TRUSTS AND PRICES 157 



sidered that the highest price in New York City, 9 cents, is 

 only 2 cents in excess of the price at Rensselaerville, Rens- 

 selaer county, which, like Winchester, enjoys the privileges 

 of the "most favored" towns. The examples might be in- 

 creased at pleasure. 



The reason for these variations is evidently to be sought 

 in local fluctuations of supply and demand. This explana- 

 tion is directly corroborated by the testimony of Mr. Mon- 

 nett, former attorney general of Ohio. He submitted a table 

 showing the Standard Oil company's prices of kerosene from 

 tank wagons on the same day in thirty towns in Michigan and 

 Ohio, of which there were twelve where the Standard Oil com- 

 pany had competition, and eighteen where it had the local 

 market all to itself. In the former towns the price varied 

 from 4| to 6^ cents per gallon, whereas in the latter it stood at 

 from 7f to 8f cents. 



An examination of the prices of Royal baking powder 

 would simply duplicate what has been stated above. It is 

 needless to inquire into the figures relating to sugar and salt, 

 since it has been candidly admitted before the commission 

 on behalf of the American Sugar Refining company and the 

 National Salt company that local discriminations are prac- 

 ticed to meet competition. The foregoing data seem to indi- 

 cate that the prices charged by trusts for their products have 

 little or no relation to the costs of production and distribu- 

 tion. 



Where the combination controls the bulk of the output, 

 competition as a rule will be only local. Within the domain 

 of monopoly the level of prices will be determined by the 

 mathematical rule of maximum and minimum; the price may 

 be high or low, according to whether greater net results could 

 be secured by smaller sales at higher prices, or by larger sales 

 at lower prices. In markets of equal size, it would seem, the 

 net price (i.e., the selling price less the cost of transportation) 

 would tend towards uniformity. Within the competitive 

 field prices ought to be regulated, in the long run, by cost of 

 production. The combination, however, enters as a disturb- 

 ing factor. On the one hand, monopoly profits secured in 

 some markets enable it to cut the prices below the normal 



