"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 repet.i.tion 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 compet.i.tors' 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 a.s.sociated 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 partic.i.p.ation 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 a.n.a.lysis 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 a.s.set. 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 a.s.sociated with them the strangling of compet.i.tion 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 ma.s.ses 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 a.s.set 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 const.i.tuents, 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 pa.s.sing 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.

XIX

Allen Sanford, during the next few weeks, found much to think about besides himself. His advance had been more rapid than Gorham had expected. His position with the Companies was still the same, but his value in his position had steadily increased. The impetuosity and intensity which, previously uncontrolled, had made him heedless, were now directed through a smaller vent, and gained in power. Gorham's early belief that the boy possessed in no small degree, though undeveloped, the business genius which had accomplished his father's great success, was being definitely confirmed, and he rejoiced in it.

Allen had studied the business problem with which he came daily in contact as closely as he could with the little experience which had as yet come to him. What man of affairs does not recall how intangible was that turning-point, in his own early business career, before which he felt hopelessly submerged in that sea of infinite detail, vainly struggling to gauge its currents and to escape its undertow; after which he found himself advancing with steady strides, short at first, but gaining in power as the lesser responsibilities merged into greater ones!

Gorham's business training, previous to the inception of the Consolidated Companies, had been in accord with the universal business code, quite at variance with the idealistic basis which he himself had now established. Allen's training had all been along Gorham's idealistic thread. It was perhaps natural, therefore, that Allen, under these circ.u.mstances, should look upon the transactions of the Consolidated Companies from a different viewpoint from that which Mr. Gorham took. At all events, some of these business acts did not seem to the boy to be in full accord with the altruism which he had learned from his preceptor.

Allen had come to know most of the directors and some of the stockholders, and he was convinced that the prevailing instinct which controlled their relations to the Consolidated Companies and to its transactions was self-interest pure and simple. There was no question that the Companies had accomplished important reductions in the necessities of life and in the cost of public utilities, as a result of which the people were radically benefited; but to Allen's untrained mind even this seemed to be a clever business policy from the exercise of which the corporation gained more than it gave. Already there had come to him a sense of apprehension as to what might happen if Mr. Gorham's restraining hand should lose its present power, and the control should fall into the hands of men such as he conceived Covington and his sympathizers to be; and lately the boy had regarded this chance as not altogether remote.

Gorham never allowed Allen to discuss with him the personalities of any of the directors or stockholders with whom he came in contact. This was partly due to his feeling that Allen was not as yet competent to form opinions of any value, and partly to his general principle that he must hold his own mind unprejudiced in his duty toward his a.s.sociates. For this reason, and for another which lay closer to his heart, the boy had never expressed to him his distrust of Covington, though he had been tempted to do so on more than one occasion. Now, however, during the absence of his chief from the offices, Allen felt sure that a crisis was near at hand. He knew that Covington was in constant communication with certain of the directors, and the nature of these conferences could perhaps be divined by the growing discontent which he saw developing among those upon whom he knew Gorham depended as his most valued lieutenants. He had been brooding over matters so long that this new and tenser situation, as he saw it, made him feel it to be his duty to talk it over with Gorham. He was none too sure that his doubts would be shared or even accepted, and this uncertainty added to his apprehensiveness in breaking over what he knew to be his chief's implied commands. This was his first experience in a business office, and it might be that what caused him anxiety was only a part of the day's work, to be found in any similar establishment. Still, he determined to free his mind of its ever-present burden, and he selected the time shortly after Gorham's return from Washington.

Gorham listened to Allen's reports well into the night. The boy did most of the talking, and Gorham absorbed with little comment the story which he had to tell. Allen was surprised and relieved to find that he listened to him without criticism, and it strengthened him in his own confidence to find that the elder man treated him with a consideration beyond that which he had previously received.

"You are quite right to come to me with this," Gorham said at length; "but I feel that, as far as the business is concerned, you are unduly apprehensive. I shall satisfy myself on this point on my return to the office. Now, as to Mr. Covington: I have been aware for weeks of your personal dislike for each other, but it is unworthy of you, Allen, to allow this to influence you to the extent of doing him so great an injustice."

Allen colored deeply at the criticism. "I have waited until I am certain that it is no injustice before bringing the matter to you," he said.

"I have also been aware of another fact," Gorham continued, "which is in itself an explanation of your present att.i.tude. When I tell you that it is my fondest hope that Alice shall marry Mr. Covington, you will understand. This in itself is the strongest evidence I could give of my confidence in him."

This was a blow far greater than any Alice had dealt him. Allen had never lost hope that sooner or later he could convince her that he had attained man's estate, and this he considered the only real barrier between them. But if Mr. Gorham had set his heart upon her marriage to Covington, he knew the case was hopeless. The older man watched him as he struggled with himself.

"You should have no thought at present of marrying any one," he said, kindly. "You are not mature enough yet to know your own mind. You have done well, and I have great hopes for your future, but for the present you must be content to solve one day's problems before taking up the next."

"I wouldn't mind so much about Alice," the boy finally managed to blurt out, "if it was any one except Mr. Covington."

"Have you any actual evidence that he is other than an upright, able man, whose character ent.i.tles him to the fullest confidence and esteem?"

"No actual evidence; but I know I'm right. Please don't let him have Alice without making sure."

Gorham placed his hand kindly upon the boy's shoulder. "Your interest in my little girl's happiness, though prejudiced, makes me overlook this boyish jealousy toward a man whom I respect. But you can't think that my carefulness in so important a matter as this would be any less than your own. Come, now, let us forget all this. Go back to your duties, my boy, with a confidence that my judgment is better than yours."

As Allen made no reply and showed no inclination to leave, Gorham wondered if he had still anything further to say. The boy moved uncomfortably in his chair as the question was asked.

"Not regarding the business detail, Mr. Gorham," he replied at length.

"Oh, I am all at sea!" he burst out suddenly, his voice trembling with emotion. "I guess business isn't in my line anyhow."

"What do you mean, Allen?" Gorham asked, completely surprised by the boy's intensity.