Consolidation

“ What are the effects of subletting on the accumulation and introduction of capital, and also on population?—It puts an absolute stop to the accumulation of capital, in the same proportion that consolidation assists its accumulation; and, if carried to any extent, the ground ultimately produces little more than food for the rapidly accumulating population to be fed out of it. ”

“ Toward this result strong economic forces are working. Consolidation has many technical advantages: it saves time, reduces the unit cost of administration and of handling goods, gives better use of the rolling stock and of the terminal facilities of the railroads, and insures continuous train service. It has the advantages of other large production and the possible economies of the trusts. ”

“ That generally the effect of consolidation, as distinguished from a union by merger of one company into another, is to work a dissolution of the companies consolidating, and to create a new corporation out of the elements of the former, is asserted in many cases, and it seems to be a necessary result. ”

“ But it is not commonly evident at the outset what are the most favorable terms that he can get in his dealings with other business men whose interests are touched by the proposed consolidation, or who are ambitious to effect some similar consolidation of the same or of competing industrial elements for their own profit. It rarely happens that the interests of the business men whom the prospective consolidation touches all converge to a coalition on the same basis and under the same management. ”

“ From what has been said earlier, it is evident that certain classes of industries, especially those that require the investment of fixed capital to large amounts, are especially adapted for combination. Very little tendency towards consolidation is found in the farming industry, and, relatively speaking, little in industries that require the investment of but small capital. It is perhaps, however, not too much to say that in nearly all lines of industry which from their nature are adapted for consolidation combinations more or less firm have been made during the last few years. ”

“ Effects of a General and Strong Consolidation.—With all the lines in this country and Canada in a strong consolidation, the advance of rates to, or well toward, the limit set by the principle of natural place value created would inevitably come unless the power of the state should in some way prevent it. ”

“ And it should also be added, in order to a passably complete account of the undertaker's function, that he not only can and does effect economising coördinations of a large scope, but he also can and does at times inhibit the process of consolidation and coördination. It happens so frequently that it might fairly be said to be the common run that business interests and undertaker's maneuvers delay consolidation, combination, coördination, for some appreciable time after they have become patently advisable on industrial grounds. ”

“ But if a consolidation of the States into one government be an event so justly to be avoided, it is not less to be desired, on the other hand, that a consolidation should prevail in their interests and affections ”

“ The circumstances which condition the work of consolidation in industry and which decide whether a given move in the direction of a closer and wider organization of industrial processes will be practicable and will result in economies of production, -- these circumstances are of a mechanical nature. They are facts of the comprehensive machine process. The conditions favorable to industrial consolidation on these grounds are not created by the business men. ”

“ And this consolidation, it is plain, is only effected by sweeping out or swallowing up smaller enterprises. This is the logical and perhaps inevitable result of our modern social system—in which wealth and "greed of gain" is held to be the chief end of life. ”

“ Business is consolidated because consolidation pays—not primarily, through the increase of prices, but through the greater stability, the lessened costs, and the growing security that has accompanied the abolition of competition.
Again the forces of social organization have triumphed in the face of an almost universal opposition. American business men practiced competition until they found that coöperation was the only possible means of conducting large affairs. ”

“ Consolidation and amalgamation are the necessary and unavoidable tendencies of modern business. As surely as the primitive partnership succeeded individual effort and as, later, corporations were created to enlarge the sphere of partnerships, so is it certain that the industrial units which will fight for control of trade in the much larger markets of the modern world will represent vastly larger aggregations of capital than (except in extraordinary and generally state-aided institutions) were dreamed of fifty years ago. ”

“ Such signs point to the climax of consolidation. And yet, even the rise of the bankers is not the only or the surest indication that centralization is culminating. The destruction, wrought by accelerated movement, of the less tenacious organisms, is more evident below than above, is more striking in the advance of cheap labour, than in the evolution of the financier. ”

“ Baha’is from India, Pakistan and Burma are eligible for your Asian Teaching Committee.
Consolidation can mean the establishment of the institutions you enumerate, but it is not essential at present; to increase the assemblies and groups, and bring in new believers, is the most important part of consolidation; as the plan unfolds, he will have to see what other things are really essential and call your attention to them. ”

“ Social consolidation is, however, not a simple problem, for social consolidation implies an equivalent capacity for administration. I take it to be an axiom, that perfection in administration must be commensurate to the bulk and momentum of the mass to be administered, otherwise the centrifugal will overcome the centripetal force, and the mass will disintegrate. In other words, civilization would dissolve. ”

“ The great, at the present stage of development perhaps the greatest, opportunity for saving by consolidation, in the common run of cases, is afforded by the ubiquitous and in a sense excessive presence of business enterprise in the economic system. ”

“ But it is not by the consolidation, or concentration of powers, but by their distribution, that good government is effected. ”

“ Early in the last century the evolution was completed by the final consolidation of the entire capital of the nation. The industry and commerce of the country, ceasing to be conducted by a set of irresponsible corporations and syndicates of private persons at their caprice and for their profit, were entrusted to a single syndicate representing the people, to be conducted for the common profit. ”

