Trade monopoly

“ It is the "monopoly" profits of trusts and combines, taken either in construction, financial operation, or industrial working, that form a gathering fund of self-accumulating credit whose possession by the financial class implies a contracted demand for commodities and a correspondingly restricted employment for capital in American industries. Within certain limits relief can be found by stimulation of the export trade under cover of a high protective tariff which forbids all interference with monopoly of the home markets. ”

“ The monopoly can no longer reduce its price to apply to only the limited field in which the new competitor works, but must reduce its prices everywhere to meet those made by the rival. In the case of monopolies in trade and all monopolies in manufacturing in which the fixed capital required is but small, this is all that would be needed to encourage the establishment of new competitors and discourage the monopoly from grasping after undue profits from the public. ”

“ That to vitiate a combination such as the act of Congress condemns, it need not be shown that the combination, in fact, results or will result, in a total suppression of trade or in a complete monopoly, but it is only essential to show that, by its necessary operation, it tends to restrain interstate or international trade or commerce or tends to create a monopoly in such trade or commerce and to deprive the public of the advantages that flow from free competition ”

“ No gift of nature assists to maintain a monopoly in trade. It must be wholly artificial, and it relies for its strength simply on the adherence of its members to their agreement to maintain prices. Its degree of power can never be great, compared with monopolies which control the original sources of production; for if it is attempted to put up prices inordinately, competition will start up outside of the combination, or the consumer will be led to deal directly with the producer. ”

“ When a company of merchants undertake, at their own risk and expense, to establish a new trade with some remote and barbarous nation, it may not be unreasonable to incorporate them into a joint-stock company, and to grant them, in case of their success, a monopoly of the trade for a certain number of years. ”

“ But in dealing with the question of monopolies we must not conclude that [72] the absolute control of supply is at all necessary to the existence of a monopoly. While there are monopolies, as we have seen, which have the keys to some of the necessities of civilized life, there are others which control merely some easier means for their production, carriage, or distribution; and to this latter class belong the principal monopolies in trade. ”

“ Hence there is no danger of private monopoly; no opportunity for particular groups of producers to make corners in raw materials; to get monopoly prices for commodities in times of scarcity, or to resist legitimate improvements in machinery or processes merely because these would interfere with the vested interests of the persons owning particular instruments of production or possessing a particular kind of skill. ”

“ In effect, from what known point could one then start, to imagine that a nation, who openly countenances monopoly at home, in order to encourage her foreign trade, lays the most solid basis for the monopoly she wishes to secure to herself every where? ”

“ It is not thought necessary at the present moment to state the results that then had been reached at Common Law, and finally buttressed by the Constitution, with minute exactness or in great detail; but generally it was held that all restraints of trade—that is to say, "trade" itself, not merely "traders,"—where their restraint did not restrain trade itself,—were against the public welfare, and injurious; and that the greatest of all trade evils was when they reached the point of monopoly. ”

“ But, besides the injury to the native merchant by his exclusion from the export trade, it was strangely forgotten that the monopoly of that trade secured to the foreigner must have deprived the grower of perhaps half his customers,—namely, of all the English dealers who would have purchased the article for exportation; and must thus, by diminishing competition, have tended to depress prices instead of raising them. ”

“ It is possible even to find some defence for one aspect of Monopolies. The granting of a monopoly of trade in particular regions—Russia, Guinea, the Levant, the East Indies—to Companies of merchants, had a definite justification. Individual private competitors could not conduct the trade on a large scale; large corporations, secured against rivals, could face the risks and the heavy expenditure requisite to success, and could be granted a liberty of action, being left to their own responsibilities, which was impracticable for the private trader. ”

“ Perfect free trade consists in the absence of restrictions on both sides.... We cannot combat rival tariffs, directly or indirectly, without subjecting British industry to severe depressions in relation to foreign industry and foreign labour.... To lay suitable duties upon the production of the foreigner, who lays burthens upon yours, does not give the monopoly of the home market to the home producer, nor turn towards any particular employment more capital and labour than would naturally go there. ”

“ Our cases determine that a party has monopoly power if it has, over 'any part of the trade or commerce among the several states', a power of controlling prices or unreasonably restricting competition. ”

“ As competition becomes more intense, its burdens become more heavy to carry. Perhaps two of the largest houses in the trade, who are able to force prices lowest, come to a sort of tacit understanding that their salesmen "will respect each others rights a little and not force prices down beyond all reason." It is plain that here the foundation is laid for the establishment of a monopoly. Yet the agreement certainly seems to be nothing more than these two firms have a right to make. Its result is seen, however, in a slight increase in the price their customers have to pay. ”

“ Validation by Congress of agreements to exclude competition is unusual. [23] Monopoly is a protean threat to fair prices. It is a tantalizing objective to any business compelled to meet the efforts of competitors to supply the market. Perhaps no single fact manifests the power and will to monopolize more than price control of the article monopolized. There can be no clearer evidence of restraint of trade. ”

“ It implies that if, for any reason, monopoly of production exists, it carries with it the right to control the entire trade of the produced article, and to prevent any competition that otherwise might arise between wholesale and retail dealers. ”

