THE CONTROL OF THE MARKET

Professor Wyman's book contains a clear exposition, intelligible to the layman, of the legal aspects of the combination problem. He shows that the ancient principles of the common law have, after some initial uncertainty, proved sufficiently broad to render illegal the various devices resorted to for the purpose of suppressing competition.

On the remedial side, however, the common law was not adequate. The movement toward combination was too general to be checked by litigation instituted by individuals. To meet this difficulty, the Sherman Anti-Trust Law was passed. It provided more effective procedure and more definite penalties, but did not make illegal anything which would not have been illegal under the common law. By the strict and continuous enforcement of the common law under this statute, Professor Wyman believes that as much will have been done as is desirable toward the maintenance of conditions favorable to competition.

He does not, however, conceal his belief that an increasing number of industries will come to be carried on under conditions of virtual monopoly. He, therefore, argues for some sort of regulating commission analogous to the Interstate Commerce Commission. This is a proposal favored by an increasing number of lawyers as well as by many concerned with the management of existing monopolies. Whether it would prove a wise solution of the trust problem is primarily an economic rather than a legal question. It is also a far less simple question than the lawyer seems to appreciate.

In few, if any, of the industries in which monopoly conditions are found were these monopolies established without resort to predatory methods, which are contrary to the common law. It is often assumed that costs of production are lessened through the monopoly organization of industry. At the outset, it does often happen that savings are made in the expense of marketing and through the adoption in all plants of the best methods in use in the various plants included in the combination. But that progressive improvement will go on as rapidly as under competition is far from certain.

Everything depends upon the progressiveness of the management of the monopoly. Under a monopoly, all eggs are placed in a single basket, so far as the monopolized industry is concerned. Here the railroad analogy breaks down completely. Even if every railroad had a monopoly in the territory which it serves, there would still be many railroad companies. The danger of unprogressive management throughout the railroad industry is, therefore, slight. But in industry, the danger of unintelligent and ineffective management, the besetting weakness of a long continued monopoly, is too great to allow one, except as a last resort, to look with favor upon the establishment of a system of state regulation through an industrial commission. While it would probably prove effective as a means of preventing extortionate charges by monopolies, it might also create conditions favorable to the continuance of monopolies regardless of the efficiency of their management.