how much is nothing but "water"? Would such knowledge adequately protect the investor? Would such knowledge, by inviting competition, if real profits were made public, sufficiently protect the consumer? Many of our best thinkers think no further remedy is needed. Are the interests of the stockholders in the stability of business and the interests of the consumers in steady and low prices, under present industrial conditions, the same? 6. Effects of the combinations.

(a) On prices. It remains still to be fully established what the effects of these combinations are upon the prices of raw material and of the finished products. Are prices of raw materials held lower than is normal by the combination? Are the prices of the finished product lowered or made higher by the combination? Is it possible that competition can force prices so low, that by driving into bankruptcy a large number of establishments the interests of the public will be seriously injured? Is it in the interests of the laborers and of the public at large, that the fiercest possible competition in prices be encouraged? One of the leading rivals of the sugar combination has lately asserted that he believed the formation of the sugar trust had the effect on the whole of lowering prices. Although the trust immediately put prices up, had competition continued longer so many more refiners would have failed, he thought, that the short supply on the market would have pushed prices far above the rate established by the trust.

(b) On wages. Despite the fact that the wage-earners themselves seem to be in good part opposed to the industrial combinations, it is often asserted by the managers of the trusts that combinations of capital have increased the wages of the laboring men. The laborers themselves assert often that these combinations throw many men out of employment. They believe also that combinations, by controlling practically all of the plants of any one industry, are in much better condition to resist the demands. of labor, and to endure any pressure that can be brought upon them by threats of strikes. A strike in one or two, or several establishments, will not affect the combination materially, provided it can carry on production in its other establishments at the same time. The growth of great corporate organizations of capital, they think, therefore, will give the death blow to trade unions. But the question is not yet settled. May the laborers possibly, by making also a thorough combination covering the whole of any one industry, be as well able to deal with their employers as they are at the present time? If their organization covers only two or three plants, they appear to be at a disad

vantage. If their organization covers the entire industry, can the laborers and capitalists then act together as a unit in fixing wages over the whole territory? Through their agreements on wages, can they more readily control the prices to consumers than has ever been the case heretofore? Would not the capitalists prefer to tax the consumer, rather than the workman if he has a choice, and if one must suffer, to give him his profit? If so complete a system of organization of labor is difficult to start and to manage, will it be in the interest of the employers to aid the laborers in making, and holding, this organization, in order more effectively to control prices? These questions are not yet settled; and a fertile subject, not for speculation merely, but for serious thought, remains in the possibility of such an extension of labor unions that the employers and employees throughout an entire industry, can, with little fear of successful opposition, practically fix prices arbitrarily by agreement. Another form of union to reach the same end, and one which has already a basis in successful experience, is for the workmen to become stockholders in the combination, and thus to divide with the capitalist the profits of monopoly. How generally can this plan be made practicable? The effects upon the consuming community at large of any such union of employer and workingman need also careful study.

(c) Upon middlemen. A third complaint against great capitalistic organizations comes from the middlemen, particularly from jobbers and wholesale dealers, who assert that the trusts are eliminating them. Is this elimination of the middlemen, as well as the saving of labor, to be considered on the whole a gain to the community or a loss? If the trust can deal directly with two or three large jobbers, can fix their prices, and guarantee their profits, will there be enough saving in energy to the community to make up for the loss to the others who are driven out of business temporarily? Will it also be possible within a comparatively short time for those persons whose business is thus ruined, as well as for the laborers who are driven out of employment by the combinations, to secure employment elsewhere through the added demand that may come from the saving of cost and of labor energy, and from the increase in the export trade?

It is asserted that the trust, by killing the small establishment, checks the growth of individuality in young business men, making of them mere hirelings. Others assert that no one is fit for command till he has first learned to obey; that in the great organizations there are many positions of responsibility, in which individual initiative can have full play; that the distribution of rewards to men of real merit is much more certain and just when

business is well organized; and that the places at the top are much more worthy the ambition of the man of great individual power.

An example has been lately suggested: If a dozen small railroads unite into one great system, few men lose positions. The general superintendents of the small roads become division superintendents of the large system, with no decrease in pay, with substantially the same duties and responsibilities, although frequent reports are required from a general superintendent. Before the consolidation, reports went to the president and directors. The best men have better opportunities for higher position; the average men do not lose; the poor men are more surely thrust down to pure routine labor. Will not the same effect be generally found in all consolidations?

The question is perhaps the most vital one of the whole discussion. Only experience can give the final answer.

