ii 4 MAURICE H. ROBINSON 



determines the process of formation; that is, the promotion 

 and underwriting of the consolidation. The report of the 

 commission shows that at present the laws of the states in 

 which the corporations are chiefly formed, are singularly 

 defective in protecting legitimate business interests in these 

 points. Corporations are necessary for the permanent de- 

 velopment of the industries of the country, and the investors 

 in these corporations ought to be protected as a matter of 

 public policy, so that with reasonable care on their part their 

 investments may be attracted into those lines where capital is 

 most needed; that is, where the social demand for production 

 is most urgent. If the investors are not protected, it means 

 simply that the development of the industrial resources of the 

 country will be retarded, and the demand not satisfied, unless 

 the investors are able to protect themselves until public policy 

 provides sufficient regulation over the formation of corpora- 

 tions to allow investments to be made with reasonable safety. 

 IV. The Monopoly Power of Combinations. The 

 fourth question in the solution of the trust problem asks whether 

 any of the great corporations have a monopolistic charac- 

 ter, and if so, upon what basis this monopoly rests. The 

 testimony upon this point is interesting and instructive, if 

 not conclusive. The monopoly power of a combination is 

 shown in the control of prices, of wages, and of the rate of 

 interest. The first two are of more importance in this con- 

 nection, since the capitalist is usually combined with the 

 entrepreneur in the formation of the consolidation. Both 

 the consumer and the wage earner are outside. It is impos- 

 sible for the consolidations to form a union with the con- 

 sumers. It is not impossible for them to join with the wage 

 earners, especially where the wage earners are united into 

 some form of labor organization. The study of the monopo- 

 listic position of the great corporations ought to investigate 

 especially the question of the relation of the consolidations 

 to prices and wages. Professor Jenks's study of prices found 

 in the first volume of the report is an interesting beginning 

 in this line. If the consolidations are able to raise prices, this 

 will be shown in the increase of the margin of profit. Pro- 

 fessor Jenks's study shows conclusively that for a certain 



