The Lords of Industry
Henry Demarest Lloyd
[Reprinted from North American Review, June
1884]
Lloyd (1847-1903) was the Gilded Age's most
influential critic of the so-called Robber Barons, the
businessmen who did so much to foster the spread of the
transportation, communication, and industrial revolutions after
the Civil War. Lloyd was for many years associated with the Chicago
Tribune. Lloyd was also a frequent guest at Hull House in
Chicago.
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When President Gowen, of the Reading Railroad, was defending that
company in 1875 before a committee of the Pennsylvania legislature
for having taken part in the combination of the coal companies to
cure the evil of "too much coal" by putting up the price
and cutting down the amount for sale, he pleaded that there were
fifty trades in which the same thing was done. He had a list of them
to show the committee. He said:
Every pound of rope we buy for our vessels or for our
mines is bought at a price fixed by a committee of the rope
manufacturers of the United States. Every keg of nails, every paper
of tacks, all our screws and wrenches and hinges, the boiler flues
for our locomotives, are never bought except at the price fixed by
the representatives of the mills that manufacture them. Iron beams
for your houses or your bridges can be had only at the prices agreed
upon by a combination of those who produce them. Firebrick,
gaspipe, terracotta pipe for drainage, every keg of
powder we buy to blast coal, are purchased under the same
arrangement. Every pane of window glass in this house was bought at
a scale of prices established exactly in the same manner. White
lead, galvanized sheet iron, hose and belting and files are bought
and sold at a rate determined in the same way. When my friend Mr.
Lane was called upon to begin his speech the other day and wanted to
delay because the stenographer had not arrived, I asked Mr.
Collins, the stenographer of your committee, if he would not act. He
said no, it was against the rules of the committee of stenographers.
I said, 'Well, Mr. Collins, I will pay you anything you ask. I want
to get off.' ' Oh,' said he, 'prices are established by our
combination, and I cannot change them.' And when we come to the cost
of labor, which enters more than anything else in the cost of coal,
we are met by a combination there, and are often obliged to pay the
price fixed by it."
Adam Smith said in 1776: "People of the same trade hardly
meet together even for merriment and diversion but the conversation
ends in a conspiracy against the public, or in some contrivance to
raise prices." The expansive ferment of the New Industry,
coming with the newscience, the new land, and the new
liberties of our era, broke up these "conspiracies," and
for a century we have heard nothing of them; but the race to overrun
is being succeeded by the struggle to divide, and combinations are
reappearing on all sides. This any one may see from the
reports of the proceedings of the conventions and meetings of
innumerable associations of manufacturers and dealers and even
producers, which are being held almost constantly. They all do
something to raise prices, or hold them up, and they wind up with
banquets for which we pay.
Four years ago the Chicago Lumbermen's Exchange adopted a
resolution declaring it to be "dishonorable" for any
dealer to make lower prices than those published by it for the
control of prices in one of the greatest lumber markets of the
world. Monthly reports are required by this Exchange from dealers,
so that accurate accounts may be kept of stock on hand in order to
regulate prices. The price lists of the Exchange are revised and
made "honest" at monthly banquets. In February, 1883, it
was found that members who ostensibly adhered to the price lists
dipped into the dishonorable practice of competition on the sly by
giving buyers greater than the usual discounts. This was then
forbidden, and another pathway of competition closed. The effect of
this pricelegislation was attested by the address of a dealer
of Minneapolis at one of the pricelist banquets of the
Exchange, who said that his firm, which made sales as far off as
Manitoba and Dakota, had never sold a foot for less than the
published lists. A delegation of dealers from the Mississippi River
district spoke feelingly of their labors "for harmony" and
their willingness that Chicago should make prices. A secret meeting
of lumbermen from all parts of the West was held in Chicago, March
8, 1883, to discuss means for advancing prices, restricting
production at least thirtyfive per cent., and in general, in
the language of one of them, putting themselves into a position like
that of the coal producers of Pennsylvania, who by combination
dictated the prices of coal throughout the whole country. In May,
last year, the national association of lumber dealers met in
Chicago. It represents over five hundred and fifty retail dealers in
the West, and its principal purpose was to prevent wholesale dealers
at Chicago, St. Louis, and other centers from retailing lumber to
carpenters, farmers, and scalpers in the territory of the retailers.
