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The margin fell again in the latter part of 1889. This was owing to the fact that large competing refineries, especially those built by Claus Spreckels at Philadelphia, had entered the field. For rather more than two years, while this vigorous competition continued, the margin fell back to a point substantially as low as had existed before the formation of the Trust. February, 1892, the Trust bought up the competing refineries, and the margin was at once put back to the non-competitive height. From the years 1892 to 1898 this margin remained, relatively speaking, high, with, as will be noted, a slight gradual lessening, owing presumably to the improvements in refining and the consequent lessened cost, with possibly a growing realization of the danger of inducing new capital to enter the business. Throughout all these years, with the exception of the time when there existed vigorous competition between the Trust and the Spreckels refineries, it will be noted that, on the whole, there was a close correspondence between the English margin and the American, the changes in the duty upon sugars having apparently only a slight temporary effect upon this margin, although the removal of the duty on raw

sugar by the McKinley tariff affected very decidedly the price of sugar to consumers.

In the latter part of 1898 vigorous competition against the American Sugar Refining Company (the reorganized Trust) began on the part of Arbuckle Brothers, Claus Doscher, and others. Prices were immediately cut so that the margin between raw and refined sugar has fallen again very decidedly. Instead of standing from 75 cents to $1 per hundred pounds, as had been the case most of the time during the three or four years preceding, it has remained during the last year at but little above 50 cents, and at times has been even below that, with at present, in June, 1900, a considerable increase.

This study of the chart, then, especially when we compare the American with the English and German margins, shows clearly this: The sugar combination has, beyond question, had the power of determining for itself, within considerable limits, what the price of sugar should be, low or high, with or without competitors, although when there has been competition it has chosen to cut prices to drive out its rivals rather than to run the risk of letting them gradually take its market on account of its high prices. Dur

ing about nine of the twelve years which have passed since the organization of the Trust, the margin between raw and refined sugars has been considerably higher than it was for three years before the Trust was organized, and than it has been during the three years when there has been vigorous competition.

The combination forced the fighting so severely against Mr. Spreckels as a competitor that he was apparently glad to sell out after about two years. The present contest between the Trust and its opponents has continued for more than a year and a half, and at present shows no sign of ending but this, that, with perhaps the exception of Arbuckle Brothers, the opposition refineries have been run at far below their full capacity, have stopped entirely at times, and presumably have been making practically no profits, and that now they are making a com bination among themselves.

The chart seems to show also that the Trust has had very little, if any, effect toward steadying prices. The fluctuations, both in the price of sugar and in the margin, seem to be fully as great since the combination was formed as before, and to be rather greater, on the whole,

than the fluctuations in the English or the German market.

The assertion often made that the price of sugar would have been higher if it had not been. for the formation of the Trust seems to have a partial, but only a partial, justification in the chart. The chart does make it perfectly clear that during periods of the most vigorous competition the sugar refiners were doing their work on a very low margin. The large number of refineries that went into bankruptcy before the formation of the Trust seems to show clearly that the margin was ruinously low. While it is probably for the economic advantage of the country that the weakest competitors be forced out of business from time to time, it can hardly be considered for the benefit of the country that competitors of substantially equal strength carry competition so far that all are running at a loss, and that a large percentage of them go into bankruptcy. When competition is so fierce, the inevitable result of its continuance would be that, as Mr. Post, a rival of the Trust, says, the few who survive would be able, owing to the lessened supply, to put prices at considerably above usual competitive rates, and would be en

couraged to do so, because they could not well supply the demand. Unrestricted competition,

then, among powerful rivals in an industry of this character would thus lead, it would seem, to very great fluctuations in prices from those abnormally, not to say ruinously, low to those abnormally high.

One ought not to fail to note that in industries of this class, under present methods of doing business, one can scarcely with propriety speak of a competitive rate that is in any sense normally uniform. The "normal price" of economists has been based upon cost of production under a system of competition among small capitalists. From what has just been shown, it appears that in an industry like that of sugarrefining competition will first force all to sell at a rate that is below cost for many, perhaps all, refiners, until many fail. Then the short supply for a period of years, if no combination is made, will enable all those surviving to reap large profits from high prices, till new capital, after months or years, is tempted into the business. Then prices fall again below cost. It would seem that in such an industry the real rate under competition, if the almost inevitable combination were not made, would be first below cost, then