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

far above it, then below again, and thus continuously in cycles. There is no normal level of competitive price based on cost of production.

While there does seem, from this thought, to be this partial justification for the claim that the Trust may have lowered the price of sugar on the whole below what it would have been for a time had the combination never been formed, the relative steadiness of the English margin at a point which, in the main, seems lower than ours, considering the higher grade of English refined sugar, as well as the exceedingly high margin found frequently in the United States since the organization of the Trust and the large profits of the American Sugar Refining Company, would seem to show that the price of sugar in this country has probably, on the whole, been rather higher than it would have been had most refiners been willing to take but a small profit above the cost of refining, and certainly considerably higher than it would have been under conditions of competition such as have existed during the last two years.

A still further fact which leads to the same conclusion is that Mr. Havemeyer, the president of the American Sugar Refining Company, seems

unwilling to concede that the cost of refining is as low as his competitors assert. Mr. Jarvie, of Arbuckle Bros., says that with a margin of from 50 to 60 cents sugar can be refined without loss. Mr. Doscher agrees, saying that it can be done without loss when the margin is 50. Mr. Post places the margin somewhat higher, but concedes that a large establishment like the Trust would have an advantage of from 3 to 5 cents a hundred pounds in refining. Mr. Havemeyer, on the other hand, puts 50 cents a hundred as the bare cost of refining, and declares that 24 cents more at least must be added on account of the waste in raising sugar from 96° to 100°, the polariscope test of the refined, thus making the margin necessary for profit some 75 cents a hundred, instead of from 50 to 60. Apparently he thinks it wise to reckon in some interest on investment with the cost, which the other witnesses seem not to have done. He admits that " no great damage is done" when the margin is at 75 cents. There is a profit, if all is in good working order.

Another point which is to be considered, although it is one which is scarcely noticeable, or noticeable only in certain special cases on the

chart, is this, that in order to secure the same profits the margin between raw and refined sugars should be slightly greater when the price of raw sugar is high, inasmuch as the loss of weight is a more expensive waste. If, for example, with raw sugar at $3 a hundred there were a 7 per cent. waste, let us say, in refining, this loss would amount to 21 cents a hundred; while if, with the same 7 per cent. waste, the price of raw sugar were $4 a hundred, the waste would amount to 28 cents. We see, therefore, that in order to make the same profit the margin should be 7 cents a hundred more in the second case than in the first. The witnesses speak of unusually vigorous competition and a consequent low margin each year from December to March, while the Louisiana crop is being refined and marketed, but this does not appear with any regularity.

On the whole, the chart seems to make it perfectly evident that the sugar combination has raised the price of refined sugar beyond the rates in vogue during the period of active competition before the formation of the Sugar Trust and the two competitive periods during its existence. We can perhaps hardly judge so accurately as to