916 REPORT—1890. 
The following Papers were read :— 
1. Modern Forms of Industrial Combination. By Professor A. T. Hapiry. 
Combinations have two distinct purposes—economy in production or monopoly 
in sale. The former tends to lower prices; the latter, as a rule, to raise them. 
The law has therefore favoured the former and discouraged or prohibited the 
latter. In past times it has been easy to draw this distinction; to-day it is no 
longer possible, for two reasons: 1. In many lines of industry (e.g., railways) 
capital is invested on so large a scale that economy practically involves monopoly. 
2. In all industries with large fixed capital competition often reduces prices below 
cost, driving some concerns out of business, and causing fluctuation of prices (e.9., 
iron trade) and waste of capital. If some of this waste and fluctuation cau be 
avoided by monopoly, it may involve public economy. Modern forms of combina- 
tion have this double character as monopolies and means of economy. 
A mere agreement to maintain rates is often tried, but almost always ineffec- 
tive. A ‘corner,’ which attempts to control the sale of the product rather than the 
means of production (e.g., the metal syndicate of 1887-88), is sometimes tempo- 
rarily successful, but not permanently so. Of more lasting use have been divisions 
of traffic between different producers, either a division of the field (gas companies), 
or an allotment of traffic by percentage, sometimes called a ‘pool,’ in use among 
factories, shipping, and railways. The International Steel Rail Combination (ing- 
land, Belgium, and Germany) was the widest instance. Finally, they may divide, 
not the traffic, but its proceeds (joint purse agreement), often coming little short of 
actual consolidation. The Standard Oil Company has made the greatest success in 
this kind of consolidation. A ‘ Trust,’ as used in America, is simply a means to this 
end, whose importance has been over-estimated. 
The dangers from combination are more obvious than the policy to be adopted. 
Some advocate direct prohibition; this fails to-day because what is necessary and 
economical is so intermixed with what is dangerous. Some advocate recognition 
and supervision by the Government. The danger here, as in most cases of legalised 
monopoly, is that the protected combinations will not be worked up to the best 
standard of efficiency. A third policy, advocated by the Socialists, is that the 
Government itself should own such industries. This solution is liable to the 
same dangers as the second, and usually in a greater degree. The safest policy 
would seem to be one of laissez-faire, based on somewhat different grounds from 
those which would have been advanced thirty years ago. We can no longer 
hold that free competition is an automatic regulator of prices, always tending to 
put them where they belong, and that combination is economically wrong. But we 
can maintain that the possibility of competition is the best if not the only available 
stimulus for high industrial efficiency ; that unprotected combinations can succeed 
only when they forestall such competition by efficiency and low prices on their own 
part; and that, though the leaders of such combinations have not as yet fully 
learned this lesson, there is an educational process going on, which radical inter- 
ference on the part of Government would tend to check, without being able to offer 
anything equally promising in its place. 
2. The Ulterior Aims of Co-operators. By Bensamin Jones. 
Statistics submitted to the last Annual Co-operative Congress show that in 
1889 there were 1,515 co-operative societies with 1,054,996 members, and 
18,675,819/. of capital. Their sales for the year were 40,225,406/., and their 
nett profits after paying interest on capital were 3,775,4647. The increase in 1889 
over the year 1888 was fully ten per cent. 
These associations have been gradually developed during the last one hundred 
years, and there are over thirty societies in existence whose birth dates from fifty 
up to one hundred and thirteen years ago. But the growth of co-operation has 
been mostly the result of the last twenty-five years, and the business of one society 
alone in 1889 was more than double the total trade of all the co-operative societies 
in 1865. 
