e a legal right to claim compensation from the state
for the injury it has done them. And in almost every case they would set
up the claim that their property had been thus injured. To determine the
point at which reasonable prices and reasonable profits become
extortionate prices and unjust profits is a task requiring expert
knowledge and the most comprehensive judgment, aided by the most
accurate statistics. To impose this task on our already overburdened
courts would permanently block the wheels of justice, and would give to
the judicial department of government a work which its machinery is
wholly unsuited to carry on.

It seems evident, therefore, that when it becomes necessary for the
state to directly fix prices to be charged by monopolies, a more radical
step should be taken. The monopoly should be established on a permanent
basis, and the state should have some part in its direct control.

Discarding, therefore, direct action by the state to fix prices as
inexpedient, for the present, at least, let us see what we can effect by
means of "potential" competition, which term we will use to signify that
competition which may be established in any monopolized industry if the
inducements offered are sufficiently great. It must be remembered that
nowadays men of capital and enterprise are always on the look-out for
every opportunity to invest money and expend their industry where it
will bring the greatest returns. If any monopoly seems to be making
large returns, people are generally ready to believe that it is making
twice as great profits as it really is; and some one is quite likely to
start in as a competitor, if there is a prospect of large profits. Now
we wish to do two things. We wish to make it so easy for new competitors
to enter the field against a monopoly that its managers will keep their
profits down in order not to call in any new competitors. We also wish
to so modify the intensity of competition between the monopoly and the
new competitor that the latter may have a chance at least of being
repaid for its expenditure in entering the field. The simplest and best
of the legal provisions which we may enforce to this end is the one
already stated of non-discrimination. The monopoly can no longer reduce
its price to apply to only the limited field in which the new competitor
works, but must reduce its prices everywhere to meet those made by the
rival. In the case of monopolies in trade and all monopolies in