NOTES AND ABSTRACTS 281
be controlled by a number of organizations which seemed to be able to fix prices with- out regard to competition. Two or three of the largest and most conspicuous had assumed the peculiar juridical form known as a "trust," a word which has continued to be commonly used for all capitalistic combinations of a supposed monopolistic tendency, whether they take that peculiar legal form or not. The discovery of their existence led to a popular demand that the several governments of the states and of the union should enforce what the lawyers declared to be the principles of the common law with regard to conspiracy in the restraint of trade. Anti-trust laws were passed by some twelve or more state legislatures; and in 1890 by the United States Congress itself with regard to interstate commerce. Although, in the new wave of business con- fidence, there is a fresh movement on the part of capitalists engaged in industry toward far-reaching and all-embracing combinations, there is not, in the original and exact sense of the word, a single " trust " in America. The " trust," properly so called, was nothing but an easy legal mechanism for arriving at an end which could equally well be achieved by other means. It was this : The shareholders of a number of joint-stock companies all handed over their stock, and with it their voting powers, to a small board of trustees, receiving in return certificates representing the amount deposited. Externally each company, or "corporation," retained its inde- pendent constitution ; but henceforth its management was in the hands of the trustees, who acted nominally on behalf of the shareholders of that particular company, but really directed the operations of all the establishments according to a general plan. The attempt to enforce the supposed common law and the invention of new penalties in obedience to popular outcry have resulted in making it impossible for a number of companies or individuals to enter into formal contracts of certain particular kinds to restrict production and fix prices. What we have to look at. therefore, in the United States is not a particular form of association, but all such capitalistic monopolies — or (where the control of supply does not amount to a monopoly) all such market dominations — as are able so far to govern supply as to have the power of fixing prices without any immediate fear of competition, either domestic or (thanks to the tariff wall) foreign. There is a distinct tendency toward the extension either of combination or of more or less complete amalgamation of interests to more and more branches of industry, as well as toward the growing solidification of that increasing number of combinations which manage to survive. The student of the operation of the force of self-interest under modern conditions of production on a large scale can find no more instructive reading than the series of monographs which American econ- omists and their pupils have devoted to the history of a number of the monopolized industries. The movement toward some mitigation of the influence of competition in the determination of price is very widespread in American industry, and is one of the chief directions in which the force of self-interest, which but recently made only for individualistic competition, is now making itself felt. The "trusts" represent but the culmination of this movement, which takes a hundred forms. The "great indus- stry " of modern times, so long as it is carried on under conditions of individualistic competition, has certainly inevitable consequences of the gravest character. The tendency to periodical crises, due to a want of coincidence between supply and demand, is reinforced by the increasing use of fixed capital. The formation of "trusts" is, in the main, simply an attempt to lessen and, if it may be, avert altogether the disastrous and harassing effects of cut-throat competition. Their formation has, in most instances, followed upon a period of overproduction and consequent depres- sion. The success of the combinations tends at present toward the creation of a regime of what the French call patronage. But the great captains of .American indus- try are not all of them mere money grabbers. Many are in their way industrial statesmen. No large generalization as to the ultimate issue of industrial development can be made. In the case of the Standard Oil monopoly, the development has already reached a point at which, on the purely economic and administrative side, there could be little objection to the government taking over the business — if only there were a government politically capable of the task. In countries where the monopolizing movement is well under way the governments should assume the duty of. in some way, controlling prices. The principle of public determination of maximum rates and maximum dividends has already been recognized in various countries in various directions ; and it will doubtless have to be carried farther. But, before this can be
