals the Trust then offered its implements to the farmers on deferred payment, charging from 6 to 10 per cent on their promissory notes. As the Trust could borrow as much money as it needed at 3 or 4 per this -""is a very profitable form of business. The Osborne Company was forced to follow suit; but not having the immense capital of the Trust behind it the Osborne Company was driven to borrow. Gradually and secretly the, Trust's financial agents got possession of the Osborne Company's " paper," and then suddenly descended upon the company with a demand for an immediate settlement. The Osbornes were compelled to give way, and this is only one of the many means employed by the Harvester Trust Company in " illegal restraint of trade." Our readers are aware that this Trust has attempted to invade ' these colonies, and that it has threatened j with destruction more than one leading Australian firm that has refused its terms. The future career of the Harvester combine will be watched with anxious interest by colonial statesmen. But in the United States its development is a far more serious public danger. Two years ago this Trust, according to the published statistics, was paying 40 per cent on its capital of £25,000,000, and this result had been attained by killing competition and securing a virtual monopply of a great trade at the expense of rivals and consumers alike. A vigorous critic of the Trust once described it as a system of fiscal bloodsucking.- and denounced the people fop their sheep-like timidity and docility in tolerating it. But President Roosevelt is well able to vindicate the national reputation in the struggle he has entered upon against the tyranny of the plutocrats.