In common use the word "trust" is at present rather loosely used to denote any combination formed for the purpose of restricting or killing competition. Properly speaking, however, a trust is a combination to restrain competition among producers, formed by placing the various producing properties (mills, factories, etc.) in the hands of a board of trustees, who are empowered to direct the operations of production and sale, as if the properties were all under a single ownership and management.

The novel characteristic of the trust is not the fact that it is a monopoly, but that it is a monopoly formed by combining several competitors according to a new plan. The process of placing property in the hands of trustees is familiar to every business man. In the formation of a trust the different firms or companies who have been competing with each other in the production and sale of goods agree to place the management of all their several properties in the hands of a board of trustees. The powers of this board and its relation to the owners of the various properties are ingeniously devised to evade the common law, which declares that contracts in restraint of competition are against public policy, and illegal.

The first of the modern trusts was the Standard Oil Trust, which was a combination formed among several of the refiners of crude petroleum in the States of Pennsylvania and Ohio in the year 1869. The original combination grew out of the control of certain important patents connected with the process of refining. It pursued its course for a number of years without attracting much attention outside of the centre of its operations; but of late years so much has been published in regard to it that the very word "Standard" has come to be almost a synonym for monopoly. It is probable that certain branches of the iron and steel trade were the next to be combined by means of a trust, but as these were arrangements between private firms, not much information as to the time of their origin has reached the public. The second great trust to attract general public attention was the American Cotton Oil Trust, in which some of the same men who have so successfully engineered the Standard Oil combination are heavily interested. These two great trusts, the Cotton Oil and the Standard, have attracted widespread attention, and, to a certain extent, the public has become familiar with their organization and plan of operation; but popular feeling on the subject was not fully aroused until 1887, when the newspapers of the country made generally known the fact that the trust principle of combination was being rapidly adopted by the manufacturers of a large number of important lines of goods. The effect which these monopolies were believed to have upon the public welfare was pointed out by writers and speakers, and Congress and the State Legislatures were besought to investigate these combinations and seek to suppress them. Meanwhile it seems to be true that the popular agitation has had no effect in lessening the number of trusts, or checking their formation and growth; and they continue to increase and to gather their profits, while the public impotently wonders what it is going to do about it. Let us be careful, however, to make no assumption that the trust is injurious to the public at large. That is a matter which is before us for investigation.

It is safe to assume that the reader is somewhat familiar with the general charges which have been brought against the trusts; but even if this side of the story has not been heard, it is not unfair to look at them first from the standpoint of the men who make and manage them. In order to do this, suppose we select some particular trust which will serve as a type, and imagine that some frank, candid manufacturer, who is a member of this trust, comes before us to give an account of its formation and operations. This man comes, we suppose, not as an unwilling informant, or as one on trial. He is frank, honest, and plain-spoken. He talks as man to man, and gives us, not the specious argument of an eloquent pleader in defence of trusts, but just that view of his trust and its work that his own conscience impels him to take. Certainly, then, he deserves an impartial hearing.

A number of years ago the principal manufacturers of linseed oil in the United States formed an association. It was started largely for social ends, and was very successful. Business men are generally most interested in their own plans and operations; and those who are familiar with the same topics and have similar interests and purposes are apt to make agreeable companions for each other. We discussed many points connected with the management of our business at the meetings, and by interchanging with each other our views and experiences with different devices, methods of management, etc., we were able to get much valuable information, as well as social pleasure, from meeting one another.

Now within the past few years things have been going from bad to worse with the manufacturers of linseed oil. The long and short of it all was that the margin between the cost of the raw seed and running our mills, and what we could get for the oil cake and the linseed oil in the market, has grown exceedingly narrow. It's hard to tell just what has caused it. They say over-production; but what has caused the over-production? One thing that may have had something to do with it is the new mills they have been putting up in the Northwest. Many of the Eastern mills used to get large quantities of seed from Iowa; but they are building cities out there now, as well as raising flax-seed, and when they were booming some of those cities they would raise heavy bonuses in aid of new enterprises. Among these were some great linseed oil mills, which have loaded up the market pretty heavily of late years; so that not only has the price sagged down, but we have all had to work to get rid of our stocks. The firms which had the best mills and machinery, and were in a position to get their seed reasonably and put their goods on the market with least expense for transportation, etc., have been making a small profit over and above their expenses. But some of the works which had to bring their seed a long way, and which haven't quite as good machinery as can be had now, were in a bad way. There were some of the oldest houses in the trade among them, too, and with fine men at their head. It was too bad to have them go under. They tried to cut down expenses, but strikes and trouble with their men prevented their saving much in that way. Then there was one item of expense which they had to increase instead of cutting down: that was the cost of marketing. Competition was so fierce, that, in order to keep up their trade, they had to spend more on salaries of expensive salesmen, and in advertising and pushing their goods, than they would dream of ordinarily.

