be at least a cent a can, and perhaps a cent and a half a can, but said the price could not go beyond 10 cents for standard goods without very exceptional causes. (703,704.)

C. Trusts and industrial combinations.-1. Evils and objections.— Mr. SCHONFARBER, representing the Knights of Labor, declares himself personally opposed to trusts and combinations, but only in so far as they destroy competition. The witness believes that the time of individual enterprise has gone by. We must seek to get all the advantage possible from large aggregations of capital, while checking the evil effects which are likely to come. The witness is opposed to large capital only when it has special privileges from legislation, from railways, or from other sources, which enable it to wipe out competition.

The Knights of Labor, however, declare themselves specifically opposed to combinations of capital or trusts. They advocate legislation by Congress, in view of the interstate character of such organizations. Trusts which destroy competition become dangerous by reason of their power to restrict production and increase prices to consumers. They are especially dangerous to labor, since they can bring all the manufacture of a particular class of commodities into 1 or 2 large establishments, making use of the most improved machinery and displacing a large number of laborers. The Knights of Labor are not reactionists, and do not think it possible to get back to hand labor or small enterprises, but they do not want the capital of the country controlled in such a way that a large proportion of the population will be deprived of labor while all the increase of wealth goes to a small fraction. The trust, with its increased use of machinery, is tending to reduce all workingmen to the grade of unskilled labor; it is eliminating rapidly the great middle classes, and is widening the breach between capital and labor. The opportunity for rising from the ranks of labor to the ranks of employers has largely disappeared. (441-445.)

Mr. EATON, Secretary of the Boot and Shoe Workers' Union, thinks that combination is a natural economic development and that it can not be prevented in any way. On the whole competition has been a curse to the workingman by constantly necessitating the cheapening of labor cost of commodities. If ever the time shall come when no man will be obliged to compete with another for labor, it will be a great benefit to mankind. Meantime, the most that can be done is to regulate some of the special privileges which combinations have enjoyed, and to remove unjust discriminations. The witness believes that the ultimate outcome of the present tendencies will be socialism. If some of the present great industrial combinations should unite with the great railroad combinations into an organization having a capital of 15 billion or 20 billion dollars, it would not be a great while until the people would settle the question of the control of industry. (373,374.)

Mr. MCMACKIN, commissioner of labor statistics of New York, says that the workers of New York State seem to think that they can make better agreements with the industrial combinations than with the smaller enterprises. If he were in the place of the labor leaders he would doubtless take the same view which they take. He would be willing to have the business run by the man that he could make the best terms with. We must, however, consider the great body of the American people as distinct from the manufacturers and the workers. The organized working people do not, at the best, amount to more than one-eighth of the wage workers. Under present conditions we shall have a trust of the manufacturers and a trust of the workers. The danger is that the great body of the American people are going to think that if a few men can run these businesses and become enormously rich, and if a small number of men who work at them can live in comfort, the State ought to undertake the whole affair, and give comfort to all. In other words, the result of present conditions is likely to be a tendency toward socialism. That would, in Mr. McMackin's judgment, take out of American life the ambition, the initiative, the individuality which have made America. This is the fundamental danger which existing conditions place before us. (810,811.)

Mr. SEARCH, president of the National Association of Manufacturers, thinks the effects of combinations on prices and wages are as yet scarcely to be prophesied. Competition in some lines seems likely to disappear altogether. There is a great disadvantage in making the vast majority of our citizens employees instead of independent producers, and this is only partly offset by the distribution of capital stock of combinations among numerous owners and by the employment of numerous highly skilled superintendents at good salaries. (127, 128.)

Hon. A. D. CANDLER, governor of Georgia, believes that trusts are injurious to the best interests of the country, having a tendency to raise prices and build up

colossal fortunes at the expense of the self-reliant middle class. He considers their power injurious to State, municipal, and national existence. He thinks that the resulting evils may be lessened by the united action of State and Federal legislation, and suggests that the States should enact uniform legislation, perhaps similar to that of Texas. He would give every legitimate enterprise a fair profit and no more. (535, 536.)

2. Advantages of trusts.-Mr. BULLOCK, a cotton manufacturer of Atlanta, considers trusts unobjectionable. The oil trust has given the public a better oil for less money than ever before. The aggregation of capital has enabled it to introduce many economies, such as pipe lines. He thinks the increase in the price of nails has been caused by the increased demand, not by the trust, and that nails were at one time below the cost of production. Wherever combinations are clearly in opposition to the public welfare he would like to see them regulated by Congress, as the railroads are by the interstate-commerce law. He favors a constitutional amendment empowering Congress to act, if there is any doubt about its present power. He thinks uniformity, harmony, and fairness are more likely to be secured by national control than by State legislation, in matters affecting different sections of the country. He thinks that legitimate concerns will not object to publicity. He would not tax trusts differently from other taxpayers. (525, 526.) Mr. WOODWARD, a Chicago retail merchant, believes trusts beneficial. He thinks they result in cheapening the cost of production and ultimately result in lower prices to the consumer. (737.)

