XVIII

James Riley's information, while causing Gorham some concern, was not

the matter which gave him the greatest anxiety during the days he passed

away from his office. The fact that Buckner was in town was not

altogether surprising, and his maudlin comments need not necessarily be

seriously considered. In addition to the commission he intrusted to

young Riley, Gorham also set in motion the wheels of his own

secret-service department, feeling confident that he would soon learn

all the facts. The conduct of the current business of the Companies,

complex as it had now become, appeared to be advancing steadily along

the lines which he himself had laid down for it, and he saw no reason to

think that his temporary absence was causing the slightest

disarrangement of the delicately adjusted machine upon which depended

the continued momentum of the business. This interested him

particularly, as he considered that the crowning point of his successful

formation of the Consolidated Companies would not be attained until his

actual contact with the business was not required.

But great enterprises do not expand themselves without the jealous

watchfulness of other competing or interested organizations, and

Gorham's daily reports contained an increasing number of references to

the efforts being made by these to harass the Consolidated Companies

with governmental interference. Senator Kenmore had by this time become

the chief spokesman of the Companies in Washington. Since his first

exhaustive examination into its affairs, his doubts as to the

possibility of conducting so mammoth a consolidation along conscientious

lines had been dissipated by the absolute straightness of the course

which Gorham steered. His influence had been exerted frequently in

behalf of the Companies, and each time the success which thus came to

the corporation carried in its wake advantages to the people, just as

Gorham had promised. The Senator had become one of Gorham's stanchest

admirers and supporters, and the president of the Consolidated Companies

in turn relied fully upon him. For several weeks Kenmore's

correspondence had suggested certain unrest in the Senate concerning

trusts and consolidations, so when Gorham received from him an urgent

summons to come to Washington at once, it left no room for doubt as to

the necessity which prompted its sending, and obliged him for the

present to abandon his idea of rest.

Gorham found Kenmore awaiting him in his office, and the Senator, with

characteristic directness, came to the point at once.

"Some one is starting up another scare on monopolies and combinations,

and is making the Consolidated Companies the target. Do you know

anything about it?"

"Does it come from New York State?" Gorham asked.

"Yes; the junior senator is at the head of it."

"He is a Tammany man."

"Yes."

"Brady made him, and now he is collecting his fee. The Consolidated

Companies hit Brady hard in the Manhattan Traction deal, you remember.

How much headway has it gained?"

"Enough to be dangerous; that's why I wrote as I did."

"It can't be dangerous while we have the people so strongly with us, but

it might become troublesome. Whom do you want me to see?"

"The President. I have made an appointment with him half an hour from

now. The Senator from New York has touched him a bit by demanding why he

is haling the other great corporations into court, and leaving the

Consolidated Companies to grow larger and stronger without opposition."

"Have you discussed the matter with the President?"

"No; I thought it best to let you present it as a whole. Come--we shall

find him ready for us."

The President received his callers in his office. He was a great

President, and as such realized, as some of his predecessors had not,

that the country of which he was the chief executive was constantly

outgrowing the legislation which had been wise at the time of its

enactment. He realized that as expansion comes conditions change, and

these changed conditions necessitate the exercise of a far-seeing and a

far-reaching judgment in administering the law in its spirit rather than

always in its letter; but the experience he had gained in the White

House had taught him the difficulties which beset his path in living up

to his convictions. Gorham had been frequently called to his councils

for advice upon various subjects, and the President was familiar with

the Consolidated Companies in conception and operation.

"We are accused of discrimination, Mr. Gorham," the President

explained, after the first greetings. "You and I have discussed the

Consolidated Companies upon various occasions; I have watched its

operations carefully, and I am free to say that my early apprehensions

have thus far proved groundless. I believe that I have acted

conscientiously in pushing the investigations and prosecutions against

those combinations which are really a menace to the country; but there

are some who disagree with me, and flaunt the Consolidated Companies in

my face as an evidence of insincerity on my part. I have asked you and

Senator Kenmore to meet me here this afternoon, to talk over the

question quite informally with the senator from New York and with the

Attorney-General."

"I appreciate the opportunity, Mr. President," Gorham replied, quietly.

"Then we are all ready for the discussion," said the President, touching

a button. "They are waiting--I will send for them."

Upon the arrival of the others, he repeated to them what he had said to

Gorham, and then, settling back in his chair, became an interested

listener, leaving Gorham and the senator from New York as the principal

disputants, with Kenmore and the Attorney-General joining in the

argument from time to time.

"Do I understand that Mr. Gorham speaks for the Administration in this

matter?" asked Senator Hunt, with some asperity.

