Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1901-06-12
THE EFFECT OF TRUSTS ON PRICES


Prof. jerks, of Cornell, in the
North American Review, takes up
the question of the effect of trusts on
prices. His conclusion is that $50
far the chief benefit has been retained
by the capitalist; the laborers have
secured small part; the great mass
of the consumers in some instances
none of the benefits, in others part. :"
The two cases which he considers in
detail are the Standard Oil company
and the sugar trust. both long-estsb-
lished combines which have sought to
secure q monopoly.
From 1871 to 1881, under competi-
ton, the price of refined oil fell from
nearly 20 cents gallon to 10 cents.
The next year the trust was organ
lied, and since that time the price
has remained remarkably steady.
The average price last year was the
same as that in 1887. Yet Prof.
jerks points out that there have been
many improvements in the methods
Of production that have enabled re-
finers to manufacture by-products.
which are as profitable as the refined
oil itself. Under normal conditions
least part of the benefits of these in
ventions. But the partial control of
the market maintained by the Rookie
Teller combination has secured all the
advantages to the members OF the
com bination. The enormous adj
vance in Standard Oil stock during
the last few years is an Indication of
how great these advantages are.
Much of the same results have at
tended the development of the sugar
trust, which was organized in 1887.
Before that date the margin between
the price of raw and of refined sugar
had been falling rapidly. Just before
the formation of the trust it was only
about seven mills a pound. 1mmedi-
ately afterward it increased to Is
mills. This encouraged the estab-
lishment of the Spreckels refineries,
which brought down the margin. The
trust absorbed it's rivals and put the
price up again. A few years later the
Arbuckles entered into competition
and the margin fell. Now an agree
ment has been formed by the trust
and its rivals which amounts prac-
tically to an extension of the combi-
HdiiOh anu INC nHH Siu has SOHS up 10
9 mills
During two.thirds of the time of
the trusts existence, Prof. jerks
says, the combination has been able
to make very high profits. In most
of the cases which he has examined
he has found the conditions more or
less similar. The mem bers of com BIZ
nations in private conversation with
him frankly admit that the margin
between the raw material and the fin
ished product is increased. What
was the combination made for?" they
ask.
Prof. jerks is hopeful that the
influence of competition, actual or po-
tential, will give the consumer lar
ger part of the saving made by the
trust in the future. His article, how
ever, it is contended, says the Spring
field Register, does not give the reader
similar assurance. The fact is that
the principal reason for the organiza-
ton of trust is to secure a practical
monopoly in order that larger divi-
dends may be secured on still more
highly inflated capital. The history
of trusts that nave made a record, of
which are the oil and sugar monopo-
lies, apparently give little reason to
hope that the consumers will receive
their share of the savings so long as
the trusts are unrestricted by the
state.