tially the entire output of the world, made a most humiliating failure; but such experiences ordinarily serve but to point out weaknesses in a certain plan and to suggest better methods for the future. Since 1902 the great tobacco companies of Great Britain and of the United States have agreed not to invade each others home territory and have joined in the British-American Tobacco Co. (Ltd.) to develop and largely to control many markets foreign to both countries. Their success augurs well for the possibility of other such agreements, many of which have had wide influence. A striking illustration of the range and power of combination in the international field is furnished by the banking syndicate of four, then six, then after the forced withdrawal of the American group of five groups of banks backed by their respective governments to make loans to China. Not only bankers outside the group but the Chinese Government felt that the syndicate had a control of the situation substantially monopolistic, and that China could not, as a matter of fact, secure loans outside the syndicate, if such loans had any political bearing. It is not yet clear how far the power of the syndicate extends.

Freight discriminations in behalf of favored shippers are very frequently cited as a chief cause for the formation and rapid growth of industrial combinations. There can be no doubt that such discriminations have frequently been made in favor of large shippers, whether manufacturers, buyers of grain, shippers of dressed meats, or others. In fact, in many lines of business for many years in the United States, it was probably true that no person who did not receive some rebate

from the printed tariff rates, or other favor from the railroads, could remain in business, as such rebates or other favors were so frequently given.

For years after the law against rebates passed there was reason to believe that this evil still existed to some degree. For some years prominent shippers expressed the opinion, based apparently on their own experience, that rebates were regularly paid in disguised form by the railways to a few of the largest shippers, and that in this way the smaller dealers were compelled to sell their goods directly to the larger. Others did not hesitate to say in private that their shipments were regularly made by special contract, and that practically no attention was paid to schedule rates. Shippers, railway officials, special students particularly well acquainted with the problems of interstate commerce, all asserted that such discriminations existed in favor of the larger shippers. Now, however, the practice seems to have stopped and the evil to have been overcome, except in form so changed that it is not contrary to law.

The enormous and dangerous power of the railways, by giving special rates in favor of shipments to one town to build up that town at the expense of its neighboring rivals, or to pour wealth into the lap of one great shipper or manufacturer, while bringing by the same process ruin to his competitors, can hardly be overestimated. The fact that such discrimination has been considered by our highest courts and ablest writers contrary to public policy as well as to good morals does not lessen materially the difficulty of the problem.

There can be no question that the largest shippers

are able in many cases not merely to lessen labor for the railways, but also to render more secure their profits, their steadiness of shipment, and certainty of pay. Moreover, they can in many cases render direct service to the railways in the way of adapting their shipments more or less to the conditions of traffic so as to accommodate the railways, and in cases of agreements more or less formal, among different roads, they can act as eveners of traffic. Many of these services, some of which are perfectly legal and proper in their nature, would seem to justify some sort of payment, and it is on the basis of such benefit received that the railroads attempt to justify their discriminations from an ethical as well as from a business standpoint. Such justification might, too, in many cases be complete, were the railroad dividends alone under consideration; but if the public weal is threatened by monopoly thus created, and if individual ability and effort, however well directed, are thus secretly rendered useless, there can hardly be justification from the social point of view. In interstate matters, of course, since the passage of the Interstate Commerce Law in 1887, such discriminating practices are clearly illegal, and they have generally been considered as contrary to public policy; but that they have been granted, and that business has been done largely on that basis, is scarcely a matter of question. That such discriminations, too, usually favor the large shipper, giving him at times monopolistic power, and increasing his monopolistic power, if such already exists, is beyond doubt.

Of course the main elements of evil are secrecy and discrimination. So far as special rates can be

made general, even though the conditions are such that few can meet them, if also they are public, the evil is greatly lessened or in some cases removed.

Inasmuch as such discriminations are contrary to law, it has been asserted by several of the larger combinations, such as the Standard Oil Company, that it is even better policy for them, to say nothing of the moral aspect of the question, to live up to the law strictly, and see to it that their rivals are forced to do the same, than to run any risk of being caught in illegal practices. This is especially true where the shipments are very numerous and are made from widely separated points, so that evasions of the law would almost certainly be detected. One scarcely needs to add that their rivals believe that their practice has not always agreed with their avowed policy, and in some cases at least the courts have found them guilty.

Aside, however, from violations of the Interstate Commerce Law, the large combinations at times get freight advantages which add greatly to their power. It seems to be established that the Standard Oil Company receives decided advantages from the location of its refineries at Bayonne, New Jersey, when the nature of the freight rates on oil shipped into eastern territory is taken into consideration. Shippers of goods from western Pennsylvania or Ohio to points in the New England States are usually given Boston rates on most articles; but on petroleum the rate is arbitrary, a local rate usually being added to the through Boston rate. On that account the rivals of the Standard Oil Company whose refineries are located in western Pennsylvania or Ohio find it impossible to compete

at many points which they could easily supply at profitable prices, provided that Boston freight rates were charged. The Standard Oil Company, by bringing its oil to East Boston in tank steamers from its refineries on the seacoast, can distribute throughout New England at only the local rates, thus securing so decided an advantage that it is able to control the oil market throughout that territory. In like manner, by having very large refineries located at Whiting, near Chicago, it is able to supply the South and West at lower rates than its rivals, who ship from western Pennsylvania or Ohio, the rates from the immediate neighborhood of Whiting being apparently much lower than those from localities where rival refineries are located. It may pay exactly the same rates as its competitors pay when shipments are made over the same routes; but, owing to the fact that its refineries are more advantageously located, it not only secures a great advantage in the saving of cross freights, but it can also save through favors in rate making. It is not thought by many that there is any direct discrimination when oil is shipped over the same route, but the railroads seem in some instances to have arranged their rates in such a way that they work decidedly to the advantage of a company situated as is the Standard Oil Company. The arrangements made, too, are so different from those that obtain in other lines of goods that they give color to the belief held by many that the railroads and the Standard Oil Company are working, in certain cases, practically in partnership. It is probable that a careful study of the freight rates on other classes of goods controlled by other very large shippers would reveal similar