There are too many sellers; and, so any wholesaler who persists in
competing in this way with local dealers is, when found guilty,
named to all the retailers and punished by losing their trade. The
mills of Puget Sound, which supply a large proportion of the lumber
consumed in the Pacific States, formed a combination last year to
regulate the production and sustain prices. It is said by the local
newspapers that the mills which do not belong to the association are
hired to stand idle, as there are too many mills, and the
association finds it profitable to sustain prices at the cost of
thousands of dollars paid out in this way. The lumber market of the
Pacific coast is ruled by the California Lumber Exchange, and that
is controlled by a few powerful firms. The prices of redwood
are fixed by the Redwood Manufacturers' Association, and those of
pine by the Pine Manufacturers' Association. During the past year
the retail dealers of San Francisco have had to sign contracts with
these associations, binding themselves to buy only from members of
the associations, to buy and sell only at prices fixed by them, to
give time and discount only according to rule, and to keep accounts
so that every item will be clear to the inspectors hired by the
associations to look after the retailers.
Finally, the retailer binds himself, if he is " found guilty"
of committing any of the forbidden sins, to pay a fine which may
amount to one thousand dollars, to be divided among the faithful.
The literature of business can show no more remarkable productions
than the printed forms of these contracts. This system is in
imitation of the "special contracts" with shippers which
have been put in force by the Central Pacific Railroad.
Western ranchmen complain that the competition of buyers is
disappearing. They declare that there exist at the Chicago stockyards
combinations of buyers who, by their ability to make large purchases
and their agreement to offer but one price, get cattle at their own
figures. One member of the " ring " does the buying today;
another tomorrow, and so on. The cattle kings have
combinations to defend themselves from cattle thieves, State
legislatures, and other enemies, and propose to extend this category
so as to include the middlemen at the stockyards. The
Stockgrowers' Association of Wyoming have $100,000,000 in
cattle. At the recent convention held by this body in Cheyenne, it
was unanimously declared that its business had been "seriously
injured by the pooling arrangements prevailing among buyersat
the Chicago stockyards," and the executive committee were
instructed to obtain the fullest possible information as to VOL.
CXXXVIII. NO. 331-38, the means by which cattle might be shipped
direct to the European Consumer.
Last July Messrs. Vanderbilt, Sloan, and one or two others out of
several hundred owners of coal lands and coal railroads, met in the
pleasant shadows of Saratoga to make " a binding arrangement
for the control of the coal trade." " Binding arrangement"
the sensitive coal presidents say they prefer to the word "combination."
The gratuitous warmth of summer suggested to these men the need the
public would have of artificial heat, at artificial prices, the
coming winter. It was agreed to fix prices, and to prevent the
production of too much of the raw material of warmth, by suspensions
of mining. In anticipation of the arrival of the cold wave from
Manitoba, a cold wave was sent out all over the United States, from
their parlors in New York, in an order for halftime work by
the miners during the first three months of this year, and for an
increase of prices. These are the means this combination uses to
keep down wagesthe price of men, and keep up the price of coalthe
wages of capital. Prices of coal in the West are fixed by the
Western Anthracite Coal Association, controlled entirely by the
large railroads and mineowners of Pennsylvania. This
association regulates the price west of Buffalo and Pittsburgh and
in Canada. Our annual consumption of anthracite is now between
31,000,000 and 32,000,000 tons. The West takes between 5,000,000 and
6,000,000 tons. The companies which compose the combination mine,
transport, and sell their own coal. They are obliterating other mineowners
and the retailer. The Chicago and New York dealer has almost nothing
to say about what he shall pay or what he shall charge, or what his
profits shall be. The great companies do not let the little men make
too much. Year by year the coal retailers are sinking into the
status of mere agents of the combination, with as little freedom as
the consumer.
There was an investigation of the coal combination by the
Pennsylvania legislature in 1871, the testimony taken in which
showed, as summarized in " The Nation," then the leading
antimonopoly paper in the United States, that when,
after a thirtydays' strike by the men, a number of private
coalmine owners acceded to their terms and wished to reopen
their mines and send coal again 'to market, the railroads, by which
alone they could get to market, raised their freights, as their men
were still on strike, to three times the previous figures. These
great corporations had determined not to yield to their men, and as
they were mineowners and coal sellers as well as carriers,
they refused to take coal for their competitors. The latter, if they
could have got transportation, would have given their own men
employment and supplied the people of the country with coal. This
would have compelled the great companies either to make terms with
their workmen, or to let_ these other mineowners take the
trade. Instead of doing so, they used their power over the only
available means of transportation to dictate the terms upon which
every other employer should deal with his men, by preventing him
from sending his products to market so long as he granted his men
better terms than those laid down by the company. The result was
that the price of coal was doubled, rising to $12 a ton; the
resumption by the private mineowners was stopped; and they,
the workmen and the Consumer, were all delivered over to the tender
mercies of the six great companies.
