Jasper County Democrat, Volume 15, Number 53, Rensselaer, Jasper County, 5 October 1912 — TRUTH ABOUT THE TRUST. [ARTICLE]

TRUTH ABOUT THE TRUST.

“Expected Economies From Combination” Do Not Materialize. [Louis D. Brandeis in Collier’s.] Leaders of the new (third term) party argue that industrial monopolies should be legalized lest we lose the efficiency of large scale production and distribution. No argument could be more misleading. * * * It may be safely asserted that In America there is no line of business in which all or most concerns or plants must be concentrated in order to attain the size of greatest efficiency, for, while a business may be too small to be efficient, efficiency does not grow indefinitely with increasing size. What tbe most efficient size is can be learned definitely only by experience. The unit or greatest efficiency is reached when the disadvantages of size counterbalance the advantages. The unit of greatest efficiency is exceeded when the disadvantages of size outweigh tbe advantages. Tbe history of American trusts makes this clear. That history shows:

First —No conspicuous American trust owes its existence to tbe desire for increased efficiency. “Expected economies from combination” figure largely in promoters’ prospectuses, but they have never been a compelling motive In the formation of any trust. On the contrary, the purpose of combining has often been to curb efficiency or even to preserve inefficiency, thus frustrating the natural law of survival of tbe fit test. ■

Second.—No conspicuously profitable trust owes its profits largely to supe rior efficiency. Some trusts have been very efficient, ns have some independent concerns, but conspicuous profits have been secured mainly through control of the market, through the power of monopoly to fix prices, through this exercise of the taxing power. Third.—No conspicuous trust has been efficient enough to maintain long as against the independents its proportion of the business of the country without continuing to buy up from time to time Its successful competitors