that land monopoly, railroad illegalities and tariff are the sole supports of the trusts, the advantages of mere size of business evaporating before the stage of monopoly is reached; Professor Jenks, on the other hand, regards the advantages of mere size as in themselves sufficient to support a trust. The issue is one of fact which cannot easily be resolved. For it is not possible, I think, to find a trust or strong corporation which has not enjoyed at least one of the artificial supports I have named. This does not prove that a trust could not grow without them, but it distinctly does cast the onus probandi upon the socialist as distinguished from the Henry George man, the free trader, and the railroad reformer.

I have used the words trust and monopoly for the sake of convenience. Monopoly is, of course, entirely a matter of degree. No American trust has a monopoly unqualified by some measure of real and direct competition, while potential competition furnishes a further genuine restraint upon the abuse of power over the consumer. Even the oil trust has small competitors over a portion of its home market, and one independent pipe line still exists, competing for export trade. But a growing degree of monopolist power attaches to the great corporations which I have described, and the surviving competition, real and potential, seems inadequate to secure the consuming public against rises of price unwarranted by the cost of production.

Perhaps Mr. Russell Sage goes too far in saying, "If the truth were known, concentration of wealth is popular with the masses;" but it is certainly true that the millionaire has been an object of admiration rather than of enmity among the masses. The sporting instinct in America has been specially directed towards the race for wealth, the racing regulations are not too particular, and the winner is greeted with general applause by the millions of spectators who are eagerly seeking for some chance of similar personal distinction. Great wealth and crooked methods of acquiring it have long been familiar, and do not disturb the popular complacency. Though the publicity given to the formation of "combines" during the last few years, and the appearance of trusts as an issue of party politics, are slowly educating the nation in the real significance

of the new capitalism, it cannot be said that any fixed general feeling of hostility against the power of the triangle of capitalist forces-railroads, finance, industrial trusts-exists in the general body of the people. A considerable insurrection against the dominion of local corporations handling municipal monopolies is everywhere on foot in the larger cities; spasmodic revolts against railroad monopolies or discrimination over wider areas occur, but no clear signs of a steady settled determination to break the power of the great national trusts are yet visible. There is indeed a sort of socialist party, broken into many groups, which takes as one of its mottoes, "Let the nation own the trusts." In the municipal and state elections of 1902 some 300,000 votes were cast throughout America for "socialist" candidates, and the rise of a numerically powerful party in the future must be regarded as a possibility. But for the present this definitely socialist sentiment and policy are not a serious factor in the situation. The feeling is rather one of growing disquietude and perplexity than of urgent alarm. There is a growing recognition among thinking persons of all classes that trusts have come to stay, that they are capable of using anti-social powers, and that it will be necessary to find public methods of restraining them. So far as any policy is developing in the general mind it is temperamental individualism of the American, and is directed towards a restoration of the competition which trusts seek to destroy, rather than at the socialization of industries from which competition is recognized to have disappeared.

If some sort of semblance of competition is retained, if good wages are paid and employees are fairly treated, if no considerable actual rise of prices oppresses the consumer, the general temper of Americans favors a policy of laissez faire. A trust may be a virtual monopoly, it may regulate production and control local markets, it may take for itself all the economies of improved methods of production, and of the elimination of expensive competition, distributing them in dividends on watered stock, but these things will arouse no effective sentiment of animosity in the public mind. The real danger arises when some great corporation opposes a large organization of labor, as in the Homestead and the Pullman

