Hawke's Bay Herald. FRIDAY, MAY 29, 1898. " RINGS AND TRUSTS "—CHIEFLY AMERICAN.

Hawke's Bay Herald, Volume XXXI, Issue 10315, 29 May 1896, Page 2

Hawke's Bay Herald. FRIDAY, MAY 29, 1898. " RINGS AND TRUSTS "—CHIEFLY AMERICAN.

As the fierce competiiioa whioh has gone on in the Industrial world during the last half century haa had tha effect of centralising Industrial effort, and by causing the collapse of small and weak organisations, plaoing trade more within the grasp of a few people having the command of large capital, the formation of " combines " for the exploitation of various markets lias baen rendered comparatively easy. In America these " combines," whioh are in different) aspects known bs " rings " or "trusts," have been formed on larger isoales than io other parts 0/ tha world, A cable message from Washington, dated May 24th, and published by us or( Tuesday, read as follows :— " The House' by a large majority rejected a resolution moved by a Popalieb member impeaohing the President for Issuing bonds and refusing to force through a law aimed sguinat the great trnßts." What the effeot of the particular law advocated by the Populist was to be we are left in donbt, bat probably it was In the direotion of codify. Ing the various State laws and bringing In one Act, operative throughout the entire Republic, that would tingaish the present " trusts " and prevent the granting of charters to others. The law on the subjeot seems to be in a state of chaoa, as several State Courts have ruled the formation of a " trust " to be illegal, while others have as distinctly decided the other way, It Is not, how« ever, to dieonss the legality of these associations that we write, but to point ont to our readers tha methods on which they are conducted, and than give . them an opportunity of forming an idea of the justifiable hatred with which "oomblnos" of all descriptions are regarded by the masses upon whom they prey. Baker, in his Monopolies and the People, gives the following description of a wheat "corner" (it should be understood that monopoly oonelats in control rather than in aotaal possession of goods) :— The man who forms a corner in wheat first purchases or secures the control of the whole available supply, or as near the whole anpply &a he can. In addition to this he purchases mare than Is really within peaph of the market by uC'nb others who agreeftq deliver hlm^boat at DfcoureehßaHto omo^ ■*•<**. BSrf gf his wheati ecure the greoi,.. "•■ *tter feg (laems [uletly at low figures ; buu „ " »«. vj 5 ■ hat the whole supply Is nearly ■- ' antrol, he spreads the news that there is "corner" la the market and buys penly all the wheat he can, offering igher and higher prices until he raises he price oufficlently high to suit him. low the men who have contracted to ellver wheat to him at tbls time are at Is mercy. They must 1 buy their wheat F him at whatever price he chooses to ask ad deliver It as coon as purchased in rder to fnlfil their contracts. Meanwhile illls must be kept in operation and the 1 Hera have to pay an Increased price for heat: they charge tbo bakers higher tices (or flour nud the bakers raise the dee of broad. Thus is told by tjta hungry lonths in the poor man's borne, the last ;t in the tragedy of the 'corner." Although these combinations have iueased of into years io number and

