Friday, 30 September 2016


One of the striking features of the nineteenth century is the progress which has been made in industrial combinations. In nearly every industry the factory has displaced the individual workman; the co-operative store, or the huge emporium, is swallowing up the small shopkeeper; and now they, in turn, are being absorbed by rings and trusts. These latest of modern developments in the commercial and industrial world have hitherto been confined principally to the United States; indeed, it may be said that they are an American invention. There they wield enormous power, and it is hopeless for the small dealer to stand out against them; should he prove obdurate and refuse to be dictated to, or governed by the ring, or should he desire to manufacture his own goods and sell them at his own price, he soon finds out what it is to run counter to a combination that practically controls the industry. If his customers are local he finds that the ring is underselling him in his own market. Pressure is also brought in other directions. His goods are unaccountably delayed in transit, his credit is undermined, and his life made a perpetual worry until he is glad to throw up the sponge. Then when the ring has got command of both supply and distribution it puts up the price of the article it deals in, controls the output, and makes a handsome profit out of the consumer, although it is contended that in the long run prices are reduced. The huge accumulations of capital in, the United States render this description of monopoly comparatively easy. America is the land of millionaires, and most of them are in trade. They control the railways, the State Legislatures, and, as we have lately seen in the operations of the Sugar Trust, are able to buy sufficient members of the United States Senate to prevent it passing legislation that will injure their interests. The Standard Oil Company, of which Rockfeller, the millionaire, is the moving spirit, controls not only nearly all the oil output in the United States, but has lately come to an understanding with the owners of the Southern Russia petroleum wells to divide the market between them. There was a time when the operations of these "trusts" and "combines" were confined principally to the United States, but latterly they have been extending their operations to Great Britain, or the moneyed men of the old country have been taking a leaf out of their book. Mr. H. W. Macrosty, in a late article in the "Contemporary," gives an outline of the manner in which these monopolists are absorbing and amalgamating British industries. He says, "Single amalgamations, while not entirely excluding competition, control the screw, cotton, thread, salt, alkali, and india-rubber tire industries. In other cases, an informal agreement among masters fixes prices; as, for instance, in the hollow-ware, antimony, nickel, mercury, lead pipes, petroleum, and fish supply." The immense capital manipulated by some of the combines will be understood when we mention that twenty-four firms in the engineering trade have a capital of over fourteen millions sterling, whilst a sewing thread combination has ten millions of capital. Our telegrams tell us that the mania for combination is spreading, and that one industry after an other is passing into the hands of a few monopolists.
The question that naturally arises is, where is it all to end? Are we to pass through successive stages in which production in each industry will become the monopoly of a combine to that in which one huge octopus trust will absorb them all in turn, and become the practical owner of all the industries of a nation, or, perhaps, of the world? It may be urged that the latter is impossible, as no human brain or set of brains could control and manage such a vast concern; but if not, where is the line to be drawn—at the special industry, or at those of a nation? In either case the men who compose the trust would be the masters of the situation. They could charge their own prices, make their own profits, turn plenty into scarcity, and thus wield a power in comparison with which that of Kings and Prime Ministers would pale into insignificance. As a matter of fact, they do this to a large extent now, and when the organisation becomes more complete there will be no limit to their power and arrogance. We have been told by writers on the coming social Utopia that the "ring" and "combine" stage of industrial and commercial life is but the immediate forerunner of State control of all sources of production; indeed, advanced socialistic reformers make such control one of the planks of their political platform. The capitalist has hitherto been blamed for the cut-throat competition that lowers the margin of profit and reduces the workers' wages, and the cry has been to do away with both capitalist and competition. It is, therefore, a singular corrollary that the capitalist should now be doing, of his own initiative, what the socialist is trying to bring about in another way. There is, of course, this fundamental difference between the two, that whereas the capitalist is destroying competition for his own benefit, the socialist professes to strive for the same object for the benefit of the multitude. If competition is to be done away with in this manner, most people would prefer that the benefits derivable from its abolition should be distributed among the individual units rather than go to make the rich man still richer. It has, however, yet to be proved that competition, which has been proved in the past, and still is, the great incentive to progress, is the evil some would have us believe, and that a state of society in which each would perform his allotted task in "tread-mill" fashion, would be an improvement.
There has been agitation in the United States for legislation to check the operations of these "combines," but so far nothing has been done. The same remedy is suggested in England by the writer referred to, who thinks that, with the alternative behind of State purchase and public administration, this might be done. The development of this latest phase of our commercial and industrial life will be watched with interest. That there is a vast waste of human energy in the competitive system, which might be eliminated by proper and well-regulated combination, is admitted, but whether the suggested cure would not be worse than the disease has yet to be proved. It is noteworthy that the "Land of Liberty," the home of triumphant democracy, should also be the birthplace of these huge monopolies, and that its cities should be honey-combed by corruption and given over to the irresponsible rule of Bossdom. As it suffers most from the disease, probably it will furnish the remedy, but certainly the outlook is not promising.

Launceston Examiner (Tas. : 1842 - 1899), Monday 22 May 1899, page 4

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