134 CHARLES J. BULLOCK 



shares have usually represented the amount paid in cash or 

 securities for the plants that have been purchased and for 

 the working capital supplied by the financier. The common 

 stock represented nothing more than "the substance of 

 things hoped for" in the way of alleged economies of opera- 

 tion. Although times have been unusually prosperous, and 

 prices, already high, have often been increased by the trusts, 

 dividends on the common stock have almost universally 

 disappointed the expectations of those who invested with the 

 hope of securing a part of the "enormous" savings of com- 

 bination. 



The second argument advanced to prove the tendency 

 to monopoly is the claim that mere mass of capital confers 

 such powers of destructive warfare as to deter possible com- 

 petitors from entering the industry, at least until prices 

 have long been held above the competitive rate. It is said 

 that a large combination can lower prices below the cost 

 of production in any locality where a small rival concern is 

 established, thus driving it out of the field. If, on the other 

 hand, a large rival company attempts to compete in all mar- 

 kets, this will mean an investment of capital in excess of the 

 needs of trade, with a consequent depression of business and 

 loss to all concerned. Without doubt the destructive com- 

 petition waged by combinations is an important consideration, 

 and it may well enough re-enforce monopoly where other 

 attendant circumstances favor consolidation. But a monop- 

 oly based solely upon this power would be, confessedly, a 

 temporary affair; for probably no one would claim that all 

 capitalists would be intimidated permanently by such cir- 

 cumstances. This argument, therefore, may be used properly 

 enough to strengthen the conclusions drawn from the alleged 

 economies in production; but it does not of itself establish 

 the existence of a permanent tendency to monopoly. Of 

 this truth, any one who observes the trouble which trusts are 

 having with new enterprises at the present moment may ob- 

 tain sufficient evidence. 



It should not be forgotten, furthermore, that this argu- 

 ment depends upon the fact that combinations at present 

 are allowed to employ the weapons of discriminating prices 



