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 242 THE AMERICAN JOURNAL OF SOCIOLOGY

neglect to apply it inexcusable. But beyond this the mere big- ness of the trust is sufficient cause for alarm and for legislation to regulate it in the interest of the public. It is true, as we have said, that competition will always spring up again if prices rise above the competitive level. But it must be remembered that the plant which can hope to compete with the trust at all must be immense, must represent a fixed investment which cannot be withdrawn when prices again fall to their normal level. Now, if free capital could compete with the trust, competition would remain perfectly automatic ; but since capital must be sunk in apparatus which is useless for any other purpose, and since the plant_ of the established concern is already amply able to supply the ordinary demand, the trust may run prices consid- erably above their normal point, i. e., may exact from the public a profit far above the average that capital can secure from non-trust investments. Furthermore, the established trust may have built up such a reputation for its products that a competitor who could manufacture equally cheaply w.ould be unable to affect its prices. The food company which I have used as an illus- tration of the way in which trusts may be formed is earning dividends of lO to 25 per cent, on its actual investment, and yet competitors scarcely touch it at all. Even if they can manu- facture as economically and produce as good wares, they must sell their product at from 10 to 50 per cent, less than the large concern receives. While, then, their competition may affect prices to some extent, they must run for years without profit before they can reduce the profits of their com- petitor to a fair average. These conditions hold of all com- modities which reach the consumer through retail trade, and must make capital pause before it enters the lists to bring down prices.

The fact that prices are below what they were before the trusts were formed does not settle the question in favor of those institutions. Prices ought to fall continually, and should fall in every case until the profits on the actual investment reach a normal rate, usually but slightly above the rate of interest on good securities. Take away the stock-jobbing element, and