publication in this journal, these papers have been in great part rewritten by the author, and in all revised and brought up to the latest date; and are now nearly ready for publication in book form by Messrs. D. