law. In my Illinois village we were confronted when we bought meat, not by a beef trust, but by an entire consolidation of the beef industry in one person, namely, Joe C. We bought our beef from him or went without. Later Charley D. came in we dealt not with a Big Five and two hundred independents described in the Federal Trade Commission report, but with a Big Two. The rich man of the region in a neighboring town had his meat sent in from a distance. This doubled the cost. With that one exception and occasional purchases in the winter of frozen beef from farmers by the 'quarter,' not one family in that region ever found relief from the power of our Beef Trust.

Not only has the substitution of large for small producing units resulted in no weakening of competition; more than that, it is an obvious deduction, from facts known to all observers, even from the hackneyed commonplaces of recent industrial history, that, with and because of the growth of capitalism, competition has in our day become intense and swift and sure beyond all previous human experience.

What do we mean by competition? We ought to mean the ready movement of the factors of production labor or productive instruments-toward those employments in which prices are exceptionally high and profits large. That is, competition is substantially 'mobility.' Two things are necessary for this mobility: (a) knowledge, among persons outside of the high-priced employment, that it is profitable; (b) the possibility of increasing the use of capital and productive energy in employments whose superior attractiveness has become known. In both respects the tendency of recent industrial evolution has been toward making competition more prompt.

An even more striking factor in the

situation before us is the fluidity, the mobility of productive forces, now that the craftsman has given way to the machine as the dominant factor in production. The skilled workman, having learned his trade, was immobile; he could not invade another craft and he had little fear of an invasion of his own field by unskilled men or by men of acquired ability unlike his own. Tasks like those which formerly required muscular strength and skill gained through long apprenticeship are now performed in a large and increasing percentage of cases by men of little strength and brief training.

In automobile-making 43 per cent of all jobs, we are told, can be learned in one day; 36 per cent more, in not more than a week; only one per cent require more than a year. The factory worker shifts frequently from one employment to another employment and back again. The replacement of the skilled workman by the unskilled laborer and the machine is shown strikingly in the steel industry. 'Steel is not made with hands. Man does little more than touch levers while the balance is done by steam and electricity.' 'In a mill rolling 3000 tons of rails a day not a dozen men are seen on the mill floor.' In these last years the steel mills have needed additional laborers; they have drawn on the Mexicans of the Southwest and the Negroes of the South. The cottonfield laborer may almost at once be set to work in a steel mill. The decline in power of unions in the steel industry is a result and an evidence of the waning importance of manual skill. 'For the past thirty years they have suffered an unbroken series of defeats."

If labor is readily diverted from one employment to another by the allurement of profits, the other great factor in production is equally fluid. New capital - the current accumulation of

surplus income is unspecialized industrial protoplasm quickly turning in any direction, attracted by the hope of profit, creating new competing products with a promptness and certainty unknown in the age of handicraft.

The owners of investment capital and their advisers are looking incessantly for the most profitable opportunities for its employment. The earnings from oil, from steel, from the packing industry, from automobiles, from sugar, from commerce and ship ping, flow into steel or automobiles or oil, or whatever gives greatest promise of high earnings. In the production of the chief staples, every sort of productive agency labor, no longer specialized as in the past but adaptable to any use, and material of every kind - is at the disposal of any group of persons possessing the requisite number of dollars.

The matter is comparative, and in comparison of past and present we can say only that in the more general knowledge to-day of the relative attractiveness of business opportunities, in the increasing readiness with which unspecialized labor and unspecialized material for plant and equipment can be turned with brief preparation, the consumer finds a tolerably secure defense against high prices due to restricted supply.

It must be understood that competitive influences or processes are many. There is competition of the obvious sort between rival companies; there is the influence of 'potential competition,' caution in raising prices for fear of calling new rivals into the field (thus Miss Tarbell showed how, when prices of oil increased, the production of oil from shale increased and new wells were opened so that Mr. Rockefeller and his associates found that 'making oil very dear does not pay'). There are other forms of competition, or processes having the same

effect as competition, in both railway transportation and manufactures, which have generally been slighted or overlooked. One of these neglected forms of competition is what might be called the motive of the empty car. If all railway property in the United States were united under one owner, it would still be necessary for that magnate to place a limit on charges in order to attract business, and thus to employ more fully his trackage and his rolling stock, as more than half the expense of railway operation continues even when traffic and revenue are next to nothing. The same principle applies to manufactures: running at half capacity is ruinous.

Another sort of competition is competition between one commodity and another for the purchasing power of the public. The fact that unlike commodities compete has been recognized in the case of the liquor traffic; the grocer has been biased in favor of Prohibition by his own interest in destroying a rival. The same sort of competition is well known in other cases without being called competition. For example, an association of onion-raisers in the Rio Grande Valley some years ago developed a market for their products in Kansas City by inducing the grocers there to lower the price of onions at retail, causing an increased demand for onions by a process of competition with the whole range of foods known to Kansas City housekeepers.

The development of a market for any commodity by joint action of producers of that commodity (as in the case of California fruits) through distributing samples, advertising, demonstrations to teach the public its uses and advantages, is inter-commodity competition. It is quite reasonable to believe that, if production of each commodity came to be consolidated in one

company, the competition of the several groups for the patronage of the purchasing public would be as intense and as effective an influence toward moderate prices in every line as any imaginable competition between rival producers of the same kinds of articles.