It seemed too bad to cut each other's throats in that way, for that was what it amounted to, and when the association met,—or what was left of it, for the business rivalries had grown so bitter that many of the former personal friendships between the members had become strained and one after the other had dropped out,—the situation was discussed by the few members who met together. It was discussed earnestly, too, by men who felt an interest in what they said, because unless some remedy could be devised, they had got to sit still and watch the savings of a lifetime slip through their fingers. One thing was very clear to all. Though competition was as sharp as any one could possibly wish, the public was not getting such a wonderful benefit after all. Prices were not so very much lower for oil, nor higher for seed. It was the selling expense which had run up to a ruinous figure; and on one point all the members were unanimous,—that if all the firms in the trade could only work together in harmony in marketing their goods, they could save enough in salesmen's salaries, etc., to make a great difference in the profit-and-loss account without affecting the selling prices in the market one penny.

Another very important matter, which we had to handle pretty tenderly in our discussions, was that of adulteration. I must confess that a good many firms in the trade, who used to be above any thing of the sort, have been marketing some goods in the past few years which were not exactly the "pure linseed oil" which they were labelled. It's a mean business—adulteration,—but not many of our customers ever test their purchases. The one thing they are apt to look at is price, for they are buying to sell again; and when rivals are selling a cheaper oil that seems just as good until it is laid on as the pure linseed that you are obliged to ask a higher price for, the temptation to meet them at their own game, rather than lose your old customers, is a very strong one. Certainly, when competition took this form, it hurt the public even more than it hurt us. When people wish to buy pure linseed oil they ought to have some prospect of getting it, instead of getting an adulterated mixture of various substances; but at the rate competition was running, there seemed to be small prospect that there would be any really pure linseed oil put on the market in a short time. We have often discussed the possibility of stopping these adulterations, but it was a hard matter to cure by mere mutual agreement. How do I know what my competitor in a city a hundred miles away, does with the vats in his cellar after working hours, even if he has solemnly agreed not to adulterate his goods? For I must confess that there are a few men in our trade who are as tricky as horse jockeys.

Quite a number of improvements have been patented in linseed oil machinery in the past twenty years. Nothing wonderful, but things that effect little economies in the manufacture. We could have done without them; but when a few firms took them up, of course the rest had to follow suit, or fall behind in the race of competition. We have had to pay a heavy royalty on some of these machines, and it has been rather galling to count out our hard-earned dollars to the company which has bought up most of the patents, and is making 100 per cent. a year on what it paid for them, with no risk, and without doing a stroke of work. Now if we manufacturers could work in harmony, we could make this company come down from their high horse, and they would have to ask a reasonable price for their machines. But we could do more than this. It stands to reason that a good many improvements will be made in our machinery in the future. We don't object to paying a fair price to any inventor who will work out these new ideas for us; but it does seem unjust for him to go and sell them to some outside company for a song, and have that company bleed the users of the improvement for every ounce they will stand. Now, by working together, we can refuse to pay royalties on any thing new which comes up; but require, instead, that any new patent in our line be submitted to a committee, who will examine and test it; and if they find it to be of value, will purchase it for the use of all members of the association.

Some of the members thought this was as far as we ought to go. They were opposed to "trusts" on principle. But the great majority saw so clearly where we could continue to better ourselves that they became enthusiastic over it.

Some speculators, in years of short crops, have occasionally tried to "corner" flax-seed in a small way. We could refuse to buy except directly from the growers, and that branch of speculation would be a thing of the past. We have sent out some pretty sharp men as buyers, and sometimes they have bought flax-seed in some of the backwoods districts at very low rates. At other times, two buyers from rival firms have run counter to each other, and paid prices larger than their employers could really afford. But with our combination, we cannot only fix uniform prices for seed, but we can send out only enough buyers to cover the territory; and the work of buying is reduced to simply inspecting and weighing the seed.

Now another thing: Of course, not every manufacturer in the business owns his mills. It is a fact that since the close times of the past few years the majority of the firms are carrying mortgages on their mills; and some of them in the West are paying as high as eight or ten per cent. interest. But with the combined capital of all the firms in the trade at our back, we can change all that. Either by a guaranty, or by assuming the obligations, we can bring the interest charges on every mill in the association down to four or five per cent. at most.

