From the time of the formation of the Trust
the fall of price has been only half a cent. The moral is obvious. So
long as there is competition, in spite of the expense of conducting
the strife, prices fall; when the competition is suspended, and there
is a saving of friction, the public gains no further reduction.

The reason why, even after the complete monopoly had been attained,
the price of oil was not put up again will be apparent when we come to
examine the economic limits of the power of a Trust.

[Illustration: FLUCTUATIONS OF PRICES OF STANDARD OIL, 1870 TO
1890.]

Sec. 10. A large number of these Trusts, similar in their constitution to
the Standard Oil Trust, and with the same object of maintaining a
scale of prices based upon monopoly, have been founded in the United
States. Some have undoubtedly owed their establishment to the
prevalence of low profits in a trade where close competition has led
to a constant cutting of prices, and their foundation has been
leniently regarded as an act of self-defence. To this order belong the
Whisky Trust, the Cotton Oil Trust, the Cotton Bagging Trust, and
others. Indeed, one well-informed writer upon the subject holds that
this is the normal origin of the Trust. "With the exception of the
Standard Oil Trust, and perhaps one or two others that rose somewhat
earlier, it may be fairly said, I think, that not merely competition,
but competition that was proving ruinous to many establishments, was
the cause of the combinations."[133]

This condition of ruinous competition must be recognised as the normal
condition of all highly-organised businesses where modern machinery is
applied, and which are not sheltered by some private economy in the
shape of special facilities in producing or in disposing of their
goods. Even the Standard Oil Company, as we saw, claimed that a policy
of consolidation was forced upon it by the conditions of the market.
But this claim is not a refutation, but an admission of the statement
that the object of a Trust is to obtain monopoly prices; for these
ruinously low prices and profits are the result of free competition,
and the only alternative to this free competition is monopoly. Hence
it is a legitimate conclusion that the economic object of a Trust is
to substitute monopoly for competitive prices, and to do this more
effectively than can be done by the mere acceptance of a common
price-list by the separate firms engaged in a branch of p