'Why not?'
'We had greater capital. With a large business there is always less waste and greater efficiency.'
'And your branch store absorbed the profits of the three small ones. I see. But tell me, what became of the owners of the three stores?'
'One is driving a delivery wagon for us. I don't know what happened to the other two.'
Ernest turned abruptly on Mr. Kowalt.
'You sell a great deal at cut-rates. [51] What have become of the owners of the small drug stores that you forced to the wall?'
'One of them, Mr. Haasfurther, has charge now of our prescription department,' was the answer.
'And you absorbed the profits they had been making?'
'Surely. That is what we are in business for.'
'And you?' Ernest said suddenly to Mr. Asmunsen. 'You are disgusted because the railroad has absorbed your profits?'
Mr. Asmunsen nodded.
'What you want is to make profits yourself?'
Again Mr. Asmunsen nodded.
'Out of others?'
There was no answer.
'Out of others?' Ernest insisted.
'That is the way profits are made,' Mr. Asmunsen replied curtly.
'Then the business game is to make profits out of others, and to prevent others from making profits out of you. That's it, isn't it?'
Ernest had to repeat his question before Mr. Asmunsen gave an answer, and then he said:
'Yes, that's it, except that we do not object to the others making profits so long as they are not extortionate.'
'By extortionate you mean large; yet you do not object to making large profits yourself?… Surely not?'
And Mr. Asmunsen amiably confessed to the weakness. There was one other man who was quizzed by Ernest at this juncture, a Mr. Calvin, who had once been a great dairy-owner.
'Some time ago you were fighting the Milk Trust,' Ernest said to him; 'and now you are in Grange politics.* How did it happen?'
* Many efforts were made during this period to organize the perishing farmer class into a political party, the aim of which was destroy the trusts and corporations by drastic legislation. All such attempts ended in failure.
'Oh, I haven't quit the fight,' Mr. Calvin answered, and he looked belligerent enough. 'I'm fighting the Trust on the only field where it is possible to fight-the political field. Let me show you. A few years ago we dairymen had everything our own way.'
'But you competed among yourselves?' Ernest interrupted.
'Yes, that was what kept the profits down. We did try to organize, but independent dairymen always broke through us. Then came the Milk Trust.'
'Financed by surplus capital from Standard Oil,' [52] Ernest said.
'Yes,' Mr. Calvin acknowledged. 'But we did not know it at the time. Its agents approached us with a club. 'Come in and be fat,' was their proposition, 'or stay out and starve.' Most of us came in. Those that didn't, starved. Oh, it paid us… at first. Milk was raised a cent a quart. One-quarter of this cent came to us. Three-quarters of it went to the Trust. Then milk was raised another cent, only we didn't get any of that cent. Our complaints were useless. The Trust was in control. We discovered that we were pawns. Finally, the additional quarter of a cent was denied us. Then the Trust began to squeeze us out. What could we do? We were squeezed out. There were no dairymen, only a Milk Trust.'
'But with milk two cents higher, I should think you could have competed,' Ernest suggested slyly.
'So we thought. We tried it.' Mr. Calvin paused a moment. 'It broke us. The Trust could put milk upon the market more cheaply than we. It could sell still at a slight profit when we were selling at actual loss. I dropped fifty thousand dollars in that venture. Most of us went bankrupt. [53] The dairymen were wiped out of existence.'
'So the Trust took your profits away from you,' Ernest said, 'and you've gone into politics in order to legislate the Trust out of existence and get the profits back?'
Mr. Calvin's face lighted up. 'That is precisely what I say in my speeches to the farmers. That's our whole idea in a nutshell.'
'And yet the Trust produces milk more cheaply than could the independent dairymen?' Ernest queried.
'Why shouldn't it, with the splendid organization and new machinery its large capital makes possible?'
'There is no discussion,' Ernest answered. 'It certainly should, and, furthermore, it does.'
Mr. Calvin here launched out into a political speech in exposition of his views. He was warmly followed by a number of the others, and the cry of all was to destroy the trusts.
'Poor simple folk,' Ernest said to me in an undertone. 'They see clearly as far as they see, but they see only to the ends of their noses.'
A little later he got the floor again, and in his characteristic way controlled it for the rest of the evening.
'I have listened carefully to all of you,' he began, 'and I see plainly that you play the business game in the orthodox fashion. Life sums itself up to you in profits. You have a firm and abiding belief that you were created for the sole purpose of making profits. Only there is a hitch. In the midst of your own profit-making along comes the trust and takes your profits away from you. This is a dilemma that interferes somehow with the aim of creation, and the only way out, as it seems to you, is to destroy that which takes from you your profits.
'I have listened carefully, and there is only one name that will epitomize you. I shall call you that name. You are machine-breakers. Do you know what a machine-breaker is? Let me tell you. In the eighteenth century, in England, men and women wove cloth on hand-looms in their own cottages. It was a slow, clumsy, and costly way of weaving cloth, this cottage system of manufacture. Along came the steam-engine and labor-saving machinery. A thousand looms assembled in a large factory, and driven by a central engine wove cloth vastly more cheaply than could the cottage weavers on their hand-looms. Here in the factory was combination, and before it competition faded away. The men and women who had worked the hand-looms for themselves now went into the factories and worked the machine-looms, not for themselves, but for the capitalist owners. Furthermore, little children went to work on the machine-looms, at lower wages, and displaced the men. This made hard times for the men. Their standard of living fell. They starved. And they said it was all the fault of the machines. Therefore, they proceeded to break the machines. They did not succeed, and they were very stupid.
'Yet you have not learned their lesson. Here are you, a century and a half later, trying to break machines. By your own confession the trust machines do the work more efficiently and more cheaply than you can. That is why you cannot compete with them. And yet you would break those machines. You are even more stupid than the stupid workmen of England. And while you maunder about restoring competition, the trusts go on destroying you.
'One and all you tell the same story,-the passing away of competition and the coming on of combination. You, Mr. Owen, destroyed competition here in Berkeley when your branch store drove the three small groceries out of business. Your combination was more effective. Yet you feel the pressure of other combinations on you, the trust combinations, and you cry out. It is because you are not a trust. If you were a grocery trust for the whole United States, you would be singing another song. And the song would be, 'Blessed are the trusts.' And yet again, not only is your small combination not a trust, but you are aware yourself of its lack of strength. You are beginning to divine your own end. You feel yourself and your branch stores a pawn in the game. You see the powerful interests rising and growing more powerful day by day; you feel their mailed hands descending upon your profits and taking a pinch here and a pinch there-the railroad trust, the oil trust, the steel trust, the coal trust; and you know that in the end they will destroy you, take away from you the last per cent of your little profits.
'You, sir, are a poor gamester. When you squeezed out the three small groceries here in Berkeley by virtue of your superior combination, you swelled out your chest, talked about efficiency and enterprise, and sent your wife to Europe on the profits you had gained by eating up the three small groceries. It is dog eat dog, and you ate them up. But, on the other hand, you are being eaten up in turn by the bigger dogs, wherefore you squeal. And what I say to you is true of all of you at this table. You are all squealing. You are all playing the losing game, and you are all
