TRANSACTIONS OF SECTION F. 905 
_ which are insisted on by those who desire to magnify the importance of the move- 
ment are nearly always the same, and they have all had special advantages of 
- more or less importance. 
: This is specially true of the only Trust which can show a long record of undis- 
puted success on a large scale—the Standard Oil Trust. For, firstly, the petroleum in 
which it deals comes from a few of Nature’s storehouses, mostly in the same neigh- 
_ bourhood : and it has long been recognised that those who can get control over some 
of the richest natural sources of arare commodity are well on their way towards a par- 
tial monopoly. And, secondly, the Standard Oil Trust has many of those advantages 
which have been long recognised as enabling large railway companies to get the 
- better of their smaller neighbours; for, directly or indirectly, it has insome measure 
controlled the pipe lines and the railways which have carried its oil to the large 
towns and to tidal water. 
: § 8. On the other hand, we must remember that the future of a young and 
_ vigorous movement is to be measured, not so much by what it has achieved, as by 
_ what it has learnt; and that every unsuccessful attempt to hold together a Trust 
_ has been a lesson as to what to avoid, taught to men who are wonderfully quick to 
jearn. In particular, it is now recognised that a very large portion of the failures in 
the past have been due to attempts to charge too high a price; that this high price 
has tempted those on the inside to break faith, and has tempted those on the out- 
_ side to start rival works, which may bleed the Trust very much unless it consents 
to buy them up on favourable terms; and, lastly, that this high price irritates 
the public: and that, especially in some States, public indignation on such matters 
leads to rapid legislation that strikes straight at the offenders, with little care as to 
whether it appears to involve principles of jurisprudence which could not be 
applied logically and consistently without danger. The leaders in the movement 
towards forming Trusts seem to be resolved to aim in the future at prices which 
will be not very tempting to anyone who has not the economies which a large com- 
bination claims to derive, both in producing and in marketing, from its vast scale of 
business and its careful organisation ; and to be content with putting into their 
own pockets the equivalent of these economies in addition to low profits on their 
capital. There are many who believe that combinations of this kind, pursuing a 
moderate policy, will ultimately obtain so great a power as to be able to shape, in 
a great measure, the conditions of trade and industry. 
§ 9. It may be so, but these eulogists of Trusts seem to claim for them both 
that individual vigour, elasticity, and originating force which belong to 2 number 
of separate firms, each retaining a true autonomy, and that strength and economy 
which belong to a unified and centralised administration. Sanguine claims of this 
kind are not new; they have played a great part in nearly all the bold schemes for 
industrial reorganisation which have fascinated the world in one generation after 
another. But in this, their latest form, they have some special features of interest 
to the economic analyst. 
They have a certain air of plausibility. for the organisers of Trusts claim that 
they see their way to avoiding the weak points in ordinary forms of combination 
among traders, which consist in the fact that their agreements can generally be 
evaded without being broken. For instance, the most remarkable feature in the 
history of English railways during the present generation is, not their tendency to 
_agree on the fares and freights to be charged over parallel lines—for that has long 
been a foregone conclusion—it is the marvellously effective competition for traffic 
which such railways have maintained, both of a legitimate kind, by means of 
improved conveniences offered to the public as a whole, or of an illegitimate kind, 
by means of those special privileges to particular traders which we are now, at 
last, seriously setting ourselves to stop by law. 
It is difficulties of this kind which the modern movement towards Trusts aims 
specially at overcoming. Trusts have very many forms and methods, but their 
chief motive in every case is to take away from the several firms in the combina- 
tion all inducements to compete by indirect means with one another.'| The chief 
: 1 P.S.—Professor Brentano has called my attention to the plan of the German Iron 
4 Combination, which does not allow individual firms to sell direct to the consumer, but 
bi 1890. oN 
