INTERNATIONAL CONSOLIDATION 217 



ing therefrom, constitute what is usually called "free compe- 

 tition." Fierce and bloody struggle on the economic field of 

 the world of hundreds of thousands and millions of compet- 

 itors naturally results in killing off and driving out of busi- 

 ness an overwhelming majority of them. In modern indus- 

 tries (except agriculture) the advantages of large scale pro- 

 duction are so great that the smaller establishments must in- 

 evitably and continually fail in "free competition," and in 

 course of time these industries must of necessity be concen- 

 trated in a very small number of very large establishments. 

 Then the owners of these surviving establishments agree to 

 put a stop to the process by suspending competition. Thus the 

 trusts are the natural outgrowth of modern industrial condi- 

 tions. They do not owe their existence to any legislative de- 

 vice and consequcnly can not be prevented by the same. They 

 are as far beyond legislative control as the procession of the 

 seasons of the year. The mere concentration of industry in 

 a few large establishments does not constitute, however, the 

 trust; it only creates conditions favorable to the formation of 

 a trust. The trust is formed only when some sort of an agree- 

 ment is entered into by surviving competitors whereby com- 

 petition among themselves is suspended. In its original stage 

 it was a mere agreement relating to prices and output. It 

 passed through several stages until finally the typical trust is 

 a single huge corporation which has absorbed a number of 

 competing corporations. Thus in its original stage the trust 

 was not a factor of concentration, but a means to prevent still 

 further concentration. There is always a strong probability 

 that the same conditions which destroyed a large number of 

 small competitors, leaving only a few large ones in the field, 

 would continue until all but one should succumb, leaving only 

 a single surviving concern in complete and absolute posses- 

 sion of the field. In order to suspend these conditions and 

 prevent this form of concentration the Compact is entered into. 

 It is a sort of agreement relating to the cessation of industrial 

 lities, a measure for preserving the balance of industrial 

 power, a kind of industrial di -armament. These compacts 

 could not, hi , prevent still further concentration tend- 



ing to exterminate all competitors but one, leaving only a 



