In conclusion, it may be well to examine the statement attributed to Mr. Andrew Carnegie, that, "there is no possibility of maintaining a trust. If successful for a time, and undue profits accrue, competition is courted which must be bought out; and this leads to fresh competition, and so on until the bubble bursts. I have never known an attempt to defeat the law of competition to be permanently successful. The public may regard trusts or combinations with serene confidence."
Surely if this statement is true, we have little need for further examination of this subject. We have now knowledge enough of our subject to enable us to determine its truth or falsity. We have found in the actual trusts that we have examined none which have shown signs of succumbing to outside competition. More than this, however, we have seen that it is possible for a trust to carry on business and deliver goods to the consumer at much less cost than an independent manufacturer can. And as surely as this law holds that production on the largest scale is the cheapest production, so surely will the trust triumph over the independent manufacturer wherever they come into competition. If the trust were always content when its competitors were disposed of, to make only the profits which it could secure by selling at such prices as the independent manufacturers could afford, there would be less outcry against it. But with the consumers wholly dependent upon it for supplies, the prices are in the trust's hands; and the tendency is to reap not only the profits due to its lessened cost of production, but also all it can secure by raising the selling price without arousing too much the enmity of the public.
Clearly the trust is at once a benefit and a curse. Can we by any means secure the benefit which it gives of reduction in cost without placing ourselves at the mercy of a monopoly? This is the question which must occur to every thoughtful man. Before we can answer it, however, we must examine the effects of competition and monopoly in other industries.
III.
MONOPOLIES OF MINERAL WEALTH.
It is a well known historical fact that the extraction of metals and minerals from the earth has been more subject to monopoly than almost any other business. It was, and in a large part of the civilized world still is, esteemed a prerogative of the sovereign. Agricultural products have always been gathered from a wide area; manufactures were formerly the product of mean and scattered workshops; but in the working of a rich mine, there was a constant income more princely than was to be obtained from any other single source. Again, with all due respect to the traditions of former generations, it seems to have been thought that any thing to which no one else had a valid title belonged to the crown; and as no one was able to assert any stronger claim to the ownership of mineral wealth than that they had stumbled upon it, it was natural for the sovereign to claim it as his. We see thus the recognition at an early date of the inherent difference between natural wealth and that created by labor.
But coming down to the present time, it is evident that the business of extracting some of the rarer metals from the earth is peculiarly liable to become a monopoly. It is one of the new laws of trade, whose force and importance we are just finding out, that the ease of restricting competition varies with the number of competing units which must be combined. Our most valuable metal, iron, is so widely distributed that any attempt to control the whole available supply could not long be successful. But it is one of the peculiarities of modern industry that by its specialization it furnishes constant opportunities for the establishment of new forms of monopoly, whose power is not generally understood. In the manufacture of Bessemer steel, which has now largely displaced wrought iron in the arts, it is necessary to use an iron ore of peculiar chemical composition. This ore is found most abundantly and of best quality in the mines of the Vermilion range, lying about one hundred miles north of Duluth, Minn., and in the mines of the Marquette Gogebic, and Menominee regions in the north Michigan peninsula. According to good authorities, a combination more or less effective has been formed among the owners of all these mines; and the highest price is charged for the ore which can be obtained without driving the customer to more distant markets for his supply. Among the mines of this district, competition, if not entirely stopped, is greatly checked, and is likely soon to be entirely a thing of the past. It is an interesting fact that among the members of the syndicate which owns the principal mines in the Vermilion regions are some of the trustees of the Standard Oil Trust. It is stated that some of these mines have paid 90 per cent. per annum on their capital stock, which, it is to be noted, represents a much greater sum than the amount invested in the plant of the mine.
It is thus apparent that the mining of the raw ore from which iron is made, abundant and scattered though it is, is not free from monopoly. The combinations to restrict competition among the makers of cast iron and of steel belong properly under the head of monopolies in manufactures. We need only refer here to the fact that they are supposed to exist and have more or less control of the market.
Fortunately for the stability of our system of currency and of finance, the precious metals, through the small ratio which their current production bears to the world's stock, and the fact that this stock is scattered among an enormous number of holders, are safe from any attempts to establish a monopoly to control their price through the control of their production. Other metals, however, which are like silver and gold in being found in workable deposits at but a few points on the globe but are there found in abundance, are peculiarly adapted to facilitate the schemes of monopolists. Of lead, copper, zinc, and tin, we require a steady supply for use in the various arts; and the statement has been made that the supply of each one of these is in the hands of a trust. To see the effect which these combinations have had on prices, let us examine the prices which have prevailed for two years past on these four articles, as shown in the following table: