called Trusts, and railroads or partnerships or wealthy individuals, and the evil seems to be common to all. The fault seems to be rather with the legislatures and the character of the men whom we, the public, send to them, or with our ethical and social standards, than with corporations as such. If the combinations have good features about them, it would certainly be unwise to attempt to destroy them because our legislators were dishonorable men. A much wiser as well as a much more certain and probably an equally practical measure, would be to endeavor in some way to improve the character of our legislators by better methods of election, or by general education, or to lessen the opportunities, through rules of our legislatures or otherwise, of those who are unscrupulous enough either to blackmail a well-meaning corporation, or to take dishonest pay from a dishonorable corporation. That the political evil exists, is beyond question. That its cause is mainly the Trust and its only remedy the destruction of the Trust by no means follows, although that seems to be a normal presumption by very many.

Of much greater significance on the whole is the effect of industrial combination upon our social organization. The democratic social systems of the United States and of many of the newer English colonies seem to have developed a power of self-control and of selfdirection in the individual citizen which can rarely be found elsewhere in the world. This power of selfdirection is found to a remarkable extent often in local governments, and in individuals, especially in business.

men.

The chief purpose even of our school systems, in the judgment of many of our ablest and most high

minded teachers, is to develop among our rising citizens this power of self-control. In fact, M. Demolins, in his most interesting book, "Anglo-Saxon Superiority," ascribes the success of the English-speaking peoples in self-government and in the establishment of colonial systems largely to this independent spirit, which he thinks has been developed in our systems of education, both that of the schools and that of the home, in the inclination of parents and teachers to compel children, especially the boys, to rely upon themselves in all the ordinary emergencies of life.

It is thought by many that competition in industry develops this power of individual self-direction, while the Trust system destroys it. Under the competitive system, each cares for his own. The one who shows on the whole the greatest power of self-reliance, selfdirection, and skill-the fittest-is the one who, in the competitive struggle, survives. As his weaker rivals fall out, the plane of efficiency is elevated and the whole industrial structure is raised. This competitive struggle among individuals may be cruel in its effects upon those who lose, but from the strictly economic point of view it, so far at least, has generally seemed best for society, inasmuch as it has resulted in the success of the one most fit whenever the competition has been legal and just.

When, on the other hand, combinations among competitors are first made, the weaker instead of being forced to the wall, are saved, although their establishments may be closed by the combinations, and although they may have been taken into the combination on terms, relatively speaking, unfavorable. When the

whiskey combination was organized with its eighty separate distilleries, of which nearly seventy were almost immediately closed or dismantled, unless in fact they had been closed before, dividends were paid equally upon all the property, although the absolute amounts paid to the stockholders who had put in their plants at low prices were, of course, comparatively small. When, in 1887, the Sugar Trust was organized, the weaker competitors were not forced to the wall, but were taken into the combination, although, doubtless, at a low valuation.

Aside from the effect upon individual character, consider first whether the community loses or gains economically by this apparent preference of the combination to buy up weaker establishments rather than to force them out of existence by a more determined competitive struggle. From the standpoint of the creditors it is probable that there is comparatively little difference in the methods employed. If competition should continue, and the weaker producer be forced into bankruptcy, so that his creditors would receive but fifty cents on a dollar, they would lose by so much. If, on the other hand, with the man's business in the same low condition, the establishment is bought up at fifty cents on the cost price, if the man is honestly eager to pay his debts, the situation is probably not materially different. A man who is compelled to sell to a combination at what he believes to be less than the value of his establishment under the competitive system, may, of course, have feelings of bitterness toward the combination that the bankrupt would not have toward any of his competitors; but the economic result to him and to his cred

itors would not be materially different. Both lose in either case.

During the continuance of the competitive struggle between rivals who eventually enter a Trust, or between a large combination and its outside rivals who are being gradually forced out of business, prices to consumers are likely to range low for a considerable period. Under those circumstances, it would seem that the consumers, for the time being at least, gain more than they would if the combination were earlier effected, without any of the competitors being driven into bankruptcy. On the other hand, it must not be forgotten that the most vigorous competition is almost of necessity wasteful. While on the one hand the ablest competitors rely upon excellence for their success, many others, especially in the last stages before they yield, resort to questionable practices. Cheap devices are sometimes employed which are likely to result in imperfect goods. The manufacture of shoddy instead of genuine goods is sometimes encouraged. Desperate means to secure unwarranted credits are often resorted to; and the loss from these sources, as well as the direct loss to the competitors themselves, is likely to more than offset the gain to the consumers from the temporary lowering of price until the producers are, many of them, driven into bankruptcy. Besides this, the combination or the surviving competitor is likely, when the fight is won, to recoup his losses by demanding an indemnity, not from the vanquished as does a victorious nation, for that would be a vain attempt, but from the onlookers, the consumers. The victor will ask, too, why the consumers ought not to pay the indemnity.

They have been, through low prices, the beneficiaries of the conflict.

A reasonable competition, which may indeed force out one by one individual producers, is clearly a healthful influence in the industrial community, stimulating the better ones to their best efforts and raising the plane of efficiency. A competition of this nature where, one by one, the weaker competitors drop out and more efficient ones come into the industry from time to time, produces no crisis in that industry. On the other hand, fierce competition among rivals nearly equal, especially when large amounts of fixed capital are involved, not only leads to the wastes already mentioned of illadvised methods and measures, and losses to practically all of the competitors themselves, but, further, leads to general depression in the line of industry involved. This depression will lead to shifting of capital from that industry into other lines for which, under normal conditions, there is not so great need in the community, and this, in itself, involves another industrial loss. For these reasons it is probable that, when competition is of this nature, the community will gain from the economic viewpoint by a combination which stops the competition before it has reached the ruinous stage, even though it does involve for the time being the taking of some plants that are comparatively useless. The value of those plants will, in part at least, be saved by employing them in other lines of industry; but even where the loss is temporarily a total one, it is likely to be less to the community as a whole as well as to the combination itself than would result from a continuance of the competition to the ruin of a large proportion