NOTES AND ABSTRACTS 705
sale of an article an advantage which all do not possess. The central idea of the trust is the combination of large amounts of capital in such enormous transactions as to afford its members monopoly privileges. That railroad discriminations have a marked influence in promoting the trusts is coming to be widely recognized. The conditions of these discriminations are as follows : Previous to the enactment of the act to prevent these abuses it was the usual method for the railroads to give a specially low rate, or pay a rebate, to large shippers, whom it is obviously to the interests of the railroads to encourage. The act made the giving of a lower rate to one shipper than to another a crime for both parties concerned. To escape this provision the favors have been made to take, sometimes the form of an elevator commission, sometimes an excessive car mileage ; sometimes to make a particularly long haul cheaper than a shorter haul ; sometimes the shipper pays the full interstate rate in consideration that he shall receive preferential rates within the state to which the Interstate Commerce Act does not apply. The effect is to reduce the number of persons with whom these transactions are had to a minimam ; both because of the desire of avoiding the risk of detection, and because of the inability of the small dealers to compete. In such large operations the small advantages thus granted to the large dealers often represent more than the entire margin upon which the business is transacted, and are in the aggregate millions of dollars annually. The unavoidable result is to exclude the small competitor more and more from these operations and center the business in the hands of the large competitor. — Ch.\ri,es A. Frouty, " Railway Discriminations and Indus- trial Combinations," in Annals of the American Academy of Political and Social Science, }sXiVi3.xy, 1900.
Publicity the Greatest Need in Our Industrial Development. — That the transition which has in the last few years been rapidly taking place in business from the partnership form of organization to the corporation has been necessitated by economic conditions and has proved of great economic utility is now very generally conceded. The great corporation is properly considered as a-useful invention — a valuable industrial machine. But its introduction, like that of every labor-saving invention, has been attended with confusion and hardship. The chief cause that has occasioned and is occasioning these great corporations is the growing impossibility of doing business on the separate competitive basis. Eminent business-men, among them F. B. Thurber for the grocers, some of the foremost insurance men, coal dealers, and merchants of the middle West, agree in the testimony of one of them : "Competi- tion has got us now where the only dress we ought to wear is the cap and bells." Under these conditions it is grotesque to talk about "the rights of independence of the small middle class." Combination and organization on a large scale has been the only available method of meeting the demands of these conditions. But the very size and character of such organization, involving the interests of a large number of stockholders, and of a very much larger public, necessitates a degree of publicity of accounts and methods which has not been at all adequately recognized in the United States. Indeed, most of the evils will be found to center in the underhand methods which no civilized nation except the United States any longer permits. Over- capitalization and the rank abuse of special rates by railroads, increasing the power to crush small dealers and force strikes with employes, are parts of the same cor- rupting methods. As an instance of the failure to require publicity Dr. von Halle says in his book on Trusts, or Industrial Combinations and Coalitions in the United States: "It is one of the most disastrous holes in the corporation law of the United States that stock companies are not forbidden to buy or sell their own securities. In Europe such transactions have been punishable for many years." And the very men who manage the trusts are condemning these evils with most emphasis. The domi- nating peril of the trust — the peril that includes most others — is the influence of the large corporations upon politics and the bearing this influence has upon economic privileges. The part that certain corporations have played in corrupting the sources of political life in the United States is quite the greatest danger under which the coiriitrv suffers. .\nd the most drastic condemnation of these practices has not been by the socialists, but by some of the very men who do these things. In this whole matter we are working in the dark ; and our cut-throat competition, unjust favors.