The coal combination was again investigated by the New York
legislature in 1878, after the combination had raised the prices of
coal in New York to double what they had been. The legislature found
that private mineoperators who were not burdened like the
great companies with extravagant and often corrupt purchases of coal
lands, heavily watered stock, and disadvantageous contracts, forced
on them by interested directors, and who have only to pay the actual
cost of producing the coal, "can afford to sell at a much less
price than the railroad coalproducing companies, and would do
so if they could get transportation from the mines to the market."
This is denied them by the great companies. "The private
operators," says the report, " either find themselves
entirely excluded from the benefits of transportation by reason of
the high freights, or find it for their interest to make contracts
with the railroads, by which they will not sell to others, and so
the railroads have and will keep the control, of the supply of the
private operators." To those who will not make such contracts,
rates are fixed excluding them from the market, with the result,
usually, of forcing them to sell their property to the lords of the
pool. "The combination," the committee declared, "can
limit the supply, and thereby create such a demand and price as they
may deem advisable.» The committee found that coal could be
laid down on the dock in New York, after paying all charges, for an
average of $3.20 a ton. It was at that time retailing in the city
for $4.90 to $5.25 a ton. "The purposes of the combination are
solely to advance the price of coal, and it has been successful to
the amount of seventyfive cents to one dollar a ton. Its
further advance is only a question whether the combination can
continue to repress the production." An advance of only twentyfive
cents a ton would on 32,000,000 tons be $8,000,000 a year, which is
not a bad thingfor the combination.
Some excitement was caused by the report in August, 1882, that
there had been formed in New York and Philadelphia a combination of
buyers to control the markets, and " that it was far more
autocratic than that of operators and railroads had ever thought of
being." Nothing has since been heard of this combination. The
only combination of buyers of coal that now exists is called the
State, but its members have not yet learned to know their rights or
their power. The total amount of anthracite coal land is estimated
by President Gowen, of the Reading, to be between 260,000 and
270,000 acres. Of this the Reading Coal and Iron Company owns 95,000
acres, and also holds under a lease of the Central Railroad of New
Jersey about 14,000 acres, making in the neighborhood of 110,000
acres. The Lehigh Valley Railroad controls about 25,000 acres; the
Delaware, Lackawanna and Western about 20,000; the Delaware and
Hudson about 20,000; the Pennsylvania Coal Company 8000 to 10,000,
and the Pennsylvania Railroad 5000 to 10,000. The rest of the coal
lands is held by individuals, firms, and corporations, and is "necessarily
tributary" to the railroad lines of the companies above named,
with all that implies. The capitalization of the coal companies with
that of their satellites is upward of $500,000,000. This
capitalization was declared by the New York legislative committee to
be excessive. Mr. James B. Hodgskin explained, some years ago, in "The
Nation," how this inflation was brought about. A generation
since, the most important coal lands were covered by the prettiest
farms and the wildest mountain forests in the United States, then
worth fifty cents to fifty dollars an acre. They were bought up by
speculators who sold them to the companies at ten to twenty times
the real cost. When railroads were found to be necessary for the
development of the mines, railroad schemes were taken in hand by the
same class of men, who had acquired experience, skill, and money by
their manipulation, of the mining companies, and similar tacticswere
employed to make money out of the new roads. Roads were built
costing but onehalf or threequarters of the first
mortgage bonds issued on them, and were then saddled with additional
stock capital equal to the bonds, making the nominal capital of the
roads three or four times the real cost. Of course the road was
expected to earn dividends on the twentyfive dollars of real
cost as well as the seventyfive dollars of fictitious cost.
The swollen total at which the capitalization of the coal companies
now stands was obtained by adding the drops in all mining stocks to
the drops in all railroad stocks. This is one of the cases in which
like has not cured like.
One of the sights which this coal side of our civilization has to
show is the presence of herds of little children of all ages, from
six years upward, at work in the coal breakers, toiling in dirt, and
air thick with carbon dust, from dawn to dark, of every day in the
week except Sunday. These coal breakers are the only schools they
know. A letter from the coal regions in the Philadelphia "
Press " declares that " there are no schools in the world
where more evil is learned or more innocence destroyed than in the
breakers. It is shocking to watch the vile practices indulged in by
these children, to hear the frightful oaths they use, to see their
total disregard for religion and humanity." In the upper part
of Luzerne county, out of 22,000 inhabitants 3000 are children,
between six and fifteen years of age, at work in this way. "
There is always a restlessness among the miners," an officer of
one of the New York companies said, "when we are working them
on half time." The latest news from the region of the coal
combination is that the miners are so dissatisfied with the
condition in which they are kept, by the suspension of work and the
importation of competing Hungarian laborers in droves, that they are
forming a combination of their own, a revival of the old Miners and
Laborers' Association, which was broken up by the labor troubles of
1874 and 1875.
Combination is busy in those softcoal districts, whose
production is so large that it must be sent to competitive markets.
