MICHIGAN ACADEMY OF SCIENCE. 133 



1896 to 1900. The U. S. Bureau of Labor estimates that the price of 

 food on thi? side of the Atlantic was raised over twenty per cent during 

 the same ten year period. The London Economist has tabulated an in- 

 dex number which shows an increase of 27 per cent, June, 1897 to Janu- 

 ary, 1910. Bradstreet's index number shows an increase of 61.9 per 

 cent from July 1, 1896 to January 1, 1910. Professor Norton of Yale 

 estimates that the ratio of the recent jirice advance in the United States 

 to that in England is as 3 to 2. A German statistician has estimated 

 that the appreciation in the price of the articles most necessary to the 

 household of the German wage earner was, during the period, 1895-1908, 

 a})]iroximately 27Vi: per cent. 



Both the United States and Germany have witnessed gi'eater progTess 

 toward industrial amalgamation and systematization during the last 

 fifteen years than has England. If the price level is being forced up 

 chiefiy by an increasing gold supply, and if competition operated freely 

 behind tariff walls; England, not the United States and Germany, 

 should present the most marked advance in prices. Evidently, other 

 agencies have been acting to raise the price level during a period when 

 consolidation, integration and systematization of industry are reduc- 

 ing the expenses of production. Is monopoly one of these agencies? 

 Are increasing land rents, growing mono{>oly gains, swelling returns 

 from franchises, and the like, absorbing a larger and larger percentage 

 of the national output, and, therefore, acting so as to tend to force the 

 price level upward? Is the burden of rents and of monopoly gains heavy? 



The Interstate Commerce Commission, Public Utilities Commissions, 

 the various and sundry attemps to fix fair prices, living Avages and rea- 

 sonable rates, all point unmistakably to the general acceptance of the 

 opinion that competition is not the living, active, vital force or prin- 

 ciple which economic theory often so vividly and enthusiastically pic- 

 tures. In fact, competition has led to combination ; and combination 

 bulkwarked behind protective tariffs, franchises, rights of way, land 

 ownership and the economics of large-scale industry has been able to 

 derive a variety of returns many of which were unknown in the realm 

 of untrammeled competition as i)ictured by the classical and other 

 economists. Monopoly is a potent factor in the economic world; it 

 can no longer be neglected in a study of prices or in a discussion of the 

 cost of living. 



Industry in the United States is carrying an enormous burden of 

 fictitious values, or of watered stock. These values are created by cap- 

 italizing the large incomes derived because of the control of various 

 market opportunities, and because of the stifling of competition. The 

 rapid trend away from the small business unit and competition toward 

 the large business unit and the control of prices by means of combina- 

 tions and agT-eemeuts, furnishes a favorable opportunity to increase the 

 returns upon capital actually sunk in the business and to capitalize 

 those extraordinary returns. The leveling force of competition has 

 lost its potency in most lines of industrial activity; and as yet we are 

 gToping in the dark for a substitute. 



Not long ago Mr. John Moody estimated that about one-half of the 

 total wealth of the nation is not "created" wealth ; in short, one-half 

 of the estimated wealth is fictitious, the capitalization of various forms 



