through low prices, the beneficiaries of the conflict.

A reasonable competition, which may indeed force out one by one individual producers, is clearly a healthful influence in the industrial community, stimulating the better ones to their best efforts and raising the plane of efficiency. A competition of this nature where, one by one, the weaker competitors drop out and more efficient ones come into the industry from time to time produces no crisis in that industry. On the other hand, fierce competition among rivals nearly equal, especially when large amounts of fixed capital are involved, not merely leads to the wastes already mentioned of ill-advised methods and measures, and losses to practically all of the competitors themselves, but, further, leads to general depression in the line of industry involved. This depression will lead to shifting of capital from that industry into other lines for which, under normal conditions, there is not so great need in the community, and this, in itself, involves another industrial loss. For these reasons it is probable that, when competition is of this nature, the community will gain from the economic viewpoint by a combination which

stops the competition before it has reached the ruinous stage, even though it does involve for the time being the taking of some plants that are comparatively useless. The value of those plants will, in part at least, be saved by employing them in other lines of industry; but even where the loss is temporarily a total one, it is likely to be less to the community as a whole as well as to the combination itself than would result from a continuance of the competition to the ruin of a large proportion of the competitors. When unfair and illegal methods of competition are employed, such as the use of discriminating rates on railroads, or any dishonorable practices, the above discussion does not apply. Such unfair and illegal methods put the question rather into the field of criminal law or social ethics. Such practices are under no circumstances to be justified or defended.

But aside from the effect of the avoidance of bankruptcy on the part of numbers in the community, it is often urged, and that with much reason, that under the present system of production on a large scale, an individual cannot start independently in business, unless he has large capital or is in some way personally in favor with the

managers of the larger combinations. We have, therefore, in the community, it is said, a few magnates in productive activity, together with multitudes of men of sound judgment, capable of managing large enterprises independently, who are reduced to the position of employeestheir individuality dwarfed, the development of their manhood checked-all this, of course, to the detriment of the State.

So far as this contention is true (and there is much truth in it), it is perhaps the most serious objection that can be made to the present system of industrial combination. It is a wellknown fact that the high officials in our large insurance companies, in our railroad systems, in our banks, and in other great industrial enterprises, do give opportunities to their children and their friends for advancement in the direction of industrial enterprises which could not so readily at least be secured by others. On the other hand, it is doubtless true that if these scions of the industrial magnates show themselves incompetent, they often will be soon removed from their positions, or dropped into others of less responsibility, while the more capable men who have earned their positions

take their places. If such a course is not taken, the rivalry of old or new capital will soon make itself felt. The savings of combination before mentioned will be more than offset by the losses arising from incompetent management, and the combination will fall before its smaller rivals. That this tendency in great corporations toward nepotism is strong cannot be doubted. If it is not largely overcome through the variety of interests in the combination itself, it will be an easy matter for competition to hold its own in another short generation.

On the other side, however, of this vital question, there are one or two matters for consideration. Many men are now trying to work independently who are industrially fit only to work under direction. Any careful business man or observer of business conditions can probably name among his acquaintances men who, good workmen perhaps, are fit to be carpenters or machinists or tailors while working under the direction of others, but who wish to become and at times do become contractors, or who open stores of their own where they are in positions of financial responsibility as heads of establishments, and who, whenever they secure

such independent positions, invariably bring disaster upon themselves and consequent discomfort to their families and loss to their creditors. There can be no question that, from the strictly economic point of view at least, the endeavor of these men to manage a business independently, when they are fit only to be workmen under the direction of others, is a distinct evil. Unless the waste is needed to enable society to select the business leaders, or unless men who work under the supervision of others are deprived of their individuality, the loss is probably great enough to overbalance any gain which society derives from their attempts at managing a business for which they are not fit.

The fact should not be overlooked that persons holding subordinate positions are usually granted much more independence in work than is often thought. In a large mercantile or manufacturing establishment the heads of departments ordinarily have full discretion in the management of their departments as long as they prove successful.

Their employers look for results. They are given general directions in order that they may fit properly into their places in the great organization, but they have