We have been paying enormous rates to fire insurance companies. They are not as familiar with our business as we are ourselves, and they don't know just how much risk there really is; so they charge us a rate which they make sure is high enough. We can combine together and insure ourselves on the mutual plan; and by stipulating that each firm shall establish and keep up such precautions against fire as an expert may direct, we can not only reduce the cost of our insurance to that of our actual losses, but we can make these a very small amount.

It may be said that we might have done all these things without forming any trust to control prices. But the practical fact was that we could not. There was so much "bad blood" between some of the different firms in the business, from the rivalry and the sharp competition for trade, that as long as that was kept up it was impossible to get them to have any thing to do with each other in a business way. It was no small task to get these old feuds patched up; but some of the best and squarest men in the business went right into the work, and at meetings of the association, and privately, exerted all their influence to forward this coming together for mutual aid and protection. They did it conscientiously, too, I think, believing that it was necessary to save many of us from financial ruin; and that we were not bound, under any circumstances, to sacrifice ourselves for the sake of the public. The trust has been formed, as every one knows, and many of the things we planned to do have been already accomplished. We have stopped adulterations on all goods made by members of the trust; and the improvement in the quality of linseed oil which has been effected is an important benefit to the public. We are managing all the works in the trust as if it were all a single property, controlled by different managers; and the saving in expense, over the old plan of cut-throat competition, when everybody was striving to save himself and sink his rivals, is an enormous one.

One thing which has caused much hue and cry, is the fact that we have closed half a dozen mills or so. But the matter stood in this way: these mills were not favorably situated for doing business, all things considered; and all the mills in the country cannot run all the time, because there are more mills in existence than are needed to supply the market. These mills must have been closed soon, if the trust had not commenced operations, because they could not be run under the old regime and pay expenses. We knew we could make the oil at a less cost in our other mills, so we concluded to buy out the owners of these at a fair price, and shut up the works. Prices of linseed oil have been raised somewhat, we confess; but we claim that they had been forced down much too low, by the excessive competition which has prevailed for a few years past. Of course some of the most hot-headed and grasping among us, were anxious to force prices away up, when they once realized that we had an absolute monopoly of the linseed oil trade of the country; but the great majority were practically unanimous in a demand for just prices only, and the adoption of the policy of live and let live; for trust-makers are not entirely selfish.

We claim, moreover, that we are breaking no legal or moral law by this action. We are, for the most part, private parties or firms—but few corporations,—hence the attempt to abolish trusts on the ground that the corporations composing trusts have exceeded the power given by their charters will fail to reach our case. We have certainly done this: we have killed competition in the linseed oil trade; but we submit that with so many other interests and trades organized to protect themselves from outside competition, and control the prices at which their products are sold to the public, we were, in self-defence and for our own preservation, obliged to take this step.[1]

If we omit the references to the especial trade, the above view of a trust from the trust-makers' standpoint will do for almost any of the many combinations which have been formed by different manufacturers for the purpose of controlling production and prices. One thing is clearly indicated in the above, and will certainly be conceded: That the men who have formed these trusts are animated by the same motives as those that govern humanity in general. They have, in some cases at least, known what it was to be crowded close to the wall by severe competition. They all at once saw a way opening by which they could be freed from the worries and losses which had been making their business one of small and uncertain profits, and would be set squarely on their feet with a sure prospect for large and steady gains. It is using a common expression to say that they would have been more than human if they had refused to improve this opportunity. Certainly, then, in examining further the trusts, we shall do so with no feeling of personal prejudice toward the men who originated them and carry them on.

As we have given a hearing to the case from the trust-makers' standpoint, it is only fair that we should hear at equal length from the public who oppose the trusts; but to abbreviate the investigation, let us suppose that we are already familiar with the various charges which are brought against the trust monopolies, and let us proceed at once to consider the actual effect of the trusts upon the public.

Since we have heard so much in defence of the linseed oil trust, it will be well for us to inquire concerning the results, in which the public is interested, which have followed its organization. During the year 1887 (the trust was formed in January of that year) the price per gallon of linseed oil rose from thirty-eight cents to fifty-two cents; and this price was kept up or exceeded during 1888. That is to say, every purchaser of linseed oil, or every one who had occasion to have painting done, pays to the members of this trust, for every gallon of oil that he uses, about fourteen cents over and above the sum which he would pay if competition were allowed to do its usual work in keeping down prices.