“ Giving the matter in parenthesis the most liberal construction, it is only when there is an acquisition of substantially all the property of another corporation in connection with a merger or consolidation that a reorganization takes place. ”

“ But even where no effective monopoly is achieved, a coalition of this kind has a salutary effect, at least temporarily. In almost all cases a consolidation of this kind is able to effect considerable economies in the cost of production, as pointed out in an earlier chapter, and such economies bring relief through enabling the combined industrial ventures to earn a reasonable profit at a lower price for their product than before. ”

“ Another argument may eventually arise in favor of consolidation. The contingent gift at the late session, of fifty thousand dollars, for books and apparatus, shows a sense in the legislature 354 that those objects are still to be provided. If we fail in obtaining that sum, they will feel an incumbency to provide it otherwise. What so ready as the derelict capital of William and Mary, and the large library they uselessly possess? ”

“ Looking thus at the legislative intent appearing in the consolidation act, we are constrained to the conclusion that a new corporation was created by the consolidation effected thereunder in the place and in lieu of the two companies previously existing, and that whatever franchises, immunities, or privileges it possesses, it holds them solely by virtue of the grant that act made. ”

“ Fifty years before, the consolidation of the industries of the country under national control would have seemed a very daring experiment to the most sanguine. But by a series of object lessons, seen and studied by all men, the great corporations had taught the people an entirely new set of ideas on this subject. ”

“ This coördination of functions, and consequent mutual dependence of parts, conduce to consolidation of the group as an organic whole. Gradually it becomes impracticable for any member to carry on his life by himself, deprived not only of the family aid and protection, but of the food and clothing yielded by the domesticated animals. So that the industrial arrangements conspire with the governmental arrangements to produce a well-compacted aggregate, internally coherent and externally marked off definitely from other aggregates. ”

“ SCOTLAND. Centralization tends everywhere to the exhaustion of the land, and to its consolidation in fewer hands, and with every step in this direction man becomes less and less free to determine for whom he will work and what shall be his reward. ”

“ Consolidation of Partnerships.—There are various reasons why the consolidation of partnerships may be of mutual advantage to the individual firms concerned. When two or more firms consolidate, the competition which formerly existed between them is eliminated and co-operation takes its place. ”

“ Whether such be the effect or not must depend upon the statute under which the consolidation takes place, and of the intention therein manifested. If, in the statute, there be no words of grant of corporate powers, it is difficult to see how a new corporation is created. ”

“ We believe the main cause is the wholesale consolidation which has taken place in American industry. A huge organization is too clumsy to take up the development of an original idea. With the market closely controlled and profits certain by following standard methods, those who control our trusts do not want the bother of developing anything new. ”

“ Oppressive and intolerable as was the regime of the great consolidations of capital, even its victims, while they cursed it, were forced to admit the prodigious increase of efficiency which had been imparted to the national industries, the vast economies effected by concentration of management and unity of organization, and to confess that since the new system had taken the place of the old the wealth of the world had increased at a rate before undreamed of. ”

“ It is evident that most of these reasons apply to a single local factory with far greater force than to a federation of locally scattered plants. It was once believed that the growing disadvantages of large industry would set an early limit to consolidation. ”

“ With the growth of national uniformity went also the concentration of control. As the field of competition widened, the number of possible winners declined. Men measured strength, not only in their town or State, but across the continent, and the handful of leaders used the facilities of communication as the basis for the further expansion of their industries. Business was extended because it was possible and because it was thought to pay.
Many of the economies of consolidation were so obvious as to need no argument. ”

“ To the advantages derived from consolidation would accrue those arising from administration by the state, which would look to securing a working advantageous to the whole public, while to private companies the advantage of stockholders would always be sought first. ”

“ A division of territory into a number of specific groups, each absolutely monopolized by one interest, seems to be the only logical outcome of the consolidations which have been already accomplished. ... ”

“ While the plant value and the past earnings of each of the companies may be considered in allotting them their respective interests, these are not a safe guide as to future earnings. In the case of partnerships especially and often in the case of corporations, there is a loss of valuable good-will. It is generally held that the benefits of consolidation greatly overbalance these disadvantages. ”

“ This will tend to put a stop to the securing of inordinate profits by favored individuals at the expense whether of the general public, the stockholders, or the wageworkers. Our effort should be not so much to prevent consolidation as such, but so to supervise and control it as to see that it results in no harm to the people. ”

“ Our government is now taking so steady a course as to show by what road it will pass to destruction, to-wit: by consolidation first, and then corruption, its necessary consequence. ”

“ New bonds are exchanged for the old bonds or preferred stock of the constituent companies, while the common is exchanged for the corresponding issues in the merged corporations. The balance is used for the purpose of paying organization expenses and the fees of the promoters, and to provide working capital for the consolidation. The ratio and the medium will depend to a great extent upon the nature of the business, the attitude of those who are interested in the merger corporations, and the optimism or hopes of the promoters. ”