A pool has just been formed covering the annual product of 6,000,000
tons of the mines of Ohio. Indiana and Illinois are to be brought
in, and it is planned to extend it to all the bituminous coal
districts that compete with each other. The appearance of Mr.
Vanderbilt, last December, in the Clearfield district, of
Pennsylvania, at the head of a company capitalized for $5,000,000,
was the first entry of a metropolitan mind into this field. Mr.
Vanderbilt's role is to be that of producer, carrier, dealer, and
consumer, all in one. Until he came, the district was occupied by a
number of small companies and small operators, as used to be the
case in the anthracite field in the old days. But the man who works
himself, with his sons, in a small mine, cutting perhaps from twenty
to forty tons a day, cannot expect to survive the approach of the
Manhattan capitalist. The small Clearfield producers, looking at the
fate of their kind in the anthracite country, greeted Mr.
Vanderbilt's arrival with the question, " What is to become of
us?" "If the small operator," said one of the great
man's lieutenants," goes to the wall, that is his
misfortune, not our fault." In March last the prominent
Clearfield companies gave notice that wages must be reduced on the
1st of April, and immediately thereafter a union of their employees
resolved that if the reduction, which they declared to be "
without reason," was made they would strike.
Powerful syndicates are at work to control the coke industries of
Pennsylvania, which will require from ten to fifteen millions of
dollars. March 23, 1884, it was stated that the efforts of a year or
more to consolidate the large and small cokemakers of the
Connellsville district had succeeded. Nearly 8000 ovens joined the
pool, which is under the command of the four largest firms. The
smaller men agreed to shut their ovens whenever the heads of the
pool ordered. It was announced, two days afterward, that one oven
out of every seven had been closed "until further orders,"
that the price of coke would be advanced at once from ninetyfive
cents to $1.15 a ton, and that farther advances would be made until
the price had been raised to $1.50. In March, 1883, the St. Louis "
Age of Steel" had news that a combination had been made of all
the coke iron furnaces, with one exception, in Tennessee, Alabama
and Georgia, to fix uniform prices and prevent indiscriminate
competition and "trickery" of all kinds, which is the
disrespectful language in which the coke iron economists speak of
the sacred law of competition.
There has been since 1872 a national combination of the
manufacturers of the stoves, into which the combination coal must be
put; and its effect, the founder said, in his speech at the annual
banquet in Cleveland, last February, had been to change the
balance from the wrong to the right side of the ledger. Until
lately, at least, combination matches lighted the fire of
combination coal in these combination stoves, and it is combination
oil which the cook, contrary to orders, puts on the fires to make
them burn faster. The combination of match manufacturers was
perfected by tho experience of sixteen years of fusions, till lately
it shared with the coal combination the pleasure of advancing the
price of fire by proclamation on the approach of winter. It is now
at war with the new companies which have gone into the manufacture
since the repeal of the internal revenue tax. These it is attempting
to ,conquer by underselling them, tactics which have hitherto` never
failed. The Government of the United States, before which all men
are equal, helped this combination to kill off its competitors,
shielding it from foreign competition by a tax of thirtyfive
per cent. on the importation of matches from abroad, and shielding
it from domestic competition, by administering the internal revenue
tax so as to make its small competitors pay ten per cent. more tax.
This drove them into bankruptcy, or combination with`the ring, at
the rate of one or two every month. The railroads, like the
Government, helped to transfer this business from the many to a few,
by carrying the combination's matches at lower rates than were given
to its little competitors.
When the housemaid strikes a combination match on the wallpaper,
she leaves a mark on an article the manufacture, sale, and price of
which are rigidly regulated by the American Wall Paper
Manufacturers' Association. A recent writer has described this oathbound
combination which has established a wallpaper monarchy in the
United States. When the cook takes the paper from off the express
package, the hardware, the drygoods, the groceries, the candy,
the ham, which have been sent home, she is still handling an article
the price of which is fixed by private enactments. The Western
Wrappingpaper Association, ever since 1880, has, with more or
less success, been struggling to keep down the deluge of too much
wrappingpaper, and to fix the prices of all kinds, from the
paper under the carpet to that which is used in roofing. It recently
failed, but was at once reorganized on a firmer footing than
before, and its mills are now allowed to turn out but onehalf
as much as they could produce. Besides this, the wood pulp and straw
paper industries have been amalgamated.
