YALE ALUMNI WEEKLY
THE CANDLELIGHT SPEECH:
Full Text of President Hadley’s Den-
ver Address on Trusts.
The following is the address of Presi-
dent Arthur T. Hadley before the Can-
dlelight Club of Denver, January 8,
1900, on the subject, “What Shall we
do with the Trusts ?’—
Mr. Chairman and Gentlemen of the
Candlelight Club—I thank you most
heartily for your welcome. I cannot
begin to tell how much pleasure it gives
me to receive such a greeting from such
a group of citizens of Denver; and, in
fact, I may candidly say that it was more
in anticipation of the pleasure of thus
meeting you than because I thought that
I could give you any great enlighten-
ment on this subject beyond what you
already possess, that I consented to ac-
cept your invitation and to speak this
evening.
We are dealing, as practical men, with
a question of practical moment. I pre-
sume that very few persons gathered
around this table hold extreme views in
any direction. Every one, I think, who
has watched this modern development
sees its evil. Every one also sees the
great good with which these evils have
been inseparably intermixed. We have
before us a development in business of-
fering great economy of labor, great
power of business organization for the
benefit of producers and consumers, but
also great dangers and great difficulties
in its treatment. ;
Before deciding what to do with the
trusts, let us see what trusts are—like
the candidate for a high political office,
who, before speaking on “Tariff for
Revenue Only,” wished to know “Who
Tariff was, and why he was for Revenue
only.” What are the trusts? What
shall we give as a working definition?
Some one has said that “A trust was a
corporation which had got so big as to
be dangerous.” I think we may give a
little more precision to this same idea,
and say that a trust, i. e., from the in-
dustrial standpoint, is an organization
where the increased economy of produc-
tion due to large size has been made the
pretext for securing a monopoly of the
market; and, from the legal standpoint,
we may define it as an organization
where the corporate form has been used
as a means of evading some of the legal .
traditions concerning restraint of trade.
THREE METHODS.
Now, how are we to stop these large |
productive organizations from becoming
monopolies and from using their power
as monopolies to the detriment of the
public? How are we to prevent the use
of the forms of corporate organizations
to do away with that time-honored and
salutary legal principle that attempts to
restrain trade when made by contract
between independent individuals, and to
be bound down and checked as far as
possible by the courts? ‘There are three
ways of doing it, and, as far as I can
see, only three ways. ‘The first is to
prevent the organizations from getting
so large. The second is to: use and ap-
ply more carefully certain of the old
legal principles and see if we cannot
thereby lessen the evils under which we
suffer. The third is to aim at such a
development of the public sentiment of
the community as to impose on the
leaders in these large trusts new con-
ceptions of moral obligation in commer-
cial dealings,
Those who are classed as opponents
of trusts rly on the first point. They
would use the second only as a make-
shift. They doubt whether the third
can be applied at all. On the other
hand, those who are classed as defenders
of trusts (I am not now speaking of the
persons who are retained to defend
trusts, but who look at the subject from
outside) deprecate hasty legislation.
Such men, I say, distrust the possibility
of applying the first of these methods;
and, while they would use the second as
far as it can be used, would rely mainly
on the third. The question is, shall we
rely mainly on prohibition or on growth
of moral sentiment in the community ?
The difficulty with the first, the diffi-
culty of opposing trusts by not letting
them get so big, is the same difficulty
under which Mr, Atkinson and other
opponents of expansion in political af-
fairs at present suffer. We have ex-
panded. Whether we like it or not, we
are compelled now to make the best of
it. And in business also we have ex-
panded. ; ae
We have these large organizations
with us, and, as far I can see, they are
likely to stay with us. Now, what hap-
pens when you talk about these great
evils as a reason for prohibiting trusts?
If the trust is there and is going to stay
there, and if you are not going to pre-
vent the corporation from being very
large, the attempt to lay stress on the
evils resulting from its size is of very
little use unless you can find some prac-
tical means of preventing that largeness.
Unless some reasonable probability
can be shown that the result of declama-
tion against trusts will be to turn the
clock of business back twenty-five years
and break up our big corporations into
little corporations, a mere declamation
in regard to the evils is useless. In fact,
it is worse than useless. It is like ad-
vocating prohibition in a town where
liquor is going to be sold, and a good
deal of it. Prohibition that does not
prohibit is worse than no prohibition at
all. I take it that we must expect busi-
ness to be very large in the future, so
largely organized that in a great many
lines there will be a de facto monopoly ;
and if that is the case, the attempt to
argue against largeness does no good
and distracts attention from other
things that might do good.
