234 THE AMERICAN JOURNAL OF SOCIOLOGY
Illustrations of the tendencies just described are easily found. The sugar trust, one of the greatest of our great monopolies, was built up by competition. Only in the later stages of its development were combinations formed. The crisis of 1873 and 1877 destroyed nearly all of the refineries of the country. But the Havemeyers, running their own West Indian fleet, using the most improved machinery, and controlling ample capital, were only strengthened by the storms which swept away all competi- tors. By their superior strength they had already been able to cut prices so low that even a slighter commercial disturbance would have shaken down all other refineries. Since that time the methods usually ascribed to trusts have been employed in absorbing competing refineries, when it appeared cheaper to absorb them than to crush them by competition. The sugar trust exists, however, because the margin between its cost of production and the necessary selling price is so wide ; not because a few men have formed a conspiracy in restraint of trade. A better illustration of the way trusts develop is found in the case of a certain company' which manufactures a food product and whose trade brands are familiar to every traveler from the Rockies to the Rhine. This concern sells over three-fourths of the total output in its line, has large resources, its trade repute is unexcelled, and it supplies a demand which is susceptible of indefinite expansion, especially abroad. Its superior economic strength enabled it to press its competitors, and some of the latter readily accepted the offer of a " promoter" to bring about a combination. Such an arrangement was agreed to by all par- ties ; but the rapacious demands of some of the smaller concerns for their worthless plants soon caused the stockholders of the big company and the new subscribers for stock to drop the scheme. Shortly afterward a new plan was taken up by which the large company was to be reorganized without taking in a single competitor, but by increasing the capital stock and using the new capital to be subscribed by some English investors to
' More specific reference in this case would be improper, since personal relations with this company enable me to state facts concerning a deal which is not yet con- summated.
