MONOPOLIES AND TRUSTS
Advantages of large scale production: The industrial revolution demonstrated the overwhelming advantages of division of labor and power machinery over the old handicraft system. With the improvement of transportation facilities the early form of the factory system is in turn supplanted by a system of large scale production whose units are immense factories, often employing thousands of hands. Large scale production saves in the purchasing of raw materials and in the application of power. Materials and coal can be purchased in train loads cheaper than in car loads. Five thousand horsepower costs much less than ten times as much as five hundred horsepower. Large scale production makes possible the use of expensive machinery and the attainment of a high degree of mechanical efficiency in consequence.
The labor cost is relatively less. Greater subdivision of labor makes larger production possible. The cost of superintendence is relatively lower, and the whole organization can be made more efficient and more nearly perfect than would be possible with production on a small scale. Different grades and kinds of goods can be made in different plants belonging to the same concern, and each plant can run continuously on the same grade, thus saving the cost of changing machinery. By-products can be fully utilized. The butcher who kills three or four animals a week can use nothing but the best parts of the meat and the hide, but in a great packing house not an ounce of material need be wasted. Petroleum could be distilled on a small scale, but the residuum would be wasted and only the kerosene used. In a Standard Oil refinery the petroleum yields not only kerosene and gasoline, but also lubricating oils, paraffine, aniline dyes, coal tar, vaseline, drugs of many kinds, and even the chief constitu-