Mr. RUSSELL, a working shoemaker of Massachusetts, believes that great aggregations of capital tend to cheapen production and that they usually pay higher wages and give steadier work than small concerns. Mere aggregation of capital does not constitute monopoly. There is no monopoly in this country, except possibly under patents. (338.)

3. Effect on prices and competition.—Mr. GoмPERS, being questioned as to the power of organized labor to control the trusts in their dealings with consumers, answers that that is not the province of organized labor. He is not prepared to say what effect industrial combinations have on prices. Prices have risen; whether because of the trusts he does not know. The general tendency of prices, in the long run, is downward, in spite of temporary fluctuations. Cheapened processes of production compel lower selling prices. (643, 644, 654.)

Mr. COFFIN believes that some methods of competition, such as a refusal to sell to those who handle any goods not made by one establishment, ought to be suppressed, whether the concern which resorts to them is called a trust or a corporation or a partnership. The right to buy up every opponent, in order to make a monopoly, is unquestionable under our Constitution, but if power was not used unfairly to keep others out of the field such great combinations would be unprofitable, because new competition would arise, and the great combinations would fall of their own weight. (784.)

Mr. GOUDIE, a retail dealer, defines a trust as a combination that can gain the practical control of a needed article, and hold it, sell it, or distribute it for individual benefit. (726.)

Mr. ROTH, publisher of the Retailers' Journal, says that while trusts may cheapen prices at the start, after they are organized they raise prices. (714.)

Mr. WOODWARD testifies that the Pittsburg manufacturers of glassware entered into a combination at the beginning of 1900 to maintain prices. The same prices are maintained, but rebates of certain percentages are given at the end of the year, according to the number of thousands of dollars' worth of goods bought. The dealer accepting this arrangement, however, binds himself not to buy any goods from an outside plant. (737.)

Mr. Woodward says it takes very wise managers to manage a trust, and a good many of them are not wise. It is not always wise to buy at the lowest possible price, and it is not always wise for a manufacturer to exact the last penny he can get. When he does he drives his customers to convert their own material. Many of the underwear manufacturers are erecting their own spinning plants, because they can not buy yarns cheaply enough from the spinners. Mr. Woodward says 51 per cent of all merchants and manufacturers are controlled by the judgment that reasonable prices, fair dealing, and fair profits are the best basis for continued prosperity. (737, 738.)

Mr. YOUNG, manager of the Fair department store, Chicago, says that if times become bad the prices of goods will drop in spite af any combination, and that if times remain good and there is a very large profit in any one business, competition will arise. The matter is certain to regulate itself. (696.)

Mr. FRY, president of the National Glass Company, is confident that if industrial combinations put the prices too high they will be unable to maintain them

and the matter will regulate itself. He admits, however, that it is difficult to organize competition against great aggregations of capital, and that it would take very good management. (904.)

4. Effect on labor.-Mr. KENNEDY, an organizer of the American Federation of Labor, says that there is a possibility of good to labor through industrial combinations. If there are 4 competitors in a business, 3 of them may be disposed to treat their workmen fairly, but if the fourth cuts his men as low as possible, competition will almost compel the others to cut theirs. If the 4 join in a single combination the desires of the 3 will overpower the desires of the 1. But as a matter of fact the trusts undertake to equalize conditions in all their plants, and they generally equalize them on the basis of the lowest wages that any plant has paid. In the absence of labor organizations their effect is likely to be to reduce wages to a minimum. Where the laborers have been strongly organized the trusts have usually met them fairly, and Mr. Kennedy believes that some concessions have been made in Indiana which could not have been made if the trusts had not been formed. (753.)

Mr. Kennedy suggests, as a desirable part of governmental control of industrial combinations, that the 8-hour day for their employees might be enforced. (754.)

So far as the effect of trusts on the regularity and permanence of employment, or on wages and hours and other conditions of work, is concerned, Mr. GOMPERS says that there are not yet data enough available to justify a judgment. Sometimes a nonunion establishment has been unionized in consequence of being absorbed by a trust, and wages have been increased, hours have been reduced, and union conditions have been established. In other cases a union establishment when absorbed by a trust has become nonunion. The great combinations have made the blacklist more severe and more effective. (642,643.)

Mr. Gompers says that even the shutting down of one plant of a great combination where there may be a strike involves an increase of business at its other plants, and consequently the employment of more men there. (619.)

Mr. DONNELLY, president of the International Typographical Union, declares that the formation of great manufacturing and other combinations has destroyed the smaller institutions which 15 or 20 years ago were found in all our country villages. Men have been drifting to the cities, there to join the ranks of the unemployed or to drive out other workmen. There have been seen in New York and Chicago as many as 500 able-bodied men, willing to work, lined up by policemen to receive half a loaf of bread and a cup of water. (291.)

