the smelters down and then settle with your men on better terms than if only one or two were shut down?'

"A. "I think so.'

"Q. If a combination owning say, seven smelters in this state, as you say your combination does own, all being under this one great power, could shut one of them down, say, at Leadville, and smelt the ores either here [Denver] or in Omaha or Durango, would not that make the men very timid about building homes and feeling that they were, in a way, a part of your institution?'

"A. "I guess that is so.'

"Q. 'Don't you think it would make them less liable to build homes, and that takes the confidence out of your men ?' "A. "I think that has been the tendency,

yes.""

What does the reader think of lodging in a private corporation the tyrannical power here frankly confessed by Governor Grant to undermine the home-making spirit of our industrious toilers and to coerce them into submission at one point by starvation, while the trust uses other plants to still grind out its profits?

Yet along with the other dangers from this undemocratic power so lodged, lurks also the complement of the "sympathetic strike." Note the sympathetic maneuver by the trust in diverting work from the plant involved in strike to another plant entirely free from such embroglio, in order to bring the trust success at the former by the help so given by the latter.

We shall see the tremendous operation of this dangerous power in the strikes to be examined later. This power was also in practical operation July 12, 1899, at the very moment Governor Grant was giving his testimony referred to above. The first eight-hour law was then being resisted by the Smelter-Trust and the smeltermen struck. The strike first began in Durango, as mentioned above, and finally spread to every trust-smelter in the state. The Guggenheims had not then been fished for with the proper bait, and

they were lauded to the skies for recognizing and conforming to the law, and for giving safe asylum to the men who wished another master than the trust.

The strike was brief, however, as the supreme court declared the act unconstitutional and the men, humbled though they were, but law-abiding withal, went back to work.

The Congressional Industrial Commission brought our two interesting phases of this eight-hour struggle that must not be overlooked.

First. The Smelter-Trust was eager for the fray and determined to put its newly acquired industrial power to instant test and to try out issues with the smeltermen and miners from the very start.*

Second. But indeed as part of the accomplishment of the first, the SmelterTrust refused to recognize the miners' union. Itself a union, just starting off on its industrial career, still it imperiously spurned to treat with the union of the miners. And this, too, in the face of the above admission by Governor Grant that the same cause that drove the smelters into combination operated equally upon the smeltermen and the miners. He might have added that its operation was more than equal, for when the "captains of industry" fled from unnatural competition, it was merely to save their profits, but the miners in their fleeing were trying to save their homes and their lives. We quote from Governor Grant again:†

"Q. 'Now, you spoke about the recognition of the union of your workmen. I understood you to state that you declined to treat with their committees ?'

"A. 'Yes.'

"Q. 'Did you decline to treat with the committees because they were representing a union, or because the action of that union in this respect is not in keeping with a spirit of fairness?'

*Testimony of Governor Grant, Report Industrial Com., Vol. 12, pp. 207-8.

† Report Industrial Com., Vol. 12, p. 207.

Here again we have the ethics of the trust. Not what the union then was doing, but what it might do in the future, in cutting down profits and dictating to the trusts, was the reason it was spurned. If this reason is good, then the same fear for the future that the people have of all the trusts would justify their instant extermination. Governor Grant's idea of the labor union and the trust is the familiar idea of the lion and the lamb lying down together, but always with the lamb inside of the lion. Here is his euphemistic way of expressing this lion and lamb episode in speaking of labor organizations:*

"If they operate wisely and judicially and are moderate in their dealings with the corporations, I think the organization a good thing. I have no opposition to it unless it threatens my business."

Here is the economic struggle exposed in all its rawness. By one, too, who was at the time chairman of the "operating committee" of the trust in Colorado. By one, too, who by reason of his reputed

fairness had been a member of the first board of arbitration in the state. Yet who now, when this board was appealed to by the miners, refused to arbitrate, and when the board went ahead he appeared

with his witnesses and counsel and submitted his evidence. But when the board made its findings and recommendations here is the curt reply he sent :

*Report Industrial Com., Vol. 12, pp. 205–6.

"The operating committee, after giving due consideration to the document, decline to accept the findings of the board as binding upon this company."†

Such was the conduct, too, of one who was so esteemed by his fellow-citizens. that in 1886 he was elected governor of the state upon the Democratic ticket. He publicly announced himself an instantly converted Republican, however, in 1899 when Governor Thomas sent to the legislature the message on "Trusts," quoted from above, and especially directed at the Smelter-Trust then forming. Thus we see, too, how economics mould the political convictions of "captains of industry" as well as their ethics. It is easy to see now what a brusque adversary the Smelter-Trust and its allied mineowners invite. Such adversary must certainly be lusty, alert, wary and determined. How well the Western Federation of Miners meets that condition we shall see further on.

