weapons of unfair competition or of the advantages of natural monopoly, - a thing by no means easy, trusts and pools would still probably possess a material degree of monopolistic power. It would be a dangerous experiment to remove the ban of the law from them without substituting effective machinery for regulation.

We have sought to show further that it is feasible to prevent by law the more formal types of combinations and of contracts in restraint of trade. It may be impossible wholly to prevent informal understandings which in some degree restrict competition. These informal understandings, however, are far less effective in maintaining monopoly prices and charges than formal combinations such as pools and trusts. have It was pointed out that the difficulties of govern- 1 ment regulation are exceedingly great.] The policy of permitting trusts to exist might result in the extension of trusts over almost the entire field of industry. It might also result in practically complete monopolization by each trust of its particular field. The determination of costs and of investment as a basis for the fixing of prices and profits over the multifarious field of industry would require immensely elaborate investigations and would involve extraordinarily difficult questions of judgment. Proper adjustment to the ever varying conditions of demand would be almost impossible. A vast governmental machinery for fixing prices and profits would have to be superimposed upon the machinery of private business. Government ownership on a vast scale or even complete socialism might readily be the outcome of this policy.

Finally, it has been shown that most of the alleged advantages of trusts in efficiency could probably be

secured in quite as great measure through large individual plants and through smaller combinations not powerful enough to threaten monopoly. While the suppression of competition itself may tend to bring about certain economies and other advantages, the importance of these is usually over-estimated, and there must be set against them not only the grave difficulties of regulation, but the tendency of monopoly and of regulation itself to lessen efficiency.

It may be granted that the data and the reasoning throughout this, discussion have been not altogether conclusive. It cannot be expected that every one will agree with the points of view here taken. The burden of proof, however, rests upon the defenders of the trusts. They ask us to permit the trusts to exist, whether with or without regulation. In this they are asking a departure from what until very recently were universally considered the proper principles of law and of economics. Their argument is certainly no more conclusive than the argument of those who would suppress trusts.

To defend big business is easy. The advantages of large scale production are obvious. To identify big business and large scale production with the trust is quite another thing. The glamor of the huge corporation with its mighty plants, its splendid organization, its thoro accounting system, its integration of related processes, must not blind us. All these are essential to progress. To get them we might even, be willing to pay the high price of surrendering competition. But we must be sure that they can be secured at no lower price before we tender such a compensation, or before we even enter on a path which may ultimately necessitate that compensation.

To pass from a régime of competition to one of monopoly is easy. To return from a régime of monopoly to one of competition is immensely difficult. The American people have not yet tried out fully the possibilities of competitive industry. It would be foolish to abandon the experiment thus early in our national development. If we destroy as far as possible the trusts that now exist, if we prevent trusts and combinations from being formed, we shall soon see whether it is possible to secure real competition, and whether under competition efficiency can reach a high point. If not we can readily enough change our policy. On the other hand, to accept the trusts today is to leap in the dark. Every step in that direction is difficult to retrace. The results of an experiment with permitting trusts freely to organize and with regulating them could not be determined for such a long period of time that the trusts would meantime get a grip almost impossible to shake off. In fact, we never could satisfy ourselves by such an experiment that a trust régime was more satisfactory than a régime of competition, for we should have no fair example of the working of competition under similar conditions with which to make comparison.

Particularly weak would it be to allow the mere fear of a temporary disturbance of business to turn us from a safe permanent policy. The thoughtful man can have no patience with the complaint that the government is interfering with business or lowering the prices of securities by enforcing the anti-trust law. Suppose an industrial depression should be brought about? Is that a heavy price to pay for protecting the decades and the centuries of the future against a mighty evil? Granted that it is uncertain whether the trust régime would

be a mighty evil, the mere possibility that it would prove such is enough to justify a present sacrifice to avert it.

The thoughtful opponent of trusts does not urge that, as the phrase goes, the government should “run amuck." It need not in a year or two attack every combination without due inquiry as to whether it actually possesses or threatens monopoly power, or as to the manner in which it is exercising such power as it does possess. A policy once determined upon and definitely announced may be carried out with reasonable deliberation and consideration of all interests. But it is high time that an end shall be put to all doubt of the intention of the people. Either they must proclaim their determination to maintain a régime of competition in manufactures and trade for an indefinite period to come, or they must promptly declare themselves for the policy of regulation. The safe policy for today is prohibition of trusts and other monopolistic combinations. It is the vigorous enforcement of the antitrust laws, aided by the provision of expert administrative machinery such as the new trade commission.

Whether the ultimate policy adopted toward the trust be laissez faire, regulation or prohibition, we shall, in all probability, find it necessary to supplement the chosen policy by vigorous exercise of the taxing power. Taxation can take away a large part of monopoly profits and other unearned gains whether derived from trusts and pools, from railroads, from banking, from control of land and other natural resources, or from any other source.

Direct taxation of trusts and other business enterprises with a view to taking away excessive gains would encounter practically the same difficulties as regulation

of prices and profits. Heavy income taxes upon individuals, particularly if progressive, are very hard to enforce. Inheritance taxes would be more feasible. Progressive inheritance taxes, even with rates such that much the greater part of the largest fortunes would be taken by the government, would, in the opinion of many thoughtful men, be neither unjust nor socially disadvantageous. They are defensible even when applied to fortunes derived from strictly legitimate business. Taxes of this sort might in some degree tend to check the accumulation of capital and to prevent the efficient captain of industry from exercising his talents to the utmost, but the effect in these directions would probably not be very marked. There might, too, be some difficulty in enforcing collection and preventing evasion, but on the whole the system would go far toward correcting that immense disparity of wealth and of opportunity which is the main source of social unrest.