The American Paper Association aims to control the prices and
production of paper for newspapers and books, and` for writing. The
dealers in old rags and old paper formed an association in Cleveland
three years ago to deal with the "old rag" problem of how
to cut down the enormous profits the women of our country are making
out of the contents of their ragbags. In January, 1883, the
trade met again at Rochester, formed two "national"
associations, and solemnly agreed upon the prices to be paid for
mixed rags "that we gather from house to house," and for
brown paper and rag carpet. " No change of price for rags or
paper," runs the decree of the oldrag barons, "is to
be made without consultation of every member of the executive
committee." The Western Wooden Ware Association discovered,
last December, that there were too many pails, tubs, and bowls, and
ordered its members to manufacture but onefifth of their
capacity. In February it gave them permission to increase this to
onehalf. The Western Cracker Bakers' Association met in
Chicago in February to consider, among other things, "the
reprehensible system of cutting prices;" They first had a
banquet. After their "merriment and diversion" the
revelers, true to Adam Smith's description, turned to consider "some
contrivance to raise prices." "The price lists were
perfected," said the newspaper report, and then they adjourned.
The men who make our shrouds and coffins have formed a close
corporation known as the National Burial Case Association, and held
their national convention in Chicago last year. Their action to keep
up prices and keep down the number of coffins was secret, lest
mortality should be discouraged. The largest manufacturers of
quinine in the world are the Boehringers of Milan, Manheim, and
Paris. The next largest are Powers and Weightman of Philadelphia.
The latter have just leased the Boehringer factory in Manheim. New
York druggists say that these two could force up the price of
quinine very high by combination, but do not believe they will do
so. A pool of the seventeen leading quinine manufacturers of the
world was formed last July. It included the manufacturers of
America, Great Britain, and the continent of Europe. It advanced
prices for a time twenty cents an ounce, but went to pieces at the
beginning of 1884. The manufacturers of patent medicines organized
in 1883, and the wholesale and retail druggists have followed with
organizations to prevent the sale of these nostrums at cut prices,
or by any persons who were not regular druggists. A " drug war"
has broken out and threatens to rage over the entire Union. The
combination of the wholesale druggists and that of the manufacturers
have mutually agreed to divide the United States into districts,
each of which shall be under a superintendent, who is to watch the
druggists and report all those cutting prices, who are thereupon to
be boycotted.
Every one knows about the thirtymilliondollar steel
combination, which has not kept the price of rails from declining
from $166 a ton in 1867 to $32 a ton in 1884, but during this
decline has kept the price of railsthat is, the price of
transportation, that is, the price of everything, higher in this
country than anywhere else. Chairman Morrison of the Committee of
Ways and Means is a witness to the fact that the chimneys of the
Vulcan Mill at St. Louis stood smokeless for years, and meanwhile
its owners received a subsidy reported at $400,000 a year from the
other mills of the combination for not making rails, with, however,
no payment to its men for not working. The steelrail makers of
England, France, Belgium, and Germany are negotiating for an
international combination to keep up prices. The "Age of Steel"
startled the country last January by the statement that a monster
pool was to be formed of all our pigiron manufacturers. The
country was to be divided into six districts. As many furnaces were
to be put out of blast as were necessary to prevent us from having
too much iron, and these idle furnaces were to share, like the
Vulcan Steel Mill, the profits of those that ran. This has not yet
proved to be history, but it may turn out to have been prophecy.
There are too many nails for the nailmakers, though no such
complaint has been heard from the housebuilders. There is a
nail association, which at the beginning of the year advanced price
ten cents a keg. Last November it ordered a suspension of the nail
machines for five weeks, to the great distress of eight thousand
workmen, who are also machinesselffeeders. " We
hope," said the nailmen, according to a Pittsburgh
dispatch of December 29, 1882," to show consumers that we can
not only control production, but that we can do so unanimously, and
at the very time when nails are tho least wanted.'' On April 9th, of
this year, the nail manufacturers of the West met again at
Pittsburgh, and adopted the most modern form of pool, with managers
having full powers to regulate prices and restrict production. "An
early advance of prices may be expected," we are told. Every
mill in the West is in the pool. Nailbuyers are not allowed to
converse with nailmakers. All business must be done through
the Board of Control.
There is too much barbed wire for the wire manufacturers, though
not for the farmers, and a pool, under the " entire control"
of eleven directors, has, within a few weeks, been formed, in which
are enrolled all of the chief manufacturers. Its members met in
March in St. Louis, and advanced prices. They met again in Chicago,
April 4th, and advanced prices 10 percent, and adjourned to meet in
thirty days for the purpose of making another advance. This
combination cuts off competition at both ends. It confederates the
makers, so that they shall not sell in competition with each other,
and it buys all its raw material through one purchasing agent, so
that its members do not buy in competition. The Western Pig Iron
Association regard "the cutting of prices as the bane of
business," and do what they can to stop it. Thirteen concerns
making wroughtiron pipes in this country met in December last
to unite under the very appropriate name of the Empire Iron Company.
