of concentration to some extent. But with the evolution of national Trusts to world Trusts, which has already commenced, we are confronted with a far more intricate problem. This would appear to necessitate an international commission for the purpose of controlling prices.

At the present moment, however, there is no immediate necessity to institute legislation in Great Britain for the control of the Trust, owing to our Free Trade system and our state and municipal ownership of public utilities.

But the time will come, and it may not be so far off as is commonly supposed, when the power of the Trust, national or cosmopolitan, will force itself upon public attention with no uncertain sound. The general situation has been summarised by Macrosty as follows:

"The position of the British combinations in regard to the interests of the community may be summed up as not at present dangerous, but containing, like every new development, great and unknown possibilities alike for good and for evil. Over prices their powers are not great but are growing. So far they have shewn no increased power over their employees, and with a strong trade union they need not have."4

Combinations which confine their operations to Great Britain are fully alive to the weakness of their position owing to the free admission of foreign competition. They are obviously at a great disadvantage compared with combinations in countries where their commodities are sheltered behind a tariff wall, since the excess products of foreign competitors can enter Great Britain without payment of duties, whereas British excess products cannot enter protected countries without scaling the wall. This situation has already resulted in the formation of a number of international combines centred in or conducting business in Great Britain. Of the more successful may be noted the Imperial Tobacco Company with a capital of £17,500,000, the limited Alkali Company with a capital of £8,200,000, W. Cory & Sons Coal Company with a capital of £2,800,000, J. & P. Coates Thread Company, The Nobel Dynamite Trust Company with a capital of £3,000,000, and the International Steel Rail Company.

One of the latest Continental combines is the "Union Continentale Commerciale des Glaceries.” The main pur

The Trust Movement in British Industry, p. 342.

pose of this scheme is to centralise in Brussels the commercial services of all the continental plate-glass works, and to from a comptoir de vente" of the industry, in order to suppress all competition, not only in respect of prices and conditions of sale, but also as to conditions of packing and quality of plate glass. It consists already of 13 companies, of which 5 are Belgian, 1 Dutch, 3 French, 1 Austrian, and 3 German. Should these operations be extended to Great Britain and an effective world monopoly established, it is obvious that our free trade system would prove no bar. Even if such a combine were declared illegal by English law, so far as the English unit of the combine was concerned, any such decision would be ineffective. As Professor Van Hise rightly maintains, "no law can suppress the gentleman's agreement, where there are no rules, no constitution, no contract, but common action is effected verbally and informally." Some of the most oppressive combinations have been of this character. Neither combination nor agitation should be driven underground. It is significant that the loudest complaints in Great Britain are raised not so much against the legally recognised amalgamations as against associations which have no existence in the eye of the law and work in secret. "To strike" says Macrosty, "at the methods adopted by combinations is not easy without at the same time repressing measures blamelessly adopted by the individual trader. Boycotting, dumping, selling at a loss to crush competition, maintaining prices at the highest level which the market permits these are no monopoly of combinations, but are weapons in every-day use by manufacturers, merchants, and shopkeepers. It would be indeed an extraordinary thing to strike a competition in the name of competition."

To legislate in a panic, regardless of economic conditions. due to natural devolopments, would be fatal. It cannot be stated too often or too emphatically, that these great amalgamations are the best instruments for production of commodities, their transportation and distribution, and for the supply of public services devised up to date. To attempt to break them up into their original units would be foolish, were it not in many cases impossible. "Crude methods of suppression," says Macrosty, "are always wrong, nor does it seem sensible to search among legal principles relevant

5 The Times, Jan. 22, 1913.

to a different stage of industry for weapons to hamper and obstruct."

But if the time is not ripe for legislation, it is surely time for a close inquiry into the workings of industrial combinations in the United Kingdom. A Royal Commission would elicit evidence which would awaken public opinion to the magnitude of the evils, and the vital importance of discovering some effective method of protecting the interests of the consumer and the general public.

In the meantime, we shall be wise if we carefully note the march of events in the United States and on the Continent, taking full advantage of the lessons to be derived from a study of the economic conditions attending industrial concentrations in the United States and elsewhere, and of the attempts made by the Legislature to remedy the evils inseparable from that system under the economic conditions which now prevail. JURIS CONSULTUS.

INTERLOCKING CORPORATIONS.

