some. They are indebted for their life and continuance, mainly, some of them wholly, to the massing and the adroit manipulation of capital.

That monopolies quite often come into being and endure for a time in this way no one can possibly deny. The recent French Copper Syndicate offers an example. So does every corner in wheat, salt, lead, or other article of trade. That, however, massed capital alone, without special favor from natural circumstances or from law, can be made the permanent basis of monopoly, many deny. I believe that such denial is a mistake, and that what is thus declared impossible has occurred, is occurring, and is destined to occur more and more.

It is not meant by this that all forms of business are monopolized with equal ease. Some of them unquestionably could not, unless by the government itself, be monopolized at all. So far, and in this sense, the language used a moment ago may be qualified, and the admission made that every successful monopoly must have had the aid either of nature or of law. Precisely within what precincts laissez-faire monopoly is confined by nature it would at present be difficult to say with any certainty. Tentatively, I venture to formulate as follows: that laissez-faire monopoly is precluded in a business in proportion as it can be carried on with small capital, and independently of both location and organization. The denial that a permanent laissez-faire monopoly is anywhere possible is undoubtedly prompted to a great extent by a misunderstanding as to what it requires to constitute a monopoly. Many evidently suppose that monopoly is impossible in an industry, so long as any sort of competition prevails there. If the competition is other than formal, this is of course true; but, in several businesses where what may be called competition still exists, it is not real: it is simply formal. The point deserves special attention.

It is maintained that the Standard Oil Trust, for instance, cannot be in the enjoyment of a monopoly, because there remain active refineries not leagued with it. The argument is thought to be re-enforced by the observation that the number of outside concerns has even increased, perhaps doubled, since the trust went into effect. A moment's reflection will show the inference to be unwarranted. It is not necessary, in order that a great business may be a monopoly, or, what is the same, keep a higher than competitive price upon its goods, that it should directly control the entire production. Immediate mastery of a decided majority is practically the mastery of all.

No one will question that the Copper Syndicate enormously elevated prices above what competition would have made them; yet it purchased only about three-fifths of the world's entire product. This enabled it to dictate prices to consumers; and all the little producers not in the syndicate came in for a part of the advantage.

Now, this syndicate, a combination of the very loosest order, lasted nearly eighteen months, and during its continuance imposed upon the commodity in all the markets of the world a purely arbitrary price, not far from 100 per cent., on an average of the whole time, above what it would naturally have been. Even now the copper corner has not been definitively ruptured. Prices are not yet normal. A monopoly market remains, and must till the immense supply of copper which the manipulators of the metal piled up in Paris has been disposed of. Even the still more informal agreement at present subsisting suffices to keep the metal at least two cents a pound above what open competitors would be taking. In view of this history, I cannot doubt that, had the Copper Trust been solidly organized like the Standard Oil Trust, and administered with any approach to the energy and methods of that organization, it would have become a permanent institution.

That this might have been is further indicated by the history of the Canadian Oatmeal Millers' Association, a ring for depressing the price of oats and raising that of meal. It has closed ten mills, paying them from $300 to $800 each per annum, or a total of $6,312, for their inactivity. The Canadian Parliament's Trust Committee of last winter found that the outside mills, numbering about twenty-five, are "of such limited capacity that their influence is not materially felt in the general market; but they avail themselves of whatever advantage the combination gives them to keep up prices."

The principle here is similar to that of rent. Price-fixing by the dearest cost of production is another analogue. As the most cheaply produced part of the product will not "go round," the whole which the demand requires sells at the rate necessitated for that which costs the most. Still another illustration is the cost to the American people of our Hawaiian sugar. We know that sugar rates to consumers have not been lowered by the entry of the Hawaiian crop into this country duty free, for the reason that not enough thus comes in to supply the market. So, still further, the silver dollar continues at gold par because not sufficient silver dollars or

certificates circulate to do the country's required money work. the same way, unless the small producers who pretend to compete with a given combination can enlarge their capacity sufficiently to supply the market, it remains for the combination to say what prices shall be. In other words, monopoly is possible in spite of any competition which is merely apparent.

We are told that the competition of capital with capital inevitably breaks down a monopoly so surely as the monopolists elevate prices above the level of normal cost. This theorem, when considered purely a priori, seems very specious. Exorbitant prices of course mean exorbitant profits. But an extraordinary rate of profit in any industry is sure, one would suppose, to call capital from less productive channels into this, until the return for the use of capital has been brought down again to the usual level.

That this is the tendency must be admitted; but there is much to thwart it, to prevent the alleged result. There is a tendency to uniformity in wages between different trades and different grades of laborers, but wages never become uniform. So there is a tendency to identity between different nations in the prices gotten for like articles of commerce, but international prices never agree.

