102 STATE BOARD OF AGRICULTURE. 



WEDNESDAY EVENING. 



The addresses related to political science, the subjects being "Trusts," 

 "A Campaign for Rural Progress," "The Torrens System," and "Inde- 

 terminate Sentences for Criminals." Hon. George B. Horton, Master 

 Michigan State Grange, presided. 



TRUSTS. 



BY PROF. HENRY C. ADAMS^ DEPARTMENT OF POLITICAL ECONOMy, UNIVER- 

 SITY OF MICHIGAN. 



(Abstract.) 



A trust is a manufacturing or commercial industry of such size, or 

 organized in such a manner as to dominate the situation. The most cer- 

 tain evidence that an industry dominates the situation is that the price at 

 which its goods are sold is determined in an arbitrary manner and not 

 by the principle of competition. As further characterizing trusts, it 

 should be added that in their present form they are, almost without 

 exception, combinations of competing industries. Whether one approves 

 or disapproves, this description of them cannot be denied. 



After tracing the development of modern trusts and showing why 

 their present form is that of a gigantic corporation. Professor Adams 

 next considered their alleged advantages and disadvantages. The claim 

 that trusts are a natural evolution of industry, and should on this ac- 

 count be left undisturbed by the legislature, was summarily dismissed 

 on the ground that an added step in the development of industrial form 

 may req.uire, for the protection of the people, an added step in the de- 

 velopment of political restraints. The claim that large capital is neces- 

 sary for economic production was also conceded, but attention was 

 called to the fact that all the essential elements in economic production 

 may be attained this side of an aggregation of capital necessary to domi- 

 nate the market of seventy-five millions of people. The argument that 

 "potential competition" persists even after actual competition has been 

 killed, was set one side, as unworthy the consideration of an economist. 

 The consideration that trusts are necessary in order to adjust the supply 

 to the demand, and by this means to obviate panics and commercial de- 

 pressions, was admitted to be plausible, but attention was called to the 

 fact that the only means of adjusting supply to the demand, in harmony 

 with the interests of the mass of people, is to provide for an increase of 

 demand rather than for the curtailment of supply. The theory that 

 supply must be curtailed is pernicious in principle and must ultimately 

 result in the destruction of the motive for industrial progress. 



