The Influence of Anti-Trust Legislation Upon the Technique of Industrial Organizations

• Published date: 01 January 1930
• DOI: 10.1177/000271623014700113
• Date: 01 January 1930
• Author: J. George Frederick
• Subject Matter: Articles

The Influence of Anti-Trust Legislation Upon the
Technique of Industrial Organizations
By J. GEORGE FREDERICK
President, The Business Bourse, New York City; Economic Counsellor;
Author, Modern Industrial Consolidation
&dquo; BIG business&dquo; in America in the in restraint of trade,&dquo; was the language
past half century may be com-
of Section I of the Act, with personal
pared to a species of huge sun-
punishment for violation. This great
flower which suddenly begins to grow
growth in the quiet little garden of
in a garden in which before there were
small plants was to be killed, root and
only small flowers. The gardeners
branch. The issue was squarely joined
are alarmed and try their best to clip
and a terrific struggle ensued for the
back, stunt and even to eradicate the
next dozen years, culminating in the
plant, and cry out that it will suffocate
hectic anti-trust conferences and nation-
the rest of the garden, but it persists
wide outcries of 1900 and 1901, passing
with ever increasing force and resource-
through the panic of 1893 and the free
fulness, although the frantic efforts of
silver craze on the way.
the gardeners do result in changing the
Never were stronger basic forces
sun-flower’s shape, color and form.
locked in battle. On the one side was
Industrial organizations assuredly
the human fear of all things large, as
have been &dquo;clipped back,&dquo; stunted
well as the justifiable fear of great
and twisted into new shapes by the gar-
power in the hands of ruthless individ-
deners-the legislators-but, equally
ualists. On the other side were the
obviously, the species has been so
economic visions of men with imag-
hardy, the soil so ripe and ready for
ination and the scientific spirit of the
them, that they have grown not only
day, but also the untamed greed and
in constantly increasing number but
unsocialized technique of men of power
also in constantly increasing size.
and ability.
Moreover, the plant has become more
useful and
ALTERATION IN MOTIVE
more popular, reacting upon
the rest of the garden in a manner
It was therefore inevitable that the
admittedly stimulative and salutary.
first great alteration in the technique
Even the gardeners have lost much of
of industrial organization coming as a
their fright and animosity; while the
result of the crude Sherman Law should
entire garden now takes on, more and
be an alteration in motive and business
more, a giant character.
morals. The truth of the matter is
that the motives and morals of small
FIRST EFFECTS
business had not been very high, and
The first effect of the famous Sher-
that when magnified by means of the
man Anti-Trust Law of 1890 was to
device of the corporation into large
shake &dquo;big business&dquo; to its roots, for
scale business their glaring defects and
this blow of the gardener’s axe was one
dangers became very evident. When a
of the most hard-hitting and unequivo-
small shoemaker is greedy, opportunis-
cal pieces of legislation ever enacted.
tic, ruthless and scheming it is not a
&dquo;Every contract, combination in the
matter for much public alarm. But
form of trust or otherwise, or conspiracy
when that shoemaker organizes a great
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many other shoemakers and hides be-
speaking, had to be enacted and per-
hind the anonymity of a corporation,
secutions threatened and begun under
it assuredly does become a public
it before the hard and brittle individ-
concern.
Moreover, this public con-
ualism of some innovators of large
cern
multiplies itself geometrically,
scale business could be broken open and
because unfamiliar size is alone a
a new leadership, under a new tech-
stimulator of fear. To so simple an
nique, substituted.
equation as this can be reduced the
&dquo; big business &dquo; alarm-which has by
NAPOLEONIC CONCEPT DISPLACED
no
means yet run its length. We had to
What was this new technique, com-
develop a new business ethic and tech-
ing with the beginning of the new
nique before we could endure the new
century? It had two aspects. Let us
leviathan of business.
examine, first, the introduction of the
line-and-staff conception of organi-
STANDARDS CHANGE
zation, displacing the &dquo;Napoleonic&dquo;
Large scale business, then, called for
conception of organization. I call the
a redefinition of business standards of
old methods of organization &dquo;Napole-
morality; or, more accurately, a re-
onic&dquo; because it is known that Na-
vision of the technique of fair play in
poleon granted little authority or dig-
terms of fiduciary responsibility, re-
nity to his inferiors, even tweaking the
lationship to employees, to competition
ears of the aides next to him, in full view
and to the public. It had to be recog-
of his army, to indicate how absolute a
nized that a kind of commercial age
monarch he was. Czarism would be
of adulthood had been reached, a dis-
an equally good name. It is the tech-
placement of the self-centeredness of
nique of the dictator, the uncom-
the child by the group consciousness
promising individualist. It reserves
of the adolescent, even if not yet the
to itself all authority, although it
mature man. Our American pioneer-
does not hesitate to impose heavy
ing, small scale business, built upon the
responsibility. It is accountable to
personal tradition of the Yankee trader
no one, and bases its decisions on
and peddler, prospector, settler and
the &dquo;personal genius&dquo; theory. It
pioneer had to be made over into more
uses a great deal of fear, favoritism
socialized instincts before we could
and &dquo;driving&dquo; in its employee re-
play with the dynamite and high ten-
lationship and is hostile to the special-
sion electricity of large scale business.
ist and the expert; and at the same
This was indeed a slow and painful
time is motivated by a personal power
process, for it had to do with m.en and
motive, if not also a personal profit
their points of view, their technique of
motive. Its prototype is well known
motivation and their conceptions of the
in all history, in the little kingdoms of
technique of organization. A right-
dukes and...