One strong reason why large profits by no means always evoke much competition in the industry which gives rise to them is that so few know how large they are. The public rarely has other than the most indirect and imperfect means for assuring itself whether a business is especially lucrative or not. The publication of dividends is no certain guide. High dividends may imply depletion of capital, as low ones may be but a symptom of valuable enrichment to the plant. Innumerable are the arts familiar to the higher book-keeping, whereby even stockholders are kept ignorant whether businesses in which they themselves are interested are or are not in a prosperous way.

It may be thought that some of the interested parties, at any rate, must know the real rate of profits, and that, if it is great, these will secretly undersell, dissolving the ring from within. The rickety species of combination formerly prevalent certainly involved this danger, and the fate suggested certainly overtook many. But the trust obviates this risk beautifully and entirely. Trusts in the proper sense have absolutely nothing to fear from within. The sole question is whether they can be overthrown from without.

I maintain that there are no economic forces on which dependence can be placed to work this result. The capital necessary for bona fide competition in any of the great industries of our day is immense, and must needs be still more so in future. To fight the Sugar Trust, the Whiskey Trust, or either of the trusts in oil, you must have resources not to be brought together on an uncertainty or at simple notification, because, as I again beg you to remember, bona fide competition requires the means for supplying the entire market. But, even were the capital forthcoming in a day, months or years would in most cases necessarily have to be spent in setting out the plant and bringing it to bearing condition. Skill, too, must in some way or other be acquired, which might take longer yet.

During all the time of its preparation and incipient work, the new interest is subject to attacks from the old; and, if the old uses its advantages with only a fair measure of skill and resoluteness, the new must die ere fully alive. The instant it enters the market, it finds itself fatally underbidden. It fights, loses, and tries elsewhere. Its foe confronts it in the next field as in the first; and the struggle is repeated, probably with the same result. Such a campaign is nearly certain to go against the upstart, even when no legal rights are trangressed. But this is hardly ever the case. Appeal is found necessary to courts and legislatures; and these bodies, even if not corrupt, as they too often are, will, as a rule, be more apt to favor the established than the struggling enterprise. This is not speculation. Ample history teaches us what kind of event to expect in such a conflict.

Meanwhile is working a motive totally ignored by most writers on this subject, which very often indeed leads a monopoly's formal competitors of their own accord to continue formal competitors only, instead of making earnest and relentless war upon it. If willing to do this, they may, within large limits, share all the profits of the monopoly without any of its responsibilities, while perhaps enjoying in addition the reputation of glorious martyrdom for the public good. How this is possible has been suggested already. Establishments not in the combination, so long as its monopoly endures, are, in spite of themselves, its parasites, lifted up and nourished by its power. They are related to the monopolists proper just as rent-takers are to marginal cultivators. Often, doubtless, they are not aware of this, and sincerely suppose themselves to be receiving competitive prices. Yet we know too much

of human nature to believe that this can always be their thought. If Mr. Claus Spreckels, for instance, should require another year or two before commencing to refine sugar in Philadelphia, not a few people will be led to suspect him of subservience to the consideration of which I speak.

But suppose, in spite of first opposition, all things finally in readiness for full production, along with an earnest determination to compete. The great chimneys smoke, the wheels turn, and the market teems with the rival's goods. The uncertainty is but just begun; and it cannot but be greater, as a rule, for the new concern than for the old. Veritable competition between immense business enterprises is in our day no baby affair,—no mere case of friction or gentle collision, from which one of the parties is going to retire so soon as hurt. It is a battle of Titans, of bull-dogs. The signal for letting go is likely to be death, not pain or a little blood. So vast the stake, each side is pushed by every economic consideration to make the struggle one for victory or annihilation. While the duel lasts, the public is supplied with the products, not at competitive prices in the proper sense, but at cut rates, lower than healthy competition would induce. Such a state of things is not economically good for the community as a whole, because it can go on only at the cost of impoverishing producers for the sake of consumers. This means, of course, that it cannot long endure at any rate. Either of two results must have place. Faintheartedness may bring truce or one or the other of the two gladiators may utterly succumb. In either case, monopoly is resumed again.

But, were it true that every laissez-faire monopoly which arises must at length fall, the success of most of them for so great a length of time is sure to call new ones into life whenever old ones die. Whatever ability our industrial system possesses to overturn a given monopoly, is an ability, not to restore old time competition, but simply to substitute one monopoly for another.

Meantime, observe, the fall of this or that monopoly does not, as many seem to imagine, constitute the slightest recompense to society for any plunder to which it may have been subjected. After the Chicago fire, fire underwriters enormously elevated their rates. Of course, the profits, so high, toled new companies into existence, many of which ultimately became insolvent. Before collapsing, however, most had made money inordinately, enriching their stockholders at the public expense.. And when, at last, com