Why does this not work? "ls *.txt | xargs cat > all.txt" (all files into single txt document)

ls *.txt | xargs cat >> all.txt

might work a bit better, since it would append to all.txt instead of creating it again after each file.

By the way, cat *.txt >all.txt would also work. :-)

If some of your file names contain ', " or space xargs will fail because of the separator problem

In general never run xargs without -0 as it will come back and bite you some day.

Consider using GNU Parallel instead:

ls *.txt | parallel cat > tmp/all.txt

or if you prefer:

ls *.txt | parallel cat >> tmp/all.txt

Learn more about GNU Parallel http://www.youtube.com/watch?v=OpaiGYxkSuQ