Wages

As indicated in the discussion on prices, so far as the Trusts really make savings through their new method of organization, they have a surplus fund which could be used in some way. Testimony before the Industrial Commission, and also the events of the last few years as reported in the public press and in public meetings, seem to show that in certain instances the laborers have gained slightly from being able to take advantage of this increased ability of the Trusts to pay.

 The statistical investigation made by the United States Department of Labor at the request of the Industrial Commission in 1900, while the material was not complete enough to reach positive conclusions, indicated that, so far as the evidence went, the industrial combinations had, on the whole, not brought about any lowering of the wages of labor, and had probably produced a slight increase.

The attitude of the Trusts toward the laboring-classes and toward the labor unions has apparently not differed materially from that of individuals and corporations under the competitive system. Some oppose trade unions; some favor them. Some are kindly disposed toward the laborers; some are disposed to grant them no favors. So far as a tendency can be detected, it seems to be toward the consolidation on the one hand of the laborers into larger and larger unions in order that they may be able to hold their own against the combinations, and on the other, for the larger combinations to recognize that as they are themselves organized, they must themselves deal with an organized body of laborers. If this tendency can be seen, however, it must be recognized that there are many exceptions.

It is somewhat encouraging to note that in many instances the unions and the Trusts are uniting upon trade agreements for a period of a year or several years, and that through this system of trade agreements the danger of expensive strikes is being lessened, although as yet this custom has become by no means universal. There appears also to be a tendency for the trade unions and the employers to unite for the benefit of both and to exercise their power at the expense of the consumers by maintaining prices higher than would obtain under the competitive system. It is to be expected that this union of employers and laborers against consumers is likely to become more frequent if the Trusts and the unions increase in number and strength.

Social Effects

It has often been charged that the great corporations and Trusts exert a corrupting influence upon legislatures and the courts. It is probable that in individual cases this charge is true. On the other hand, legislatures have not been free from such charges under the competitive system, and it probably would be difficult to prove absolutely that conditions are worse now than they were before the great industrial corporations were formed. The remedy for such an evil would seem to be chiefly in improving the character
of our legislatures.

A more significant consideration is whether the Trust, by bringing so many individuals under one centralized management, destroys to any material extent the powers of self-reliance and of self-direction on the part of individuals which are naturally developed by the struggles of the competitive system. Opinions differ to a considerable extent on this subject, but there can be no doubt that, although the opportunities for a man to start an independent business in certain lines of industry are lessened, on the other hand the competition for promotion and for positions of responsibility within the combination itself is severer in the case of the great corporation than in the case of the private business or partnership. When a group of two or three partners are managing a business, they may readily give preference to their sons or friends even when the business ability of such persons is not of the highest type. When the interests of thousands of stockholders must be considered, and there are large boards of directors, each feeling that his position depends to a considerable extent upon the success of the business, favoritism cannot be shown to any very great extent.

Legal Position

When a Trust or combination is organized, its rights and powers are determined by the ordinary rules of common and statute law applicable to the particular form of organization adopted. That is, if the combination is a Trust, its rights and powers are determined by the ordinary rules of law governing Trusts; or if the combination is effected by one of the methods of corporate combination, its rights and powers are determined by the general law of corporations. Aside from these questions of the methods of organizing combinations, the Trusts raise no peculiar legal issues except that as to their legality when organized.

In ascertaining whether a combination is unlawful at common law, it should be remembered that the mere combination or cooperation of several individuals is not in itself unlawful, and in the case of partnerships and corporations combination of individuals is encouraged by the law. Combination by corporations, however, as has already been indicated, when not authorized by statute, may be such an abandonment or misuse of their corporate franchises as to be illegal under the general law of corporations. In general it may be said that combinations are unlawful per se only when the purpose of the combination is unlawful or against public policy, or when the means adopted by the combination for effecting its purposes are unlawful or against public policy.

The grounds upon which combinations have been held to be unlawful at common law may be somewhat roughly classified as follows: (1) That the contract (when the combination has been effected by contract) is illegal and void at common law because in restraint of trade. (2) That the combination is an unlawful conspiracy, either civil or criminal. (See conspiracy). Technically the second class includes the first, since there can be no combination without two or more parties to it who are technically guilty of conspiracy where the purpose is to enter into an illegal contract. (to be continued)