Once more a striking phrase has suddenly became a part of our everyday speech and with it a cause, though it is as yet a more or less indefinite cause, has found a measure of prosperity. It is an effective phrase, one in which an advertising agent or a seeker of political catch words must take a pure delight. "Interlocking directorates." You do not have to hear it often to find yourself thinking of the boards of directors of many of the big corporations in the land as mortised and fitted to work in perfect unison—an interlocking, interchangeable, intercorporate marvel of the joiner's art. Nor does the imagination far outstrip the facts. In every city of any size how many interlocking corporations are there? How many are there in the big cities; some of Statewide importance, some of national or even international influence?

The Steel Corporation, for example, is a morsel to roll under any man's tongue. Here is the way it impresses one militant journalist :

"The Steel Trust's advantage over competitors of three dollars a ton in cost of production, due not to superior effi

ciency but to the ownership of certain strategic railroads and steamship lines, is greatly enhanced by its relations to many other carriers. The few men who control the Steel Corporation are directors also in twenty-nine other railroad systems, with 126,000 miles of line-more than half the railroad mileage of the united States-and in steamship companies. These men are also directors in twelve steel-using street railroad systems, including some of the largest in the world; they are directors in forty machinery and similar steel-using companies; in many gas, oil, and water companies, extensive users of iron products; and in the great wire-using telephone and telegraph companies. The aggregate assets of these different corporations exceed sixteen billion dollars. Sixteen billion dollars is more than twice the assessed value of all the property of New England. It is more than one and one-half times the assessed value of all the property in the thirteen Southern States. It is larger than the assessed value of all the property in the twenty-two States, north and south, lying west of the Mississippi river, except only Texas."1

Interesting, even startling, but in a measure misleading, if these great properties are considered as being under a common control. The common control extends to a considerable part of them; with the others this relation means little more than ease of intercommunication or ability to respond quickly to a common impulse, for a common benefit or defense. On the other hand, the Steel Corporation is not the only sun with satellites in the American sky. There are several others.

However, the new-found phrase has proved in a measure tyrannical. As is so often the case with such phrases, being a catch-word it has bred impulsive judgment-it has turned attention to one side of a big problem and has effectively excluded most others. First, it has begged the questionit has created an assumption that interlocking directorates are in and of themselves undesirable. But this might be indulged, if it had not so totally obscured the big questions that lie just behind. Directors, after all, are merely the agents or trustees of corporations. A corporation's owners are the principals. Its big stockholders-and yes, begging leave, its

1 In Collier's Weekly, Oct. 5th. 1912. Compare the testimony taken by the Pujo investigating committee of the House of Representatives, especially that taken on Dec. 18th, 1912.

little ones are the men behind the guns. If interlocking agents are anathema why not interlocking principals? Yet the question of common ownership is as effectively obscured as though it were almost non-existent.

The problem is more than this. Indeed it is not one but several problems. The question of intercorporate directorates, it must be granted, is a question of importance. But it is indissolubly connected with several others. The questions of intercorporate contracts, of intercorporate combinations, consolidations, leases and sales, invite thought in which the intercorporate directorate may be but incidental, a background shadow. And brooding over all is always the question of the interlocking ownership of these corporations, the interfinancial hegemony, which can no longer be obscured. Moreover each and all of these problems has two sides. Public and private interest differ and are not the same. Intercorporate directorates, intercorporate ownership, contracts between corporations having common directors or ownership, may signify one thing from the standpoint of a minority stockholder, another from that of the majority stockholder, and still another from that of the public. And all of these questions may in turn be qualified or entirely metamorphosed by the nature of the business in which, as it happens, the particular set of interlocked corporations under examination is engaged. If the corporations are small or middle-sized merchandising corporations, the consuming public may be specially exercised at their real or imagined practices. If they are industrial corporations, labor will be particulaly alert to all their doings. If they are public service corporations, they will always entertain a medley of interested inquisitors— a little bit of this, that and the other thing. If they are corporations of the secret process brand, or if they are close corporations, or if they are in any sort of business in which reticence is something more than good manners, they may experience one sort of thing-which may sometimes prove very painful whereas if they are corporations of the banal, open-to-everybody kind, or the kind that has an assured monopoly, a perpetual franchise, and stock and bonds all listed on the stock exchange, the experience may, as a rule, be quite different. A little more discrimination than we have had thus far in the interlocking directorate controversy-which doesn't quite cover everything in the trust and corporation question-may prove helpful.