C. E. DUTTON — ECONOMICS OF CONCENTRATED CAPITAL. 
13 
the total profit by arbitrarily raising the rate of profit beyond this point, 
it will surely fail, for it will canse a falling off in the yolnme of sales to 
a degree more than counterbalancing the increased rate. Or, if the rate 
be lowered, the increase of traffic will not make np for the diminished 
rate. Towards this rate the action of the trusts tends. It is, however, 
an ideal rate, which must be sought and discovered if possible by trial, 
and not one which is self-evident and visible at a glance. Nor is it fixed 
and constant in any case, but varies or fluctuates from week to week, 
and month to month. Whether it is actually reached or not, or even 
whether it is closely approximated we, of course, have no means of know- 
ing. But there is good reason to infer that it is not only seldom ex- 
ceeded, but generally is fallen short of. Nor can it in any case be a high 
or exorbitant one, but on the contrary is a low one. The principle here 
set forth is well understood by able and sagacious business managers, 
and, in fact, is seen to be commonplace as soon as stated. It explains 
why the trusts are under no inducement to overcharge the consuming 
public for their goods, and yet are able to secure a very large profit. 
Hitherto I have spoken of them as being formed for the proximate 
purpose of escaping from competition. But do they in reality escape from 
it? Usually they do escape from destructive competition, but by no 
means from normal competition, though they are more or less shielded 
from it. Here the question arises whether an escape from competition 
such as we see in these organizations is a salutary condition of affairs, 
beneficial to the community. 
So far as regards destructive competition, it is not only injurious on 
moral grounds, but to the economic interests of a community. It is de- 
structive and wasteful to the public as well as to the competitors. As 
regards normal competition, political economy knows of but one way in 
which it can be escaped with benefit to the community, and that is to 
furnish it with goods and services which shall be better in quality or 
lower in price than anybody else can furnish. In reality, however, this is 
not escaping from competition, but is keeping ahead of it in the race 
with competitors who are ever pursuing. But for crushing and throt- 
tling competition, neither political economy nor ethics furnish any sanc- 
tion. 
Unfortunately, many of the industrial trusts have been charged with 
procedures of that character. These charges have been made the subjects 
of investigation by courts and legislative bodies, and their results are 
before the public. This, however, is not the time and place, nor am I 
the one to pronounce judgment upon them. All that I can say here is, 
that to whatsoever extent these charges are well founded, they involve 
conduct which is as much opposed to sound economy as it is to sound 
ethics. 
