TRUSTS AND COMBINES.

New Zealand Mail, Issue 1649, 7 October 1903, Page 74 (Supplement)

TRUSTS AND COMBINES.

THEIR OPERATIONS. THE NEW ZEALAND BILL. AN INTERESTING REVIEW. Tlx© Minister for Labour (Right Hon !R. J. Seddon) presented to 1 arliament last week an in ter eating paper dealing •with the operations of trusts and combines throughout the world, in view of t>k© introduction of tine Monopolies Prevention Bill. The paper was prefaced, by the following remarks by the Minister :—‘‘Having decided to bring forward this session legislation with the object of preventing the formation of pools, rings and trusts in connection with food supplies, clothing and housing the xaeoplo, I deemed it advisable and imperative to obtain the fullest information possible from cither countries through the Agent-General and the Government Agent in San Francisco, and accordingly 3 Acts of Parliament, reports, etc., as affecting tl'Jo various countries wherein trusts flourish and in which law exists for suppression and regulation, have been obtained. These papers, together with much information obtained from other sources, Ixavo been classified and precised by the Secretary for Labour, and the result is now submitted herewith as a Parliamentary paper, placing in the hands of members, in a concrete and practical form, full information respecting combines, pools, rings and trusts, their effect® upon trade, and the results accruing to the manipulators themselves. This will. I hope, enable members to become conversant with the various phase® of the subject, giving them a full grasp of the situation, and, with the knowledge of what has occurred and what is transpiring in other countries, the result may be the passing of such legislation as will prevent trade monopoly obtaining in.this colony.'' UNITED STATICS. It is not easy, says the Secretary for Labour, for persons born in Great Britain or its colonies, to understand with what fury many of the trusts are assailed in the United States. * Doubtless to those whose lives are influenced to failure and ruin by great combinations of capital it appears hard to refrain from speaking in heated laaiguag© concerning them. Not only from the mouths of private citizens, however, hut from the responsible utterances of members of Congress, can he gathered some conception of the hatred and loathing felt for the methods and actions of the trusts. The great enterprises which have legitimately reduced the cost of production, and have won a pla-ce for American enterprises in the international industrial world, should not be strangled by adverse legislation, but only controlled by national reflation. To strike down industrial or commercial combinations, with the result of closing factories and mines, and turning workers by thousands into the streets, would be a calamity whoso extent could hardly be imagined. It would have been impossible to bring to life and nourish the foreign trade of tho United States had business been restrained to tlx© old system of email competing firms and corporations. Under the new order of concentration of capital contracts have been made which allowed one concern to equip a whole railroad, building its bridges,-laying its rails, furnishing its rolling-stock, the order® being filled in lees time than was ever before known in the industrial world. So vast has been the increase of production that, the railways have not been able to furnish transportation to convey it. One great advantage pertaining to trusts is tine distribution of their earnings to a large number of shareholders. It is probable that while not more than three thousand individuals shared the dividends of the concerns which were afterwards amalgamated into the Steel Trust, the present ownership is divided among fifty-five stock-holders. The Sugar Trust has about thirty-two thousand sitock-holders, and almost • every other American trust lias a widely distributed ownership of it® share’s and bond®. The position attained by trusts (should ho a source of national pride and not of legislative attack. They have wrought dismay on the Continent of Europe and in Great Britain by introducing giant forces undreamed of beforo into Commercial life, and they alone have enabled the United Spates to

