at the bar, in Parliament, in medicine, in engineering, men fight on without much thought of others, except a desire to excel or defeat them. Very lofty minds, like Sir Philip Sydney, with his cup of water will not stoop to take an advantage if they think another wants it more. Our age, in spite of high authority to the contrary, is not without its Sir Philip Sydney, but these are counsels of perfection which it would be silly indeed to make the measure of the rough business of the world, as pursued by ordinary men of business."

Justice Gray, in Leslie vs. Lorrillard (110 N. Y. 519), says: "I do not think that competition is invariably a public benefaction; for it may be carried on to such a degree as to become a general evil."

That competition only is desirable which stimulates to cheap producing, and selling at a reasonable profit, supplying the most for the money. This competition need not be direct, it may be indirect; nay, the fear of competition may be as efficacious, if not more so, than the competition itself. To-day the whole world is one market place; space has been annihilated, and distance. destroyed. Communication throughout the world is practically instantaneous. The manufacturer of one place or country is a competitor of every other manufacturer of the same goods in every other place or country. The capital of America competes with the capital of every country on the globe, and so the capital of every country on the globe competes with the capital of America.

No consolidation, however large the proportion of any particular industry it may have absorbed, dares to raise prices beyond the point where an inducement is made to other capital to engage in the same business-nay, more than this, I maintain that no consolidation can continue its control of any line of industry unless it can produce and supply the trade with its product at a price less than that of the individual competitor; this because of the smaller area of business of the individual competitor, and the element of personal equation. Direct competition from those engaged in the same industry not only can, but does, confront every large aggregation of capital in every line of business in which consolidations have been formed. And experience has shown that the formation of consolidations has been followed in every instance by new capital embarking in the same line of industry in competition with the consolidation. Large numbers. engaged in the same industry, some competent, some otherwise, have invariably produced seasons of very high and very low prices, because reasonable regulation of such trade was imprac

ticable, and capital, even when necessary, was deterred from embarking in enterprises subject to such hazards. The organization of a consolidation is the signal that wiser counsels will prevail, and forthwith capital seeks the opportunity for profitable investment.

The evil, therefore, of high prices, or rather unreasonable profits, is reduced to a minimum, because the direct competition of those in the business exists, and judging from experience always will exist, while capital, ever eager for profitable investment, stands like a watchdog, guarding the public against excessive profits by other capitalists.

Every well-managed consolidation, by the natural laws of trade, must result in reducing the cost of production and distribution. With the improperly managed consolidation we have nothing to do. No argument for or against consolidation can be predicated thereon. You cannot make men wise or competent by legislation. You cannot expect counsels of perfection from imperfect mortals. We can only reason from essential features of consolidation, not from incidental mistakes made by incompetent management. That such large enterprises reduce the cost of production, is an economic fact too well established now to need further authentication. The saving, incident to the handling by one company of ore, in and from the mine to the finished steel structure on its site, as compared with a dozen intermediaries, each applying more or less of skill, and each claiming more or less of profit, is so patent as to require statement only. Improvements in processes, there being no obstacle to the adoption of the latest and best; the economies from standardization of wares; continuous operation on certain goods, and the consequent opportunity for introducing special machinery; savings in freight: and facilities and capital for purchasing in any quantity to provide for any contingency, are advantages only available to large enterprises with abundant capital and competent management. The cost of production being reduced, the cost to consumer is reduced, if actual competition, or the fear of competition, commonly called "potential competition," prevents the consolidation from demanding unreasonable returns. This proposition must be conceded, unless the laws of trade are to be reversed, experience is to go for naught, and history is to be denied.

It will be urged, however, that the cheapening of cost will be at the expense of the laborer, the salesman and the small manufacturer. As to the salesman and the small manufacturer, it may be said no great economic change can take place without some temporary hardship, and the benefit of the public is a higher

consideration than the temporary inconvenience of a comparative few. But there is another answer which involves no concession. The statistics show that of those engaged in business or trade, a large percentage fail-about ninety per cent. This goes to prove that a large number of those who are thus supplanted by the consolidation are incompetent to engage in business, and if they were left alone would fail. Many such, under the protecting wings of the consolidation, with the benefit of the better brains at the helm, earn in the aggregate much more than they would have accumulated, if they had continued as sole proprietors, without the benefit of the better brain and management of the experienced and selected few.

The laborer and salesman are placed in a more favorable position by the consolidation. Under the system of individual competition, with its eras of depression and overproduction, its shutdowns and its curtailment of output, there was no continuity of employment. At one time every available man was engaged, capacities of plants enlarged, and production increased until beyond the demand; then came the fall in prices, the bankruptcy of plants, the shut-downs; and laborers, salesmen, clerks and other employes were thrown out of employment, sometimes dependent upon charity, as in our large cities a few years since. These eras of overproduction were not infrequent. This is changed by consolidation. The supply and demand are kept approximate, overproduction is jealously avoided, and there results continuous employment.