"I speak for the Consolidated Companies, and for that alone," Gorham

replied, promptly.

"Then you will perhaps explain why your corporation, the largest trust

in existence to-day, is immune, while other trusts are being persecuted

to the extent of the Government's power."

"I am not authorized to answer any question which has to do with the

Government," Gorham continued; "but it may be that it is due to the same

reason that some of the 'other trusts' you mention are not as yet

incorporated as a part of the Consolidated Companies."

"Then they have been approached?" the Senator asked, quickly.

"Several of them have approached us; but they have thus far been

unwilling to accept the principles upon which the Consolidated Companies

is founded."

"You refer to its alleged benevolent aspect?"

"Yes, if you choose to call it that," Gorham replied, smiling. "We

prefer to call it reciprocity. If we receive favors in the form of

concessions from the people, we believe it to be not only fair, but also

sound business, to use these concessions not to bleed them, but for

their benefit."

"In other words, the Consolidated Companies is a good trust, and the

others are bad trusts?"

"Exactly."

"The Sherman Act, if I read it correctly, makes no distinction."

"But the Government does."

"And to that extent unlawfully discriminates," the Senator said,

emphatically.

"What would be the effect upon the country if the Sherman Act were

enforced literally?" Gorham asked.

"That is not for me to say."

"Perhaps the Attorney-General will give us his opinion," Gorham

persisted.

The Attorney-General had been listening to the discussion with much

interest.

"There can be but one answer to that question," he replied; "it would

produce an industrial reign of terror, and yet I am frank to say that,

from a legal standpoint, I believe Senator Hunt is correct in his

statement that the Government unlawfully discriminates in drawing any

distinction between good and bad trusts; but let me say further, that it

is my definite opinion that the Sherman Act, as it now stands, is a

menace to the country. That Act, literally interpreted, would break up

every trust into smaller corporations. It is based on a hasty inference

that great consolidations are of necessity monopolies. Even if we

disintegrated a great corporation like the Consolidated Companies, for

instance, into a large number of smaller corporations, we should not

have solved the problem. There would always be methods by which a common

understanding could be reached, and, in the disintegration, producing

concerns would lose much of the efficiency in serving the public which

has already been demonstrated by the Consolidated Companies. I have

answered your question frankly, giving you my opinion from a legal and

also from a personal standpoint."

"Was there not a time," Kenmore asked, "when the public in England was

as much afraid of the formation of business partnerships as our public

has been afraid of trusts?"

"Yes," the Attorney-General replied; "our own trust legislation is

nothing more than a modern repetition of certain laws which centuries

ago were in force in England, and were designed to prevent the formation

of co-partnerships in business."

"Yet partnerships were formed in spite of the law, were they not?"

insisted Kenmore, "and it was discovered that the prices of goods did

not go up."

"We are digressing," the senator from New York interrupted. "As I

understand it, we are concerned with the present rather than the past."

"I am glad you realize that," Gorham responded, "for it has a

considerable bearing upon the situation. In the past, the public has

been opposed to the organization of industry, and properly so, since it

has meant the secret rebates, the limiting of output, the 'fake'

independent companies, and the stealing of competitors' secrets; but

to-day there is a changed public sentiment, and perhaps I may be

pardoned if I say that I believe the Consolidated Companies has played

its part in bringing this about. The magazines have turned from

muckraking to articles instructing their readers in finance; the

anti-trust orator is speaking to empty seats; and intelligent lawmakers,

who once considered 'corporation' as a synonym for 'crime,' now

carefully distinguish between the honest and the dishonest organization.

The Administration is elected by the people to exercise the will of the

people, and it is the will of the people to-day that honest combinations

be permitted, in order to reduce the cost of the necessities of life."

"It is a conflict between a literal interpretation of the law and

industrial progress," added Senator Kenmore, "and the law as it stands

does not appeal to justice nor does it express American public

sentiment. Bigness, in commerce and industry, has now come to be

associated with progress. Production on a large scale is justified by

its economy and efficiency when brought about through the free play of

economic forces. It would be just as ridiculous to oppose the

ever-increasing demand for machinery."

"To what point is all this leading us?" asked Senator Hunt, impatiently.

"These one-sided arguments may be interesting to those who agree with

them, but my question still remains unanswered: why does not the

Government enforce the law equally against one offender as against

another, since by that law both are offenders?"

