ONE CAUSE OF THE HIGH COST OF LIVING
In one of their fireside talks, Selwyn told Dru that a potential weapon
in the hands of those who had selfish purposes to subserve, was the long
and confusing ballot.
"Whenever a change is suggested by which it can be shortened, and the
candidates brought within easy review of the electorate, the objection
is always raised," said Selwyn, "that the rights of the people are being
invaded.
"'Let the people rule,' is the cry," he said, "and the unthinking many
believing that democratic government is being threatened, demand that
they be permitted to vote for every petty officer.
"Of course quite the reverse is true," continued Selwyn, "for when the
ballot is filled with names of candidates running for general and local
offices, there is, besides the confusion, the usual trading. As a rule,
interest centers on the local man, and there is less scrutiny of those
candidates seeking the more important offices."
"While I had already made up my mind," said Dru, "as to the short ballot
and a direct accountability to the people, I am glad to have you
confirm the correctness of my views."
"You may take my word for it, General Dru, that the interests also
desire large bodies of law makers instead of few. You may perhaps recall
how vigorously they opposed the commission form of government for
cities.
"Under the old system when there was a large council, no one was
responsible. If a citizen had a grievance, and complained to his
councilman, he was perhaps truthfully told that he was not to blame. He
was sent from one member of the city government to the other, and unable
to obtain relief, in sheer desperation, he gave up hope and abandoned
his effort for justice. But under the commission form of government,
none of the officials can shirk responsibility. Each is in charge of a
department, and if there is inefficiency, it is easy to place the blame
where it properly belongs.
"Under such a system the administration of public affairs becomes at
once, simple, direct and business-like. If any outside corrupt
influences seek to creep in, they are easy of detection and the
punishment can be made swift and certain."
"I want to thank you again, Senator Selwyn, for the help you have been
to me in giving me the benefit of your ripe experience in public
affairs," said Dru, "and there is another phase of the subject that I
would like to discuss with you. I have thought long and seriously how to
overcome the fixing of prices by individuals and corporations, and how
the people may be protected from that form of robbery.
"When there is a monopoly or trust, it is easy to locate the offense,
but it is a different proposition when one must needs deal with a large
number of corporations and individuals, who, under the guise of
competition, have an understanding, both as to prices and territory to
be served.
"For instance, the coal dealers, at the beginning of winter, announce a
fixed price for coal. If there are fifty of them and all are approached,
not one of them will vary his quotation from the other forty-nine. If
he should do so, the coal operators would be informed and the offending
dealer would find, by some pretext or another, his supply cut off.
"We see the same condition regarding large supply and manufacturing
concerns which cover the country with their very essential products. A
keen rivalry is apparent, and competitive bids in sealed envelopes are
made when requested, but as a matter of fact, we know that there is no
competition. Can you give me any information upon this matter?"
"There are many and devious ways by which the law can be evaded and by
which the despoliation of the public may be accomplished," said Selwyn.
"The representatives of those large business concerns meet and a map of
the United States is spread out before them. This map is regarded by
them very much as if it were a huge pie that is to be divided according
to the capacity of each to absorb and digest his share. The territory is
not squared off, that is, taking in whole sections of contiguous
country, but in a much more subtle way, so that the delusion of
competition may be undisturbed. When several of these concerns are
requested to make prices, they readily comply and seem eager for the
order. The delusion extends even to their agents, who are as innocent as
the would-be purchaser of the real conditions, and are doing their
utmost to obtain the business. The concern in whose assigned territory
the business originates, makes the price and informs its supposed rivals
of its bid, so that they may each make one slightly higher."
"Which goes to show," said Dru, "how easy it is to exploit the public
when there is harmony among the exploiters. There seems to me to be two
evils involved in this problem, Senator Selwyn, one is the undue cost to
the people, and the other, but lesser, evil, is the protection of
incompetency.
"It is not the survival of the fittest, but an excess of profits, that
enables the incompetent to live and thrive."
After a long and exhaustive study of this problem, the Administrator
directed his legal advisers to incorporate his views into law.
No individual as such, was to be permitted to deal in what might be
termed products of the natural resources of the country, unless he
subjected himself to all the publicity and penalties that would accrue
to a corporation, under the new corporate regulations.
Corporations, argued Dru, could be dealt with under the new laws in a
way that, while fair to them, would protect the public. In the future,
he reminded his commission, there would be upon the directorates a
representative of either the National, State, or Municipal governments,
and the books, and every transaction, would be open to the public. This
would apply to both the owner of the raw material, be it mine, forest,
or what not, as well as to the corporation or individual who distributed
the marketable product.
It was Dru's idea that public opinion was to be invoked to aid in the
task, and district attorneys and grand juries, throughout the country,
were to be admonished to do their duty. If there was a fixity of prices
in any commodity or product, or even approximately so, he declared, it
would be prima facie evidence of a combination.
In this way, the Administrator thought the evil of pools and trust
agreements could be eradicated, and a healthful competition, content
with reasonable profits, established. If a single corporation, by its
extreme efficiency, or from unusual conditions, should constitute a
monopoly so that there was practically no competition, then it would be
necessary, he thought, for the Government to fix a price reasonable to
all interests involved.
Therefore it was not intended to put a limit on the size or the
comprehensiveness of any corporation, further than that it should not
stifle competition, except by greater efficiency in production and
distribution. If this should happen, then the people and the Government
would be protected by publicity, by their representative on the board
of directors and by the fixing of prices, if necessary.
It had been shown by the career of one of the greatest industrial
combinations that the world has yet known, that there was a limit where
size and inefficiency met. The only way that this corporation could
maintain its lead was through the devious paths of relentless monopoly.
Dru wanted America to contend for its share of the world's trade, and to
enable it to accomplish this, he favored giving business the widest
latitude consistent with protection of the people.
When he assumed control of the Government, one of the many absurdities
of the American economic system was the practical inhibition of a
merchant marine. While the country was second to none in the value and
quantity of production, yet its laws were so framed that it was
dependent upon other nations for its transportation by sea; and its
carrying trade was in no way commensurate with the dignity of the coast
line and with the power and wealth of the Nation.