Each was to deposit $20,000 as security that he would adhere to
rules to prevent the calamity of too much iron pipe. One feature of
the pool was that it proposed to keep men on guard at each mill, to
keep account of the pipe made and shipped; and these superintendents
were to be moved around from one mill to another at least once every
eight weeks. April 1, 1882, when the rest of us were lost in the
reckless gaiety of All Fools' Day, fortyone tack manufacturers
found out that there were too many tacks, and formed the "Central
Manufacturing Company of Boston," with $3,000,000 capital. The
tack mills in the combination run about three days in the week. When
this combination, a few weeks ago, silenced a Pittsburgh rival by
buying him out, they did not remove the machinery. The dead chimneys
and idle machines will discourage new men from starting another
factory, or can be run to ruin them if they are not to be
discouraged in any other way. The firstfruits of the tackpool
were an increase of prices to twice what they had been.
One of the objections raised thousands of years ago in Greece,
against the union of people of the same trade, was that their
meetings degenerated into political conspiracies, and Trajan, for
the same `reason, refused to accede to the request of Pliny that he
might enroll a fire company out of the workmen of Nicomedia. No
precautions, said the shrewd emperor, can prevent such associations
from becoming dangerous conspiracies. The whisky distillers' pool is
a combination of all the distillers north of the Ohio River from
Pittsburgh to the Pacific Ocean. It regulates production, export,
and prices. Its success at Washington, in scouring legislation
several years ago granting whisky makers the privilege, given to no
other taxpayer, of a postponement of the time for payment of
taxes, is a significant reminder of Trajan's saying. The demand for
whisky so far falls short of the capacity of the pool to produce,
that a large number of distilleries are kept idle, drawing pensions
from the combination, in some cases as high as $500 a day. The
Brewers and Maltsters Association of New York fixes the prices of
beer by combination, and claims to control 35,000 votes. It takes to
itself the credit of the defeat, last year, of Mr. Maynard,
candidate for Secretary of State of New York. At the last session of
the association the .suggestion was made by one of the speakers,
that if the brewers would see that the foreigners in their employ
took out naturalization papers, they would, no doubt, " cast
their votes properly."
The publishers of school books do not like competitionthat
is, what they call " dishonest competition." Nineteen of
the leading firms of the country have formed a combination; by which
they are bound to obey the orders of an executive committee as to
prices and other matters. This, says the " Age of Steel,"
will be cheerful news to the heads of families, who already have
enough halfworn school books in the house to have stocked a
whole township forty years ago. A heavy penalty is imposed upon any
publisher who supplants the books of \ another house in the pool by
reducing prices or otherwise. The successful man has to hand over to
`the unsuccessful one the value of the book for three years. The
Ohio Senate recently discussed means for overcoming this combination
and securing competition in the supply of school books to the State
as of old.
The competition of the fire insurance companies, which broke out
in 1875 upon the collapse of their pool, cost them in New York city
alone $17,500,000 in seven years, and in 1882 they made a new
combination which covered the whole country, and is, in point of
wealth and cohesiveness, one of the most powerful and most
successful in the country. The combination of makers of stamped
tinware, farmed in 1882, expelled members who sold at lower than the
fixed rates, and refused to allow any one in the pool to sell to the
offenders. The situation was so uncomfortable, that the expelled
deliberated whether to prosecute the association for conspiracy or
to pay the penalty and go back into the fold; they chose to do the
latter.
Two years ago it was found that there was too much milk in New
York and Boston. The "embattled farmers" of Orange county,
which supplies New York with twothirds of its milk, declared a
milk war. The New York dealers were cut off from their regular
supplies. Committees of farmers waited at every railroad station,
and offered to buy all the milk that was brought down for shipment
by those who did not join in the combination. When bought it was
spilled. When not bought it was usually spilled just the same. Two
Italians with performing bears were in Goshen on the night when the
first milk was spilled. The farmers said the bears did it, and while
the " milk war " lasted the spillers were known as "the
bears." When the superintendent of the Lehigh and Hudson
Railroad allowed milk to be shipped against the protests of the
farmers, they threatened to tear up the tracks, and the sheriff of
the county had to be called in to protect the road. Sheriffs'
deputies, appointed to protect the shippers, helped the bears to
spill the milk. At Warwick all the streets leading to the depot were
barricaded by the bears with ropes. It took eight men armed with
clubs, guns, and pistols to guard one man collecting milk. Peace was
declared March 24, 1883. A committee of the farmers and a committee
of the milkmen, representing eight hundred dealers in New York,
Brooklyn, and Jersey City, agreed upon a fixed price for each month
until April, 1884, ranging from two and a half to four cents a
quart, according to the time of year. The organization of farmers
spread until it covered Delaware, Orange, and Sullivan counties in
New York, and Hunterdon and Sussex counties in New Jersey. March
22nd, of this year, the farmers' committee and that of the milk
dealers' organization, known to the honest farmers as the "
Pump Handle Association," met again, agreed on prices for
another twelvemonth, and this year there will be no milk war. The
trade in milk at the point of largest consumption in the United
States now rests in the hands of these combinations of the mining
companies, and similar tacticswere employed to make money out
of the new roads. Roads were built costing but onehalf or
threequarters of the first mortgage bonds issued on them, and
were then saddled with additional stock capital equal to the bonds,
making the nominal capital of the roads three or four times the real
cost. Of course the road was expected to earn dividends on the
twentyfive dollars of real cost as well as the seventyfive
dollars of fictitious cost. The swollen total at which the
capitalization of the coal companies` now stands was obtained by
adding the drops in all mining stocks to the drops in all railroad
stocks. This is one of the cases in which like has not cured like.
