PREFACE TO FOURTH EDITION THIS edition of the Trust Problem is much more than merely a reprint of the old edition. It is practically a new book. Some new chapters have been added. Chapter 1 on the Evolution of Business, the very large additions made to Chapter 9 on Prices, Chapter 10 on Trusts and the Working Man, with the new facts that they contain, aid materially in the discussion of the economic principles involved. Chapter 12 on Industrial Combinations in Europe gives us a basis of wide experience. The new chapters on State and Federal Trust Legislation in the United States, and the one on Trusts and the Federal Court, showing the development of legislation during the last few years, likewise serve to strengthen the economic foundation of the discussions, since the course of legislation has, to a considerable degree, clearly been based upon the principles brought out in the theoretical discussions. In any book that is to serve as a text book it is desirable to furnish material as a basis for original study and judgment on the part of the student. The same material is desirable for business men and scholars who wish to be certain of the facts on which they are to base their judgment in business matters. In consequence, it has been thought best in the appendices to include much new material. Appendices A, B, and C vii viii PREFACE TO FOURTH EDITION show remedies for the evils of industrial combinations that have been proposed by those who have given very careful study to the subject. Appendix D, in giving outline histories of representative industrial combinations, shows, not only economic results springing from these great business organizations, but also the influence of Governmental action upon them. In the succeeding appendices are given in sufficient detail the laws of the United States and foreign countries, so that the reader can make a reasonably accurate comparison of the attitude toward these combinations of various Governments under different economic conditions. It is believed that enough of this material has been given to form the basis for an excellent course for any group of university students without going outside of the volume itself. Although, of course, the advantage of wide reading in the libraries is not to be overlooked. The history of the years since the publication of the preceding edition, though fruitful in experience and in legislation, shows no need of change in the judgment of fundamental principles. Slight changes in emphasis may be noted. The degree of monopoly power that can be exercised by the capitalistic combinations, for example, is apparently somewhat less than we earlier thought, while the regulative power of competition and of public opinion is somewhat more. New York, July, 1917. THE TRUST PROBLEM TABLE OF CONTENTS CHAPTER I THE EVOLUTION OF BUSINESS "Friction" of Competition in Retail Trade. 3. Competition Among Wholesalers and Manufacturers. 2. Advantages of Large Scale Production and of Com- |