maker; the great manufacturers, like Carnegie, ^ or Rockefeller, or Havemeyer, are possible under present circumstances because such talent for managing, whether for the public good or ill, is rare; and when it is found, the opportunities for its employment readily come, as they do to the great lawyer or preacher. Without ✅ ignoring the fact that the competitive system plays a noble part often in selecting for industrial society the great leader, it is still true that one of the chief wastes of competition is found in the fact that the separate establishments are mostly in the hands of mediocre men, who, unable to effect the savings that come from the most skilful organization or from a judicious forecast of the market, lose money for their stockholders without any saving to consumers from low prices.

Great skill in management is by no means, as many seem to think, the mere taking advantage of an opportunity to cheat a customer or hoodwink a competitor; but it frequently, if not generally, results in an absolute saving of energy which comes from the more skilful organization of labor, and adaptation of ways and means to ends. The combination, bringing to

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gether numerous establishments of the same kind, is enabled to select the most skilful men to place in charge, and thus practically an entire industry can be managed with the same skill as a single establishment. While it is of course true that one man cannot give his personal attention to the details of a very large business, so that at times, doubtless, in the combination there is a certain waste that comes from lack of detailed inspection by the chief owner, it is nevertheless true that this waste is in most cases

comparatively little. The man of really great executive ability knows so well how to organize his business that men of inferior capacity working under his system, even though only upon salaries, are enabled to do better and more careful work by far than the same men in an independent position, where they are unable to consult to advantage men more skilled than they. One chief gift of a great executive is the power to select and direct subordinates. The skill of Grant as a general was shown not more in the planning of battles than in the selection of his chief commanders, and in his power to discern wherein they could be trusted, so as thus to inspire each to his best efforts.

The same skill is shown by a great captain of industry.

This advantage of management by the best talent is a matter also of the proper distribution of talent. Some man in his independent establishment may have been peculiarly successful on account of his skill as a salesman; another, on account of his organizing ability; a third, on account of his special technical knowledge, and so on. If these various competing establishments are united into one, to each man can be given the department for which he is peculiarly adapted, and in that way the joint establishment gets the advantage of the peculiar skill of each.

Manufacturing establishments are sometimes embarrassed by the difficulty of securing a proper supply of raw material at the exact time when it is needed, and in proper quantities and qualities. On the other hand, miners or other producers of raw material are also frequently embarrassed in finding a sure market for their product. In consequence of these facts, many combinations like the Federal Steel Company (the organization of which with its peculiarities is explained in detail in a later chapter) have

been made, not of those who are competitors in the same line of manufacture, but rather between the producers of raw material and the manufacturers of the finished product, in order that these requirements of demand and supply may be readily met, and the course of production from the raw material through to the highest finished product may be carried on without delay or unnecessary friction.

A very large establishment often finds it profitable to manufacture some by-products from its waste material, which, owing to the extra capital needed, or to an insufficient quantity of waste material, its smaller rival must either lose entirely or part with at a disadvantage. The largest oil refineries at times make as much profit from by-products as from their illuminating oil.

It would seem that if there is any real economic function of combination of capital, whether it has attained monopolistic power or not, it is this: saving the various wastes of competition, in great part by providing for the direction of industrial energy to the best advantage. Under wastes of competition may be understood also those of subdivision in production or production on a small scale; under

combination also mere aggregation of capital. But these separate meanings should be distinguished, as is done later. In this way only can it be made possible for the general public to secure articles of consumption at an absolutely low price on the basis of a low cost of manufacture. How far combinations thus far have permitted the public to gain these advantages, and how far they have themselves selfishly taken advantage of their superior productive power to the detriment of the public, will be considered elsewhere.