cessfully for some ten years in the bedstead trade, and to have spread successfully in other lines; but within a few months misfortunes have come and the combination has been, temporarily, at any rate, under somewhat of a cloud.

It is probable that in Europe capitalization is, relatively speaking, not so high as in the United States. This is due in part to business habits-more particularly, probably, to the greater degree of publicity required for corporations as well as for most other forms of business enterprises. In England, when one of the large corporations has been formed, there has been made pretty regularly a careful appraisal of the value of the separate plants as going concerns with a capitalization at a moderate rate of the earnings of the separate plants for several years preceding the combination. It is doubtless true that in a good many instances these appraisals are made rather high; but so far as one can learn, it has been only in the rarest cases that there has been issued watered stock to double or treble or quadruple the value of the tangible assets, and rarely also is the stock issued beyond an amount upon which there might be reasonable hope of paying dividends.

In Germany, Austria, and France, whenever the combinations have assumed the form of a stock corporation, the rigid laws have practically held capitalization down to the actual cash value of the assets, estimating the establishment as a going concern, the promoter receiving his pay, if he receives it at all, either in some fixed sum for his trouble or in the profit that would come from selling shares at a premium.

The effect of the combinations in Europe on prices of the product seems to have been, on the whole, substantially that which has been indicated in Chapter VIII. as the effects of the United States combinations. Managers call attention to the savings of combination, and to the fact that at times prices are lowered; but perhaps more frequently, when one considers the matter with them dispassionately, they will acknowledge that they believe the former profits were too low, and that their prices have, on the whole, been slightly increased as a result of the combination. Almost invariably they add that they hope ultimately to be able to reduce the absolute prices more rapidly than they could have done without the combination; but they expect,

practically in all cases, to maintain the margin

between the cost of the raw material and the price of the finished product at a somewhat higher rate than existed before. Practically, however, in every case, they believe, that by their adaptation of the supply of the product to the market demand they will be able to keep prices much steadier than before, and to keep their labor more regularly employed, thus not merely ensuring somewhat more secure profits for themselves, but also protecting to a very material extent both the laborers and the consuming public against the ill effects of commercial crises brought on often by unregulated and ignorant over-production.

More interesting in certain ways than the mere study of domestic prices is the subject of export prices and the relation of the tariff to prices. Of course it has been the custom in most countries, not merely in the export but also in the domestic trade, when customers are somewhat widely removed from the manufacturing establishment and it is somewhat difficult to secure their patronage, to make particularly low prices in order to get rid of a surplus stock. It has regularly been explained, and doubtless with much reason, that this disposal

of a surplus stock at low rates, even indeed below cost, does not increase the price of the product to home consumers, inasmuch as by exporting the surplus the plant can be run to its full capacity when otherwise it is necessary to close it down at intervals in order to prevent an accumulation of surplus stock. The cheaper production coming from running the plant all of the time at full capacity may thus so lessen the cost of manufacture that the domestic product may sell lower, even though the profit on it is paying for the loss of the export goods, than would have been possible had a much smaller product been manufactured at the increased cost brought about by only a partial use of the producing capacity.

Many persons, however, have been inclined to criticise the combinations by asserting that owing to their monopolistic power they were able to secure abnormally high prices from consumers at home, and that when they sold abroad at somewhat lower rates, they were still not selling at a loss, but were thus showing merely the degree of oppression which they were exercising upon the home consumer.

This argument has frequently been combined

with that made in connection with a protective tariff. When in a protected industry relieved of foreign competition domestic prices are kept materially higher than export prices, it is perhaps a not unnatural conclusion that the tariff is fostering monopoly, and that the monopoly is making huge profits at the expense of the domestic consumer. Doubtless in certain cases there is a very considerable element of truth in the charge, but the reply is ordinarily given as above.

Herr Wittgenstein, the founder of the great iron combination in Austria, explains that the protective tariff was needed for the sake of the industry, and had been levied by the government because it was wise. Ought not, therefore, the manufacturer to meet the expectations. of the law-givers by adding to the price at which foreign goods might without the protective tariff be sold in the country the amount of the tariff itself? In case this were unreasonable, why was the tariff levied ? If it proved unreasonable, let it be lowered. So far as selling the goods in foreign markets at lower rates is concerned, not merely do the iron manufacturers, but many others, say that, as has been intimated