and deception practised by promoters and directors at the time an industry is organized, and, later, through misrepresentation of the condition of business and of the methods in which a business is carried on. The greatest evil at the time of the organization or extension of the business probably comes from stock watering, a process which could not profitably be carried on without concealment and deception.

(2) A second class of persons injured is that of the stockholders. Directors not infrequently manage the business in their own interests, regardless of those of the stockholders. At times it is really made less profitable, or is so managed as apparently to be less profitable, in order to depress the stock on the market and to enable the directors through gambling speculations to reap large profits. Or, again, if the business itself is successfully managed, its methods of management may be kept secret, and the directors, through their exclusive knowledge, will reap large profits by buying or selling at the expense of their fellow stockholders, who, from the nature of the case, cannot be so well informed as they.

(3) Persons, not members of a corporation,

may be injured as consumers by high prices, which can be kept high, provided the combination can secure monopolistic power. The temptation to keep prices above former competitive rates is, of course, greatly increased when the corporation has issued large amounts of watered stock.

(4) The producers of raw material may be injured by low prices, which the combination, by virtue of its being the largest, if not almost the sole buyer, can compel the producer to accept.

(5) The combination may so increase its power as to injure the wage earners by compelling them to accept lower wages or to work under less favorable conditions than would be granted by competing concerns. So, too, the power exercised, apparently arbitrarily at times, of closing part of the plants to avert a strike, or even to affect the stock market, is dangerous.

(6) It may happen at times that the larger organizations will exert so powerful an influence on our political organizations that the purpose of the State will be directed away from the common weal.

(7) The mental tone of the business com

munity may be lowered by depriving individuals of the privilege and of the power to enter independently into business as readily as could be done were capital less concentrated. It should be borne in mind that this evil, while it exists, is offset, in part, by some of the advantages mentioned above.

(8) And, again, the moral tone of business may be lowered. If the larger organizations employ unscrupulous methods in dealing with competitors, or customers, or laborers, their greater power, especially if it is great enough to give them a partial or complete monopoly for a time, will have a much more detrimental influence than the same acts of an individual, both on account of the range of its application and of the more powerful influence of its example. Here again it may be well to state that there is no reason to believe that individuals managing these large combinations of, capital are worse morally, or have more evil intentions as regards competitors or the public than managers of small establishments. Both classes look carefully after their own interests, and feel themselves justified in so doing; but the power of the manager of the large corpora

tion is greater, and the injuries, both economic and moral, to the public from his selfish acts may be much more severe.

Many of those who are most inclined toward the doctrine of freedom in industry think that the wisest policy in dealing with the combinations is the let alone policy, except so far as advantages are secured by the combinations through certain restrictive provisions in our laws, such as tariffs or patents. Such advocates, of course, advise the removal of these discriminating favors. Some of those persons, on the other hand, who are most impressed with the evils of the combinations, have advocated their absolute destruction by legislative measures.

Twenty-seven States and Territories have passed laws intended to destroy such industrial combinations as now exist, and to prevent the formation of others. Fifteen States have similar provisions in their constitutions, although four of these have not enacted statutory measures to carry out these constitutional provisions. Besides this legislation on the part of our States, we have a Federal Anti-Trust Act (the so-called Sherman Act of 1890); and certain provisions of the Interstate Commerce Law of 1887, by

checking discriminations, work against industrial combinations. A study of these statutes and of the decisions of our courts of last resort which have been made under them, will show that they have had comparatively little, practically no effect, as regards the trend of our industrial development.

It is true that through these acts of legislatures and courts the form of combination has varied more or less. Through the influence of these statutes also the tenets of the common law regarding monopoly and restraint of trade have been slightly changed. Under the common law restraint of trade needed to be unreasonable in order to be condemned; under some of these statutes all restraint of trade, whether reasonable or unreasonable, is condemned. Some of the statutes have gone to such extremes that, had they been literally interpreted, they would practically have stopped many of the ordinary agreements in business which are necessary for its successful prosecution, and which are without any intention or any effect of monopoly or of other practice which would tend in any way to the injury of the community. In the interpretation of the statutes, however, our courts have regularly been rather more conserva