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 -1902] Ominous growth of Trusts. Other problems. 721 where prices have been maintained at a rate higher than would have been possible under normal competition, but there are also instances, no doubt rarer, in which the Trusts have restrained a speculative increase in prices with a view to the maintenance of stable business conditions, which their defenders claim to be their chief function. As yet it is impossible to say with certainty what is the effect of Trusts on prices; but if the great combinations do not as yet abuse their power over prices, they have the power to do so ; and that fact in itself constitutes a national problem. Unquestionably the control of the supply of any important com- modity by a single company is contrary to the spirit of American law and to the traditions of American business. And it is as much the market question of price as the social question of industrial power that excites alarm, even among the least radical. The tendency towards consolidation has not been confined to a single industry, but huge surplus profits have sought investment in neighbouring fields ; and the same directive influence is seen in many diverse lines. Railroads are coming to be more and more controlled by the same powers; while in the field of banking, which until recently has been completely decentralised in the United States, institutions of great size have been established to finance the operations of these great enterprises, and are rapidly extending their control over other banks in the leading financial centres. It would be out of place here to enlarge on this situation; but there can be no doubt that the financial power of the country is to-day centralised in fewer hands than before, and that this power is more far-reaching in its influence than seems consistent with the democratic traditions of the past. Other problems of economic policy are presenting themselves at the same time. The protective system, which has never been successfully attacked on the ground of the consumer's interest, is being criticised from two new points of view. In the first place, the question of the effect of the tariff in supporting industrial combinations has put the protectionists on their defence; while the influence of the increasing effort to extend the foreign market is more important still. The fact that the home manufacturers are able to compete in the neutral markets cannot fail to raise a doubt in the public mind as to the further necessity of such high protective duties ; and those manufacturers who are striving to increase their exports are likely to prove less enthusiastic than formerly about a system of almost prohibitive duties which restricts the whole development of foreign trade. The strongest demand for a reduction of duties comes from the West, where the desire to extend the markets for their agricultural products, and the wide-spread hostility to the Trust movement, combine to form that opinion. It cannot be said that the abstract doctrine of Free Trade has ever taken great hold in the United States ; and the present agitation follows rather the line of c. ii. 11. vn. CH. XXH. 46