Another consideration for the laboring man, is the fact that in the mad race of competition, where individual seeks to overreach individual, each striving to reduce his cost below that of his competitor, many find it necessary to begin their reductions with labor, because of their inability to take advantage of other economies, such as improved machinery large purchases of material, etc., which have been introduced by their more fortunate competitors, and thus begins the reduction of wages which spreads from factory to factory. There is generally abundance of labor in the different industries, frequently a surplus, so that laborers compete with each other in seeking employment, and among so many employers some are not loath to take advantage of this; and this is the bane of labor organizations or unions. But with the well-regulated consolidation, earning a reasonable profit, the laborer will be safe, he will be organized for self-protection, and will have fewer and better men with whom to deal. He will, therefore, by reason of the better regulation of supply and demand, be continuously employed, and his greatest curse, inter

mittent employment, with seasons of idleness, will be removed. Thus, while a fewer number of men may be employed, the aggregate days of employment, or the aggregate amount of labor employed, will be greater. There are those, however, who contend and not without good authority, that the consolidation, by reducing the price, will ultimately increase the consumption, and thereby in time will actually employ an even greater number of men. On the whole, with or without consolidation, no more labor will be employed than is necessary to supply the goods for which there is demand. Under the one system, the supply is not so well regulated to the demand, as under the other; hence recur seasons of shut-down and idleness. The consolidation prevents this; hence it must be of advantage to the laborer. The history of the Standard Oil Company is an excellent illustration of this principle. In no other industry employing so large a number of men has the working man had so continuous employment or better wages for the kind of work performed.

The officers of the great labor organizations of this country, in their papers read before this convention, have almost to a unit borne witness to the truth of the above assertions, and they all speak from experience when they favor industrial combinations.

These views are entertained by some of the best thinkers and writers on political economy. Gunton says:

"If it is true that the concentration of capital tends to diminish the cost of production and intensify competition, it follows that prices will fall or wages will rise, or both, in proportion as large enterprises supplant small ones. And this is what all industrial history shows has taken place. Take for example the cotton industry in this country. In 1831 there were 801 cotton manufacturing establishments with an average capital of $50,702 each. * * * The ratio of consumption of cotton cloth to population was 5.90 pounds to 1, and the price of cotton cloth 17 cents per yard. In 1880 the number of establishments had fallen to 756. The average amount of capital invested in establishments had risen from $50,702 to $275,403; * the ratio of consumption of cotton cloth to the population was 13.90 pounds to 1; and the price of cotton cloth was 7 cents per yard, and wages were 80 per cent higher. It will thus be seen that, comparing 1880 with 1831, the capital invested per spindle was over onethird less, the number of spindles operated by each laborer nearly three times as large, the product per spindle one-fourth greater, the product per dollar invested twice as large, the product per laborer employed nearly four times as great, the price of cotton cloth 60 per cent less, wages 80 per cent higher, and the con

*

**

sumption of cotton cloth per capita of the population over 100 per cent greater. These are the results of the process of consolidation into large capitals, extending over half a century. What is true of this industry is equally true of all industries in proportion as the concentration of capital has increased."

Those who cry loudest for legislation point to certain evils, charged as incident to consolidations, and demand prevention by law. For example, the watering of stock, the practice of reducing prices for the express purpose of crushing a rival, and then raising prices to an unreasonable amount, the circulation of false or misleading reports by the officers of such associations, for the purpose of stock speculations, and the corrupting of legislatures and municipal bodies.

These evils are not essential incidents to consolidations, they apply equally to all corporations. If it be thought that these practices can be stopped by legislation, then such wise and temperate legislation as will best prevent such practices might well be passed; but will legislation accomplish this? I am not one of those who think that you can legislate morality into a community. Laws receive their impulses from the people. The impulses move upward from the people to the law, and not downward from the law to the people. Like a pyramid, the people are the base, the law the apex; the pyramid will not stand inverted, nor will the apex stand without its base. For these immoral and dishonest practices we must look behind the statute books, behind the courts, behind the doors of the counting-house-we must look into the consciences of men. The corporation is only a cloak covering the men on whom it rests. But in these times, concealed by this covering, sometimes called a legal entity, corporate officers, as well as the community, have established a code of morals different from that by which individuals are governed in their personal transactions. Men will do through the corporation, or against the corporation, what they would shrink from doing in a personal transaction. This false moral idea is not limited to the man in the corporation; the man outside of the corporation is equally guilty. Claims against corporations, or demands upon them, are made that would never be made upon an individual. This is due to a depraved and diseased moral sentiment of the community. It is a false standard of morality. The corporation is no thing apart from the stockholders. It is a society of men. An aggregation of men. The officers who manage its affairs, the shareholders who own its stock, are the same men who sit by you at the club or in the church. Why shall they be held to one code of moral responsibility in their personal conduct and to another