CONCENTRATION OF INDUSTRY 53 



finance, are certain other forms of advanced capitalistic struc- 

 ture, commonly enjoying ampler and more secure monopoly, 

 and supported more directly by privilege. The political 

 development of America has left to private enterprise many ol 

 the most important industries which in civilized European 

 states have come under the direct administration of the state 

 or the municipality. Almost all the supply of ordinary 

 municipal services, with the exception of water, still remains 

 in the hands of private companies, and the rapid development 

 of these services, especially those connected with electric 

 traction, lighting, and telephones, has yielded huge elements of 

 monopoly profit, which American cities are just beginning to 

 learn how to tax, and which have formed useful feeders for 

 great national manufacturing trusts, such as the Westing- 

 house Electric company. More important still are the rail- 

 road, telegraph and express companies, performing, as private 

 monopolies for profit, most of those transport services which 

 have in Europe and in our colonies been undertaken by the 

 state. 



The railroad system is the first of two distinctive features 

 which mark America as the stronghold of unrestrained capital- 

 ism. It is not merely that it represents the largest and most 

 complicated organization of private capital in the modern 

 world. Still more important is the fact that this railroad sys- 

 tem is the pillar of the whole fabric of capitalism, which is 

 rightly regarded as monopolistic in character and anti-social 

 in the economic and political power it wields. 



The more closely I have reflected on American conditions 

 the more strongly I am convinced that the railroad is the true 

 center of gravity in the economic system of America. It is the 

 railroad, more than the tariff, which in point of fact has been 

 "the mother of trusts." This is sufficiently illustrated both 

 from the early history of the Standard Oil company and of the 

 Carnegie Steel company, which was the nucleus of the Ameri- 

 can Steel corporation; here, as in so many other instances, 

 discrimination in railway rates and secret rebates have been 

 the prime condition of early success. In such a country as 

 America railroad transport has always been the most critical 

 stage in that series of processes by which the raw material 