The opinion has been generally accepted by writers, legislators, and judges that the railway business is singularly noncompetitive. With all deference, I believe that competition is in that field singularly powerful. All students of railways do indeed recognize the influence of railway competition, not merely in the simple and obvious effort of adjacent lines to take business from each other, but in the case of lines far apart. Whenever two railways, however remote, carry products from competing producers those lines of rail are competitors. Thus the railways of British India and the railways from the wheat fields of Dakota to the port of New York are competitors in carrying wheat for the Liverpool market. The same process is more evident within the country; for example, the shoe manufacturers in St. Louis and the railways which serve them compete for the market of the south (Georgia, Alabama, Tennessee) with the New England shoe factories and railways.

This fact can hardly be stated with too broad an application. Practically all articles carried by American railways enter into a world-wide market where farmers, manufacturers, miners, and carriers of all regions and all nations compete. A combination to put an end to competition must therefore be world-wide; there is no such combination. The corner grocery is not more clearly competitive than the railway, even though the competition process is not identical in the two

cases.

III

An observation of the industrial organizations which this course of development has created brings everywhere to view the universal prevalence of competition which the growing fluidity of industrial agencies and instrumentalities would lead one to anticipate. To find evidence that competition survives and increases, one need only examine the rather abundant publications, official and unofficial, which have been designed to show that competition has been 'crushed.' One might, for example, reasonably expect that a work like the Federal Trade Commission's report on the Meat Industry, recommending (and in fact leading to) drastic legislation for the remedy of monopoly, would exhibit something which might possibly be called 'monopoly' by a rational person within reach of a dictionary. The commission received replies to its inquiries from 225 slaughtering interests engaged in interstate trade, besides 1132 wholesale slaughterers doing business within their respective states in addition to the purely retail slaughterers scattered nearly everywhere over the country. That is 'monopoly.' Likewise the report of the Senate subcommittee in 1923 on the 'High Cost of Gasoline and Other Petroleum Products' mentions (in addition to the seventeen companies with their thirty-eight refineries of the Standard group) a further list of twenty-eight independent companies operating fifty-seven refineries, and (yet further) a number, not specified, of small refineries. That state of things can be classified as 'monopoly' only by a use of the word (unhappily the prevailing use) so indefinite as to have no real significance. These publications not only show a multitude of competitors, but they fail to show (even when in general terms

In the meat industry during the prewar years 1910 to 1913, Armour's profits ranged from 3.4 per cent to 9.3 per cent; Swift's, 7.4 to 9.6; Morris's 4.1 to 7; Cudahy's 2.4 to 8; Wilson's, so far as reported, were 6.5 per cent. The reader is invited to decide for himself whether there is evidence in these figures of monopolistic extortion which the Federal Trade Commission represents (I am not exaggerating) as a peril of the first magnitude not only to the people of the United States but to the entire human race.

In the war years profits increased, as appears in the following table showing the percentage of gain for the monopolists and for sixty-five competitors of the monopolists.

Why become a monopolist, when it is more profitable to be an 'independent'?

In 1921 the Big Five endured a general loss; Armour's deficit was reported at $31,000,000; Wilson's at $8,462,000-five or six times the total profits of the Wilson Company for the year 1920. The Wilson organization is now (August 1924) in the hands of receivers, and a suit to have the company declared bankrupt has been brought by creditors who, departing from the complaint of the Commission that the company has the consumer's purse at its mercy, allege that it cannot extort enough of the consumer's wealth to pay its debts.

According to the brief of the Government in the suit to dissolve the Standard Oil Company, that organization in 1906 earned 24.6 per cent on

rate for the preceding ten years, and 20 per cent in the yet earlier period as far back as 1882.

A subcommittee of the U. S. Senate Committee on Manufactures, under the chairmanship of Mr. La Follette, more than a year ago issued a report on the High Cost of Gasoline and Other Petroleum Products' offering the general conclusion that earnings had been exorbitant, as shown especially by the increase in the value of the stock of the various Standard Oil Companies from the time of dissolution of the combination in 1911 to 1923. Thus a share of the Standard of Indiana is represented as increasing in value from $2520 in 1911 to $39,000 in 1923-more than a fifteenfold increase. The method of making this calculation was crudely- but as a means of arousing public indignations, effectively fallacious. The $2520 (1911) was a book value; the $39,000 (1923) was a market value. The book value in 1911 of a company which had been exceedingly prosperous for more than a score of years would probably be much less than its market value. The shares were not on the market in 1911, being all owned by the holding company; but after the dissolution they were again sold independently and November 26, 1912, the 30 shares into which each original share had been divided were valued in the New York stock market at about $325, making for the 30 shares $9750 instead of the Committee's $2520. The increase to $39,000 is not in the ratio of 15 to 1, but a fourfold increase not a phenomenal growth if we remember the possibilities of compound interest, and realize also the exceptional conditions attending the oil business during that period, which made large profits comparatively easy without any sort of monopoly power.