The Age of Mergers

109

all these show the drift which has become a rush
toward consolidation.
These consolidations, existing and proposed, are
to effect economies and to increase profits. The subsidiary
 companies of the old Standard Oil Company,
which was dissolved in 1911 by decree of the Federal
Supreme Court, have grown into a small group of
billion-dollar companies. The New Jersey and California
 Standard Oil have each securities exceeding a
billion in value, while those of the Indiana company
are close to this sum, and the Standard of New York
has risen to $660,000,000 in market value. The
splitting up of the old company merely produced
giant offspring, with dividends aggregating, during
1928, nearly $220,000,000 for the thirty components.

What will the governmental authorities do with
all these lusty “bigger and better” mergers, which
operate sometimes contrary to the spirit if not to the
letter of the anti-trust laws?
That depends largely on what they do with themselves.
 No doubt holding companies are economically
 valuable in simplifying the financial structures.
They introduce the immensely valuable insurance feature
 of diversification. The problem is: Can monopolies
 and unreasonable restraints of trade be prevented
 while these modern aggregations of capital
use their facilities to gather business statistics, guard
against inflated inventories. standardize their products,
 and arrive at price agreements that prevent
losses formerly sustained by cutthroat competition ?