stances, many of the officers have been removed.

Mr. Gary, President of the Federal Steel Company, testified before the Industrial Commission that large savings had been effected through the displacement of unnecessary officers in the tompanies which entered the Federal Steel Company, and that some gain had also been made by the reduction of the salaries of officers that remained, inasmuch as they were given less responsible positions. He submitted a table showing the number of employees of all classes during the years 1898 and 1899, with their comparative wages. This showed an increase of 4.76 per cent. in the number of officers and clerks, but a decrease of 6.26 per cent. in their average daily pay, making a slight decrease in the total expenditures. Considering the de

cided increase in the number of laborers and the large increase also in the amount of business done, that seems to be a noticeable saving.

Mr. Gates, Chairman of the American Steel and Wire Company, testified also to the same effect. The official organizations of the separate plants that are in the American Steel and Wire Combination had been to a considerable extent done

away with.

Each plant formerly had its president, vice-president, manager, and other officers, most of whom had been discharged, the business being put in the charge of the men in the central offices in New York and Chicago and the plants being operated under the direction of district superintendents. He was of the opinion that perhaps 50 per cent. of the high-priced officers had been dispensed with, as well as the two hundred travelling men mentioned before.

The fact that the laborers discharged by the combinations are to a considerable extent superintendents and travelling men, two classes of high-priced laborers, is likely to promote less hostility on the part of the laboring classes than if it were the ordinary workingmen who were discharged. In either case, however, the industrial effect depends, of course, on the use that is made of these savings. If they go entirely to increase the salaries of the officers that remain, or perhaps even in dividends to the stockholders, the savings will be considered of less general industrial benefit than if they go, to a considerable degree at least, to the public in the way of reduced prices or to the common laborers in increased wages.

The experience so far would seem to show that labor has been made more efficient by combinations of capital; that, owing to the better organization, there is a larger average output per workman; and that the benefits of this increased efficiency have been divided between employers and workmen, the consumer receiving as yet relatively little benefit directly. The last two years, however, have been very exceptional, and it is as yet too soon to speak with certainty as to ultimate results. So far, at any rate, no damage to the laborers as a class seems to have resulted, either in the way of decreased wages, in spite of the classes mentioned before that have clearly been injured, or in the way of less steadiness of employment. In fact, it is probable, as regards the latter feature, that employment may be made, and probably has been made, somewhat more steady, in spite of the fact that in some instances individual plants have been closed, apparently with no good reason, excepting to shorten the output in order that prices may be kept up, or, worse yet, to affect the stock market. Such acts cannot be too severely condemned. Happily they are not common, and the evil can apparently be reached by legisla

tion.

Numerous charges to the effect that the combinations have shortened the output in different industries for the sake of putting up prices have, of course, been made, but a careful study of all the evidence presented in different investigations along this line seems to show that this contention is often not justified. It is doubtless true that in individual cases plants have been closed for the sake of cutting off some one rival; but, generally speaking, plants closed are either unfortunately situated or have not been skilfully managed.

If the power of the labor organizations keeps itself commensurate with that of the combinations of capital, it is probable that the tendency toward the combination of these two at the expense of the consumer will, for a time at least, increase. The plan suggested by Mr. E. P. Smith, of Birmingham, England, to avoid strikes and other difficulties between employers and their employees, is of this nature. His suggestion is that combinations complete enough to control in good part an entire industry be made among employers on the one hand and employees on the other; that a committee representing both classes fix the relations between them as re

gards wages, and to a considerable extent also as regards prices, it being understood that wages shall be fairly high and profits fairly large. In case, then, any new competitor of the capitalistic class comes into the business, by agreement of both parties prices would be cut to his customers, if necessary, and laborers in that line of industry would refuse to enter into his employ. On the other hand, if laborers in that industry were to increase beyond the normal demand of those in the combination, they would be opposed by the laborers already employed, and the employers in the organization would refuse to give them work. this plan has been proposed, and perhaps justified, both in theory and in practice, most efficiently by Mr. Smith, it is nevertheless true that in this country, in Chicago at any rate, similar combinations in one or two lines of in

While

dustry have been effected. The "forgotten man" in this case seems to be the consumer, inasmuch as the rate of profits and the rate of wages being both fixed by interested parties, although called fair, are likely to be higher than in many cases would be considered fair by the

consumer.