LEGAL METHODS.
Now, let us take the second remedy—
the application of old-fashioned legal
methods for the regulation of these cor-
porations. I believe that in a great many
cases the worst evils connected with the
growth of trusts would disappear in
large measure. Take, for instance, the
matter of promoters’ liability. In the
United States for the past fifty years the
need of attracting new capital has been
so great that we have stretched all
points in the law to give every facility
to the man who shall extend business,
no matter whether that extension was,
from the investor’s standpoint, sound or
unsound.
We are now reaping the fruits of it.
Perhaps two-thirds of the industrials
that are put on the market at the pres-
ent time and represent to the public
mind the verv largest combinations, are
combinations that were made not
primarily for the purpose of operating
plants effectively, but for the purpose of
selling securities quickly. <A little more
rigidity in the application of principles
of liability, the kind of regidity that is
used in England at the present time and
has been used right along, because they
are not under the necessity of putting
forth false stimuli for the attraction of
new capital, would of itself tend to cure
some of these evils. So many of the
promotions of securities during the last
year were of an essentially fraudulent
character and intended for the benefit of
those who had securities to sell, con-
nected with false representations as to
the value of the thing to be sold, that
simple honesty and old-fashioned legal
principle in the matter of responsibility
in these matters would have reduced
last year’s unprecedented movement
toward monopoly within much narrower
limits, and would have done away with
no small part of the public alarm on
the subject.
Again, the doctrine of conspiracy is a
matter of law which can be applied by
a little more clearness in public opinion
to very many cases where it has not
been applied in the past. I think it may
be said in this matter also that England
in the general interpretation of the law
calls a great many things by their right
names that we donot. To be sure, Eng-
land allows to pools and trusts some
things that we do not allow; but Eng-
land prevents, and prevents without
special statute, but by a different way of
looking at things, a great many of the
worst abuses under which we suffer. If
three men prevent a fourth from enter-
ing into the business there is plenty of
law to reach those three men if it can
only be properly aplied.
BARKING UP THE WRONG TREE.
We have set our dogs barking up the
wrong tree. We have said “Monopoly,
monopoly, bark at that monopoly,” and
our dogs have barked at the monopoly;
and in the meantime we have wholly
. failed to note that the thing to be at-
tacked was the conspiracy. The harm
was not that these three men got to-
[Continued on 176th page.]
175
“The Leading Fire Insurance Company of America.”
STATEMENT OF THE CONDITION OF THE
ETNA
INSURANCE COMPANY,
Hartford, Conn.
On the Sist day of December, 199.
Cash Capital, we ae $4,000,000.00
Reserve, Re-Insurance (Fire), 3,202,547.53
Reserve, Re-Insurance (Inland), 76,307.29
Reserve, Unpaid Losses ( ay 320,600.63
Reserve, Unpaid Losses (Inland), 91,032.70
Other Claims, 171,307.98
5,157,615.07
Net Surplus, Ae re
Total Assets, ‘ : $13.0159:4 11.20
Surplus as to Policy Holders, $9,157,615.07
LOSSES FAID IN: EIGHT Y-ONE YEARS:
$85,641,084.50.
WM. B. CLARK, President.
W. H. KING, Secretary. E. O. WEEKS, Vice-Prest.
A. C. ADAMS,
HENRY E. REES,
Assistant Secretaries.
KEELER & GALLAGHER,
General Agents.
WM. H. WYMAN, General Agent.
W. P. HARFORD, Ass’t General Agent.
BOARDMAN & SPENCER,
General Agents.
CHICAGO, ILL., 145 La Salle St.
NEW YORK, 52° William St.
BOSTON, 95 Kilby St.
PHILADELPHIA, 229 Walnut St.
WESTERN BRANCH,
443 Vine St., Cincinnati, O.
NORTHWESTERN BRANCH,
Omaha, Neb.
PACIFIC BRANCH,
San Francisco, Cal.
INLAND MARINE DEPARTMENT.
—————- A, Se NS lees mm
Agents in all the principal Cities, T owns and Villages of the
United States and Canada.
