THE EFFECT OF TRUSTS ON PRICES
Having surveyed the trust movement and having studied in detail a number of representative trusts, we may now turn to an examination of the underlying causes of the trust movement. And understanding of the reasons for forming trusts will enable the reader more readily to comprehend the popular attitude toward them as evidence in legislative enactments and judicial proceedings; and will greatly assist him in determining what the public policy with respect to them should be.
The primary explanation of the trust movement, notably that characterizing the period from 1898 to 1903, would appear to be the desire of the manufacturers to restrict or eliminate competition and thus to establish monopoly prices. Whether this competition that it was desired to eliminate was "ruinous" in its nature is a question we have analyzed elsewhere at considerable length, the conclusion being that competition can not properly be regarded as ruinous, except possibly in a quite limited range of industries.1 A secondary influence was the hope of achieving the economies of the trust form of organization,--a topic that will receive consideration in chapter XIX, Third, though of less importance, was the lure of large profits of the trust promoters, men who conceived the idea of a trust in a given industry, or, if they did not conceive it, at least carried it though to a successful consummation. There were other incentives, to be sure, such as the ambition of certain individuals to become Napoleons of industry, but undoubtedly these were the three principal motives. First, then, as to the trust and prices.
The evidence as to the effect of trusts on prices has been presented for a number of trusts; and may be briefly summarized at this point. In making this summary and throughout the sub-____________________