petition rendered even normal winnings impossible, so that some of the companies failed, did the failure recoup the community? Not at all. The broken organizations settled as they could, got new charters, and proceeded to business again on such terms as they then found possible.

The moral of this is that a succession of monopolies in a business is quite as likely to bleed society as a single permanent one. In other words, were we to grant, contrary to what was shown above, that a power resides in competition to break down sooner or later every monopoly which comes into being, this power would have to be accounted an evil rather than a good, unless supplemented by some resource which should either prevent new monopoly out and out or else render all monopoly innocuous.

In what has been said it is implied that monopoly prices are about certain to be higher than competitive prices. The philosophy of this must now be traced. When a commodity hitherto produced competitively begins to be turned out under the auspices of a monopoly, cost obviously no longer regulates price. The range of prices is likely to be quite arbitrary for a time, the seller's whim being perhaps sobered a little by his memory of old, competitive rates. Slowly caprice gives way to law; but it is a new law, that of men's need. Prices go higher and higher, till demand, and hence profit, begins to fall off; and they then play about the line of what the market will bear, just as they used to about that of cost. The producer can be more or less exacting according to the nature of the product. If it is a luxury, the new law may not greatly elevate prices above the old notch. If it is a necessity, he may bleed people to death. Imagine a monopoly over quinine in the midst of a typhoid epidemic.

The price cannot of course fall below the cost of production; but, if the monopoly is close and the article one of necessity, it may indefinitely exceed cost. This might on rare occasion be the case even in a luxury. If fashion were to make Constantia wine an object of intense desire among the wealthy, a pipe of it costing $100 might sell for $100,000. Let Constantia become indispensable to life, and the ratio of selling price to cost would be even greater than this.

But the law of monopoly price shows its full significance only when industry is considered dynamically. Whereas a régime of competition speedily throws into the lap of consumers all the benefits arising from improved processes in production, monopoly tends

to retain all these in producers' hands. It may thus come to pass that, even when prices experience no absolute rise, or even fall a few points, they still range far above what they would have been if governed by competition, the producer pocketing all the gains afforded by new inventions in machinery and methods, whether made by himself or by others. In a case like this, the circumstance that prices have not risen makes it specially easy to deceive the public. The profits, how exorbitant soever, are not likely to be published; and the fact that they arise more or less at the expense of all of us, since now, though we pay no higher than formerly, we still do pay more than we should have had to pay with competition, is too recondite for popular attention. Press and platform echo the praises of such a monopoly, when it may in fact be a much worse leech upon the body politic than another which, having elevated prices a little absolutely, is deafened with a perfect diapason of anathema.

If the lessened cost of the article is entirely due to the monopoly, or to the skill and exertions of those who profit thereby, many will be of opinion that the monopolists have a right to all the gains thus arising. Massed capital and centralized control are tremendous advantages, and may be made vastly to cheapen production. Ought not those to reap the gains who render possible these better conditions of industry? Ought not society gladly to acquiesce in an arrangement, though perhaps excessively profitable to a few, which furnishes it a given line of products as cheaply as competition ever did?

This is a purely ethical question, not economic at all. I shall therefore not open it to discusssion, as I am dealing only with economic laws. Permit a remark or two, however. Monopolists often utilize, to swell their own dividends, improvements which they had no hand whatever in originating, and of which they have gotten the control by the most doubtful means. To the proceeds of these society has as good a claim as they. Again, it seems clear that society's right, whether enforceable or otherwise, to participate in the advantages which the bettered means of production in any department afford, is not cut off at the limit which invention had reached when the monopoly was established. Some advancement would surely have been made, even if competition had continued. This would then naturally have accrued to the weal of all of us; and the use of any means to thwart such a result would have been denounced as an infringement of our rights. If

that judgment would have been just, the public is justified in demanding at least that share in the present profits of any form of production now monopolized which would have fallen to it, had not the monopoly arisen. Hence, even if we limit society's right in the manner just indicated, the mere truth that a monopoly has not elevated prices is no proof that its riches have not been gotten in part at the expense of consumers. But I, for one, should not always agree to this limitation of the social claim, since, though an existing monopoly may have effected colossal saving, as much as you please beyond what would have been possible with competition, a different private monopoly or control by the State itself might have done far better still. Patent rights are limited, however probable it may now and then be that but for the patentee the improvement would never have been made.

