52 J. A. HOBSON 



manufacture. But her advance was very rapid; the resource- 

 fulness bred of an adventurous career manifested itself in 

 remarkable mechanical inventiveness, and in quickness to 

 seize and improve the best European inventions; no trade or 

 individual traditions blinded their eyes, they had no old plant 

 or machinery to consider, but began with the latest and the 

 best ; the high wages of manual labor were a stronger stimulus 

 to substitute machines than any European nation felt; no 

 federal restrictions and little effective state control were 

 allowed to hamper the full economy of the machine and the 

 factory system; the preternaturally rapid development of the 

 railroad system by European capital opened up to them the 

 vast and varied natural resources of their country. Employer 

 and workman were subjected to a keener stimulus of gain than 

 ever prevailed in England, even during the rise of Lancashire, 

 and this stimulus was mainly directed to the improvement of 

 machinery. Lastly, the tariff greatly facilitated the rise of 

 the manufactures, and, by securing the American manufac- 

 turer against foreign competition, has proved specially effica- 

 cious in feeding infant industries into giants and enabling 

 them to exercise a giant's tyranny. The size of the American 

 market has commonly sufficed to support the fullest economies 

 of large scale production with the best plant and the most 

 complete division of labor, while the possession of almost 

 complete security against outside competition has enabled a 

 corporation, which has once secured supremacy in the domes- 

 tic market, to save most of the expenses of competition, and 

 to mature its plans for conquering foreign markets. The 

 abnormally high profits which a tariff enables such a trust to 

 earn in its domestic sales may certainly be used to enable it to 

 undersell foreigners in their markets, the export trade being 

 of the nature of bounty fed or by-products which it is profita- 

 ble to sell for whatever price they will fetch. This phase of 

 the trust economy deserves fuller discussion than I can here 

 afford to give; but it is certainly the case that this power of 

 "dumping" goods in foreign markets at below cost price is an 

 important international implication of the trust. 



These manufacturing trusts do not, however, stand alone; 

 closely linked with them, both in industrial working and in 



