882 



SCIENCE. 



[N. S. Vol. XVII. No. 440. 



all industries might be divided into two 

 classes, viz., competitive and monopolistic. 

 Under the head of competitive industries 

 he included the production, of all commodi- 

 ties which could be transported to be sold 

 in markets other than that of their origin. 

 Under monopolistic industries he classed 

 public service corporations. He then pro- 

 ceeded to show that in competitive indus- 

 tries, if the price of the article sold was 

 raised too high or so as to obtain an undue 

 profit, fresh competition would be induced. 

 On the other hand, the cost of a unit of pro- 

 duction decreased as facilities for produc- 

 ing an increased number of units within a 

 given time were developed or acquired. 

 By example he showed that the economic 

 selling-price for production in lots of 1,000 

 was less than the cost of producing in lots of 

 100. Consequently the producers of lots of 

 1,000 would kill off all producers in lots of 

 100. Similaiiy the economic selling-price 

 for lots of 10,000 was less in cost of pro- 

 duction for lots of 1,000. Finally, the 

 economic selling-price for 1,000,000-lot pro- 

 duction would be less than the cost in the 

 100,000-lot production. So that, ultimately, 

 the largest producers of unit lot productions 

 would kill off all smaller producers. Mr. 

 Foote said that the large combinations 

 which were able to turn out unit lot pro- 

 ductions on an immense scale were public 

 benefactors. They could not become odi- 

 ous monopolies because they were always 

 bound to safeguard themselves against at- 

 tack from competition and also against the 

 possibility of making active the latent force 

 of potential competition. Every reduction 

 in selling-price broadened markets by 

 bringing the product within the buying 

 power of an ever-increasing number of con- 

 sumers. This was the process which tended 

 to make the luxuries of the rich the necessi- 

 ties of the poor. In order, however, for 

 economic production to be carried on 



profitably along competitive lines, secrecy 

 in management was absolutely essential. 

 And this was true whether the producer 

 was a single person or a large corabination 

 of corporations. The present anti-trust law 

 and all other laws which made a distinction 

 between different classes of manufacturers 

 in competitive industries were illogical and 

 indefensible as an interference with free- 

 dom of contract, were clearly in conflict 

 with the natural law of economical de- 

 velopment and were not really for the in- 

 terest either of workmen or of consumers. 

 Public service corporations, which were 

 naturally monopolistic, Mr. Foote pointed 

 out were on an entirely different footing; 

 these should be strictly regulated by laws 

 determining the cost price of services ren- 

 dered and allowing, in addition thereto, a 

 fair economic profit. This was all that 

 could be done by public ownership, and, in 

 Mr. Foote 's opinion, when the public 

 clearly realized this they would no longer 

 place unnecessary burdens upon public ser- 

 vice corporations, because each of these 

 burdens had to be paid for by the con- 

 sumer. 



As a logical conclusion Mr. Foote sug- 

 gests that the Sherman anti-trust law be 

 revised to make it properly applicable to 

 industrial corporations only, excluding 

 from its operation inter-state transporta- 

 tion corporations, that the inter-state com- 

 merce law be revised properly to deal 

 with inter-state transportation corporations 

 only, and that the states take similar action 

 applicable to business and public service 

 corporations. 



Remarks on Capitalization and Publicity: 

 Hon. Martin A. Knapp, chairman oi the 

 Inter-State Commerce Commission. 

 Mr. Knapp discussed the proposition 



that all corporations under congressional . 



control be required to make full disclosures 



