interest is not his sole means of livelihood, the just rate of interest is not determined by, nor does it hear any definite relation to, the content of a decent livelihood in the individual case. Consequently, conn)etition may be the proper rule of justice for the interest receiver, as well as for the director of industry, although it is not always a just rule for the ordinary wage-earner.
What arc the grounds for the assertion that the mvestor in a monopoly h;is no right to more than the competitive or prevailing rate of interest? The an- swer to this question is bound up with the more funda- mental question concerning the basis of the right of any investor to receive any interest at all. But, no matter what answer we give to this latter question, no matter what justification of interest we may atlopt, we cannot prove, to can have no ground upon which to erect the begiunings of a jiroof, that the capitalist hius a right, ius capitalist, to more than the prevailing or competitive rate of interest. If we assume that interest is justified as the product or fruit of capital, we tiave no reason to assert that the so-called product has a higher value than men at- tribute to it in the open market under competitive conditions. If we regard interest as the due reward of the capitalist's sacrifices in saving, we have no ground for maintaining that these are not fully re- munerated in the current rate. If we adopt the theon,- that seems to be most satisfactory and least assailable, namely that interest is chiefly justified on grounds of social utility, inasmuch as the community wouki probably not have sufficient capital unless men were encouraged to save by the hope of interest, we must likewise conclude that the current competitive rate is .sufficiently high, since it brings forth sufficient saving and sufficient capital for society's needs. The argument based upon this theorj' may be stated summarily as follows: Since interest on capital cannot be shown to be unjust on individual grounds, that is as a payment from the purchaser of the prod- uct of capital to the owner of capital (for it must be remembered that the consumer is the real and final provider of interest on capital), it will be justified on social grounds if it is necessary in order to evoke sufficient social capital; and there is an overwhelm- ing probability that it is necessary for this purpose. Since interest is justified only for this purpose and to this extent, the just rate of interest cannot be higher than the rate that attains this end, which in our time is the competitive rate.
The doctrine that capital has no right to more than the competitive rate of interest is accepted by the social estimate everj'where (see Final Report of the U. S. Industrial Commission, p. 409). It is implic- itl}' iisserted in the teaching of the theologians that the competitive rate is the just rate in the case of money loaned (cf. Tanquerey, "Dc Justitia", n. 906). Where the risk and other circumstances are the same, men do not value an investment any higher than a loan; they will put their money into the one or the other indifferently; consequently, it would seem clear that, when the circumstances just referred to are the same, a fair return on invested money need not exceed a fair return on loaned money. To be sure, investors and business men <lo obtain more than the competi- tive rate of interest in some years and in some enter- Eri.ses, even where competition is act ive and constant ; ut this advantage is either offset by exceptionally low rates in other years, or it is due to unusual business ability, or it arises from an increase in the value of the land connected with the enterprise. In all these cases the exceptionally high rate is undoubtedly lawful morally, but the exce.ss is due to other factors than the capital pure and simple. Since the prevailing or com- petitive rate is sufliciently high to satisfy the demands of justice in businesses that are subject to competition, there seems to be no good reason why it is not, gener-
ally speaking, sufficiently high in monopolistic con- cerns. The owner of a monopoly has no more right to take advantage of the helplessness of the consumer in order to extort an exceptionally high rate of interest on his investment than the money-lender has to ex- ploit the distress of the borrower in order to exact an exorbitant rate of interest on the loan. It would seem t hat the only exception to this rule would occur when the monopoly, while paying a fair wage to labour and a fair iiricc to those from whom it buys materials, in- troduces economies of production which enable it to sell its gooils at less than the prices charged by its com- petitors, and yet make unusual profits and interest on its investment. In such a case it seems reasonable that a monopolistic concern (more properly, its active directors, who alone have effected the productive economies) should receive some of the benefits of the cheaper methods of production. On the other hand, there is no good reason why the monopoly should ap- propriate all the benefits of the improvement. If it does not share them with the consumer by reducing prices below the competitive level, it renders no social service to compensate for the social danger which is inherent in every monopolistic enterprise. As a mat- ter of fact , the great majority of existing monoplies do not pay higher wages nor higher prices for material than competitive concerns, and yet they charge the consumer higher prices than would have prevailed imder competition (cf. Final Report of the Industrial Commission, pp. 621, 625, 660).
In the preceding paragraphs reference is had to monopolistic concerns that fix prices without any supervision or restriction by the State. W'hen the public authority exercises adequate control over the charges of public service monopolies, such as gas and street-railway companies, and determines these freely and honestly, it would seem that the monpolis- tic corporation has a right to collect the full amount of the charges established by the public authorities, even though they should yield unusual profits on the invest- ment, for the presumption is that such charges are fair to both producer and consumer. No such pre- sumption extends to those cases in wliich the state control over charges is only mildly corrective and par- tial, instead of fundamental and thorough.
II. Monopolistic Methods. — The methods and practices employed by monopoUes in dealing with their rivals did not occupy the attention of the older moral theologians who wrote on the subject of monopoly. Nor have recent writers given this phase of the sub- ject the attention that it deserves. As a consequence, authoritative ethical teaching is as yet silent, whereas public opinion regards as immoral most of the prac- tices by which monopolistic concerns harass and elimi- nate their competitors. Among the most notable of these methods are discriminative underselling, the factor's agreement, and railway favouritism.
Discriminative underselling occurs, when the mon- opoly sells its goods at unprofitably low prices in the territory in which it wishes to destroy competition, w^hile imposing unreasonably high prices elsewhere. While the independent dealer who is driven out of business by this device has no strict right to the pat- ronage of the customers who are drawn away from him through the low prices established by the mo- nopoly, he haa a right not to be deprived of that pat- ronage by unjust methods. According to a general and far-reaching moral principle, a man is unjustly treated when he is prevented by unjust means from ob- taining an advantage which he has a right to pursue (cf. Lehmkuhl. "Theologia Moralis", I, n. 974; Tan- querey, "De Justitia", n. .588). .Among the unjust means enumerated by the moral theologians are: force, fraud, deception, falsehood, intimidation, and extortion. Now when a manufacturer or a merchant is deprived of the patronage of his customers through ruinously low prices, which the monopoly is enabled tq