Competition; Monopolies -- United States; Trusts, Industrial
It is thus plain that the action of the government in declaring the
restriction of competition to be illegal is wholly ineffectual to check
the growth of monopoly. And, further, the fact is that it is hardly
possible for the government to take any more extreme stand in the
matter. Let us suppose that it does declare, not only that these
combinations are against public policy, but that they shall be punished.
Then would it be a punishable offence for two country grocers who had
been selling sugar below cost to agree that henceforth they would charge
a uniform price and make an eighth of a cent per pound! It is to be
remembered that _competition_ necessitates _action_. Can the government,
therefore, _compel_ a man to compete, to cut prices below his neighbors,
or to carry on his business at all, if he does not choose to do so? Such
a law would establish the government's right to regulate the conduct of
purely private business to a degree never before known. Such a law to
protect the theory of individualism would be a most flagrant
infringement of the rights of individuals. It is plain, then, that
government cannot possibly keep up competition by direct action.
Whether it is possible to do so by indirect means is a much harder
question. Monopoly results, as we have found, from the intensity of
competition. If it is possible to modify the intensity, to keep the
candle from burning itself out too quickly, so to speak, it is possible
that competition may be kept alive by legislative enactment. So far,
practically nothing has been done in this direction, and it remains yet
to be seen what remedies of this sort may accomplish.
A pertinent example of an attempt by the government to keep competition
alive is the Interstate Commerce law. Before its passage the railway
companies had a patched-up and nominally illegal species of combination
to restrict competition, known as pooling. As described by President
Charles Francis Adams of the Union Pacific Railway, "it was merely a
method through which the weaker corporations were kept alive." The
Interstate law prohibited this restriction of competition, and also, by
enactment of the long-and short-haul clause, made the competition more
widespread and injurious to the railways. As a result an astonishing
impetus has been given to the growth of the great systems and the
consolidation of the minor competing roads. More than that, however, the
great increase in the intensity of competition has done so much to drain
the resources of the companies and injure their revenues, that some
measure for uniting all the railroads of the country under one
management is now being seriously planned by many men in railroad
circles. Thus this result, which was probably inevitable, has doubtless
been hastened many years by the action of the law. The means taken to
intensify competition has operated, as might have been expected, to
hasten the complete establishment of monopoly.
Public-domain text, read in full here on John Shaqi.
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