The Dominion THURSDAY, APRIL 21, 1910. TRUSTS.

Dominion, Volume 3, Issue 797, 21 April 1910, Page 4

The Dominion THURSDAY, APRIL 21, 1910. TRUSTS.

An echo "of the war against the American Trusts /reaches us to-day in a message reporting that the At-torney-General of New York State is taking proceedings against certain financiers who arc alleged to be concerned in an attempt to corner the cotton supply. His action, which is said to be ''unprecedented" and to have caused a sensation, is doubtless due to the strong attitude which has lately been taken up by the President and the Federal AttorneyGeneral, Mr. Wickersham. Contrary to the hopes arid expectations of the large corporations, MR. Taft came out several times in January and February as not only a staunch believer in the Sherman law, but as a believer in the wisdom of strengthening that law. The Sherman Act has never really had a fair trial; the ease with which decisions given under it have been nullified or evaded has been assisted _by the steady cultivation of the idea that if it were rigidly enforced the law would destroy modern American business. The efficiency of the law was also seriously damaged by Mr. Roosevelt's persistent advocacy of the doctrine that there are good as well as bad Trusts. He said in 1907 that it was "unfortunate that our present laws should forbid all combinations, instead of sharply discriminating .between those combinations which do good and those which do evil. ~' . .It is a. public evil

to have on the statute books a law incapable of full enforcement because both judges and juries realise that its full enforcement would destroy the business of the country. .. . . The law, as construed by the Supreme Court, is such that the business of the country cannot be conducted without breaking it." Me. Taft takes the opposite view. In a message to Congress in January he said that an examination of the Supreme Court's Trust •, decisions showed him that there was no' necessity for an amendment of the Sherman Act "to exclude incidental and beneficial covenants in restraint of trade." In actual practice, the Court applies the statute "only to the real evil aimed at by Congress." To draw a line between good and bad Trusts is both unnecessary and impracticable, for to ask the Courts to decide what.is reasonable and unreasonable "restraint of trade" would be "to put in the hands of the Courts a power impossible to exercise on,any consistent principle which will ensure, the_ uniformity of decision essential to just judgment, to thrust upon them a burden they have no precedents to enable them to carry, and to give them a power approaching the arbitrary, the abuse of which might involve our wholo judicial system in disaster." The tendency in America just now is to look at the Trust problem from the viewpoint of first principles: to consider, • not the apparent immediate fruits of the doings of a great corporation.! so much as the inherent and permanent consequences to:. be expected from the toleration of its methods.': This tendency Me. Taft and Mr. ~ 'Wioljeesham are . doing their utmost to encourage. To the plea that the Trusts are the natural result of the accommodation of business to the needs "of the time, that competition, though good enough in its day, has had its day, Me. Takt replies that "if the enforcement of the law is not consistent with, the present methods of carrying on business, then it does not speak well for the present method'''of conducting business, and they must be changed to conform to the law." He defines ■the principle of the Sherman Act as being "that those engaged in modern business, especially of manufacture and transportation, shall pursue the policy, with respect to their competitors, of 'live and let live,' and that they shall not use the business ,of their concerns to frighten exclusive patronage from customers and the elimination -of smaller concerns from' competition, and thus control the output and fix prices." Mr. Wiokeksham went a step nearer the ethics of, monopoly in defining "the underlying principle" as "the preservation of the right of the in : dividual to carry on trade and com nierce free from undue control and restraint on the part of great aggregations of individuals or capital; in a word, to protect the individual from the tyranny of a group." The enemy is not amalgamated capital as such, but "the of fixing prices at will, determining the amount of production, dictating the terms on which thousands of our fellow-countrymen might pursue their means of livelihood; the power to exclude or to permit competition; all the elements of those monopolies which so stirred the generation of Englishmen from whom the Pilgrim Fathers come." It is not merely worthy of note, but a fact of the very highest importance, that this presentation of the anti-Trust case shows that the Trust system is undesirable in the same degree,.and for the samo reasons, as State Socialism. ■ . • . •

Not many years ago the main plea of the Trusts was that they greatly cheapened the cost of production and that the consumer, would accordingly be better off in the end. This plea is advanced by Protectionists and State Socialists everywhere, and it has everywhere and always been hopelessly discredited by the facts. A State monopoly is as bad as a Trust, and its effect is the same on the comfort of the individual citizen,' for in each case there is a crushing out of honest individual competition. It was as a friend of competition,-and by no means as an enemy of great industrial concerns, that Sherman brought in his Bill. In advpeating his measure he emphasised the value of legitimate corporate activity as tending . to cheapen production. Several big i corporations in sharp competition would be of great benefit to the nation, but what he recognised as evil was the amalgamation of such corporations into one huge combine. "Corporations," he said, "tend to cheapen transportation, lessen _ the cost of production, and bring within the reach of millions- comforts and luxuries formerly enjoyed by thousands." Unfortunately, however, American capitalists were not satisfied with "partnerships and corporations competing with each other," and so they invented Trusts, "the sole object" of which is "to make competition impossible." If the destruction of competition were beneficial to the nation, the Trusts would be justified of their existence,' but the principle of free exchange denies that the elimination of competition is good, and the facts bear out the theory. The economic case for the Trusts is in all fundamentals

identical with the economic case for State Socialism as it is commonly understood. Even if the defects in the judicial processes in America nullify for a time the new determination of the President to break down the Trust system, the sharpening of the issue may have the effect of bringing about an . economic awakening in America like that which was caused in Britain by the ropeal of the Corn Laws.