Competition; Monopolies -- United States; Trusts, Industrial
We find this class of trade monopolies most powerful and effective on
the frontier. Wherever railroad communication is easy and cheap the
tradesmen of different towns--between whom combinations are seldom
formed--compete with each other. The extension of postal, express, and
railway-freight facilities to all parts of the country, too, have made
it possible for country buyers to purchase in the cities, if necessary.
Thus the railways have been a chief instrument in _lessening_ the power
of this species of monopoly in country retail trade, which was of great
power and importance a half century ago.
Of retail trade in the cities, it is not necessary to speak at length.
Combination here has seldom been found practicable because of the great
number of competing units. There is, however, a noticeable tendency of
late to the concentration of the trade in large establishments, which by
their prestige and capital are able to take away business from their
smaller competitors. It does not seem likely, however, that this
movement will result in any very injurious monopoly among city
retailers.
The wholesale trade is on quite a different basis from the retail. The
number of competitors being so much less, combination is vastly easier.
The tendency toward it has been greatly fostered and strengthened by the
formation of trusts among the producers. These combinations made the
manufacturer more independent in his treatment of jobbers, and disposed
him to cut their profits to the lowest point. Naturally these men
combined to resist this encroachment on their income. They refused to
handle any goods for less than a certain minimum commission. It might be
possible in many cases for manufacturers to sell directly to the retail
traders, but in general the difficulty of changing old commercial
channels is such that the friction and expense is less if the goods are
permitted to pass through the wholesaler's hands. It is to be noted that
one cause for ill-feeling between manufacturer and wholesaler is the
fact that before the days of trusts the latter often reaped much greater
proportionate profits than the producer himself. But in time this cause
of dissension will be forgotten, and the trust and the wholesalers'
association will work in harmony.
Public-domain text, read in full here on John Shaqi.
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