What profits are the members of this trust making? Let us suppose that they were just able, at the old price of thirty-eight cents per gallon, to pay all their running expenses and four per cent. on the capital invested, making nothing for profits beyond a fair salary to the managers of the business. Then the gain of fifteen cents a gallon in the selling price is clear profit to them. Now add to this the fact, which was plainly brought out in the foregoing supposed statement by a member of the trust, that it is possible by means of the trust to greatly reduce expenses in many directions as well as to increase receipts, and we begin to form some conception of the profits which this trust is harvesting. If we wish to put the statement in figures, suppose we take the annual consumption of linseed oil in the country at thirty million gallons. Then the profits of the trust from the increased prices alone will amount to four and one half million dollars per annum.

There is another way in which trusts directly affect the public, which has received very much less attention than it deserves. Besides the people who use the linseed oil and pay the trust an extra fourteen cents a gallon for the privilege, there are a great number of people who would have used oil if the price had not advanced, but who cannot afford to do so at the advanced price. It is a well-known fact that every increase in the price of any article decreases the demand, and the advance in the price of linseed oil has undoubtedly had a great effect in decreasing the consumption of oil. So while it is undoubtedly true that at the trust's prices there are more linseed-oil mills in the country than are needed to supply its wants, yet if the prices were lowered to the point which free competition would fix, there would probably be demand enough to keep all the mills running. To the trust, then, must be ascribed the final responsibility for the stoppage of the mills and the loss of employment by the workmen. Nor does the effect upon the labor market stop there. From the fact that less people can afford to paint their houses, because of the higher price of the oil, it is certain that there will be less employment for painters; and as less paint is used, all those interested in and employed in the paint trade are sufferers. It is to be remembered that we are speaking of the linseed oil trust only to make the case more vivid. The principle is general and applies equally well to other trusts, as for instance to the loss of employment by thousands of men working in refineries controlled by the sugar trust, in the fall of 1888. Still another effect of this trust's action is to be especially noted: the fact that the diminished production of oil lessens the demand for seed; and also that in the purchase of seed, as well as in the sale of oil, the trust has killed competition. The trust may, if it chooses, fix uniform prices for the seed which it purchases; and the farmer can take the prices they offer or keep his seed. Fortunately the farmer can raise other products instead of flax-seed, and will do so if the price is lowered by any large amount.

One other possible mode of profit for the trusts, which, however, they are hardly likely to engage in—from their fear of public opinion, if for no other reason—lies in the power which they possess over the labor market. It will probably be conceded at once that the rate of wages in any occupation depends, among other things, upon the competition of the various workmen who seek employment in that occupation, and also upon the competition among those who wish to hire men to work at that occupation. It is plain that when the competition among employers to secure men is active, wages will rise; and when this competition falls off, wages will fall. Now the trust is more than a combination for selling purposes only. It is a combination of all the properties concerned under practically a single ownership. Clearly, then, as the various mills belonging to a single owner will not compete with each other in the employment of labor, the mills belonging to a trust will be no more likely to do so. Thus if it were not for the fact that the workmen are able to take up some other employment if their wages are too low, they would be absolutely obliged to take what wages, great or small, the trust chose to give, and would be as dependent for their food and clothing upon the trust as was the slave upon his master.

The question is often asked why trusts have not been formed before, and what the causes are which have started them up so rapidly in such varied lines of industry. There is certainly room for much honest difference of opinion in reference to these causes; but one cause concerning whose influence there can be no dispute is the culmination of the change from the ancient system of manufacturing to the modern. Let us briefly trace the manner in which this branch of civilization has grown: In the most primitive state of existence, each man procures and prepares for himself the few things which he requires. With the first increase in intelligence those of most skill in making weapons and preparing skins make more than they require for themselves, which they exchange with others for the products of the chase. The next step is to teach to others the special skill required, and to employ them to aid the chief workman. Conditions analogous to these existed down to the end of the last century. The great bulk of all manufacturing was done in small shops, each employing only a few workmen; and the manufacturer or master workman labored at the side of his journeymen and apprentices. The products of these little workshops were sold in the country immediately adjacent. Of course the number of these scattered shops was so great that the possibility of uniting all the manufacturers in any one trade into a single organization to prevent competition among them, was beyond the thoughts of the most visionary.

