principles of price cannot be changed by a
trust; a selling monopoly can affect price only as it affects supply
or demand.[12] The strongest trust yet seen has not been omnipotent.
Many careless expressions on the subject are heard even from
ordinarily careful writers and speakers: "The trust can fix its own
prices," "has unlimited control," "can determine what it will pay
and for what it will sell." This implies that trusts are benevolent,
seeing that the prices they charge are usually not far in excess of
competitive prices in the past. Such a view overlooks the forces that
limit the price a monopoly can charge. If the supply remains the same,
no trust can make the price go higher. The monopoly usually directs
its efforts to affecting the supply, leaving the price to adjust
itself. It can affect the supply either by lessening its own output or
by intimidating and forcing out its competitors. It is true that this
logical order is not always the order of events. The trust may not
first limit the supply, and then wait for prices to adjust themselves;
it may first raise its prices, but unless it is prepared to limit the
supply in accordance with the new resulting conditions of demand,
such action would be vain. The control of the sources of supply is the
logical explanation of the higher price, even tho the limitation
of supply is effected later by successive acts found necessary to
maintain the higher price.

The report of the Federal Industrial Commission, which, from 1898
to 1901, investigated the trusts, showed that immediately upon their
formation, the industrial combinations had raised their prices.[13]
Prices might be lowered again but only when and where competition
became troublesome, thus causing either "price-wars" or
discrimination.

[Footnote 1: See Vol. I, p. 76.]

[Footnote 2: As in the list in sec. 8, below.]

[Footnote 3: See Vol. I, chs. 8 and 31.]

[Footnote 4: See Vol. I, ch. 8, on competition and monopoly, and ch.
31, on monopoly prices and large production. An understanding of the
definitions and of the general principles distinguishing competition
and monopoly is a necessary prerequisite to a profitable discussion of
the practical problem of monopoly.]

[Footnote 5: See Vol. I, p. 267, on capital; pp. 388-393, on large
production. See also references in preceding note on monopoly; and ch.
27, secs. 1 and 2, on corporate organization.]

[Footnote 6: See above, ch. 26, sec. 3; and ch. 25, s