manufactures from eighty-five to ninety different sizes and kinds of goods. If these goods were manufactured in one or two establishments, there would be frequent changing of the rolling machinery in order to fill any one large order which called for many different sizes. Under the present circumstances, a large order calling for different classes of goods may be distributed among the different mills, each one adapted for the manufacture of a particular class. In this way changes of the rolls are largely avoided, and the delays are obviated which would result in large waste of time and energy, provided the competitive system, or the system of small independent mills, were in vogue. Mr. Guthrie's opinion is that this saving alone amounts to from a dollar to a dollar and a half per ton in manufacture. leather combinations find that they have avoided similar wastes by manufacturing in one establishment certain special grades of shoes to which special kinds of leather can be sent, instead of having each establishment separate the leather for itself and manufacture many different grades of shoes. This waste of competition-or if one prefers in this case to say of subdivision

The

which can be avoided by combination, of course varies largely with the different kinds of manufacture, but in some the waste is doubtless very great. The saving in a large establishment does not of necessity imply monopoly.

The head of one of the largest stores in the country was not long since showing a friend through the establishment. To inquiries as to wages of different employees, the reply was: "This man receives $10,000 per year; that one receives a salary of $15,000 per year," and so on, as the heads of various important departments were pointed out. When the friend remarked that it must be difficult to pay dividends if such enormous salaries were paid to so many men, the manager replied: "There is nothing so cheap as brains; they must be had at any price." Every person who deals with large affairs in any profession or trade or walk in life recognizes the fact that nothing is so rare as excellence. Whether the work be manufacturing, or transportation, or merchandizing, or teaching, or law, the fact is the same. The first-class man is exceedingly rare, and is cheap at almost any price. The great merchant princes, like Stewart, or Field, or Wana

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

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