e,
however, well-recognized limitations to the economy of large
production in the single establishment,[10] and of late there has been
ever-increasing skepticism as to the net economy actually attributable
to combinations. Undoubtedly the merging of a number of old plants has
sometimes effected an immediate improvement in the weaker ones. A new
broom sweeps clean. This movement chanced to be contemporaneous with
the development of "efficiency engineering," and of "scientific
cost-accounting," and these better methods, already developed and
applied in comparatively small plants, could be more quickly extended
to the other plants brought into the combination. Moreover, the
personal organizations in the separate enterprises had been brought to
a high state of efficiency by the stimulus of competition, and there
is reason to fear that, after some years of centralized bureaucratic
organization, much of this efficiency may be lost.

There seems no doubt that the strong motive for forming combinations
is the profit to the organizers.[11] Whatever was the more generous
motive or more fundamental economic reason assigned by the promoters,
the investing public confidently expected that higher prices would be
the chief result. There are indirect as well as direct gains to the
promoters of a combination. There is the gain from the production and
sale of goods to consumers, and there is the gain from the financial
management, from the rise and fall in the value of stock. The
promoters of a combination often expect to make from sales to the
investing public far more than from sales to the consumer of the
product. A season of prosperity and confidence, when trusts and their
enormous profits are constantly discussed, has an effect on the
public mind like that of the gold discoveries in California and in the
Klondike. Then is the time for the promoter to offer shares without
limit to investors.

Sec. 14. #Monopoly's power to raise prices#. There is no doubt that the
formation of a combination from competing plants can and does give a
control over prices, a monopoly power, not possessed by the separate
competing establishments. The same kind of power might be attained by
the growth of one establishment outstripping all its competitors,
or by a new enterprise coming into the field backed by powerful
capitalists. But this would work slower and less extensive results
than does the formation of a combination.

Of course, the fundamental