The trade in milk at the point of largest consumption in the
United States now rests in the hands of these combinations of the
mining companies. The same thing is going on at other places. The
New England Milk Producers' Association met in Boston, last January,
for the purpose of thoroughly organizing the milk farmers.
Representatives from New York who had led the farmers there were
present to point out the way. The Secretary of the Massachusetts
Board of Agriculture read a letter from a gentleman in which a cheek
of one hundred dollars was inclosed, to pay for milk to be poured on
the ground to help the success of the producers' cause. The
membership was increased from 86 to 291. Resolutions were adopted
calling upon all the farmers who supplied Boston with milk to join
the association and do all in their power to solve the " milk
problem." On March 22nd, the day of the similar meeting in New
York, the association met again in Boston, conferred with the
representatives of the milk dealers, fixed the price of milk from
April to October at thirtyfour cents for eight and onehalf
quarts by a vote of 91 to 39, and adjourned. The ballot is a new
force in the manufacture of prices, and one well worthy the
attention of those who are curious about the developments of
universal suffrage.
Other combinations, more or less successful, have been made by ice
men of New York, fish dealers of Boston, Western millers, copper
miners, manufacturers of sewer pipe, lamps, pottery, glass, hoopiron,
shot, rivets, sugar, candy, starch, preserved fruits, glucose, vapor
stoves, chairs, lime, rubber, screws, chains, harvesting
machinery, pins, salt, type, brass tubing, hardware, silk, and wire
cloth, to say nothing of the railroad, labor, telegraph, and
telephone pools with which we are so familiar. On the third of
April, the largest and most influential meeting of cotton
manufacturers ever held in the South came together at Augusta to
take measures to cure the devastating plague of too much cotton
cloth. A plan was unanimously adopted for the organization of a
Southern Manufacturers' Association for the same general purposes as
the New England Manufacturers' Association. The convention
recommended its members to imitate the action of the Almighty in
making a short crop of cotton by making a short crop of yarns and
cloth, and referred to a committee the preparation of plans for a
more thorough pool. Such are some of the pools into which our
industry is eddying. They come and go, but more come than go, and
those that stay grow. All are "voluntary," of course, but
if the milk farmer of Orange county, the iron molder of Troy, the
lumber dealer of San Francisco, the Lackawanna Railroad, or any
other individual or corporate producer, show any backwardness about
accepting the invitation to join " the pool," they are
whipped in with all the competitive weapons at command, from assault
and battery to boycotting and conspiracy. The pr*ate wars that are
ravaging our world of trade give small men their choice between
extermination and vassalage. Combine or die! The little coke burner
of Connellsville works or stops work, the coal dealer of Chicago
raises his prices or lowers them, the typesetter takes up his
stick or lays it down, as the master of the pool directs.
Competitors swear themselves on the Bible into accomplice, and free
and equal citizens abandon their business privacy to pool
commissioners vested with absolute power, but subject to human
frailties. Commerce is learning the delights of universal suffrage,
and in scores of trades supply and demand are adjusted by a majority
vote. In a society which has the wherewithal to cover, fatten and
cheer every one, Lords of Industry are acquiring the power to pool
the profits of scarcity and to decree famine. They cannot stop the
brook that runs the mill, but they can chain the wheel; they cannot
hide the coal mine, but they can close the shaft three days every
week. To keep up gold digging rates of dividends, they declare, war
against plenty. On all that keeps him al*e the workman must pay them
their prices, while they lock him out of the mill in which alone his
labor can be made to fetch the price of life. Only society can
compel a social use of its resources; the' man is for himself.
On the theory of " too much of everything" our
industries, from railroads to workingmen, are being organized to
prevent milk, nails, lumber, freights, labor, soothing syrup, and
all these other things, from becoming too cheap. The majority have
never yet been able to buy enough of anything. The minority have too
much of everything to sell. Seeds of social trouble germinate fast
in such conditions. Society is letting these combinations become
institutions without compelling them to adjust their charges to the
cost of production, which used to be the universal rule of price.