The present century has seen three great economic wonders accomplished: the invention of labor-saving machinery, greatly multiplying the efficiency of labor in every art and trade; the application of steam power to the propulsion of that machinery; and the extension over all civilized lands of a network of railway lines, furnishing a rapid, safe, and miraculously cheap means of transportation to every part of the civilized world. In order to realize the greatest benefit from these devices, it has become necessary to concentrate our manufacturing operations in enormous factories; to collect under one roof a thousand workmen, increase their efficiency tenfold by the use of modern machinery, and distribute the products of their labor to the markets of the civilized world. The agency which has acted to bring about this result is competition. The large workshops were able to make goods so much cheaper than the small workshops that the latter disappeared. Then one by one the large workshops were built up into factories, or were shut up because the factories could make goods at less cost. So the growth has gone on, and each advance in carrying on production on a larger scale has resulted in lessening the cost of the finished goods. Competition, too, which at first was merely an unseen force among the scattered workshops, is now a fierce rivalry; each great firm strives for the lion's share of the market. Under these conditions it is quite natural that attempts should be made to check the reduction of profits by some form of agreement to limit competition. Many plans have been tried which attempted to effect this by mere agreements and contracts, methods which left each property to the control of its special owners; but none have been permanently successful. By the trust plan of combination, the properties are practically consolidated; and the failure of the combination through withdrawal of its members is avoided. It offers to manufacturers, close crowded by competition, a means of swelling their profits and ensuring against loss; and encouraged by the phenomenal success of the Standard Oil combination, they have not been slow to accept it.

The point to which we need to pay especial attention, in the foregoing consideration of the causes which have produced trusts, is the fact that the cost of production is continually being cheapened as it is carried on on a larger and larger scale. And because the cheaper mode of production must always displace the mode which is more expensive: as Prof. Richard Ely expresses it, "Production on the largest possible scale will be the only practical mode of production in the near future." We need not stop to prove the statement that the cost of production by the modern factory system is a small fraction of that by the old workshop system. The fact that the former has beaten the latter in the race of competition would prove it, if it were not evident to the most careless observer. But it is also a fact that the trust, apart from its character as a monopoly, is actually a means of cheapening production over the system by independent factories, for it carries it on on a larger scale than it has ever before been conducted. Our review of the trust from the trust makers' standpoint showed this most forcibly; and we shall see more of it as we study further the methods by which the monopoly gains an advantage over the independent producer in dispensing with what we may call the waste of competition. In the argument presented by the Standard Oil Trust before the House Committee on Manufactures in the summer of 1888, occurs the following statement of the work which that monopoly has done in cheapening production:

"The Standard Oil Trust offers to prove by various witnesses, including Messrs. Flagler and Rockefeller, that the disastrous condition of the refining business and the numerous failures of refiners prior to 1875 arose from imperfect methods of refining, want of co-operation among refiners, the prevalence of speculative methods in the purchase and sale of both crude and refined petroleum, sudden and great reductions in prices of crude, and excessive rates of freight; that these disasters led to co-operation and association among the refiners, and that such association and co-operation, resulting eventually in the Standard Oil Trust, has enabled the refiners so co-operating to reduce the price of petroleum products and thus benefit the public to a very marked degree and that this has been accomplished:

"1. By cheapening transportation, both local and to the seaboard, through perfecting and extending the pipe-line system, by constructing and supplying cars with which oil can be shipped in bulk at less cost than in packages, and the cost of packages also be saved; by building tanks for the storage of oil in bulk; by purchasing and perfecting terminal facilities for receiving, handling, and reshipping oils; by purchasing or building steam tugs and lighters for seaboard or river service, and by building wharves, docks, and warehouses for home and foreign shipments.

"2. That by uniting the knowledge, experience, and skill, and by building manufactories on a more perfect and extensive scale, with approved machinery and appliances, they have been enabled to and do manufacture a better quality of illuminating oil at less cost, the actual cost of manufacturing having been thereby reduced about 66 per cent.

"3. That by the same methods, the cost of manufacture in barrels, tin cans, and wooden cases has been reduced from 50 to 60 per cent.

"4. That as a result of these savings in cost, the price of refined oils has been reduced since co-operation began, about 9 cents per gallon, after making allowance for reduction in the price of crude oil, amounting to a saving to the public of about $100,000,000 per annum."

