REGULATION OF PRICES
In view of the disappointing performance of the trusts, and in view of the comparative lack of success attending the attempts to dissolve them, it becomes pertinent to consider the suggestion that, whenever monopolies have been established in industry, the government regulate, through an administrative commission, the prices that may be charged or the profits that may be realized in the monopolized industry.
The difficulties that inhere in price regulation are impressive, as will shortly appear.
The purpose of governmental price regulation would be to establish a fair price. Since a fundamental evil of monopoly, if not the fundamental evil, is the charging of excessive prices, it would be incumbent upon the government, through some commission of the nature of the Interstate Commerce Commission or the Federal Trade Commission, to fix a fair price. Opinions will differ as to what constitutes a "fair price," but a fair price may perhaps be nightly characterized as one that is sufficiently remunerative to attract the additional investments of capital that recurrently become necessary. Stated somewhat differently a fair price is one that will ensure the desired output of a particular commodity. These two statements may readily be harmonized, notwitstanding the fact that in one sentence there is used the word necessary and in the other the word desired, by regarding an investment of capital as necessary if it____________________