The Dominion. THURSDAY, SEPTEMBER 5, 1912. MONOPOLIES."

Dominion, Volume 5, Issue 1537, 5 September 1912, Page 4

The Dominion. THURSDAY, SEPTEMBER 5, 1912. MONOPOLIES."

Of all the evidence taken by the Cost of Living Commission, perhaps none was more interesting to the punlie than that relating to certain alleged "monopolies." The Commission collected a good deal of information, and its recommendations regarding anti-"monopoly" legislation are not the least important in its report. Although there may be differences of opinion as to the particular "monopolistic" practices alleged, we do not propose to discuss the matter at the moment, but rather to, touch on a very common misunderstanding of the real objection to trading "monopolies." This objection can be found by paying attention to the strict meaning of the term. Originmonopolies were special and exclusive rights'of trading granted by the Crown, and these were obviously in violation of the common liberty of citizens to engage in lawful trade. Nowadays the term "monopoly" or "trust" is applied to almost any large trading concern which is little troubled by competition. ; Strictly speaking, only that modern '-'monopoly" is hostile to the public interest which has contrived tor itself, by its own means, that suppression of the common rights of others which was once effected by a royal charter. This is the view which within the past few years, owing to the sane management of Me. Taft and his Attorney-General, has been growing in authority in the United States. The view of Mr. Taft, and of the United States Supreme Court, may be roughly stated as fpllows:—A trust or combine is not in itself noxious or suppressible in the national interest, and is not to be condemned simply because it has a certain effect upon prices or because it yields its shareholders a larger profit than is usual in commercial enterprise; but it is to be condemned, punished, and suppressed_ if its working involves "combination in restraint of trade."

What in a trader or a trading company requires punishment or suppression is, not- the ability to make largo profits, but the readiness to conspire against the freedom of other traders. What is to be looked at is, not ends, but means. That a socalled "monopoly" can be an excellent thing in any country is disputed by no economist of any repute. It is a fact, indeed, which is tacitly admitted by those who usually exclaim most loudly against "private monopolies": the most ' confident argument of the advocates of nationalising this or that industry is that by merging all the unit shops in one big shop a groat economy in working can be effected. (And so that economy would be effected but for the fact that the State would be wasteful in every direction. But that opens up another question altogether.)_ The right way to deal with big businesses is not to make big businesses criminal, or to limit profits, or plunge into the old morass of statutory prize-fixing;: it is to punish conspiracies of all kinds in restraint of trade. They can be, and they have been, punished by the American Supreme Court; it is all a matter of evidence. The recommendations of the Cost of Living Commission are very sensible, and no doubt we have to thank Dr. Hioht for them. To some members of the Commission who would naturally wish chiefly to punish monopolistic practices 'somehow without very greatly caring how, tho suggested penalising of agreements in restraint of trade would appear to be as good, From their point of view, as would have been u few fantastic recommendations dealing with the limiting of profits and the fixing of i uriccs by statute. Thus only, can wo

explain their gratifying acceptance of proposals that arc strictly in accordance Willi the principles of Anglo-Sa-xon jurisprudence. How deeply set is the error which we have been noticing is made clear by some curiously unsound observations by a southern contemporary. After defonding tho right of manufacturers or merchants to combine in defence of their own interests—a right few people will challenge—our contemporary makes "ouo important qualification": "There must be no attempt to extract an unfair profit, or to exploit the public." "The crux'of the question," it says again, "is as to whether the prices charged by the | combinations are fair and reason■ll "» Whafc is a " fair ancl reasonable price for anything? What is au unfair profit" 'I They arc questions which wise legislators and publicists decline to answer or even to consider, for they cannot be answered, and arbitrary answers have always led to trouble. What is a "fair and reasonable" price, or a "fair profit, ' is qnito undeterminable; but the principles of jurisprudence are not vague and variable things. Thus, while it is really impossible for any person or any Parliament or any Court to say that 7i per cent, profit is as unfair as 7 per cent, is fair, to decide whether a trader or a trading .firm has acted in restraint of trade is merely a matter of ascertaining ascertainable facts. There is little doubt that many, perhaps most, big businesses controlling the trade in any territory or country employ methods which are hostile to the public interest; but let us be clear what we are punishing or interdicting. To protect the liberty of trade is one thing, and a good thing;, it. is another thing to inaugurate the intolerable paternalism of expressly regulating prices and profits, and thus to start a movement which must end by paralysing all business.