The Timaru Herald. MONDAY, JANUARY 13, 1908. THE BULWARK OF TRUSTS.

Timaru Herald, Volume XIIC, Issue 13491, 13 January 1908, Page 4

The Timaru Herald. MONDAY, JANUARY 13, 1908. THE BULWARK OF TRUSTS.

Lord Cromer is :i .financier whose work in Egypt, gives special weight to anything he has to say on fecal questions. In his speech at Glasgow, lie was. of course, addressing a public on a matter of donuetic concern into which we need not enter at present, but a, portion of his retnarks whicli have been cabled out has a special inter*!* to these southern colonics which have J-et their feet so resolutely upon the road of exclusive protection. Lord Cromer ,we believe, is quite Tight in accusing' a section of the Australian community of ah exaggerated belief in the power of the State to remedy economic evils, but equally we believe that lie is talking to deaf ears when he tells them of their failing. ' Experience alone will open their eves to the error, and experienee«:loes not come in a, day. Only- when Australia and New' Zealand have paused through the trials ihat have befallen other countries in which protection has gradually increased its hold upon the people, will they realise • the severity of the evils to which undue protection gives rise. Lord Cromer laid special emphasis upon one of these evils when he was speaking at. Glasgow—'.he growth of the "trust."' The history of high protection in Germany and the United ' States —the two countries in which it has been carried furthest—shows how these noxious organisations develop- naturally behind the shelter of a high tariff. What, happens in Germany is .shown by a report drawn up by the British-Consul at Prankfort. The 'German wire-tack manufacturers formed a syndicate and nicely regulated their prices according to the duties. They charged the public just, a 'shade- less than the price of the foreign article, including freight and duty as well as the cost of production. In Germany, as well as in the United Starts, to.which Lord Cromer referred as the most familialforcing frame of " combines," high protection has meant the rapid growth of huge associations, syndicates and corporations,, and consequently the gradual crushing and squeezing out of small independentproducers and manufacturer. In tho vast monopolistic "trust," With its ruthless -tactics towards all rivals, and its forcing up of prices to the tariff limit, we have the fullest -development of high protection. ,In Germany, according to the consular report from which we have quoted, the syndicates compel their members to boycott traders who purchase similar goods from firms not belonging .'to the syndicates. Two or mora' syndicates combine for the purposes of boycott. The wire-rod syndicate refuses to supply any 'manufacturer of wire tacks who is not a member of the wire-tacks syndicate. The syndicates can do this only so long as the duties are high enough to give them command of the home markets. In the United States the Beef Trust has practically reduced all the butchers and graziero" to a state of servitude, while organisations like the Steel Trait and the Sugar Trust have gradually absorbed the whole of their- industries from the primary production stage to the finished article of" commerce. Instead of a number of free firms, there grows up a huge power which not only drives all competitors out of business, but which can .dictate its own terms to the workers, mid, so far as the tariff allows, its own prices to the public. The American public, as we pointed out last week, is beginning to rebel against the fiscal system which hac encouraged the growth cf these colossal corporations to stifle competition and bleed the consumer. The ltßSon of Germany and the United States has not been quite lost in the colonies, for it is part- of Mr Deakin's protectionist policy to safeguard the purchaser against inflated prices whilst protecting the Australian manufacturer against foreign competition. The progress of his experiment will -be an interesting study, but we fear it will .verify Lord Cromer's criticism, that the cure of economic evils is beyond the power of the State whose interference is liable only to provoke evils of an even more exaggerated character.