On the whole, then, are we to consider the new form of organization a means of saving energy comparable with a new invention like the steam engine or the railroad, so that we may be fairly sure that, although temporary suffering occurs, there will be enough saving to lower prices and to increase the demand for goods to so great an extent that the total demand for labor will in the long run be increased and the public benefited? Or, on the other hand, is the new form of organization a conspiracy of the few rich and powerful to oppress the many? Each view is taken by thousands.

7. Legislation.

If the state needs to interfere in this modern industrial movement, what form of legislation is wisest? Should it be destructive, attempting to prevent combination, or should it be regulative, permitting combination freely, but attempting so to control that evils to the public may be avoided? Of legislation aiming at destruction we have had many examples. The question still remains unsettled as to how far this legislation will prove effective. Some points have been given interpretation by the courts; some have yet to be tested; experience only will show the outcome.

So far as legislation is to be regulative, will it be sufficient to secure publicity, or can something be done to prevent undue raising or lowering of prices and wages?

A second question of not less import is this,-How far can such legislation be national under the general provisions of our constitution regarding interstate commerce, and how far must the legislation be state?

To be more specific as we summarize: Can there be, if it seems desirable, within a reasonable time, a national incorporation of great industries, over which the federal government shall have sole control? Can organizations then, which place themselves under federal supervision and control, be exempt from a variety of legislation, either friendly or hostile, of the several states?

Can Congress now, under our present constitution, providing for the regulation of commerce between the states, secure by new legislation full information regarding the nature of the property and business of great corporations, railroad and others, and frequent reports regarding the condition of the business with power of inspection of records, so that confidence may be assured? If such publicity is sought, must a special commission or bureau be created for the administrative work?

If such inspection shows very high profits, will the fear and possibility of competition so lower prices as to distribute these. profits among the public, or would it be wise to attempt, without destroying the spirit of enterprise, to give part of the profits to the public through taxation?

Can the separate states, by any of the measures suggested, or by others, effectively promote the interests of their citizens by legislation without substantial uniformity of legislation among them all? Can such uniformity be secured, or even hoped for?

There are other problems created by the industrial combinations. I have mentioned the most important ones to which my attention has been called. It is hoped that wise counsel and conservative though bold action, may, in no long time, solve some of them.

If it will not be considered out of place, may I venture to suggest that the security of the state, and the welfare of the people, is always best attained, not through suspicion and denunciation, but through confidence in an opponent's honesty of purpose, and through an earnest endeavor to get the other man's point of view. I have known many of the trust leaders and advocates, and many of their chief opponents. In uprightness, sincerity, public spirt, patriotism, there is little difference among them. Likewise in earnest determination to look out for themselves and to protect what they consider their own, there is little difference. We all have our weaknesses: few of us are all bad. The chief endeavor of men in legislatures or elsewhere should be not as opponents, for each to hold his own regardless of right, as is only too natural, but as students, for each to be sure that he understands the other

and respects the other's sincerity. Lincoln's dictum of "charity for all" was not only Christlike, it was also statesmanlike. The true statesman seeks the truth and through candor and fair dealing and mutual respect can one best attain the truth.

At 1:10 o'clock the conference took a recess until 3 o'clock.

AFTERNOON SESSION, SEPTEMBER 13.

The caucuses of the delegations in selecting the members of the committee on organization and program prevented a full attendance of delegates until some time after the afternoon session was called to order by Chairman Head at 3 o'clock. The galleries were filled, however, and an ovation was given Professor Henry C. Adams, head of department of Political Economy of the University of Michigan, when he was introduced.

HENRY C. ADAMS.

Statistician Interstate Commerce Commission.

I have been requested to undertake a statement of the questions that arise in the consideration of the trust problem. In doing this I shall say nothing that is new, nor shall it be my aim to be exhaustive. It is possible, however, that questions which are familiar may present themselves in a new light when brought together in a single statement.

Whatever the trust problem may be, it has to do with business organization, and on this account the first question that suggests itself is one that pertains to the science of economics. We observe in almost every form of business that industrial power is concentrating itself, that organizations are growing in size, that individual industry and small enterprises are being crowded to the wall, and that the sphere of competition is constantly being narrowed. This tendency is opposed to the theory upon which our system of jurisprudence rests, and it is pertinent to inquire whether it is inherent in the nature of the industries. that are thus tending toward consolidation, or whether its explanation is to be found in the peculiar conditions under which industry at the present time is carried on. This is a most important question; for if the tendency toward consolidation be natural, remedial legislation should address itself to the control