Knowledge that Transforms

The main purpose of the original Interstate Commerce act, and of the various measures that have been passed to amend it, has been the suppression of unfair railway discrimination. The most pernicious form such discrimination formerly took was that of secret rebating. It is popularly believed, because secret rebating has been almost extirpated, that the suppression of unfair discrimination has become secondary in importance to the prevention of excessive rates. This belief is, to a large extent, unfounded. Its prevalence makes needful emphasizing of the facts that unfair discrimination continues, that it still produces baneful results, and that its suppression and prevention still are, or ought to be, the main object of government regulation of railway traffic. I would not be misunderstood as saying or implying that the condition in respect to railway discrimination is as bad as in years past. On the contrary, there has been a very marked improvement since the Hepburn act went into effect in i906. There never was a time in the history of American railways when there was so little unfair discrimination as there is now. But existing conditions fall short of being what they ought to be. There still are many evil forms of discrimination; and what is worse, many of them under existing laws cannot be stopped or prevented by either the railways or the Interstate Commerce Commission. The railways cannot stop or prevent many of them, because to do so their managers would have to make arrangements which

who has had the individual seminar. When the investigator has run the gauntlet of his instructor, and obtained some definite results, then it is good for him and for his fellow-students to lay his performance before the group and stand fire from all possible quarters. Graduate students who have had this kind of training find, when they go to Germany, that the teaching of economics there has not advanced as far as in this country. J. LAURENCE LAUGHLIN TiiE UNIVERSITY OF CHICAGO

In a paper referring to the mineral wealth of Wisconsin Dr. 0. G. Libby has shown that the lead and shot trade together attracted capital to that state, helped to fill its southern counties with population, and gave an impulse to industrial life which has never since been lost.' It might be observed in this connection that the lead resources of southern Missouri have produced here similar results, and, in the second place, that up to I852 or I853, when the building of railways caused a diversion eastward of a large part of the traffic, St. Louis received the principal commercial benefits of the lead business of the upper Mississippi region including southern Wisconsin and northwestern Illinois. The quest for furs was not the pioneer industry in Missouri as it was in other parts of the interior. The priority belongs to lead.2 This was due in part to the mineral wealth of the territory, and in part to the enterprise of John Law, and to the requirements of the Company of the West which made the search for precious metals a matter of great importance. Thus the beginning of mining in Missouri antedated the founding of the first trading post by about forty years. While the site of St. Louis, settled in I764, was chosen with reference to the needs of the fur trade, a number of factors combined to make this city one of the leading lead markets of the country. The concentration here of a large part of the western Indian trade was in itself one of the elements in the situation, for the trappers, who brought hither their furs, bought supplies, one of the most important of which was shot. While the bulk of the product of the upper Mississippi mines, for a number of years, had no other outlet than down river, it did not follow from this circumstance that this traffic would seek St. Louis rather than other places, such as Alton, Ill., which at one time made a vigorous effort to get it, or Ste. Genevieve, Mo., which was already a place of

The question of industrial combinations can be approached from many standpoints. The trust may be considered from the standpoint of its possible limitation of business opportunity. It can be considered in its relation to labor, to the railroads, to the tariff, to the banks, and to the investor. This institution can also be considered from the standpoint of its effect upon the prices of its products and from the standpoint of its efficiency as a form of business organization. It is from the last two standpoints that I propose to discuss the question. When the trusts were organized, most of them coming into existence during the five years beginning I898, two advantages were claimed for this form of business organization: first, that the trusts would maintain more stable prices than were possible under conditions of competition, and second, that they would result in raising the standard of business efficiency. The advantages of price-maintenance were urged from two standpoints: first, the benefit to the companies directly affected, and second, the benefit to the public. It has been urged, and I believe that there is general agreement on this proposition, that irregular prices, because of the element of uncertainty which they introduce into business calculations, are highly objectionable; and that any institution or agency which results in maintaining prices unchanged for long periods of time, raising or lowering the level as fundamental conditions change, must, so far as it accomplishes these results, be approved. From the standpoint of the public, it has been urged that the prices which such companies charge, because they are collected from every buyer and because the manufacturer's profits are not sacrificed in long-term contracts in every season of dull trade, will be fixed at a lower level than is possible under competitive conditions. In other words, the claim was made in defense of the trusts, that the prices of the necessaries of life, as well as of the materials and machinery of industry, would be lower as a