lirenlth of ecope, comnisrco lias never 'oeen free from them. Joseph " cornered " grain on behalf of the King of Egypt, Crasans and a few other rasoale formed a ring to ralßO food prices in Rome, coalowners impose! monoply prices on London consumers for many years during last century, while the commercial laws of the Middle Ages are fall of provisions against Che formation of monopolistic rings. Of courßO the oaloulatinna npoD which these "corners" are baaed are extremely hazardous, snd there aro many instances of the collapse of powerful bodies of ' speculators. One of the best known Instances of this kind is that of the " Copper Syndicate," a body of French capitalists formed to control the world's snpply of tin and copper. By the expeaditnre of enormons sums of' money they held the market in a cloae grip, but owing to failure to meet their engage- ' ments the "corner" was broken in 1889, and prices, which had been considerably inflated, fell. A strong effort wqb made in 18S9 to take charge of the Lancashire cotton market, bat by the bold front of the operatives (who scented a bondage of the most servile character) the attempt) woe frustrated. From these few Instances it will be seen that "corners " are ohlefly made in articles of large consumption. The strength of the Copper Syndicate, had id succeeded, would have been in lta grip over the early extractive I stage. Had it progressed in strength it would have been able to paes from the state of a "corner" to the position of a "trust." Legally a " trust" is a form of business association — " a trust of corporate stocks by means of which a body of men united in interest are enabled to carry on business through separate corporate agencies." It is a company of companies undei which the formal structure of the original companies is maintained. The method pursued in America to form " trnsts " foi " rigging the market " has been for the owners of a majority of shares in a number of corporations to agree to place their shares in the full control of a body of persons called trustees, These trustees " manage the bnslnese, except it may be in small matters of detail." Thus is formed one large organism, each shareholder in which upon surrendering his stock to the trustees receives a certificate entitling him toan interest in the property and earnings of the " trust 1 ." Durlngreeenl years "trnsts" hove been formed for the control of almost every conceivable thing : railways, telegraph lines, petroleum, whisky, sugar, tweed, &c. The Standard Oil Trust, the power of whose hold on the market we in New Zealand have had one or two reminders, is the largest and probably the strongest of these organlsa. tions. This " trust " was first formed to obtain control of the crude oil that had previously been distributed among a number of companies for refining purposes. The combination after obtaining a strong footing entered into contracts with othei monopolistic organisations — the New York Central and Hudson Hirer rail* roads. The "trust" agreed to ship over those railroads the whole of its oil, and in return the railway companies agreed to convey the freight upon terms of great advantoge, and to pay rebates to the " trust, 1 ' not only upon the " trusts oil but upon that shipped by competing refiners. la one locality, the railroad companies were to charge oil shippers 1 dollar SO cents per barrel and pay a rebate to the "trust" of 1 dollar '06 cents psr barrel, whether the latter was the shipper or not. Though this monstrous conspiracy was quickly unmasked, and the "trust" lost its charter, secret negotiations with railroad companies enabled It to carry on business at great advantage over its rivals. By making fnll use of its large capital it succeeded in stifling all competition, and by 1875 (or 10 years after its formation) it held a practical monopoly. Seventy-font refineries are said to have been bought np, leased, or bankrupted by this "trust" daring its career. The. " trust was again dissolved in 1892. It has been claimed that "trusts" benefit the consuming public by reducing prices, Never was there a greater fallaoy. Patting aside the natural question " Do low prices benefit the people?" it is patent that the very existence of a " trnst " depends upon it maintaining prices above the level of fair competition. As a " corner " aims at the rapid turning oVer of money by large sales during a period of panic, the " trust " aims at establishing a permanent hold on the pockets of the consuming public. An examination of the prioee charged for oil show that while there had been a sharp decline in prices np till the formation of tho Standard Oil Company, since that date there has bees almost a dead level observed. This was also apparent in the case of the Sugai Trust, which actually dictated the prices at which retail sellers should dispose oi their produce. It was not until the advent of the Spieckles Company that this power was broken and the "trust" forced to come down to the level of fair trade. The condition of the American farmer has been oalled one of " pathetic impotence," crashed as he is between the upper and nether millstones of monopoly ; the railways, the slaughtering, and elevator companies all being leagued against him. The exercise, however, of its power in dealing with competing capital and the general public — the use of money to debauch the Legislature and Its treatment of employe's, deserve to be placed in separate categories. The former may (or it may not) account for the apathy of the United States Legislature f anyhow it has been openly alleged for years that these leagues are only kept together by wholesale bribery. With regard to its employe's, tho following is a Bhort summary of the findings of a com. mittee of Congress with reference to the relations existing between the railroad and coal companies wbleh are formed into a trust for the control of tho anthracite coalfields in Pennsylvania and the coal miners :— Congress has found that the coal companies la the anthracite regions keep thonsands of surplus laborers la hand to underbid each other for employment, and to submission to all exactions ; hold them purposely ignorant when the mines are to be worked and when closed, so thot they cannot seek employment elsewhere : bind them as tenants by compulsion in the companies' houses, bo that the rent shall run against them whether wages run or not, and under leases by which they oan be turned out on the mountain-side in midwinter if they strike ; compel them to fill ears of larger oapaolty than agreed upon, make them buy their powder and other working outfit of the companies at an enormouß advance on cost; oompel them to bay coal of the company at the company's price, and in many oases to bay a fixed quantity more than they need j oompel tnem to employ the doctor named by the company, and to pay him whether olok or well ; " pluck " them- at the company's store, so that when pay day oomes ronnd the company owes the man nothing, there being authentic cases where "soberhardworking miners toiled for years, or even a life time, without having been able to draw a single dollar, or bat tew dollars In i aotual cash," in dobt until the day they died ; refuse to fix the wages in advance but pay tuem upon some hoons-poous sliding scale, varying with tho selling price n New York, which the railwa? slldea to said itself; and moat extraordinary of all, refuse to let the miners know the price un whioh their' living slides a fraud on lta f ace. In order to keep the miners disciplined and the "Coal market nnder-supplled, the ' railroads restriot wen; ;5 JPSftno miners often have to live Tor a month oo what they can earn in ':!* or. eight days, and these restrictions are enforced ppon the miners by holding oars from them to 'fill 09 upon competitors to go to market, ',' . Labor organisations are forbidden, and tho men Intentionally provoksd-ia fifrike' to affeot iUS B°»l rtffjrset. The laboring; pop'Uw. .-"""ttbetolragloafl jo 'kept down 1 by epeclai piemen, enrolled nnder special laws and often !«■ VlOWoo of the law, by the railroad and coal flftd Iron companies, practically wben and in what manner they choose, and practically without responsibility to any one but their employers, armed hs the Corporation ccc fit with army revolvers or Winchester rifjes qt both ; made detectives by statute, provoking ibe public to riot, and then shooting theja, . Jiy the percentagn pf wages, by false moaenregjents, by rents, stores, and other methods, the Workman is virtually a chattel of the operator,' 1 The space at oar command is not sufficient to enable ns to take as extended a view of these combinations ac wo would desire, and a-dlaonsßjon on the eooncmlc