CONTROLLING ORIGINAL SOURCES OF SUPPLY.

The Smelter-Trust does not own all the

mines in Colorado and the other mining states in which it operates, but it certainly and through its subsidiary companies controls the chief producers among them, actually owns some of the most important. In Colorado it is developing the "Silver Lake" mines near Silverton on a scale of great magnitude. Contracts are made with certain mine-owners for their entire output of ores for various periods of time,

four, six and eight months or a year‡ or longer; and this method of dealing naturally brings the big mine-owners and the trust into close business relations, and puts a barrier between such owners and the independent smelter seeking to secure a foothold. Except for some particularly desirable ore used in fluxing or otherwise, the small mine-owner with but a

+Report Bureau of Labor, 1899-1900, p. 181.

Governor Grant's testimony, Report Industrial Com., Vol. 12, p. 194.

meager or uncertain output is of little interest to the trust. The big ones, however, are as good as partners to the trust, and, as we have seen above, they are special "pets" of our tax system and of course control the Mine Owners' Asso

ciation.

The alliance between this association and the trust is so complete that they are practically one in all legislative, indus

trial or strike matters affecting the interest of either. Again, to enable the trust to monopolize the sources of ore-supply, it or its subsidiary companies have experienced experts constantly on the watch for the first hopeful signs of a new miningcamp or a new producing mine. Even the function of the time-honored prospector is being fast curtailed by the trust, and it has its own experts in search for promising mining-ground on which to make new locations.

The Standard Oil and other interests are also systematically engaged in the same sort of enterprise, and in this country, South America, Mexico and elsewhere, they already own the largest and best mines to be found or bought. Mr. Moody says there is a Standard Oil domination in the Smelter-Trust,* which must

mean that Rockefeller and the Guggen

heims have close financial interests. When these interests are finally openly united, as in time they are bound to be, the Smelter-Trust will then actually own all the great gold, lead, silver, copper and zinc-mines in the western world. Indeed, the whole face of the once familiar form of the mining industry for precious metals is already seamed and seared by the trust, and the best things in any mining-camp, new or old, are soon in its hands or in the hands of its trusted friends.

In this way the Smelter-Trust effectively controls all the original sources of ore-supply, not only in Colorado but in all the mining states of the West; also in the lead-mines of Missouri and in South America and Mexico.

*The Truth About the Trusts, p. 45.

Among other reasons given above by Governor Grant why the Smelter-Trust was created, he informs us that "the causes inducing combination in all cases are to avoid excessive and ruinous com

petition, and to enable the capitalist to get a reasonable interest on his investment by enlarging the capitalization."

Every trust has this end in view. As we have seen above, "watered-stock" endows them with the governmental function of taxation. In addition to the capital they actually invest, this pseudo capital confers the power of extorting tribute upon capital they do not invest. +Report Industrial Com., Vol. 13, p. 98.

The actual cash raised by banker Chapman to float the Smelter-Trust was but $6,500,000.*

Mr. Chapman further says that the $27,400,000 of preferred stock represents the real values involved.† Yet outside of this was exactly the same amount in common stock, $27,400,000, which represented only "water," but which Governor Grant says is "reasonable interest on the capitalist's investments." A. H. Danforth, for years general manager of the Colorado Fuel and Iron Company, mentioned in a previous article, and competent to express an intelligent opinion about the matter, says that $16,500,000 is a liberal estimate of the total value of the entire property of the Smelter-Trust, even after the Guggenheims were taken in with all their belongings. He further says that the Guggenheims were given $35,000,000 in stock for property that was not worth more than $5,000,000. Robert S. Billings, late manager of the Independent Smelter at Golden and a mining and millman of large experience, tells the writer in a letter written under date of April 4, 1905, that "the entire Smelter-Trust property in property in Colorado, Utah, Montana and Idaho did not exceed a total valuation of $20,000,000,in fact, that was an outside figure." Yet the trust is now paying 7 per cent. dividends on its preferred stock and dividends also on its common stock, and the latter has already gone to a premium and is quoted to-day (November 23, 1905) at $151 and the mining industry of Colorado and the West is required to pay tribute in the shape of dividends on more than $100,000,000 of watered stock. And we are expected to look serious when one of the great "captains" dignifies this plunder as the "capitalist's reasonable interest on his investment." Let us remember this circumlocution, however, and always identify it with the "captain's" adroitness in concealing corporate power.

Governor Grant in his ethics finds no *Report Industrial Com., Vol. 13, pp. 94-5. tld.

trouble to justify this enormous trust extortion by invoking the principle of the "unearned increment" as applied to real estate, which he says is privately appropriated despite the doctrine of Henry George. Justifying your own extortion by the extortion of some one else may not be a new idea in the ethics of graft, but it certainly is novel in social justice.