The

strikes; still more when a rise of price or a stoppage of supply of some necessary or convenience of life for ordinary citizens is attributed to the machinations of a combine or a trust. The rise in prices of bread, meat, and other foods during the last few years, popularly attributed to the action of trusts and rings, has probably done more to arouse a common feeling against combines than any other incident save one. anthracite coal struggle of the winter of 1902 was a dramatic representation of the entire movement of capitalist control, so clear and full in its outlines as to furnish a national education in the economics of capitalism. Cheap foreign labor, illegally imported so as to depress domestic wages; illegal ownership of coal mines by railroads; absolute control of output and of prices by the carrying companies acting in secret but effective concert; long protracted defiance of public convenience and public opinion by the corporations, accompanied by a refusal to submit to arbitration, broken only by threats of coercion from the federal government-such was the picture presented to the eye in the highly colored press. The result was a curious revelation of that ground swell of revolutionary feeling which always lurks in the recesses of the easy going American nature. Spasmodic local riots were taking place, coal trucks were seized and emptied by the people, merchants suspected of holding back supplies were in danger of their lives, and state conventions were passing resolutions in favor of the nationalization of coal mines. President Roosevelt, interfering in the capacity of peacemaker, effected his end by threatening to march United States troops into the mining district, in order to take forcible possession of the mines, and to secure their operation.

It is not theoretical objections to trusts, nor any plain condemnation of their practices, but these uncalculated incidents that are likely to imperil the peaceful development of the great monopolist corporations. The knowledge of this growing suspicion of the trusts, and of the sudden outburst of popular passion which may at any time be directed against them, has rapidly forced the trust issue on to the stage of party politics. Neither party has any direct definite policy to offer. For the radical difficulty consists in the fact that the great majority

of the trusts are not directly amenable to federal legislation or administrative control. America is brought up suddenly against the essential inefficiency of her federal constitution. The British parliament is competent to pass any measures it deems necessary to control, to nationalize, or to destroy any trusts or combinations that might arise in our dominions; railroads, mines, manufactures are all amenable to its supreme control. Not so the government at Washington. The only great industry the regulation of which is clearly within its competency is the railroad, and even there its powers are limited by the Supreme court's interpretation of the passage in the constitution which gives power to congress "to regulate commerce among the several states." It is improbable that so drastic a step as the nationalization of railroads would be approved as constitutional by the Supreme court. As for the manufacturing, mining, and financial corporations, they are properly amenable only to the government of the state in which they are registered. In their actual economic structure and operations most of these "trusts" are federal businesses, but in their legal structure, they are state creations, and are only amenable to state control. In theory the concurrence of several states could doubtless establish a fairly substantial body of control, though even then their efforts might be reduced to naught by the absence of any machinery for common simultaneous administration. In point of fact such common action of states is impossible; states like New Jersey, Illinois, and West Virginia make a large part of their state revenue by enticing trusts to register in their limits upon conditions of loose legal regulation. Voluntary state co-operation is no practicable substitute for federal control.

THE INTEGRATION OF INDUSTRY IN THE

UNITED STATES.

BY WILLIAM FRANKLIN WILLOUGHBY.

[William Franklin Willoughby, economist; born Alexandria, Va., July 20, 1867; graduated Johns Hopkins, 1888; appointed special agent of the United States com mission to the Paris exposition, 1900; appointed, 1890, expert in the United States department of labor and has represented that bureau at several international congresses and has conducted several investigations abroad in its behalf; author of Workingman's Insurance and contributed the following article to the Quarterly Journal of Economics.] Copyright 1901 by George H. Ellis Company

The tendency toward what may be designated as the integration of industry is a tendency which, though it has been at work for some time, has only in very recent years become one of marked prominence. At the present time, however, it constitutes the fundamental force now at work for the reorganization of our industrial system. Through it alone can be established the significance of recent important happenings.

By integration of industry is meant the knitting together, so as to form one compact, harmonious whole, of all the related branches, or all the necessary processes, of any great department of industrial work. As such, it is evidently a movement quite distinct from that of concentration of industry. Concentration indicates the bringing together of likes under central management, as where all the coal mines or all the blast furnaces or rolling mills are brought under the control of one or a few parties. Integration indicates the bringing together of dissimilar, but interdependent, branches of an industry, so that complete harmony may be obtained among them, and the undertaking contain within itself a complete control of all the factors necessary for the successful and uninterrupted prosecution of its work. This is what takes place when the same management acquires control of such widely dissimilar, but essentially dependent, branches of industrial work as the mining of coal and ore, the operation of railways and steamships for its transportation, the extraction of lime, the working of coke ovens, the manufacture of pig, its conversion into billets, bars, sheets, and what not, and from them the manufacture of