"Senator Kenmore, the Attorney-General, and I have endeavored to answer

your question to the best of our ability," Gorham replied, "and I, for

one, regret to have failed in my endeavor. We all agree, I am sure, that

the Government has a plain duty to perform, but we do not understand

that duty to be the prevention of honest and beneficial combination. The

Consolidated Companies has led the way in seeking publicity and

preserving equality, and in insuring public participation in the

benefits accruing from the combinations which it effects. If other

trusts do likewise, I have no doubt that they will be as 'immune' as you

have been pleased to call the Consolidated Companies."

"Are you prepared to deny that, in spite of this 'benevolent' aspect of

which you boast, the profits of your corporation are greater than those

of any trust in the world?"

"I have never made the comparative analysis which would be required to

answer your question," Gorham replied; "but I do say without fear of

contradiction that no organization ever gave back to the people so large

a percentage of its earnings. It may interest Senator Hunt if I outline

the principles upon which the Consolidated Companies was conceived."

Gorham's voice was a strong asset. Its low, clear tones carried without

apparent effort, and there was a firmness and sincerity in every spoken

word which always secured attentive hearing.

"The public," he said, "has long since become accustomed to mergers and

consolidations, and has naturally associated with them the strangling of

competition and the creation and enjoyment, on the part of a few, of the

conditions of monopoly. But business exploits such as these are, in a

measure, things of the past, and cannot be repeated. Great industries

can no longer hem in their rivals, or stifle and cripple them to the

extent that fields, which by natural law are free to all, become the

field of one. The people have at last risen against this, and

consolidations will only be tolerated when confidence is established

that the masses will be benefited. When the scheme of the Consolidated

Companies first became known, it was bitterly opposed by the public, who

saw in it nothing other than a new and more gigantic octopus, to feed

upon its very life-blood.

"From the very beginning, both from principle and from what I consider

to be sound business sense, I have endeavored by word and act to

convince the public that the Consolidated Companies intended to serve

its best interests, and our unprecedented success is the best evidence I

could offer that I have, at least in part, succeeded. Our stockholders

are men in high positions of trust, and they cannot continue to deliver

contracts to us unless we make good our promises to execute those

concessions to the advantage of the people. To-day, wherever the

Consolidated Companies is known, the public looks with approval upon

favors shown us by its officials, and this in itself is an asset to our

corporation of untold value. Bread, coffee, and other daily necessities

are now obtainable cheaper than ever before in the history of the world,

because the Consolidated Companies has made them so. Transportation

charges, wherever we have obtained the franchises, have been reduced

twenty per cent.; lighting costs, both gas and electric, are fifteen per

cent. cheaper in those cities which we control; government loans placed

through us are from one to two per cent. lower, thus substantially

reducing the rate of taxation. We have prevented war in at least two

instances, and thus demonstrated the possibilities of our power in

preserving universal peace. For the Government to interfere with our

work because of a technicality would result in an international

calamity."

"Are you now speaking for the Administration, Mr. Gorham?"

"Now, I am speaking as a private citizen."

"If the Attorney-General agrees with me," added the President, joining

in the discussion for the first time, "I think I may say that Mr.

Gorham's views as a private citizen are shared by the Administration; on

the other hand, I agree with the Attorney-General in the position which

he takes regarding the conflict between the legal and practical bearing

of the Sherman Act. There is only one way to solve the problem, and that

is to modify that Act so that a distinction can be made between those

consolidations which advance the country's prosperity, and those which

are operated solely for personal gain to the detriment of all except the

few directly interested. You may report back to your constituents,

Senator Hunt, that the Administration will refrain from further action

in this matter for the present, and will direct its efforts toward

securing amendments to the Sherman Act which shall make it possible to

draw a distinction between good and bad trusts, as you call them,

without discrimination."

The President rose, signifying that the conference was ended, and Gorham

left the White House in company with Senator Kenmore and the

Attorney-General. The latter wore a serious expression upon his face.

"The President took the only logical position," he remarked to his

companions; "but I tell you, gentlemen, that there is not the slightest

possibility of passing any bill through either house which can

accomplish the results we all desire."

"In another twelve months," observed Gorham, "granting that the

Companies continues to make history as it has, the people themselves

will prevent their representatives from interfering."

"Provided nothing occurs to raise a doubt as to the integrity of the

Companies' motives," added the Attorney-General, suggestively.

"How could such a doubt be raised?" Gorham was incredulous.

"By having some official in your corporation act in defiance of the

principles which you have upheld."

"We have a five-years' record to fall back upon."

"Yes; but as the Companies grows larger the risk increases."

"And the careful surveillance increases in like ratio."

"There are human limitations, Mr. Gorham," laughed the Attorney-General.