The plea is sometimes interposed that no harm can come to people in general, let monopoly profits be never so high, for the reason that the winners cannot possibly keep to themselves what they get. The wealth cannot remain piled up, it is said, but the very motive which prompted the amassing of it must lead to the use of it; and this cannot take place without a wide and rich dissemination of its benefits.

Such as find comfort in this thought are very easily pleased. The same logic could be employed to justify the creation of financial princes by taxation outright. Any such policy would desperately discourage wealth-creation, even if every cent of the vast piles were to be productively employed. The greater part might be invested abroad,— profitably for owners, at a little less than dead loss to their fellow-citizens. But a generally lucrative employment of so great wealth, either at home or abroad, could not be expected. Excessive incomes, save in rarest cases, however thriftily intentioned their recipients, cannot be invested in the wisest manner. But economists are forced to observe that inordinate wealth almost inevitably tends to impair thrift, leading its possessors to substitute unproductive for productive forms of expenditure.

It should be noticed here that the wealthy make investments of many sorts, which, though strictly not in the nature of waste, yet practically deplete society's fund of capital no less than if they were. To purchase extensively in fine art, whether for public behoof or private, to build a palatial house, or to send money to the heathen, has upon general industry precisely the same effect,

at least in the first instance, as to pay away the same sums for needless servants and equipage, or upon feasts, liquors, and women. Intensely congested wealth certainly tends to find vent, yet to the damage rather than to the advantage of labor. We should always draw a distinction between the co-operation of capital on a gigantic scale, which always has in it great possibilities of good, and colossal individual fortunes.

If the positions of the foregoing discussion have been well taken, certain propositions of very considerable consequence may be laid down. Of these, those whose importance is mainly economic are as follows: :

1. That, in a great variety of industries, perhaps a majority of all, permanent monopolies may be maintained, apart from any legislative or special natural aids;

2. That extensive competition may exist which is formal only, and not real;

3. That a combination which is faced merely by formal competition possesses a monopoly no less than if there were no competition at all;

4. That competition of capital with capital, in businesses where laissez-faire monopoly is possible any way, will never permanently break down monopoly ;

5. That when wealth is congested, whether by monopoly or otherwise, no economic laws avail thoroughly or healthfully to disseminate it again;

6. That monopoly prices are determined, not by cost of production, but by the tolerance of the market, by what the market will bear;

7. That prices under the law of the tolerance of the market, while never lower than cost, range more or less above, according as the articles approach more the nature of necessities or that of luxuries.

The practical and sociological bearings of what has been said are grave in the extreme, so grave, indeed, that I somewhat hesitate to announce them, lest you regard me as an alarmist.

No economic laws prevent the permanent existence of monopolies, or the extortion by them of prices more or less beyond those which competition would impose. It is undoubtedly conceivable that monopolists should sell at a mere fair advance on cost, just as it is that competitive producers should give away their wares outright. But, as no economic force leads to either of these

results, the economist cannot take account of them save as bare, incalculable possibilities.

In most of our substantive industries, monopoly production is / sure to arise, if it has not already done so; and only some sort of legislative regulation can protect consumers from having to pay needlessly high for their products. If things are left to drift, the measureless and intrinsically benign power of massed resources and central control will, without fail, inure to the good of the few, and not to that of the many. The rich will grow ever richer, and the poor poorer. The great nodes, or centres, of special "lucration," must of course grate against each other, since the constituents of each stand to the rest in the relation of consumers. In fields where strong organization is possible, all lateral impact will encounter opposition. When, gradually, the line of least resistance is found and followed, it will lead downward. The ultimate victims will be the laboring masses and the devotees of the feebler industries, where effective combination is the least possible.

However, if I may perchance be an alarmist, I am not myself alarmed. Our sole present needs are information, courage, and willingness to take new steps in industrial evolution so soon as they are proved to be wise. In the ages past, society has never gotten itself into an imbroglio without somehow finding a way out. It will be so now.