n6 MAURICE H. ROBINSON 



prices of trust made goods in England compare with prices 

 in other countries? How do the prices of trust made goods 

 in the United States compare with the same trust made 

 goods in England or in Germany? These questions are capa- 

 ble of solution by statistical methods. For example, it would 

 be possible to study the operations of the steel trust, and show 

 within reasonable limits what proportion of the profits of 

 the corporation is due to the fact that it operates within the 

 protection of the tariff wall. On the other hand, certain in- 

 dustries in this country have no protection whatever. Here 

 home and foreign competition tend to keep prices at the com- 

 petitive level. In the establishment of the protective system 

 it was assumed that while foreign competition would be 

 removed to a certain extent, domestic competition would still 

 be present to keep the price of the goods near the domestic 

 cost of production. The formation of trusts within the pro- 

 tected industries has changed the conditions and enables a 

 protected trust to permanently keep the prices for its goods 

 in the home market at a level with the prices at which goods 

 can be imported. Thus reduction of the cost of production 

 increases the profits of the trusts. With increasing prices 

 comes increased competition; with increasing competition 

 among the investors within this line, further consolidation, 

 increased cost of production, and permanently higher prices. 

 With the ability to maintain higher prices at home the temp- 

 tation is strong to sell the surplus product in the foreign mar- 

 ket at low prices in order to keep up the prices at home. This 

 means that the protective tariff, which was originally adopted 

 to encourage the growth of domestic manufactures, has be- 

 come, under changed industrial conditions, the means by 

 which consolidated industries are able to deflect a certain 

 proportion of the social product from other lines into their 

 own treasury. The report of the industrial commission fur- 

 nishes a large amount of evidence to substantiate these views. 

 The testimony also shows that the monopolistic position 

 of the great corporations have been aided by railway discrimi- 

 nations, by the use of the factor system and by the policy of 

 destructive competition at certain points in order that the 

 great companies might be freed from the annoyance of local 



