should be understood that they only are responsible for the opinions herein expressed. It has been the intention to present mainly facts and the judgments of others who from their intimate connection with the corporations under discussion, either as members, rivals or otherwise, are thoroughly conversant with the facts regarding them.

The book is intended to be a brief compendium of industrial conditions, so far as they particularly affect industrial combinations or are affected by them, together with some opinions regarding the influences which have brought about present conditions, and an attempt to draw from the data furnished certain conclusions regarding the economic factors involved and their working, which may possibly be helpful in connection with legislation, and with the administration of the combinations. This study is not intended primarily for the student of economic theory. As a brief impartial statement of facts and principles, it is hoped that it will prove useful to the many busy men who have not the leisure needed to gather the material, but who, wishing to do their duty as citizens intelligently, will welcome a brief compendium which may to a certain degree serve them as a basis for judgment. And yet it is thought that the studies connected herewith will be useful to students. They seem to have marked some brief steps in economic theory and method. So far as the writers are aware the term "capitalistic monopoly" was first used to characterize the trusts in the author's article of 1894.* This conception of a qualified monopoly maintained within rather narrow limits *Political Science Quarterly, September, 1894.

by sheer force of large capital was attacked by a few economists but, speaking generally, it has been accepted by both economists and business men and within the limitations suggested in this volume it stands.

Again, in the history of the Whiskey Trust,* was first employed the system of measuring the effects of the industrial combinations upon prices by indicating month by month the margin between the cost of the raw materials involved and the selling price of the finished product, a system that has since been followed in numerous other studies, both by the United States Government, and many individual writers. This has proved to be the most effective method of showing clearly the course of prices and of exposing many of the fallacious conclusions drawn from merely grouping over a series of years prices of the finished products or by using groupings of selected years of the marginal differences, methods that were formerly frequently employed and that led many sincere writers to false conclusions.

Another advance in showing accurately the effects of the combinations upon prices, was made in the Steel Corporation case by comparing the course of prices of steel in this country and abroad with the course of prices of general commodities as indicated by index numbers. The advantages of this method together with its limitations are explained in Chapter VIII on Prices.

The presentation of the business facts, not only in the earlier editions of this work but even in some of the preliminary studies,† seemed to indicate clearly the *Political Science Quarterly, June, 1889.

†Political Science Quarterly, Vol. IX, No. 3. 1894.

sound business policy that it would be wise for the managers of the great industrial combinations to follow in order to insure permanent success in distinction from immediate large profits, speculative in their nature, which were likely to be followed by disastrous competition and enormous losses. These conclusions, based on experience and economic principles, were afterward presented independently before the United States Industrial Commission by various practical business managers of the great corporations, especially by Judge E. H. Gary, at that time President of the Federal Steel Company and since then Chairman of the Board of Directors of the United States Steel Corporation. The most striking vindication of this policy advocated and followed by these business men has been found in the decisions of the courts in the cases against the International Harvester Company and the United States Steel Corporation, together with the decisions of the Supreme Court of the United States in the Standard Oil and Tobacco cases. In these cases the courts, in laying down the principles on which their decisions have been based, have finally adopted as their "rule of reason", these business principles; and their decisions, whether for or against the corporations in the individual cases, have turned upon their application of these principles to the facts as proved.

Considering the nature and purpose of this book, it has not been thought best to cite authorities for many of the statements made. Whenever they are taken from the testimony before the United States Industrial Commission, Doctor Durand's admirable index to that report will be available to all who care to verify the

citations. In many cases, however, information given has been confidential in its nature, though on that account no less trustworthy. Such information has dealt at times with practices that in some way have come under public condemnation, such as promoters' rewards, freight discriminations, commissions to bank officers, and stock speculations. In other instances it has concerned the business of special combinations, and has formed the basis for judgments when the facts themselves were matters of only private con

cern.

The appendices contain some data and documents which may prove helpful in enabling readers to make more definite and specific their judgments as to business principles independently of the conclusions of the authors and to clarify their own ideas regarding new legislation or court decisions. The admirable summary of conclusions made by Judge Howe, the permanent Chairman of the Chicago Conference on Trusts, regarding certain suggested methods for the solution of the Trust problem, is a noteworthy document, presenting what were in effect the opinions which could be agreed upon as long ago as 1900 by substantially all the membership of that great conference, representing so many conflicting views and interests Time has vindicated their judgments. The Report of the United States Industrial Commission is a most carefully considered expression of opinion and recommendations by a non-partisan body of men, made after an investigation extending over three years. Though it does not claim to be final, nevertheless it was the result of most careful study and deliberation, and is

entitled to the prominent position which has been given it by thinking men of all classes.

The proposed New York Business Companies' Act, 1900, drafted to carry out the suggestions made in Governor Roosevelt's message regarding Trust legislation, is the one formulation into a definite bill of the opinions of many persons who have thought it possible to separate sharply between the good and evil arising from the modern organizations of capital, and who are ready to encourage the good while checking the tendencies toward evil, chiefly through compelling the corporations to carry on their operations much more under the public eye than at present. While in its preparation the author was assisted by several lawyers and business men, he took alone the responsibility of determining just what the bill should contain, and has, therefore, in condensing part of it and in determining what portions of it should be printed in full, felt at liberty to make some slight modifications in the bill as reported by the Judiciary Committee of the New York Senate. Although this bill did not become law, it still stands as a type of legislation on corporation organization and management toward which we should work; and the trend of legislation in many of our states and in Congress is clearly in the direction indicated in this bill. The experience of foreign countries in this field, as shown in the chapters on foreign combinations and in Appendices giving the main provisions of the laws of Great Britain and Germany, prove how significant publicity and public control are considered in those countries.

The purpose of the book forbids giving much space to exact definitions and minute classification, but under