TRUSTS AND PRICES. 



BY I. A. HOURWICH. 



[Isaac A. Hourwich, statistician; born Wilno, Russia, April 27, 1860; his life has been 

 devoted almost entirely to statistics, and for the past fifteen years he has done much 

 of the most important statistical work for the United States government, and is 

 statistical expert for the bureau of the census; he has also written many articles on 

 copper, gold, silver, lead, and zinc mining, and is author of The Economics of the 

 Russian Village.] 



We propose to consider in the following pages the effect of 

 combination on the prices of raw material and finished prod- 

 ucts. The United States industrial commission concludes, 

 in its review of evidence on the subject of combinations, that 

 the latter are in a position to buy their raw material cheaper 

 than their competitors. The commission is inclined, how- 

 ever, to minimize the effects of this advantage. It is shown, 

 e. g., that the saving of the sugar trust on this item does not 

 exceed one sixteenth of a cent per pound ; it appears, however, 

 from the testimony, cited further, that if the competitors of 

 the trust find it "difficult to secure a customer, they will cut 

 the price perhaps one sixteenth of a cent per pound. One or 

 two of the chief competitors seem to be forced to put their 

 prices quite frequently at one sixteenth of a cent below that 

 of the American Sugar Refining company." It would follow 

 that this saving of "not more than one sixteenth of a cent per 

 pound" would enable the American Sugar Refining company 

 to meet the cut and still retain the former advantage over its 

 competitors. The difference is, accordingly, one not to be 

 treated as a negligible quantity. 



The figures published on the subject of the prices of crude 

 materials by the commission relate only to the oil combina- 

 tion and have been furnished by Mr. Archbold, vice-president 

 of the Standard Oil company, and Mr. Boyle, editor of the 

 Oil City Derrick, a witness friendly to the company. The 

 tables confine themselves to Pennsylvania oil, which is a high 

 grade product, and give the total amount of crude oil pro- 

 duced annually from 1860 to 1898, the total annual valuation 



Vol. 3-10 



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