FOOTNOTES
[1] It should be explained that the above is not given as a bona-fide statement of facts concerning this especial trust, but as a vivid description of the organization and plans of a typical trust, from the standpoint of its owners and managers.
Probably, too, few or no existing trusts have tried to benefit themselves in so many different ways as we have supposed this imaginary trust to have done. But to shorten our investigation, the author has purposely extended the scope of this trust's action, to bring out clearly the variety and importance of the methods by which a trust reaps profits, aside from any advance in the price of its product.
[2] Since the above was written the collapse of the copper syndicate has taken place. The causes which brought this about were the failure to complete the contracts for restriction of production, and lack of funds to meet the current liabilities. The reason for both these must be largely ascribed to the fact that it had come to be generally realized how great and how obnoxious the monopoly was; and capitalists rightly feared that government interference would be interposed to check the monopoly's operations. If the syndicate had made its long-time contracts at the start, or if it had been bold and shrewd enough to have inveigled speculators on the bear side of the market into operating against it, M. Secretan and his associates might have won as many millions as they could have wished. It is a significant fact that the downfall of the syndicate was not followed by the reëstablishment of free competition. Instead there was at once talk of another syndicate being formed to hold the copper stored up by the Société, and keep the price up as long as possible. On this side of the water the question was at once canvassed whether a combination could be formed among the different American companies to prevent competition and support the price. Evidently the failure of this scheme has not discouraged the makers of monopolies.
[3] Compiled from "The Coal Trade," 1888, (H. E. Saward), and "Poor's Manual of Railroads," and partially estimated.
[4] From the "Compendium of the Tenth Census of the United States," Part II., pp. 1378 and 1384.
[5] "Railway Practice." By E. P. Alexander, President Central Railroad and Banking Co. of Georgia.
[6] It should be explained that it is only proposed to base the rates as a whole upon the cost of service. As regards the relative rates on different commodities, the author, in common with all who have given careful study to the question, recognizes that the only equitable principle for proportioning rates is the much maligned one of "charging [in proportion to] what the traffic will bear." The argument against this principle is so very plausible that, until he had given the subject thorough study he held a diametrically opposite opinion.
To make plain to the reader that this is really the only equitable principle, the following illustration may serve: A coal-mine operator and a sewing-machine manufacturer build together a railroad to carry their respective products to a market. They will fix the total rates of freight at such a point as to just pay the cost of service; but it is required to find what relative rates each should be equitably charged on the shipments from his works. Evidently, to have the rates perfectly equitable, they must be in exact proportion to the benefit which each party derives from the use of the road. But this benefit which each derives is measured by the profits which each makes from his business; and this profit, in turn, is the measure of the amount each can afford to pay for the use of the road,—that is to say, "what the traffic will bear." Q. E. D.
Transcriber's Notes & Errata
Some tables have been reformatted for clarity.
The following typographical errors have been corrected:
| 57 | particularly | particular |
| 105 | 1888, | 1888. |
| 127 | succcessful | successful |
| 169 | ascendency | ascendancy |
| 174 | quenced | quenched |
| 178 | accomodate | accommodate |
| 246 | owership | ownership |
The following words were found to be variably hyphenated. The figures in parentheses are the number of times each has been found.
| bond-holders (1) | bondholders (1) |
| midle-men (1) | middlemen (2) |
| over-estimate (1) | overestimate (1) |
| over-production (16) | overproduction (1) |