created, and if individual ability and effort, however well directed, are thus secretly rendered useless, there can hardly be justification from the social point of view. In interstate matters, of course, since the passage of the Interstate Commerce Law in 1887, such discriminating practices are clearly illegal, and they have generally been considered as contrary to public policy; but that they are granted, and that business is done largely on that basis, is scarcely a matter of question. That such discriminations, too, usually favor the large shipper, giving him at times monopolistic power, and increasing his monopolistic power, if such already exists, is beyond doubt.

Inasmuch as such discriminations are contrary to law, it has been asserted by several of the larger combinations, such as the Standard Oil Company and the American Sugar Refining Company, that it is even better policy for them, to say nothing of the moral aspect of the question, to live up to the law strictly, and see to it that their rivals are forced to do the same, than to run any risk of being caught in illegal practices. This is especially true where the shipments are very numerous and are made from widely separated points, so that evasions

of the law would almost certainly be detected. One scarcely needs to add that their rivals believe that their practice hardly agrees with their avowed policy.

Aside, however, from violations of the Interstate Commerce Law, the large combinations at times get freight advantages which add greatly to their power. It seems to be established that, the Standard Oil Company receives decided advantages from the location of its refineries at Bayonne, New Jersey, when the nature of the freight rates on oil shipped into that territory is taken into consideration. Shippers of goods from Western Pennsylvania or Ohio to points in the New England States are usually given Boston rates on most articles; but on petroleum the rate is arbitrary, a local rate usually being added to the through Boston rate. On that account the rivals of the Standard Oil Company whose refineries are located in Western Pennsylvania or Ohio find it impossible to compete at many points which they could easily supply at profitable prices, provided that Boston freight rates were charged. The Standard Oil Company, by bringing its oil to East Boston in tank steamers from its refineries on the

seacoast, can distribute throughout New England at only the local rates, thus securing so decided an advantage that it is able to control the oil market throughout that territory. In like manner, by having very large refineries located at Whiting, near Chicago, it is able to supply the South and West at lower rates than its rivals, who ship from Western Pennsylvania or Ohio, the rates from the immediate neighborhood of Whiting being apparently much lower than those from localities where rival refineries are located. It may pay exactly the same rates as its competitors pay when shipments are made over the same routes; but, owing to the fact that its refineries are more advantageously located, it not only secures a great advantage in the saving of cross freights, but it can also save through favors in rate making. It is not thought by many that there is any direct discrimination when oil is shipped over the same route, but the railroads seem to have arranged their rates in such a way that they work decidedly to the advantage of a company situated as is the Standard Oil Company. The arrangements made, too, are so different from those that obtain in other lines of goods that they give color to the

belief held by so many that the railroads and the Standard Oil Company are working, in certain cases, practically in partnership. It is probable that a careful study of the freight rates on other classes of goods controlled by other very large shippers would reveal similar arrangements. Especially may one fairly make this assumption when specific cases of favoritism that are illegal in form as well as in spirit are openly acknowledged both by the railroads and by shippers.

The distinction should not be overlooked between the proper and legitimate advantages derived by large shippers and combinations through better facilities for handling, adaptation of trade to circumstances and markets, savings in cross freights, etc., and those arbitrary discriminations, whether technically illegal or not, by which a railroad may at will build up or ruin a special locality or any single shipper without regard to his care or skill.

CHAPTER IV

COMBINATION AND MONOPOLY

There is much difference of opinion as to whether or not the large combinations of capital of the present day are to be considered monopolies; and since the decisions of the courts regarding combinations are based largely on their views regarding monopoly, the question has a decidedly practical aspect. When a monopoly is found to exist, there seems to be also a difference of opinion as to the force by which the monopoly is retained. Of course circumstances are likely to differ in the different cases. Some of the larger combinations have succeeded in obtaining control of practically all of the valuable patents in certain lines of manufacturing, thus giving them a legal monopoly which would be protected by the courts. Practically all of

the barb wire made in the country at the present time, as well as the wire fencing, is in the hands of the American Steel and Wire Company, because that company owns all of the