Mr. COLE, manager of a Chicago shoe factory, says workingmen look upon the trusts as a foe, but he thinks in time they will find them a great benefit, in killing off small business competitors and establishing more uniform rates of wages. (728.)

Mr. SCHAFFER says that the members of the Amalgamated Association of Iron, Steel, and Tin Workers, of which he is president, believe that the combination of capital has had a beneficial effect, at least upon labor, and that the most of the members would prefer to deal with these large corporations or combinations. It has been found possible to reach agreements concerning wages more readily and more satisfactorily to the men. While traveling salesmen and some other classes of employees may be thrown out temporarily, in the same way as laborers are displaced by machinery, yet in many cases they will find other positions and in the long run the effect will be advantageous to labor. Since the formation of the great combinations in the iron, steel, and tin industries there has been a greater demand for labor. To-day it would be possible to find work for many more men than are available.

The witness thinks, also, that in the long run combinations will tend to reduce prices, that it will permit us to compete in foreign markets, and that, on the other hand, it will not entirely eliminate competition at home. (395-398.)

Mr. BISHOP, of the Ohio State Board of Arbitration, declares that corporate employers are apt to be more unwilling to recognize labor unions or to deal with committees representing their men than other employers. The tendency of various industries to unite into great corporations, so-called trusts, is, in the opinion of the witness, apt to increase the power of the employing class as against the employees. In 1898 a strike by the employees of two of the wire and wirenail plants in Ohio was settled promptly and satisfactorily to all. The stopping of the plants had cut off the earnings of the company as well as the wages of the men, and there was a disposition to favor settlement on both sides. In 1899, after all the wire and wire-nail mills had gone into the American Steel and Wire Company, there was another strike in Cleveland. The company refused to meet the committees of the strikers, and after nearly 3 months the strike was ended by the

men accepting the scale fixed by the company. The closing of the mills in this case occasioned no great loss to the employers, since the other plants were in continuous operation. The American Steel and Wire Company, by concentrating in a single hand the power which had before been divided, was able to oppress its men. (480, 481.)

Mr. ROTH says that the tobacco trust discharged 5,000 traveling men in 1 day, and that the spool-cotton trust also discharged all the salesmen. The trusts throw thousands of people out of work, and the goods are no cheaper than before. (714.)

5. Political effects of trusts.-Mr. GOMPERS declares that the trusts exercise an unwarrantable control over the political affairs of our municipalities, our States, and our nation. They have unwarrantably interfered with the free exercise of the suffrage by workmen. They have influenced improperly the action of our legislative, executive, and judicial bodies. Such operations have possibly been less open under the great combinations than before, but they have been more effective. The temptation increases with the wealth which is available, and vastly more wealth is at the command of the great trust than of individuals. (643.) 6. Remedies and regulation. -Mr. KENNEDY, Indiana State organizer of the American Federation of Labor, thinks that industrial combinations ought to be controlled by the Government, as well as railroads. In particular, they ought to be prevented from cutting prices in particular places in order to kill competitors, and at the same time maintaining or raising prices elsewhere. Mr. Kennedy states that at the time of his testimony the Standard Oil Company was cutting prices at Indianapolis, because a competing company was doing business there, and at the same time was putting up prices elsewhere. (753,754.)

The chief remedies to be sought for the evils of trusts, in the opinion of Mr. SCHONFARBER, of the Knights of Labor, are the prevention of special privileges in favor of great combinations, the requirement that prices shall be reasonably uniform in different sections of the country, so that combinations can not drive out competitors by cutting prices in particular markets, the restriction of capitalization, to prevent watered stock from absorbing the profits of industry, and publicity of all accounts and affairs of great corporations. If by means of such publicity it should appear that a combination in a certain field was making very large profits, capital would be directed to that field in competition.

Legislation going beyond such limits as these can not fail, in the opinion of Mr. Schonfarber, to lead ultimately to socialism, a result which he deprecates. Nevertheless, we must restrict the power of combinations and other corporations or they will become so powerful that either they will own the Government or the Government must own them. Mr. Schonfarber is not willing to admit that competition in itself has produced evils to the working classes and to others. Under free competition we have simply the survival of the fittest, but there is at present no such thing as free competition. The witness desires to see the competitive system reestablished in all industries which are not by nature public utilities. At the same time he declares that the Knights of Labor will have no fear of socialism if the time for its adoption shall come, but steps in that direction must be taken gradually. (441-445, 450.)

Mr. WANAMAKER believes that regulation of trusts to prevent extortionate prices is necessary. Moreover, there is a tendency to abuse in giving high salaries to relatives of the directors or to those who have some political or other pull, and this should be checked by legislation. (468.)

