is nothing less than an
industrial empire, if indeed they are not themselves obliged to
surrender the government of it to an innermost circle composed of
directors.

_Earlier Forms of Union._--There are forms of union which are less
complete than this and have been widely adopted. There was the
original compact among rival producers to maintain fixed prices for
their goods. It was a promise which every party in the transaction was
bound in honor to keep, but impelled by interest to break; and it was
morally certain to be broken. There was this same contract to maintain
prices strengthened by a corresponding contract to hold the output of
every plant within definite limits. If this second promise were kept,
the first would be so, since the motive for cutting the price agreed
upon was always the securing of large sales, and this was impossible
without a correspondingly large production; but security was needed
for the fulfillment of the second promise. This security was in due
time afforded, and there was perfected a form of union which was a
favorite one, since it did not merge and extinguish the original
corporations, but allowed them to conduct their business as before,
though with a restricted output and with prices dictated by the
combinations. As a rule each of the companies paid a fine into the
treasury of the pool if it produced more than the amount allotted to
it, and received a bonus or subsidy if it produced less. This form has
more of kinship with the _Kartel_ of Germany than the other American
forms, and it might have continued to prevail in our country if the
law had treated it with toleration. It leaves the power of competition
less impaired than does the consolidated corporation, of which the
laws are more tolerant. By repressing those unions which can be easily
defined and treated as monopolies we have called into being others
which are far more monopolistic and dangerous. The economic
principles on which the regulation of all such consolidations rests
apply especially to the closer unions which take the corporate shape.
To the extent that other forms of union have any monopolistic power
the same principles apply also to them; but we shall see why it is
that the pools which the law forbids have little of this power and the
corporations have much of it.

_The Condition which precludes True Monopoly._--A monopoly grows up
when a company keeps such perfect guard over its economic field that
new rivals can