as natural or patent monopolies. Unfair competitive practices are largely secret. Railroad discriminations, for example, are comparatively seldom brought to light. We shall never know how far combinations and pools in the past have used unfair methods. Even if we did know all about these practices and all about the special privileges enjoyed by combinations, it would be merely a question of opinion as to how far power over prices was attributable to them, except in cases where no unfair practices and no special privileges had existed.

The truth is that a final answer to the question whether trusts and pools, merely by virtue of combination, can maintain monopoly power and can on the average keep prices higher than those prevailing under strictly competitive conditions, would be possible only as the result of a wide-reaching and prolonged experiment. The nation and the states would have to repeal their anti-trust laws and substitute merely laws for the prevention of unfair competitive methods and the removal of special monopoly privileges. Then, perhaps, after a long period of years, we could determine approximately the advantages or disadvantages of unrestrained liberty to combine. It is such an experiment, apparently, that some would have us undertake. The chief objection to it would be the difficulty of dropping the experiment when we had learned its lesson. If it were found that trusts and pools under such conditions were injurious to the public interests, it would be almost impossible to break them up and to return to a régime of general competition.

Are we then to reach the conclusion that we know nothing about the ability of trusts and pools to obtain excessive prices if unaided by unfair competitivė

methods or special advantages? Must we give up the solution of the trust problem at the outset ? I think not. There is enough evidence at least to indicate the probability that combination of the greater part of the concerns in an industry, merely as such, gives an appreciable degree of monopoly power.

In the case of a good many trusts and pools we have reason to believe, either from the mere nature of their business or from the results of investigation, that unfair competitive methods and special monopolistic features have not been important factors. Yet in some such instances monopolistic prices have been maintained for greater or shorter periods of time.

Pools are much less able than trusts to use unfair competitive methods effectively. This is the natural result of the fact that the pool is not under unified management. Take the matter of railroad discriminations, for example. The pool ordinarily does not deal with the railroads as a unit. It has no officer or organization for that purpose. The individual members either pay the regular freight rates or separately negotiate for special rates and rebates. As individual concerns, the members of a pool are not in a stronger position to secure railroad favors than the outside concern. The practice of price discrimination also requires, in order to be an effective agent for destroying competition, a degree of centralization in marketing such as seldom exists in the pool.

Moreover, in most cases, the pool as such can have no peculiar monopoly privileges. Only in case the single members together possess the whole of some limited natural resource, or together possess all the patents on which a given business is dependent, can their combina

tion have a peculiar advantage over outside concerns. It could readily be shown that, in the case of most pools, no such conditions exist.

Nevertheless, even pools have often exercised a powerful monopolistic control over prices. The successive pools in the powder business, the pools of salt manufacturers, the pools of iron and steel manufacturers, notably the wire-nail pool of the 90's, the more recent pools in certain specialized branches of the wire industry,

these and a number of others are known to have advanced prices greatly. It is not sufficient to say that in most or even in all cases the excessive prices have been only temporarily maintained. It must be shown that during the ensuing period of competition the prices were enough below the normal level to offset the monopoly prices of the preceding period. This cannot be shown; the facts, at least in a good many cases, have been otherwise. The public has been forced on the average to pay excessive prices as the result of pools. As already indicated, moreover, the breaking down of pool prices has quite as often been due to the action of the members of the pool itself as to competition from without. show that pools cannot maintain monopoly would not be to show that trusts, with their stronger organization, cannot do so.

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Turning now to our experience with trusts, it has been demonstrated by thoro investigation that several of the trusts have maintained prices, sometimes for long periods, far above the competitive level. This has been proved true of the oil, steel, sugar and tobacco trusts. Doubtless it has been true also of many others not so, investigated. Of the four named the oil trust is exceptional. It has in such large measure resorted to

unfair competitive methods and has possessed such special privileges as might possibly account fully for the monopoly power displayed. I do not think the same can be said of the others.

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The history of the sugar trust is illuminating. While that combination has at times profited by railroad discriminations, there is little reason to believe that its ability to attack competitors was due in any great measure to such discriminations. Most of the petitors which have arisen from time to time have been exceedingly large concerns, whose business the railroads 'were eager enough to get. Price discrimination and other unfair methods of competition can be used in the sugar industry only within narrow limits. These methods were certainly not the means which prevailed to force competitors to sell out to the trust. For about fifteen years after the formation of the sugar trust in 1887, sugar prices, that is, the margins between the prices of raw and refined sugars, showed marked oscillations. A period of high monopolistic prices would be followed by the erection of new plants and a period of active competition. The competitors would then be taken into the fold and prices advanced again. On the✔ average, prices were materially higher than they would have been under normal competition. For the past ten years or thereabouts, conditions in the trade have been more steady and margins have varied but little, being on the whole rather high. The trust has lost materially in its control of output during that period. The fact, however, seems to me attributable more to the fear of government prosecution than to a change of heart on the part of the managers of the combination or to realization of their inability to maintain monopoly.

The tobacco trust possessed for a long time, if it does not still possess, very great monopolistic power. When the Spanish war broke out, the government greatly increased the taxes on tobacco. Manufacturers, as was expected, advanced the prices correspondingly. At the close of the war, the taxes were restored to their former level. But prices were not reduced. Profits soared. Had effective competition existed in the trade, it would have been impossible to maintain prices after the taxes were lowered. The tobacco trust, I feel sure, was far from owing the whole of its power to unfair competitive methods or to special monopoly privileges. Freight charges on tobacco are such a small element in cost that, even if the trust had special favors in this respect, they could have counted but little in competition. The trust did make considerable use of price discrimination as a method of warfare against competitors. It maintained bogus independent companies. It sought to make exclusive contracts with dealers. The conditions of the trade, however, are such that these practices could not wholly account for monopoly power. The ability of the trust to maintain its dominant position was largely due to its readiness to buy up competitors at good prices, and to the readiness of competitors to submit to the amalgamation process.

In the case of the steel industry, the maintenance of a generally high level of prices since about 1900 has been due largely to the willingness of the principal independent concerns to follow the lead of the Steel Corporation. The understandings with outside concerns have been usually very informal, but decidedly effective. The steel combination is much bigger than the Steel Corpora