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per mile. But even the decision of the Commission (which was accepted by the railways) was a reduction of over 16 per cent. Investigations held have resulted very generally in a lower price for gas. All important investigations of street-car service in the great cities of the United States have terminated in the conclusion that the monopoly price of five cents per passenger is a high price. The recent settlements with the street-car companies of Chicago have been based upon an agreement to maintain a five-cent fare and to give to the city of Chicago 55 per cent of the net gains. According to the statements of the interested parties, even this will leave a very handsome return for the owners of the street-car properties.

In the next place, we refer to the experience and observation of men when they have had dealings with well-defined monopolies. The express companies and the oil business afford illustrations falling within the experience and observation of nearly all readers and students of this work.

Monopolies and the Distribution of Wealth. We have not the precise statistical data which will enable us to state the exact influence of monopoly upon the distribution of wealth. We have, however, sufficient data to warrant the opinion that the high price of monopoly and the gains resulting from the exclusive position of the monopolist give us a large privileged class in countries of modern civilization, but especially in the United States. An advantage of the monopolist in the United States is found in the law of monopoly price, coupled with the failure to regulate monopoly as carefully in our country as it has been regulated in Europe, generally speaking. Ours is a country in which there is large wealth, in which wealth is easily acquired, and in which consequently people spend freely. Monopoly price must, then, be exceptionally high price and yield exceptional gains. Even when the increment of price is comparatively small, it has large significance in the case of the sale of a vast number of units of services or commodities. The difference between a four-cent street-car fare and a five-cent street-car fare may not appear to be great, but it is a difference of 25 per cent and is enormous.

All the many investigations that have been held recently in

various lines of business (especially in railways, beef industry, coal mining, etc.) point to monopoly as a prime cause of the socalled swollen fortunes of this country. In this and other countries some histories of families distinguished for wealth have been written, and probably few if any cases could be found in which some monopoly element had not entered. Various lists of rich men have been published, among them one published by the New York Sun in 1855, and one published by the New York Tribune in 1892. These lists cannot by any means be presumed to be accurate, and yet they do afford very considerable evidence of the sources of large fortunes, and point to monopoly as a prime cause of the modern enormous fortunes. This is a subject which in itself would require a larger book than the present one for adequate treatment. The student must attempt by observation and study to carry forward the lines of investigation and thought here suggested, being constantly on his guard against undue haste in generalization. Public Policy with Respect to Monopolies. It is possible to throw out only a few suggestions in this place. As many monopolies have come as a result of underlying laws of industrial evolution, they cannot all be abolished. Experience and the nature of industries like railways, gas works, etc., falling under the head of 66 public utilities," so called, should be conclusive. We must have monopoly in these cases, and the only question we are concerned with is, "What kind of monopolies shall we have?" Again, we cannot abolish monopoly simply as a result of legislative enactment. The anti-trust laws of our states, so generally failures, should be conclusive as to this point. On the other hand, legislation is not powerless, but it must be in accord with the laws of industrial evolution. The problem is abolition of undesirable monopoly where this is feasible; and very generally regulation rather than destruction. Here, again, we have the experience of the United States and of other modern nations as confirmation. We may, to begin with, admit that unregulated monopolies in private hands have always been odious and are opposed to the principle of the laws of civilized nations. They are opposed to that endeavor to secure equality of opportunity which is fundamental in modern democracy and which manifests itself as a red

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thread running through American history. Even George Washington, generally looked upon as so calm and self-contained, denounced monopolizers and wished they might be "hunted down as pests of society" and "hanged on a gallows five times higher than the one prepared for Haman." It is not so much high price that disturbs the modern man as it is inequality of opportunity; and this general sentiment has been very clearly and forcibly expressed in court decisions. It makes little impression upon the American public when it is attempted to show that the Standard Oil Company has lowered price. The enormous fortunes to which it has given rise suggest that price has been higher than it should be, yielding far greater than competitive gains; but even if it could be proved that the price had been voluntarily lowered, it would not be convincing, because we are disturbed by the alleged engrossment of opportunities by a few members of the community and not open to others. Nor would it satisfy the American public to be convinced of the sincerity of the professed benevolence and of the personal integrity of the leaders of this gigantic undertaking. The question is one of the action of economic forces, largely impersonal; the leaders are often really coerced by these forces; and from one point of view are to be looked upon as their victims.

