RECENT ECONOMIC CHANGES. 585 



publication in this journal, these papers have been in great part 

 rewritten by the author, and in all revised and brought up to the 

 latest date ; and are now nearly ready for publication in book 

 form by Messrs. D. Appleton & Co., under the title of " Recent 

 Economic Changes, and their Effect on the Production and Dis- 

 tribution of Wealth and the Well-being of Society." 



From advanced sheets we are enabled to lay before our readers 

 the following illustrations of the quality of the new material that 

 Mr. Wells has incorporated in his forthcoming volume. — Editor. 



ON THE ORIGIN AND SEQUENCE OF TRUSTS. 



It was formerly a general assumption that, when price no 

 longer equaled the cost of production and a fair profit on capital, 

 production would be restricted or suspended ; that the less favored 

 producers would be crowded out, and by the relief thus afforded 

 to the market normal prices would be again restored. But this 

 doctrine is no longer applicable to the modern methods of produc- 

 tion. Those engaged in great industrial enterprises, whether they 

 form joint-stock companies or are simply wealthy individuals, are 

 invested with such economic powers that none of them can be 

 easily pushed to the wall, inasmuch as they can continue to work 

 under conditions that would not permit a small producer to exist. 

 Examples are familiar of joint-stock companies that have made 

 no profit and paid no dividends for years, and yet continue active 

 operations. The shareholders are content if the plant is kept up 

 and the working capital preserved intact, and, even when this is 

 not done, they prefer to submit to assessments, or issue prefer- 

 ence shares and take them up themselves rather than go into 

 liquidation, with the chance of losing their whole capital. An- 

 other feature of such a condition of things is, that the war of com- 

 petition in which such industrial enterprises are usually engaged is 

 mainly carried on by a greater and greater extension of the mar- 

 ket supply of their products. An illustration of this is afforded 

 in the recent history of the production of copper. When in 1885 

 the United States produced and put on to the market seventy-four 

 thousand tons, as against forty thousand tons in 1882, the world's 

 prices of copper greatly declined. A large number of the smaller 

 producers were compelled to suspend operations, or were entirely 

 crushed; but the great Spanish and other important mines en- 

 deavored " to offset the diminution of profit on the unit of quan- 

 tity " by increasing their production ; and thus the price of cop- 

 per continued to decline until it reached a lower figure than ever 

 before known in history. 



Under such circumstances industrial over-production — mani- 

 festing itself in excessive competition to effect sales, and a reduc- 

 tion of prices below the cost of production — may become chronic ; 