Certainly it would seem that this is a strong defence of the trust's character as a public benefactor; but it is well to note that while it has been making these expenditures and reducing the price of oil to the consumer, it has also been making some money for itself. The profits of this trust in 1887, according to the report of the committee appointed to investigate the subject of trusts by the New York Legislature, were $20,000,000. The nominal capital of the trust is but $90,000,000, a large portion of which is confessedly water. In answer to the statement that the price of oil has been reduced steadily by the operations of the trust, it is charged that no thanks is due to the trust for this benefit. The trust has always wished to put up the price, but the continual increase in the production of the oil fields has obliged the trust to make low prices in order to dispose of its stock. There are also about one hundred independent refineries competing with the trust, and their competition may have had some influence in keeping prices down. It is undoubtedly true that the economy in the storage, transportation, and distribution of oil by the systematic methods of the Standard Oil Trust has made it possible to deliver oil to the consumer at a small fraction of its cost a decade ago. But it is also true that a good part of the reduction in the price of oil is due to the abundant production of the petroleum wells, which have furnished us so lavish a supply. The principal charges against this trust, made by those who were conversant with its operations, have never been that it was particularly oppressive to consumers of oil; but that, in the attempt to crush out its competitors, it has not hesitated to use, in ways fair and foul, its enormous strength and influence to ruin those who dared to compete with it.

In a later chapter we shall be able to study these more intricate questions regarding trusts with a better understanding of our problem. Let us pay some attention now to the growth of the trusts and of combinations in general for the purpose of limiting competition among manufacturers, which has taken place within the past few years.

According to the little book entitled "Trusts," by Mr. Wm. W. Cook, the production of the following articles was, in February, 1888, more or less completely in the hands of trusts: petroleum, cotton-seed oil and cake, sugar, oatmeal, pearl barley, coal, straw-board, castor oil, linseed oil, lard, school slates, oil cloth, gas, whiskey, rubber, steel, steel rails, steel and iron beams, nails, wrought-iron pipe, iron nuts, stoves, lead, copper, envelopes, paper bags, paving pitch, cordage, coke, reaping and binding and mowing machines, threshing machines, ploughs, and glass—a long and somewhat jumbled list, to which, however, at the present time, there should probably be added: white lead, jute bagging, lumber, shingles, friction matches, beef, felt, lead pencils, cartridges and cartridge-shells, watches and watch cases, clothes-wringers, carpets, coffins and undertakers' supplies, dental tools, lager beer, wall paper, sandstone, marble, milk, salt, patent leather, flour, and bread. It should be said that, as regards most of these combinations, the public is ignorant beyond its knowledge that some form of combination for the purpose of restricting competition has been formed. For the purpose of our present investigation it makes little difference just what this combination may be.

The salient facts for us to note are, that among the manufacturers of this country there has arisen a widespread movement to partially or wholly avoid competition in the production and sale of their goods; that in a very great number of manufacturing industries these combinations have progressed so far that their managers have been able to advance prices and check production; that some of these combinations have taken the form of trusts, and by this means have every prospect of maintaining their stability and reaping their enormous profits with the same permanency and safety as has their predecessor, the Standard Oil Trust; and, finally, that with this prospect before them, our manufacturers, as a class, would lose their reputation as shrewd business men if they did not follow out the path marked out for them, and combine every manufacturing industry in which combination is possible upon the plan of the trust.

In conclusion, it may be well to examine the statement attributed to Mr. Andrew Carnegie, that, "there is no possibility of maintaining a trust. If successful for a time, and undue profits accrue, competition is courted which must be bought out; and this leads to fresh competition, and so on until the bubble bursts. I have never known an attempt to defeat the law of competition to be permanently successful. The public may regard trusts or combinations with serene confidence."

Surely if this statement is true, we have little need for further examination of this subject. We have now knowledge enough of our subject to enable us to determine its truth or falsity. We have found in the actual trusts that we have examined none which have shown signs of succumbing to outside competition. More than this, however, we have seen that it is possible for a trust to carry on business and deliver goods to the consumer at much less cost than an independent manufacturer can. And as surely as this law holds that production on the largest scale is the cheapest production, so surely will the trust triumph over the independent manufacturer wherever they come into competition. If the trust were always content when its competitors were disposed of, to make only the profits which it could secure by selling at such prices as the independent manufacturers could afford, there would be less outcry against it. But with the consumers wholly dependent upon it for supplies, the prices are in the trust's hands; and the tendency is to reap not only the profits due to its lessened cost of production, but also all it can secure by raising the selling price without arousing too much the enmity of the public.

Clearly the trust is at once a benefit and a curse. Can we by any means secure the benefit which it gives of reduction in cost without placing ourselves at the mercy of a monopoly? This is the question which must occur to every thoughtful man. Before we can answer it, however, we must examine the effects of competition and monopoly in other industries.