News and citizen. [volume] (Morrisville, Vt. ;) 1881-current, 1886-10-28
AN INSTRUCTIVE INCIDENT.
MonOpoIies and the Manner In Which They
are Ometimes Worked.

1t 'sa generally recognized fact that
during the period of general business
stagnation through which we have been
passing, those industries which have
been protected have been the greatest
sufferers. Thereto e. with them, more
than with others the principle of trade
association has been resorted to, IN
order that production might be regula-
ted and prices maintained. An illus
tration of the inevitable failure which
sooner or later must follow such at
tempts was furnished by the disband-
ing of the tack manufacturers associa-
ton a short time since. The facls in the
case are interesting and instructive.
Some years ago an unwarrauted and
therefore an unjudicious investment of
capital in tack manufacturing resulted
in business depression in that industry.
Apparently two courses lay open before
the manufacturers one, outstanding
of resource, a retrenchment of expense,
and a patient waiting until, with the de-
velopment of the country, the demand
for taclls should reach the capacity of
the manufacturers to supply. his was
the course dictated by wise conserva-
tism. he other-and it was the course
adopted-was an incorporation of In
terests whose aim was to secure monop-
oily. A company was formed, board
of control elected which was intrusted
with the power of regulating the pro-
duction of tacks, giving each factory its
fair proportion of the total quantity to
be produced, and naming the price at
which the product should be sold A
very pretty monopoly this would have
been if the law of comp ii ion had been
cOnsiderate enough of the wishes of the
tack manufacturers to leave them unmo-
Tested; fine opportunity, indeed, to
load the results of the injudicious in
vestment OF class of producers on the
the consumers of this country. But the
law of competition is impartial. Unem-
ployed capital, which is found in a |
fairly well settled comm mites, and
which is always eagerly watching the
field of industrial activity, espled the
tack manu- aCturers as, in hopeful antici-
patton of Astounding prosperity, they
smiled at the thought OF the rich harvest
they would reap from the action of the
principle of trade agreement, and it
rushed III to share in their profits. This
influx Of fresh capital or the greater
part of 1t, must either be absorbed INTO
the association, or else it would be i'm
possible for the association to exist.
Absorption therefore followed; but as
these additions to productive power did
not increase the demands of consump-
ton, the board of control hal no choice
but to divide this limited consumptive
demand among a large number of pro-
ducerS: thus reducing the share and the
profit of each. The continuance of this
process of division and redivision
among the tack makers went on until
the business of making tacks had ceased
to pay any profit on the capital invest
ed. Prices have reached a natural level,
level so low that no margin of profit
remained, the association disbanded.
Good authority puts the present pro-
ductive capacity of the tack machinery
in this country at three times the con.
sumptive demand; so that for years to
come the tack industry must bear this
incubus Christian IjniO1