for comforts and luxuries have always run far beyond his means of gratifying them, because the cost was so great. I believe that it is so with us all. Our demand will come at once for other things, if, by lower prices, some of our money now used in purchasing necessaries is set free. The importance of the workingmen, or the difficulty of finding employment, or the hardship of being out of work, is not underestimated. But the progress of civilization must come through improvements in methods of production, as well as through a better distribution and a wiser consumption, using those words in their older common sense; and we must not neglect any of these sources of saving.

TABLE I.

Average Annual Price in Cents of Refined and Crude Petroleum.

The fact that a monopoly saves much of the waste that of necessity takes place under free competition, shows what the real function of monopoly may be, either in the hands of the state or under the control of the state, or under any system so managed that its saving goes in the main to society instead of to the few monopolists. But, on the other hand, it must not be thought, because competition is wasteful and

monopolies can make lower prices, that they generally do so. The solicitor of the Standard Oil Company has shown a good many times in print that the price of oil is much less now than it was before that company became so powerful. He has also shown that the difference between the price of crude and that of refined oil is much less than it used to be; and then he argues that the monopoly - which he says is no monop

=

A Price of refined sugar (granulated). B Price of raw sugar (96° centrifugal). C=Difference between A and B =cost of refining plus profits.

The argu

oly has been a positive benefit to consumers. ment is certainly very plausible. Still, the facts that he gives are not enough to uphold his argument fully. It is the natural tendency for the cost of production in all industries to lessen with the progress of invention; and this is especially the case with industries that are entirely new, as was that of refining petroleum only a few years ago. It may be seen from the price lists that the rate of decline has been very much less since the formation of the powerful central organization than

it was before. Indeed, there has been no regular decline that is really noticeable for the last twelve years.

The late developments in the processes of manufacture appear largely in a great increase in the side products an increase that might enable the producer to lower the price of the main product without any lessening of profit.

On the whole, so far as this industry is concerned, we can say

refineries.

no more than that the defense has not fully made out its case, the probability being that the monopolization of the industry checked slightly the natural fall in price. Whether the dissolution of the trust has contributed to bring about the decline of the last two years, is an interesting question, but there is no reason to think that it has. The former trustees still,

1 This diagram is constructed from a table of comparative quotations of raw and refined sugars, 1880-93, corrected by Willett & Gray, 91-93 Wall St., New York, and published in their Weekly Statistical Sugar Trade Journal, Feb. 8, 1894.

as individuals, hold a majority of the stock in the old trust refineries, and of course control. The vigorous new partial competition is probably the real cause of the decline.

So far as some of the other industries are concerned, however, the case is perfectly clear. There is no doubt whatever that the formation of the Sugar Trust in 1887 resulted at once. in a material increase in the price; that a partial breaking down of the monopoly, through adverse judicial decisions and the building of the Spreckels refineries in Philadelphia, resulted in the lowering of the price in 1890-91; while a later combination that has given the monopoly a control of some ninety per cent of the refining capacity of the country has resulted again in a serious loss to consumers through a decided raising of the price.

Notice Diagram I. When one reads in the Sugar Trade Journal the statement that "for the eight years preceding the formation of the Sugar Trust the net cash difference between raws and refined averaged 1.066 c. per lb., while the six years of the Sugar Trust and its successors show an average difference of 1.043 c. per lb.," one is likely to get a misleading impression as to the effects of competition and monopoly. A detailed study of the diagram shows that for some years before the formation of the trust there had been a fairly regular decline in either cost of manufacture or profits or both. In all probability competition had become at times so fierce that profits were small. We know that under pressure of competition great establishments often run for a time at a loss. But the effect of the combination, as given above, cannot be doubted. The manufacturers reaped a rich harvest. In all probability the cost of manufacture, particularly through the special facilities for securing raw material and for distributing the product under the combination, has materially lessened; but of this the Trade Journal takes no account. The late statement by one of the leading men of the company that, if the tariff on refined sugar were removed, they would be obliged to close their refineries, has a humorous effect when one traces the course of prices on the diagram.

The effect of the whiskey monopoly has been very marked,

though this company has had a more checkered career than the other two mentioned; and to-day it seems to be struggling against difficulties, with the chances, however, in its favor.

The table and the diagram below show that the raising and lowering of prices are matters determined at times almost by the caprice of the managers. The great increase at the beginning of 1893 was the reply to a proposition on the part of Congress to increase the tax. The last three years show enormous profits from the goods sold. It is true, however, that last year great quantities were stored, and sales were so low that large sums were borrowed to pay rebates. As the amount of the rebates given cannot be obtained from the company, the diagram does not accurately represent the profits, and accordingly the same reliance cannot be placed upon it for the last two years as for the earlier periods.

Market Prices at Peoria for Alcohol and Corn' from 1889 to 1894.3

2 From each bushel of corn the average yield is about 4.6 gallons of alcohol.

3 For prices from 1881 to 1889, see POLITICAL SCIENCE QUARTERLY, IV, 311 (June, 1889).