THE TRUST PROBLEM

Dominion, Volume 12, Issue 272, 13 August 1919, Page 8

THE TRUST PROBLEM

_$. HOW IS THE PUBLIC TO BE PROTECTED ?

The problems of trusts and combinations is not primarily a labour problem, though it is not without its significance from tho labour point of view (writes the Labour correspondent of the London "Observer"). Tho unification of business and tho diminution of the number of independent employers simplifies the negotiation of industrial agreements, aim reduces the possibilities of non-fulfilment and evasion of agreements. The concentration of capital may result in economic improvement for tho workers, though it by no moans follows that such improvement will be commensurate with the improved economic returns of the employer. Oh tho other hand, the consolidation of the control of capital in a few hands increases tho power of wealth and its fighting capacity. There is always a possibility in the case of an effective combination that tho capitalist ami the worker may conspire to profit at the expense of tho consumer. But tho various labour problems inyolved in a consideration of the trust problem need not detain us. The problem of combination is preeminently a consumers' problem, and it is from that point of view that the recent

Report of the Committee on Trusts is of interest. Without going so far as to assert that trustification will become universal, . one may say with conviction that the concentration ot capital and the amalgamation of businesses are a logical consequence of tho Industrial Involution, though modem industry was nurtured in an atmosphere of individualism and free competition of which tho trust movement is the negation. _ . The Growth of Trusts. Competition is self-destructive. What is called "fair competition" passes ovev into "cut-throat competition"; the experience gained teaches tho value ot combination. Tho unnecessary costs or economic rivalry-advertisement ana duplication of effort and services-are eliminated, and those who are acting in combination gain accordingly. But there is a, further incentive to combination inherent in tho industrial system, llio industrial revolution was tho parent o large-scale protection, and the broad tendency of tho nineteenth century was towards larger and larger scale operations. Thero was an oxpansion in tuo sizo of factories, and tho gradual consolidation of interests bringing moro lactones and businesses under a unified control. Wo nro far from an exact kuowledgo of tho ideal jmit of organisation in different industries, but it is whether "horizontal" or "vertical, which havo succeeded have done so because the economies of large-scalo protection and industrial concentration have outweighed (do possible disadvantages of incipient bureaucracy and too highly-centralised organisation. The gains which combination holds out are therefore twotoldthe elimination of tho wastes ot competition and'the economies ot large-scalo operations. These advantages might be reaped without immediate disadvantage to the consumer, though ho might be deprived of tho full benefit of future developments which would normally reduco prices. But there.is a further possible source of gain to those who by combination control a substantial portion ot the total supply of a commodity, lhcy may, within limits, it is true, raise prices! The witnesses representing combinations who appeared before the .trust Comm'itteo denied that there need be any fear of danger on this score, but that view is" not shared by the distributor or by tho ultimate consumer.

The Danger of Exploitation. The power of the consumer to -protect himself in the absence of special prevision is limited by the opportunity io purchas* h substitute (which is- a priori not "just as good" as the controlled article for his purpose) or by his ahilitv to do without. A trust may or may not have regard to the consumers interests; but those interests are not its main object, and it is highly unsatisfactory that the consumer should depend upon the goodwill of the trust. If ho "Big Pive" controls tho moat of the world, it wields a power which no small group of people should bo allowed to Sxercisk. Tho danger oJ exploitation by trusts is a real ono, and all the more serious because tho control of combina. tion is rapidly passing out ot the hands of industrialists (who at least under•itand industrial operations) into the hands of financiers who have no interest In an industry qua industry, but whoso interest is in financo and its manipulation. The result is interlocking directorates of a most subtle character and (lie drawing of the threads of international financo and the. staple industries of tho world into the fingers of a comparatively few men. Uses of Publicity. The report of the Trust Committee and the appendices published witli it illuminate to some extent the tendency towards combination which has been moro or less hidden from the gaze of the community of consumers. The first great need is publicity, tho importance of which cannot bo over-estimated. As Mr. John itilton, tho secretary of the committee, puts i.t in his extremely able memorandum attached to the report, "in quite respectable business conduct, us in other human affairs, many things are douo which would not bo done if there • were a greater probability of their being mado known. 'Light is tho sovereign antiseptic, and tho best of all policemen!'" The committee propose that machinery for the investigation of the. operation of monopolies, trusts, and combines, similar to the commissions and tribunals created for the purposo in America and the British Dominions, should bo instituted in tho limited Kingdom, and that it should be the duty of the Board .of Trade "to make recommendations as to Siato action for tho remedying of any grievances which tho tribunal may find to be established. Thisjs all the Committee has to say on the matter. The Labour group on the committee, in their addendum to the report, agree with the majority of their colleagues so far as their recommendations go, but urge that tho report docs not "adequately express the gravity of the. sil nation, and that the proposals fall far short, of what . . . will bo necessary to safeguard tho public interest." Tho Minority look to tho development of the co-operative movemerit to keep combinations m check. Moreover, it is suggested that "tho only effective safeguard against the absorption by a capitalist combination of more than tho necessary return appears to ba the control of prices." In some cases it is argued, as for example in the case of a Inist controlling a product w'hich outers inl-o "practically universal consumption," (he alternative is Slaie -jwnorsjiip, with, if necessary, uinniigoi'.ioid by a local authority, co-operative society, or ioinl-stork company. The llinnply wisely add that the subject "urgeully needs further study," which is clearly line.

Tt wis sl-ito:! Nt the iiiinunl meeting of the Trisli Auricnltnral OfKitiiis-.ition Society Hint fish captured in Trisli vulers were first sent to Grimsby and thonce bade to Dublin, "which," suitl one of l.ho sneakers, "is cortainly not Rood for the fish."