even at a loss; the
difficulty of finding safe investments drives new capital into the
hands of company-promoters, who fling it with criminal negligence into
this or that branch of production, underbidding the tariff to win a
footing in the market. All these forces render loose agreements to
limit competition more and more inadequate to secure their purpose.
Frequent experience of the impotence of these partial forms of
co-operation drives trade competitors to seek ever closer forms of
combination. An issue of this necessity is the Syndicate and the
Trust. By raising the co-operative action so as to cover the whole,
and by thus reducing the competition to zero, it is hoped that a union
may be formed strong enough to maintain monopoly prices. Thus the
Trust is seen as the logical culmination of the operation of economic
forces which have been continually engaged in diminishing the number
of effective competitors, while increasing their size and the
proportion of their energy devoted to the competition.

At each stage in the process the smaller competitors are eliminated,
and the larger driven to increase their size so that the whole may be
illustrated by a pyramid, the base or first stage of which consists of
a larger number of small units, and each higher stage of a smaller
number of larger units, with a Trust or Monopoly Syndicate for its
apex.

Sec. 7. The motive which induces a number of businesses hitherto
separate, or associated merely for certain specific actions, such as
the fixing of prices or wages, to amalgamate so that they form a
single capital on which a single rate of interest is paid, is a
double-edged one. There is, on the one hand, the desire to protect
themselves against excessive competition and cutting of rates, and on
the other hand a desire to secure the advantages which arise from
monopoly. The way in which Syndicates and Trusts are regarded depends
very much from which of these two aspects they are regarded. Those who
consider these business "combines" as arbitrary and high-handed
interferences with freedom of commerce, undertaken in order to place
in the hands of a few persons a power to rob and oppress the consuming
public by legalised extortion, regard the motive of combination to be
monopoly. On the other hand, the combining firms represent themselves
as the victims of circumstances, bound in self-protection to combine.
Our analysis of the operations of commercial competition enables us to