increase in the people's bank deposits; but neither wealth nor population has grown at anything like the pace taken by the deposits. In the ten years following 1880-a period during which wealth and population had increased possibly 25 per cent-the deposits had doubled. In the ten years following, they have doubled again; three quarters of the accretion-or more than $3,250,000,000-being added since 1897.

These figures show, of course, that as a people, we have been prosperous-that the farmer, the merchant, the workman, have as never before, had out of their earnings a livelihood and a large sum over. But this does not explain it all, or nearly all. The men of this day are not less keen than those of yesterday to make good bargains, to increase their possessions, to share in the advancing prosperity of the land. They know, too, as well as did their fathers, that it is not from idle capital, but from invested capital, that any increases must be looked for. They stand aloof, it is plain to me, not from lack of wish, but from lack of desirable opportunity. It means, if it go on, that the people at large will cease to be proprietors in the industries of the land, and in thus ceasing, exchange the active interest of proprietorship for the idle curiosity of the bystander.

A widespread withdrawal by the people at large from general ownership in the properties of the country, cannot but be fraught with the gravest dangers. A few of these are so obvious that I need only indicate them. Such withdrawal will diminish, if not destroy, popular interest in national prosperity; for, from those only who have a stake in prosperity, can we expect great interest. It will kill off competition; for the competitor of the trusts must itself be a trust, and there will be no independent field from which to recruit the means to create such competitor. It will discourage still further the wage earner in any hope of becoming part owner; and thus deepen and widen the existing gulf between wealth and labor. It will sap to its foundation the real strength of government; for government must be built on the interests, as well as the affections, of the people governed. An industrial system subject to such indictment is a rising menace to free government itself.

The remedy, in general terms, it is not difficult to state. The first thing to do is to abandon the present policy of outlawry and extermination. That policy has failed. It has failed through conditions that cannot be removed by law. Replace the old policy by a new, under which industrial corporations subjected to restraint against artificial prices, will be made, in organization and management, to invite, and worthily invite, the confidence and copartnership of all the people of the country. To suggest concrete legislation is perhaps more difficult. It should include the repeal of the Sherman act. Logically and impartially enforced, that act forbids two grocers, on opposite corners of the street, from forming a copartnership to save expenses; partially enforced, it puts the industries of the land at the mercy, not of the law, but of the officers of the law. The legislation that replaces it should provide against artificial prices, brought about either by a cornering of the supply, or by conspiracy; and also against discrimination in prices as to either buyers or places, except as affected by actual transportation rates. There should be a provision for open books; for stated examinations by some department of the government and for periodical statements to the public, as in the case of national banks and many of the railroad companies.

The new legislation should forbid the issue of primary stock in excess of the cash paid in, or the real value of property contributed, to make up the company's assets. Some department of the government should be charged-as between the company and the public-with the duty to see that this limitation was enforced. Provision should, of course, be made for further issues of stock as the value of the property increases; but such issue as is based not on subsequently acquired property, but upon increased value due to management and operation, should be secondary, always, to the first, and should be put out only after judgment, by the appropriate department, that it was justified by the earnings and standing of the company. To the extent that such subsequent issues represent increased value, due to management and operation, I would encourage, by every feasible method, its division in fair proportions between those who have furnished the capital

and those who have done the work. I would embody the basis of such division in the contract of incorporation, so that it would operate as a contract right, and not as a mere bonus. Experience has shown that there is no way to so satisfactorily mitigate the struggle between capital and labor, and none so just as a fair division of the harvest after both the reaperscapital and labor-have each had their reasonable hire.