“ We must improve and regulate the state monopolies in grain, leather, etc., which we have already established—and thereby prepare for the state monopolization of the foreign trade; without such a monopoly we will not be able to "get rid of" foreign capital except by the payment of a "tribute." ”

“ A monopoly granted either to an individual or to a trading company, has the same effect as a secret in trade or manufactures. The monopolists, by keeping the market constantly understocked by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emo [Pg 26] luments, whether they consist in wages or profit, greatly above their natural rate.
The price of monopoly is upon every occasion the highest which can be got. ”

“ It will be remembered that the gilds grew originally out of the union of artisans in any trade, who banded together to protect their interests, and who were granted certain privileges, especially that of monopoly, that they might regulate the trade more efficiently and so protect the interests of consumers also. At the present time the interests of consumers are sufficiently protected by the competition of producers, who do not need government regulations to tell them that they must sell good wares at low prices if they desire to succeed ”

“ The servants naturally endeavour to establish the same monopoly in favour of their own private trade as of the public trade of the company. If they are suffered to act as they could wish, they will establish this monopoly openly and directly, by fairly prohibiting all other people from trading in the articles in which they choose to deal ”

“ These severe restraints of trade in the interests of a monopoly granted by the state are interesting as they indicate what was, in the opinion of the age, the safest and most continuous source of national wealth. ”

“ Nothing, indeed, suggests itself more naturally to the simplest understanding than this: when a branch of industry is protected against foreign competition by tariff duties, and a combination is formed for the purpose of killing home competition, too, and thus to control prices, the natural remedy is to let in foreign competition by removing the tariff duties and thus breaking up the monopoly. ”

“ It is not on the person from whom we buy, but on all those who buy from us, that a portion of our custom duties spontaneously falls. It is the foreign consumer of our exported commodities who is obliged to pay a higher price for them because we maintain revenue duties on foreign goods.
There are but two cases in which duties on commodities can in any degree, or in any manner, fall on the producer. One is, when the article is a strict monopoly, and at a scarcity price. ”

“ The imported goods cost more by the amount of the tariff than they otherwise would; and the American producer, if he makes equally desirable goods and does not raise his selling price above that at which imported goods can be bought, is secure against foreign competition. But we have already learned that monopoly is simply the absence of competition; and inasmuch as the tariff checks or shuts out foreign competition, it has a tendency toward the establishment of monopoly. ”

“ But admitting that no other impediment existed, our system itself is an effectual barrier against extensive exports of our manufactured articles. The very means which secures the domestic market, must lose the foreign. High prices are an effectual stimulus, when enforced by a monopoly, as in our own market, but they are fatal to competition in the open and free market of the world. Besides, when manufactured articles are exported, they must follow the same law, to which the products of the soil are subject, when they are also exported. ”

“ By this shutting off from domestic goods the natural [129] competition of corresponding foreign goods by means of such tariff-taxes, a monopoly is created at the instance and for the sole benefit of certain classes of privileged home-producers. They can sell alone (monopoly) just so far as other sellers are kept out by these heavy taxes. The goal of all their striving is to get an artificially-enhanced price for their own products at the cost of their countrymen by means of a market restricted to themselves through obstacles excluding foreign sellers. ”

“ A Government which absolutely prohibits the importation of certain foreign goods, establishes a monopoly in favour of those who produce such commodities at home, against those who consume them; in other words, those at home who produce them having the exclusive privilege of selling them, may elevate their price above the natural price; and the consumers at home, not being able to obtain them elsewhere, are obliged to purchase them at a higher price. ”

“ The whole force of the argument based on mechanical invention and the development of latent aptitudes in our people now holds as against the monopoly-building part of the tariff. Keep that portion of a duty which is not needed to save an independent producer from foreign competition, which is needed only to enable the trust to charge an abnormal price and still keep the foreigner out of our markets, and you build up a monopoly which is unfavorable to continued improvement in the productive arts. ”

“ This is derived from its supposed tendency to give a monopoly of advantages to particular classes at the expense of the rest of the community, who, it is affirmed, would be able to procure the requisite supplies of manufactured articles on better terms from foreigners than from our own citizens, and who, it is alleged, are reduced to necessity of paying an enhanced price for whatever they want by every measure which obstructs the free competition of foreign commodities. ”

“ The salient fact which is evident to any one at all conversant with business affairs is, that in almost every line of trade the restriction of competition is in force to a greater or less extent. Those monopolies are strongest, indeed, which have control of production; but in so far as they can control the market, the men engaged in buying and selling are equally ready to create minor monopolies, and an acquaintance with the general markets convinces one that these monopolies are numerous enough to have a very important effect in increasing the cost of goods to the consumer. ”

“ The destruction of the American manufacture would not induce her to sell cheaper, but might enable her to sell dearer, than she now does. The ability of those foreign countries, to purchase and consume, would not be increased by the annihilation of our manufactures, and the monopoly of European manufacture. The probability is, that those foreign countries, by the fact of that monopoly, and some consequent increase of price, would be worse and dearer supplied than they now are, under the operation of a competition between America and Europe in their supply. ”