Obviously, the first step in a treatment of monopolies is to discriminate between monopolies owned and operated by organized society (that is, nation, state, or city, and managed in the general interest) and private monopoly. If it is true that a certain portion of the industrial field is naturally monopolistic, special privilege can be removed by government ownership. This is the first and most obvious method. The difficulties of government ownership are such, however, that another method is by many advocated as preferable and is, as a matter of fact, being thoroughly tried in the case of railways in the United States. And that is the method of public control of monopolies privately owned and operated. The public control, to secure equality of opportunity, must so regulate monopolies and limit price that the gains will be no higher than those produced by equally wise investments and equally wise

1 1 Bullock, Essays on the Monetary History of the United States, p. 67.

and prudent management in the field of competition.1 Sometimes it is stated that owners of railways and other monopolistic enterprises should have a competitive return upon all the money that they have invested. This would give them a position of special privilege, inasmuch as in the competitive field a great deal of money is lost. It is only wise investment and careful management in the field of competition that can secure returns equal or superior to the current rates of interest. Imprudently invested capital is lost in the field of competition; and when it is imprudently and unwisely invested in the field of monopoly, it cannot justly claim any return.

Finally, democratic sentiment demands that there should be no needless extension of the field of monopoly through favoritism, as seen in rebates and special rates of railway transportation companies.

The Relation of Monopoly to Trusts.-The development of industry is treated elsewhere in this work, and it is shown that, as a result of the forces inherent in industrial society, we pass over from labor aided with few and simple implements, scarcely more than an extension of hands and feet, so to speak, to labor aided by increasingly complicated and costly tools, and then we find labor supplemented and even replaced by machines, ushering in the era of capitalism; and, as this transition is made, industry is conducted on an ever larger and larger scale. The business unit grows from the small, isolated shop to such a mammoth concern as the United States Steel Corporation, owning an appreciable propor

1 This does not mean that in the case of old enterprises price must always be so reduced that the gains shall yield a competitive return only on the physical value of a plant. The principle of vested rights or interests has to be given a certain rôle. These have often been created by society rather than by private persons, and faith must be kept. In the case of railways and the telegraph, the American nation and states have deliberately encouraged a wasteful policy of competition which is in large measure responsible for high capitalization. It would not be right to place upon holders of these properties all the burdens of a mistaken public policy in the past. What is needed is to declare a public policy for the future and to base returns for the future upon future actual investments in the case of public utilities. In any case, we should have a physical valuation of railways, gas works, etc., as a help in determining fair prices for present and future. Now and here we can do no more than to throw out these suggestions in regard to a pressing present problem of great magnitude.

tion of the wealth of a vast nation. These large business units, as a result of evolution, are commonly designated as trusts; but they present simply the problems of large-scale industry unless they comprise elements of monopoly. This indeed very often, perhaps usually, happens in the case of the largest industrial establishments. They have been aided by rebates and other favors from railways, and they have made themselves master of peculiarly rich and especially limited supplies of natural resources, such as petroleum oil, anthracite coal, and the Mesabi iron range. The trust problem resolves itself into two classes of problems: first, the class of problems belonging to large-scale business; and second, the class of problems falling under monopoly. The discussion of so-called trusts can be profitably considered under these two categories. There is no magic in the mere word "trust," although it seems to have power to awaken alarm and has helped produce precipitate legislative action; whereas action must be preceded by an analysis of the trust problem into its proper elements to make possible its satisfactory solution.

QUESTIONS AND EXERCISES

1. Has bigness anything to do with monopoly? Do you know any small business which is a monopoly? Do you know any very large business which is keenly competitive? Contrast a state of competition with a state of monopoly.

2. Define monopoly and discuss each point in the definition.

3. Describe as fully as you can the relation of industrial evolution to the idea of monopoly.

4. Do you think that monopolists now show a worse spirit than formerly? a better spirit? Describe the monopoly established by Joseph in Egypt. (Genesis, Chap. xlvii). What good effects did it have? Is it apparent

that it had evil effects?

5. What do we understand by partial monopolies? What is there, strictly speaking, illogical in the term? Is this a sufficient reason for not using it? 6. Contrast land-ownership with monopoly.

7. Explain the importance of classification of monopolies, and especially of distinguishing between private and public monopolies.

8. State the main classes of monopolies, and give the divisions and subdivisions in each class.

9. A public tobacco monopoly exists in France and produces large revenues. The business is said otherwise to be well managed. Do you see any benefits

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