A programme such as this is not, in my judgment, either radical or impracticable. It will be opposed, however, by those who look upon corporations of any kind as a menace to public liberty and by those who look upon restraint of corporations of any kind as an invasion of industrial liberty. It will be opposed by the men who are temperamentally apprehensive, by the men who believe the present good times to be due to present conditions and deplore interference, and by the men who still wait their opportunity to get rich out of present methods of trust organization. It will be opposed by those who have given to the subject no study, by those who are incapable of giving it a candid study, and by those who thrive in practicing frauds on public opinion. It will fail until public opinion is reached and educated. But public opinion will, in the end, be reached and educated. It will be made to see that a country is not made great by becoming rich; that a government is not secure whose sole policy is to realize large dividends to capital and a large wage to laborers and to keep the peace between them; that there must be found firmer depths than these for the foundations of permanent security. We will then begin, in reality, to rebuild the industrial edifice -a new edifice made necessary by the change of time-but on the old foundations. We will anchor it, where our fathers anchored theirs, in a general proprietorship, so widely spread among the people and thus securely buttressed against hate and envy, that time and change will thereafter dash in vain against the security of the state.

THE COMBINATION OF LABOR, INTELLIGENCE

AND MONEY.

BY CHARLES R. FLINT.

[Charles R. Flint, merchant; born Thomaston, Me., Jan. 24, 1850; graduated Polytechnic institute of Brooklyn, 1868; became engaged in the South American trade, and in 1878 organized the Export Lumber company, and in 1881 the Crude Rubber company; has represented the United States at various international conferences dealing with trade and commerce; organized in 1892 the United States Rubber company which controls that industry, and in 1899 the United States Rubber company, American Chicle company, American Caramel company, National Starch company, and several other industrial combinations, and also several steamship lines; director in several banks and a score of industrial companies. The following article appeared originally in Cassier's Magazine and is published by special arrangement:]

Copyright 1900 by The Cassier Magazine Company

A combination of labor is a trades union; a combination of intelligence, a university; a combination of money, a bank; an industrial combination is a combination of labor, intelligence, and money. There seems to be much confusion in the minds of the people as to the difference between a trust and an industrial company, due to the fact that those who talk most about them are not yet well informed, either as to their organization or operation. A trust was a syndicate of men who held stock certificates of several corporations and issued trust certificates therefor. Now, industrial interests are represented by shares of stock in regularly organized companies. Although strenuous efforts were made to develop the trust system, it was found to be imperfect. It was adopted when industrial combinations were in their infancy. They were not required to have any by-laws or keep any official minutes of their proceedings, or to make any official reports. The Supreme court of New York declared them illegal, and that decision has been accepted as final throughout the United States. But the word "trust" has since been applied to great industrial corporations, and as the word represents all that is best in human character, I see no reason why the word "trust" should not be adopted as a short name for industrial combinations; and may every officer and wage earner in every "trust" realize that the shares of stock are

widely distributed among widows, orphans and others dependent on its dividends for support, and live up to the true meaning of the word.

In studying the evolution of industrial life, we find that combination is coincident with civilization. Savages have little power to combine, because combination depends on trust in our fellowman, and in primitive life it is fear that rules. One of the first steps in industrial evolution was to subdivide production into trades. Each did what he could do best, settling accounts by an exchange of products. Later, those engaged in the same trade formed partnerships, then corporations, and finally consolidations of corporations. Against this march of industrial progress there has always been opposition. There have always been those who, appealing to special interests, to the unsuccessful, the discontented, and the misinformed, have endeavored to obtain political favor by opposing progress, by endeavoring to prevent the natural, and mutually beneficial, co-operation between capital and labor. Centralized manufacture permits the highest development of special machinery and processes. The factory running full time, on large volume, reduces the percentage of overhead charges. Direct sales on a large scale minimize the cost of distribution. Centralization of manufacture and distribution reduce aggregate stocks, and therefore save shop wear, storage, insurance, and interest. Consolidated management results in fixing the standards of quality, the best standards being adopted; in avoiding waste and financial embarrassment through overproduction; in less loss by bad debts through comparisons of credit, and in securing the advantages of comparative accounting and comparative administration. Industrial evolution, which is as inevitable and as unalterable as the law of gravitation, has attained its, as yet, highest development in the United States. Every unprejudiced man must recognize its advantages, and that it is because of them that that country is taking so important a position in the world's markets, increasing its national wealth, furthering its welfare, and increasing the prosperity of its people.