With nature's present overflow of gold and other metals the big shippers "stand in" and pay their tribute, and still are getting rich, and the little shippers get their mite but are fast passing to the wall. The end is not yet, but as yet complacency is the rule, but later-it cannot be avoided there must be "wailing and gnashing of teeth."

EXTERMINATING RIVALS.

There were still subsidiary mills and plants for the Smelter-Trust to exterminate, despite the fact that with the Guggenheims in the trust it claimed to be doing 100 per cent. of the silver-lead smelting in the United States. When the trust moved on the reduction plants in Cripple Creek in 1902, its first step was to reduce the treatment charge from $8.00 to $7.50 per ton, and it was but a short time before the millmen were ready to capitulate. It was about this time, 1902, that Attorney-General Post asked leave to file in the Supreme Court of the state a petition in the nature of a quo warranto, seeking upon common-law principles to forfeit the charter of the American Smelting and Refining Company, because it was organized for the express purpose of creating a monopoly in the chief industry of the state.

Among other things he alleged that the company demanded and received extortionate and unreasonable charges for smelting and reducing gold and silverores; that it demanded and received rebates from the railroads; that it was partial and unfair in refusing to treat gold and silver-ores that were offered to it by Report Industrial Com., Vol. 12, p. 202.

certain parties against whom it desired to discriminate; that with property and plants not exceeding $25,000,000 in value it extorted for its services charges intended to pay a dividend on $100,000,000; and, generally, that it supressed competition, and was an awe and a menace to the mining industry of the state. But the court failed to grasp the meaning of a monopoly and saw no duty resting upon it to call the Smelter-Trust to account in the first instance in the highest judicial tribunal of the state; and in a scolding opinion, taking the Attorney-General to task for certain delays, and with innuendoes in bad judicial temper, the application to file the petition was denied.*

In view of the Attorney-General's allegations we can now easily understand such a telegraphic dispatch as that sent from Leadville to the Denver dailies, under date of July 14, 1902, to the effect that the trust had limited the production of the oxidized iron-ore to 800 tons per day, that the capacity of the "Caribou " was reduced from 200 tons to 60 tons, the "Sixth-Street Shaft" from 300 to 100, and many of the Freyer Hill properties were shut off altogether. It is only recently that the story was afloat of the trust treatment of the "Greenback" mine at Leadville. Its sulphides were particularly desirable for the trust smelters. A price was offered for the mine, but refused by the owners. After that the trust had no further use for the "Greenback" ores. It thus appears that the mine-owners, as well as the smelters and mills, are made to quake and quail before the mighty strides of the Smelter-Trust. The only independent smelter now in the state is at Salida, and it is not at all independent in fact but only in name. The Boston and Colorado Smelter at Argo, suburb of Denver, uses a secret process, but it has lost its independence and is apparently tributary to and taken care of by the trust.

The last smelter to fall as victim to the trust was the Independent Smelter at *30 Colo., 275; 70 Pac., 413 (Sept. 1902).

Golden. It had a capacity of 300 tons per day and was under the efficient management of Robert S. Billings. This smelter was designed to treat especially the ores of Boulder, Clear Creek and Gilpin counties, and it made reasonable rates for treatment that were satisfactory to the miners. But in the familiar Rockefeller-Standard Oil style, the SmelterTrust cut the price below the actual cost of smelting; that is, $3.50 per ton, and intimidated the miners by threatening to refuse their ores when it succeeded in destroying the Golden Smelter.

The railroads also helped in the destruction by discrimination and in other ways, and the large banks of Denver declined to extend their usual accommodations and facilities, fearing the displeasure of the trust, and finally, and only a few months ago, this large and hopeful enterprise, only eighteen miles away from the capital city of the state, was obliged to bank its fires and shut down.

THE TRUST IN POLITICS.

The head of the Smelter-Trust is Simon Guggenheim. He recently secured the appointment of his brother Daniel as president of the company. Five of the seven brothers are already on the board of directors, and age alone is probably the only reason why the other two are still waiting in the ante-chamber on probation. Simon has long had an unsatisfied political ambition. He was nominated for governor September 8, 1898, by the anti-fusion faction of the Silver Republicans. This was one of the most memorable conventions ever held in the state. It convened at Colorado Springs, and in the fight between the 'Anti's" and the Teller Silver Republicans for the possession of the opera house, 150 shots were fired and one man was killed and three were wounded.† Simon then stood on a platform that declared for "free coinage of gold and silver at the ratio of 16 to 1"; also, for the "retention of all territory taken whether by peaceful *Annual Cyc., 1898, p. 137, tit. "Colorado."

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