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trusts have gone to pieces. They see that in some cases infla- tion, Napoleonic financiering, and reckless capitalization of extravagant hopes have brought failure and disaster to the pro- moters and partners of wildcat enterprises, and they exclaim : " Behold the triumph of natural law, your best protector and guardian ! Trust this automatic regulator, and have no fear of oppression or injustice ! "
But there are other facts which are not so comforting, and which cause the consumer to pause and hesitate about consent- ing to the repeal of all anti-trust legislation. In the first place, not all overcapitalized and inflated trusts collapse after a short and troubled career. There is a suspicion abroad that many of the most powerful combinations now in existence are not as "economic" and sound as their representatives pretend. Presi- dent Schwab of the United States Steel Corporation observed some time ago in a public address that "the original trust was a dead business proposition," because it was founded on the idea of restricting production and arbitrarily raising prices, and that the new, the vital trust was strong and beneficial because it was founded on the opposite idea of increasing production, lower- ing prices, improving quality, and eliminating waste. The dif- ference is radical, but how many of the surviving combinations answer Mr. Schwab's description of the sound, the safe, the use ful trust ? A competent writer has argued that the steel com- bination itself is really insolvent its liabilities exceeding its assets, owing to the overvaluation of its constituent companies. Is there any touchstone to enable us to determine which of the trusts are "dead business propositions," and doomed to a speedy collapse, and which are stable, conservatively conducted, and "economic" ? T
1 Here is what an English " business-man " writes to the London Standard con- cerning our trusts : " We all know the general principles of an American trust. There are, I think, nearly two hundred trusts in America, and I believe about thirty of them pay dividends. An American ' trust ' might be fairly described as a process of 'making money by force.' In America a trust is usually formed by a number of companies which, in their individual capacity, cannot pay dividends, and the directors of which hope by combination, and by increasing prices to figures which are not in accordance with the natural law of supply and demand, to control the particular trade they are interested in. The companies interested sell their business to the
