Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
_Specific Means of Repressing Competition._--In practice a condition
is created in which the new competitors are reluctant to appear; for
the consolidated company has dangerous weapons with which it can
assail them. It can often secure specially low rates for the
transportation of its products, and this is sometimes enough to make
the competitor's prospect hopeless. Further, the "trust"--with or
without the aid offered by the special and low freight charges--can
enter the particular corner of the field where a small rival is
operating, sell goods for less than they cost, and drive off the
rival, while maintaining itself by the high prices it exacts
everywhere else. Again, it may reduce the price of one variety of
goods, which a particular competitor is making, and crush him, while
it makes a profit on all other varieties of goods. Still again, it may
resort to the "factor's agreement," by refusing to sell at the usual
wholesalers' rate any of its own products to a merchant who handles
products of its rivals. If some of its goods are of a kind that the
merchant must have, this measure brings him to terms, causes him to
refuse to handle independent products, and makes it difficult for the
rival producer to reach the public with his tender of goods. The trust
can organize special corporations for making war on competitors while
itself evading responsibility. A bogus company which, in an aggravated
case, is a rogue's alias for a parent corporation, may be formed for
the purpose of more safely doing various kinds of predatory work.
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