THURSDAY, JULY 31, 1902. THE 'TRUSTS' TROUBLE.

New Zealand Tablet, Volume XXX, Issue 31, 31 July 1902, Page 16

THURSDAY, JULY 31, 1902. THE ' TRUSTS' TROUBLE.

\Cotulw UATfrYER difference of opinion there may <twMywMy be as to the merits or demerits of the ' Rings ANff W/«t an^ Combines Suppression Bill ' which was 4^r=* introduced in the llonsi the other day by <O^£*||j^» the member for Wairarapa and has jusfc vTv!)<i'i- P aSPe d its second reading there can be %M y (S j\ practically no two opinions as to the seriousness of the evil aimed at and as to the reality of the clang* r of an extension of the hateful ' Trusts ' system to our own little Colony. Until within the last nine or ten years the great majority of colonists only knew of these sinister combinations from occasional and distant hearsay, but the system has reached such gigantic dimensions of late that public attention haa been focussed upon it all over the world and everybody now is familiar with the way in which a ' ring 'is worked. The process is sufficiently simple. A number of powerful producers of a given commodity form themselves into a ' syndicate ' or ' association 'or ' trust ' sufficiently strong to practically control the supply and consequently the market price of the article in question. It then proceeds to buy up the other producers and absorb them into the ' ring 'on terms arranged by itself. If any prove independent enough to refuse to ' come in ' they find their credit with the great importers suddenly gone, their supplies of raw material cut off or run up to an impossible

price, and their retail shop trade so completely undersold that in six months it disappears and they are driven into bankruptcy. The result is that before long all possible opposition is completely overthrown and the whole industry is brought into the grip of a gigantic monopoly. If the syndicate is well managed, as, in America at least, it usually is, it takes care to stop its exactions just short of the point at which they would become intolerable, but it is of course always financially successful and contrives to make big profits and pay enormous dividends at the expense of the helpless and unfortunate consumer.

As is generally known, it is in the United States that these ' trusts ' have obtained the strongest hold, and the extent to which their power has been developed there is almost beyond belief. They are multiplying so rapidly that it is impossible to keep couut of them, but it is safe to say that within the Union there are now more than two hundred articles of consumption that have fallen in this way under the control of syndicates, and in many large departments of tiade it is no longer possible to open a shop without the consent of some or other of these associations. A scheme has even been evolved — and is now being carried into execution — for ' pooling ' the means of transport of the nation, and almost all the great shipping lines trading with America have either been absorbed into the great Pierpont Morgan Trust or are aiding and abetting the scheme by conceding a ' working arrangement ' with the Trust. In England, too, the ' combine ' — which goes there under the more innocent designation of an ' Alliance ' — is gaining a footing, though England's Freetrade policy, which enables any large buyer to deal direct with Continental or Asiatic houses without the intervention of an importer, will always operate to prevent these combinations from reaching in that country anything like the dimensions which they have attained in Protectionist America. Even in New Zealand, as we have already hinted, the evil has begun to make itself unmistakably felt. During the last two or three years, not to mention a number of small and more or less insignificant combinations, two large and very undesirable Trusts have been established — viz., the Millers' Trust and the Meat Companies' Trust. Unde the former the millers formed themselves into an association for the purpose of obtaining entire control of the flour market in New Zealand. They worked also in combination with the bakers, who, it is stated, agreed in their turn that they would not buy flour except from the 'Trust' mills, in return for which the millers undertook that they would not supply any baker unless he also was in tho 'combine ' with the other bakers. The result is that the price of bread is unduly high in the Colony, without any corresponding rise for the fanner in the price of wheat, 'lhe meat monopoly to which we ha\e referred is the result of a combination, embracing practically the whole of the meat companies operating in the Xorih Island, formed for the purpose of fixing, first, what price shall be paid to farmers for their stock, and ultimately of fixing also the price to be paid by the consumer for the meat, thus inflicting at one and the same time a serious injustice on both the producer and the consumer.

Certain more or less plausible attempts have been made to defend these combinations, but for our own part we confess that we regard such associations holding a tyrannical supremacy in a certain industry and making enoimous and altogether excessive profits as an almost unqualified evil. They seem to represent the spirit and the power of unchecked, unrestrained selfishness, and even if it could be shown that in themselves they are not bad, the difficulty of keeping them from abuse constitutes itself a serious objection to them. Whatever may be said for them on theoretical grounds, in actual practice they are invariably harmful in their effect. In the first place, they are detrimental to the interests of the consumer, who has to pay a great deal more for his goods, and when it is such staple foodstuffs as bread and meat that are the subjects of the monopoly, the hardship inflicted on the great mass of the people is very serious. In the second place, by the existence of the huge monopolies individual enterprise is crushed, for no one can venture to • set up for himself ' with the certain knowledge that if he works up a business worth having he will be driven out of the field and have his con-

nection seized on by an association with heaps of capital and an irresistible centralised organisation behind it. Thus one small trader is effectually prevented from taking advantage of the openings into which, under normal conditions, his industry would be sure to flow, and thus opportunities for the legitimate development of the trade and commerce of a country are hopelessly and irretrievably lost.

But though the evil of the Trusts system is sufficiently palpable it i & \Kny difficult indued to de\iwi anything like a satisfactory remedy. In America, the public, finding themselves placed more and more at the mercy of these syndicates, have appealed to Congress and the State Legislatures for ' anti-Trust ' enactments, and several have been passed, but so far, partly through the operation of certain of the constitutional laws and partly owing to wilful defects in drafting the new enactments they ' have proved entirely inoperative. Evidently, however, the people still pin their faith to legislation for a late cablegram from Washington, published only the other day, intimates that President Roosevelt and Attorney-general Knox had conferred and asked Mr Littlofield, member of the Maine House of Representatives, and a great authority on constitutional law. to prepaiv a bill for regulating and controlling trusts. I cgishiLion has also been attempted in New Zealand in the shape of • The Kings and Combines Suppression Bill ' already referred to wh'ch has now been several times introduced in the New Zealand Parliament. The main object of the measure, as introduced the other day, was very generally approved, but the Bill was so drastically and crudely drafted that it would obviously have done far more harm than good if adopted in its present form. The House therefore affirmed the principle of the Bill by passing its second reading and then wisely postponed its further committal to enable the Government to bring down a careful and comprehensive measure on the subject.

For our own part we are inclined to think it will be found impossible to grapple properly with this problem by any kind of legislation however carefully framed. Such measures will either be, like Mr. Hornsby's, so sweeping that they will include all sorts of innocent combinations such as trades unions, farmers 1 unions, and the like, or they will be so narrow as to leave large numbers of 'combines' altogether untouched. It appears to us that the bettei plan would be to deal with each Trust as it arrives, meeting the tioublc either by an alteration of our tariff provisions or, if that will not Miflicj I>\ an extension of the functions of the State. Let us illustrate what we mean. In the eas L . of the Millers' Trust, for example, the power of the combination could probably have been crippled, if not destroyed, by the removal of the present duty on flour thus making both the bakers and the public largely independent of the 'combine.' An illustration of what we mean by an extension of State functions is furnished by the recent decision of the Government to establish a State coal mine. There was reason to believe that some at least of the coal companies were combining to keep the price of coal beyond what, wh.3 fair and reasonable, and the Government decided to checkmate the movement by going into the coal business themselves. It was a thoroughly practical and sensible step, and in a judicious extension of the principle it embodied lie?, we believe, the world's best hope for a solution of the great ' Trusts ' problem.

It will be r.-men, bored that some months ago Mr E. W. Dunne, who cariiel on for many yearn a bo .kielhngat'd stationery business in George Duuedin, ha 1 a very severe illness, from which he has jicvt'T comnltt-Iy recovered, and is now about to try a chang-e ofdim\tp. His ma->y (vv n s here, feehnp that he should not be allowed to h.ive Ouiu-din without some token of their sympathy with him under thu circumstances, have determined to tender him a farewell beiufic concert which will take place in the Garrison Hall on Ai cru-t <;. Seven! of the leading voculists and instrumentalims of Duimlin have kinily pn fferred their fcervices for the occasion, umoii? these bmij.' M i-s-es iiose Bls.ney. May Donaldson Kate itubutsou. I?. Mails-" Mr-, Toiid, Me^rs Jn%o, F. BirkeU, E* E.^ar, and Phillip-. Mes*^ Vulh-i and Barth will play the accompaniments The entertainment i^, we nre piven to understand under the patronage of stvetal . f the athkiic clubs and musical noddies a. id we have no doubt that it will be well patronised, as nput altOfMher from the object, the names of the performers is a guarantee that it will be an arti-itic buecess...