capture the trade formerly divided among foreign nations. EFFECTS OF TRUSTS. The most general and important charges brought against trusts are overcapitalisation or “watering of stock,” secrecy, or lack of publicity in organisation and conduct, destruction of competition b3 r under-selling, etc., management of institution by absentees ior benefit of absentee capital, management for private benefit of officials, destruction of local public spirit, power to corrupt elections and bribe Parliaments, power to influence Courts and set the law at defiance, absence of personal liability for illegal actions, holding vast properties (as in Mortmain) without taxation, shutting down mills, mines, etc., at will and throwing thousands out of employment, die use of boycott and black-list, fraudulent opposition to patents und use of patents, and discrimination in tariffs and rebates. In many ways besides the general inflation of prices of goods, increase of child-labour, and absence off choice of masters, does the worker suffer by corporate influence. To mention two small directions of oppressive conditions, reference is made to accident compensation and the black-list. In the Stancs. which have no legislation on the lines of the Workers' Compensation Acres of England, New Zealand, etc., the worker has to sue fox’ compensation under an Employers’ Liability Act tliab shelters the employer pander the old plea of ‘ "common employment.” In a huge corporation, covering a large extent of territory, with a numerous staff of officials and an army of workmen (one railway combination employs a hundred thousand men), it is almost impossible to get from under the plea of “common employment” in case of accident. A man can receive no orders except from a fellow-employee, however high that fellow-employee’s station ; and to get away from the territory inhabited by fellow-employees he would have to go a thousand nxilcs. Therefore, the corporation is not liable to pay compensation for accident ; it was always the fault of a fellow-employee. In regard to the black-list, ’ it is asserted that it is often vindictively and almost always heartlessly used. Under the old regime it was possible on discharge to find another employer, but under combination the employing body is a solid block of resistance, and in oaso of a worker offending his boss and being discharged, his name is black-listed in every department of the vast combination. If he does not change his name and disguise himself, there is no remedy but leaving that part of the country for ever. TAXATION. Perhaps the ultimate solution of the trfust difficulty will be found in the magic words “graduated taxation.” The great difficulty is to find any system which the power of enormous wealth cannot pierce and tear to rags by means of the legal and other talent at the service of the money-power. It may, however, be suggested that when full publicity bas thrown its light on every phase of organisation, on every dividend, bonus, preference of stock, efco., there may well he devised stringent systems of * taxation to keep down unfair profits and prevent extortion from the public. The owners of a trust have no right to say that they can “do what they will with then* own.” A human being may have that right (subject to public weal), but the trust is not a human being, nor an individual; it is a mere phantasm, or an artificial being created by the law, and over which the State that permit® its existence (and nourishes it with special privileges not granted to single persons) can exercise control and limit with . conditions. The powers which protect it and give advantages to it can bind or end it. ANTI-TRUST LEGISLATION. The public feeling in regard to combinations of capital is not nearly so strong in Europe as in the United States, although in some countries, notably Austria and Germany, the powers of trusts are relatively as great as in America. In Austria there is more disapproval of the combinations ©xpressed than in the sister country, but it appears to have little practical effect in prevention, and the coalitions “flit from form ho form” to avoid the legislative half-hearted attempts to check their activity. The German organisations appear more in the shape of agreements or pools than in the highly matured oongeries of corporations they assume in the United States, but it is pi'obable that in effect these pools and rings have as great influence in their ways on prices, output, wages, etc., as their more elaborately constituted relative overseas. There is, however, in both countries more capability of Government direction and control than is at present the case with the American trusts. In Great Britain the movement was cf decidedly slow growth, but of late years there’has been a strong tendency towards the formation of powerful and wealthy corporations, and they usually assume the form of uniting many different establishments in the same line of trade, not as in America coalescing such activities as mines, railways, foundries, workshops, shipping lines, etc., into one vast concern as in the case of the United States Steel Trust. France is the country least affected by unified combinations of capital, partly because

there lias not been in her. case severe international competition (her industries being much specialised and localised), and partly through a public resistance to monopoly which has taken action in severe criminal laws against fraudulent attempts to control markets. ENGLISH TRUSTS. Agreements regarding prices and other objects have been for a long time in force, but of late years the tendency towards consolidation has been very marked, and the coalitions have in many cases taken the form of trusts or of single corporations. Of these, several take prominent place on account of their large capitalisation and of the amalgamated firms they represent. Among these may be noted the following:—