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PART FOUR

EFFICIENCY

CHAPTER XX

BIG BUSINESS

WE are all, in our patriotic moments, proud of our ideal of Democracy, and of the extent to which it has already been successfully embodied in our institutions. But as an actual working motive in the lives of successful Americans it does not begin to have the potency of another ideal-efficiency. Efficiency it not one of the great historic slogans that we repeat on the Fourth of July, and attribute to Washington or Lincoln. But when the American traveller boasts of his country abroad, what he is most apt to speak of is the success of our big business, of our great transportation systems, and the other achievements in organization of our industrial order. And most foreign observers have given a verdict similar to that of Arnold Bennett's: "It seems to me that the brains and the imagination of America shine superlatively in the conception and ordering of its vast organizations of human beings, and of machinery, and of the two combined . . . For me they were the proudest material achievements, and essentially the most poetical achievements, of the United States.”

Because of this widespread pride in organization and efficiency, America has often been sneered at as a land of "materialists." But efficiency means the saving of human labor, its consequent release from concern with the mechanics of life, and greater freedom to pursue ideal ends. The simple peasant life

idealized by Tolstoy, the cottage handicraft life idealized by Ruskin, have their allurement for an age of machinery. But actually, such a life means longer hours of work, a harder, less human life, than efficiently organized industry necessitates. It is true that the end has often been lost sight of in preoccupation with the means; masses of workers have not yet won the greater leisure, the pleasanter conditions of work, the larger purchasing power, for which the efficient organization of human labor opens the way. The benefits of our industrial efficiency have not yet been properly distributed. To be a worthy ideal, Efficiency must lose its savor of tyranny and ruthlessness and self-seeking, and go hand in hand with a true Equality and Democracy. But in this way, as an integral part of our national ideal, Efficiency can not be overemphasized.

Just what efficiency in the ordering of human relations requires is a problem at which generations to come must work. But there is one tendency in Ameriica so far-reaching in its influence on the lives of our people that it must have our immediate attention. This is the movement toward combination and centralization in business. There is no doubt that Big Business is an American ideal, and that, whatever impulses toward the exercising of power and the raking in of profits may enter in as motives, its justification is its efficiency. Already we have many splendid examples of the saving of human labor and the diminution of the price of commodities, through the formation of our great corporations or "trusts." And there can be little doubt that the next generation will witness a great increase in this co-ordination in the business world.

That, in general, the replacement of competitive

business by closely co-operative or highly centralized business does make for efficiency is indubitable. Lack of organization means, for one thing, unnecessary duplication of plant and equipment. For example, it has been estimated by reliable statisticians that the flour-mills of the country could grind all the wheat produced in a year in 157 days, and that the saw mills could saw all the lumber consumed in a year in 120 days. Hundreds of millions of dollars are thus wasted by competitive business. Moreover, a great deal of time and money is lost in cross-routing, in separate purchasing and keeping of accounts.

A great many economies possible to a large-scale organization are not practicable for the petty manufacturer or tradesman. The big concern finds it profitable to utilize by-products. It can buy raw materials in larger quantities, and needs to keep less material on hand than was necessary in the case of the smaller concerns it replaces. It can afford expenditures beyond the means of the smaller concerns, it can avail itself of the most expert advice, and strike out more boldly into new lines. Having many strings to its bow, it needs less to fear a single mistake, and can be more enterprising than the small-scale manufacturer or trader can usually dare to be.

The wastefulness of competition is most striking in the field of distribution, including middlemen and retailers. In almost every line we see thousands of unnecessary shops, delivery wagons, and employees. For example, several years ago a survey was made of the distribution of milk in the city of Washington, D. C. "Sixty-five dealers supplied the city, by a wasteful process of duplicating storage, pasteurizing, cooling and delivery plants; in some apartment houses substantially every tenant was served by a

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