Our laws and commissions to regulate the railroads are but toddling
steps in a path in which we need to walk like men. The change from
competition to combination is nothing less than one of those
revolutions which march through history with giant strides. It is
not likely that this revolution will go backward. Nothing goes
backward in this country except reform. When Stephenson said of
railroads that where combination was possible competition was
impossible, he was unconsciously declaring the law of all industry.
Man, the only animal which forgets, has already in a century or
two forgotten that the freedom, the independence of his group, of
the state and even of the family, which he has enjoyed for a brief
interval, have been unknown in most of the history of our race, and
in all the history of most races. The livery companies of London,
with their gloomy, guildhall, their wealth, their gluttony and winebibbing,
their wretched Irish estates, exist today vain reminders to us
of a time when the entire industry of Europe was regimented into
organizations, voluntary at first, afterward adopted by the law,
which did what our pools of railroads, laborers, manufacturers, and
others are trying to do. Not only prices but manners were pooled. "
The notion," says Cliffe Leslie, " that every man had a
right to settle where he liked, to carry on any occupation he
thought fit, and in whatever manner he chose, to demand the highest
price he could get, or on the contrary to offer lower terms than any
one else, to make the largest profit possible, and to compete with
other traders without restraint, was absolutely contrary to the
spirit of the ages that preceded ours." This system existed for
centuries. It is so unlike our own that the contemplation of it may
well shake us out of our conceit that the transitions,
displacements, changes, upheavals, struggles, exterminationsfrom
Indians to sewing womenof the last two hundred and fifty years
were the normal condition of the race.
Those were not exceptional times. Our day of free competition and
free contract has been the exceptional era in history. Explorer,
pioneer, Protestant, reformer, captain of industry could not move in
the harness of the guild brother, the vassal, the monk, and were
allowed to throw away medieval uniforms. But now "the
individual withers; the world is more and more." Society having
let the individual overrun the new worlds to be conquered, is
reestablishing its lines of communication with him. Literary
theorists still repeat the cant of individualism in law, politics,
and morals; but the world of affairs is gladly accepting, in lieu of
the liberty of each to do as he will with his own, all it can get of
the liberty given by laws that let no one do as he might with his
own. The dream of the French Revolution, that man was good enough to
be emancipated from the bonds of association and government by the
simple proclamation of Liberty, Fraternity and Equality, was but the
frenzied expression of what was called Freedom of Selfinterest
in a quieter but not less bloody revolution, if the mortality of the
factories, the mines, and the tenements be charged to its account. A
rope cannot be made of sand; a society cannot be made of competitive
units.
We have given competition its own way, and have found that we are
not good enough or wise enough to be trusted with this power of
ruining ourselves in the attempt to ruin others. Free competition
could be let run only in a community where every one had learned, to
say and act "I am the state." We have had an era of
material inventions. We now need a renaissance of moral inventions,
contrivances to tap the vast currents of moral magnetism flowing
uncaught over the face of society. Morals and values rise and fall
together. If our combinations have no morals, they can have no
values If the tendency to combination is irresistible, control of it
is imperative. Monopoly and antimonopoly, odious as these words have
become to the literary ear, represent the two great tendencies of
our time: monopoly, the tendency to combination; antimonopoly,
the demand for social control of it. As the man is bent toward
business or patriotism, he will negotiate combinations or agitate
for laws to regulate them. The first is capitalistic, the second is
social. The first, industrial; the second, moral. The first promotes
wealth; the second, citizenship. These combinations are not to be
waved away as fresh pictures of folly or total depravity. There is
something in them deeper than that. The Aryan has proved by the
experience of thousands of years that he can travel. " But
travel," Emerson says, " is the fool's paradise." We
must now prove that we can stay at home, and stand it as well as the
Chinese have done. Future Puritans cannot emigrate from Southampton
to Plymouth Rock. They can only sail from righteousness to
righteousness. Our young men can no longer go west; they must go up
or down. Not new land, but new, virtue must be the outlet for the
future. Our halt at the shores of the Pacific is a much more serious
affair than that which brought our ancestors to a pause before the
barriers of the Atlantic, and compelled them to practice living
together for a few hundred years. We cannot hereafter, as in the
past, recover freedom by going to the prairies; we must find it in
the society of the good. In the presence of great combinations, in
all departments of life, the moralist and patriot have work to do of
a significance never before approached during the itinerant phases
of bur civilization. It may be that the coming age of combination
will issue in a nobler and fuller liberty for the individual than
has yet been seen, but that consummation will be possible, not in a
day of competitive trade, but in one of competitive morals.