to time back to, or often below, former competitive rates. In later years the policy seems to have changed in many instances and the "capitalistic monopolist" has apparently found it wiser not to attempt to make his monopoly complete, but rather to remain content with market leadership and fairly steady high profits, without attempting to crush his well-equipped competitors. For more than nine of the first twelve years of its existence, the American Sugar Refining Company (with capital stock not a little watered, if one judges on the basis of cost of reproduction and running cash capital) was able to keep its margin between raw and refined sugar considerably above the former competitive margin, and paid dividends of 7 per cent. on its preferred stock and 12 on its common stock, while laying up a surplus. These facts seem to show that its large capital did secure more than former competitive prices, and that it had certain monopolistic power. The nature of competition between larger competitors as compared with that among small rivals is considered at length in the chapter on Prices; but in this case it is well illustrated. After its earlier experiences new competitors kept arising from time to time and hostile legislation and court action checked the company's aggressiveness. Its proportion of the total output of refined sugar lessened. In 1907 it fell below 50 per cent. and has since declined still further until in the year 1915 its proportion was only 34 per cent. These facts show how practically impossible it is under present conditions in the United States to secure monopoly that is permanent without a patent or a legal monopoly.

The assertion made that the Sugar Combination also

received special favors from the railroads was long denied, but aside from that, the undeniable facts regarding the increase in the margin between raw and refined sugar, in the earlier years, as shown in the chapter on Prices, furnish sufficient cause for the high dividends. As late, however, as 1907 the company pleaded guilty to receiving rebates on railroads and paid a fine of $50,000. A somewhat similar assertion may be made regarding the Standard Oil Company. It was doubtless true that in earlier years it received great favors from the railroads. It is possible that it has received special favors from the railroads at times since, but though there was an apparent case or two of such favors in the form of rate discriminations they were advantages, perfectly legal in character coming directly from its large capital, which enabled it so to locate refineries and supply markets that it has an advantage over its competitors in certain territories. The other advantages claimed for the capitalistic monopoly, in crushing competitors by local cuts in prices, in transportation, and in other ways that until lately have been perfectly legal and normal in their nature, however unjust they may be, certainly seem in themselves sufficient to explain part at any rate of its high profits.

Similar experiences are found in the cases of other combinations of lesser note; and yet it ought to be repeated that in many cases, especially in earlier years, combinations have overreached and have paid the penalty of trying to secure exorbitant profits. More experience is needed to teach most of them the art of permanent monopoly so self-controlled that it is content with strong market leadership without ex

tinguishing its rivals. When this art is learned, less careful legal control by society will be needed, since it will be found that in the long run it is the policy that will pay the combination as well as benefit society.

Even as regards the special discriminating favors that are mentioned by those who believe that there is no such thing as capitalistic monopoly, it might readily enough be claimed that these very special favors are secured only by virtue of the power of large capital. However, that would be a technical claim which need not be made.

Possibly the chief influence in the long run in promoting combinations of capital, as well as their most far-reaching effect in the earlier days of the Trusts, was the element of personal ambition which is fostered by monopoly. There can be no doubt that, in the case of the larger industrial combinations, the belief on the part of the managers that a virtual monopoly could be secured was a powerful element toward bringing about their formation. The pride of power, and the pleasure which comes from the exercise of great power, are in themselves exceedingly attractive to strong men. As one with political aspirations will sacrifice much and take many risks for the sake of securing political preferment in order that he may in this way rule his fellows, so a successful organizer of business derives keen satisfaction from feeling that he alone is practically directing the destinies of a great people, so far as his one line of business is concerned. Mr. Havemeyer said that his ambition was to refine the sugar of the American people. Mr. Gates asserted that it was the ambition of the organizers of the American Steel and Wire

Company to control the wire output of the world. One cannot say that these ambitions are not as worthy as those of politicians, and as natural. No one can question that these elements of personal satisfaction and pride are most powerful factors in all lines of social intercourse, and this pride could not be gratified in business short of the belief on the part of these men that they can secure a practical monopoly. This ambition will not be gratified by the control of merely a very large business. Napoleon was not content to be the head of a great state. His ambition would brook no rival. May not the ambition of a sugar king or a petroleum magnate well be of like imperial nature, though in a more restricted field? And yet, in the case of Napoleon and possibly of other potentates of later date the event showed that ambition had overleaped itself. Likewise the chief successes of later years have seemed to rest with those who have been content with less than world domination and who have been ready to accept merely strong leadership.

Connected with this belief in the power and desirability of great leadership, if not monopoly, within the home market is belief in the ability of the great combination to enter new, and especially foreign markets. Much more capital is required to introduce into a foreign market a special product than would be required for the extension of the sale of that product within one's home country. The power of great capital thus enables the combination to extend its trade as could otherwise not be done, although this power by no means necessarily implies monopoly. The American Tobacco Company, followed by its successor in that

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field, the British-American Tobacco Co., developed a great market in Japan, later assumed by the Japanese Government, in India, China, and throughout the Far East. In some instances even, it is said, it was forced practically to create the taste for tobacco and to break down religious scruples in order to introduce its product. One may question the value to those peoples of this educated taste"; one cannot question the skill and power needed to accomplish the result. The Standard Oil Company, the International Harvester Company, the United States Steel Corporation, have pushed their products into practically all the markets of the world, in some cases even winning control of European domestic markets against the violent opposition of legislators as well as business rivals. In no case could these industries have so expanded without the possession of very large capital; and this ability to manage the foreign market in conjunction with the home market, is beyond doubt an advantage of the large organization which the small competitor does not possess. It remains to be seen whether coöperation for work in the foreign field among smaller competitors at home, which is so ardently advocated in some quarters, can successfully enter the foreign field in competition with the great combinations. It may perhaps be safely assumed that such coöperation will not succeed unless it is close enough to secure completely unified permanent management. In that event it becomes an industrial combination or a Trust. The possession of a secure foreign market gives the large manufacturer still further power in handling the home market so that it strengthens his industrial leadership.