I forces at work whioli hiiap about their 1 * formation ie oat of tbe question in a 1 1 daily paper. We have only been able to j ' briefly point out the way In whloh "trnsls" and "comers" Inflate prices (although there are sporadic instances where they havo reduced them) and weld the yoke of servitude round the necks of their workmon. With reference to the former point Hobson says: "It will commonly be to the interest of a Trnat or other monoply to maintain a lower scale of prices In those commodities whloh are luxuries or satisfy some less urgent or capricious taste, and to maintain high prices where the article of monopoly is a common comfort or a prime necessity of life for whloh there is no easily available substitute." With regard to its employ £j the Standard Oil Trust, the controlling power of the coal regions, or any similar combination of capitalists, ore the ownera of their workmen to the same extent as they are the owners of their mills and machinery. It has been claimed that the economies of production in a " trust " enable It to pay higher wages. There is no question that " trusts ' are able to do so ; but there le no power to compel them to do it, and consequently they don t. Many of them practloe a sham phllanthrophy by profit sharing, in order to deceive people that their high profits enrich the many instead of the few. There is nothing to prove that these unholy combinations are anything more than a scourge to worker and consrimer alike. It> Is a pity the American Legislature will not listen to the voice of the Populist crying in their midst. But he only follows others, For years the purer members ol that body have pointed out the growing evils of the "ring," and have dwelt on the fact that the high tariff ruling was a great factor in rendering tho formation ol controlling corporations easy. The warnings of patriotic senators have not been as efficaclona as tbe greenbacks of un> worthy wire-puller?. There Is a growing boom in America now for a higher tarlf and the appointment of Mr M'Elnley fc< tbe Presidential chair, so that apparently no effort la to be made to stifle one frnit fal source of mercantile corruption " Rings " and " trusts " will no doubt to formed with impunity for years to come and only go under when something blgge and stronger in a capitalistic sense come along and abaorbs them in Its capaclou coffers. So far as commercial morallt; goes, the United States aie about on level with tbe condition of ancien EbvdK