Mr. GOMPERS declares that he has great fear of legislative attempts to deal with the trusts, because, as a rule, antitrust laws have been applied by the courts to organized labor and not to trusts. "The antitrust law-who among all the trust magnates of America is now under indictment, under bonds? But I can point you out, right in the District of Columbia, about 25 men who are under indictment under the antitrust law. The interstate-commerce law-how has it interfered with the discrimination of the railroads and the transportation companies with preferred shippers? Not a particle; but I know that it was the incubator that brought forth the injunctions that cast our men into jail because we exercised our natural rights to quit work. It was used for the purpose of curbing men's rights to advise with each other." (656.)

Mr. Gompers says further: "For our own part we are convinced that the State is not capable of preventing development or natural concentration of industry. All the propositions to do so, which have come under our observation, would beyond doubt react with greater force and injury upon the working people of our country than upon the trusts.

"The great wrongs attributable to the trusts are their corrupting influence on the politics of the country; but as the State has always been the representative of

the wealth possessors, we shall be compelled to endure this evil until the toilers are organized and educated to the degree when they shall know that the State is by right theirs.

* * *

There is no tenderer or more vulnerable spot in the anatomy of trusts than their dividend-paying function. There is no power on earth other than the trade unions which wields so potent a weapon to penetrate, disrupt, and, if necessary, crumble the whole fabric. This, however, will not be necessary, nor will it occur, for the trades unions will go on organizing, agitating, and educating, until the time when the workers, who will then form nearly the whole people, develop their ability to administer the functions of government in the interest of all.

#

**

There will be no cataclysm, but a transition so gentle that most men will wonder how it all happened."

7. Combinations and the tariff.-Mr. SEARCH believes there is no way to prevent further growth of combinations except by taking down tariff bars and competing with the rest of the world. Combinations can scarcely become strong enough to cover the entire world. (137.)

8. Book trust.-Mr.GOUDIE testifies that at one time he had occasion to sell a newly published book. He went to practically every large store in Chicago, and found that every one of them was in the hands of the book trust. He could not sell the book to any of the large stores in the city. The manager of the trust told him that he could not sell the book except through him, and after making inquiries about the book he ultimately offered for it what would amount to about 25 per cent less than the cost of production. (727.)

9. Cracker trust.-Mr. ROTH says the New York Biscuit Company had a capital of $9,000,000, the American Biscuit Company a capital of $10,000,000, and the United States Bakery Company a capital of $5,500,000. On consolidation the trust issued preferred stock to the amount of $25,000,000 and $30.000,000 of common stock. The bakers formerly owned their own wagons and horses, and made $25, $30, or $40 a week commission for working the trade. When the trust was organized they had to sell their wagons and work for $12 a week. (714.)

10. Baking-powder trust.-Mr. ROTH, publisher of the Retailers' Journal, says the baking-powder trust advertises that the goods of its competitors are poisonous, when the fact is that the 10-cent baking powder is just as good as the 50-cent baking powder.

(713.)

11. Competition in foods.—Mr. DEMING knows of no monopoly of any article of (705.)

food.

12. Tendency toward international combinations.—Mr. SEARCH, president of the National Association of Manufacturers, thinks that the tendency toward combination is much more marked in the United States than elsewhere. A combination of manufacturers of analine dyes in Germany practically controls business, but this is owing to patents on their discoveries. The manufacture of soda ash is partly, perhaps, controlled by an international trust; but the witness, who has made a special study of the process, believes he could compete with a moderate amount of capital. (128.)

D. Foreign trade-Tariff.-1. Department of commerce.-Mr. SEARCH, president of the National Association of Manufacturers, thinks that the heads of existing Government departinents can not give special attention to commerce and industry, and there is need for a special department to further it. Such a department is favored by the National Association of Manufacturers. (126.)

2. Consular service.-Mr. SEARCH believes the consular service is of the greatest importance to export trade, and that the recent improvement in it has been of much benefit, but still greater improvement is desirable. The men in the service should be specially trained, and should be advanced according to merit. The service is one of business rather than of diplomacy, and should be brought under the proposed department of commerce. (127.)

3. Export trade of America.-Mr. LUSK, a former member of the New Zealand parliament, says that the exports from America to New Zealand have largely increased during the last 5 years, and he has no doubt that they would be greater yet if New Zealand goods could come into America on as easy terms as American goods go into New Zealand. (888.)

Mr. SEARCH says that the Stetson Hat Company was the pioneer in exporting hats. The business has sprung up within 10 or 15 years, much having been developed only still more recently. Little help has been received from the consular service except recently in South America. (136.)

Mr. Search calls attention to the rapid increase in exports of manufactured articles during the past few years. In several industries we are able to produce more than the home market can consume, notably iron products, machinery, and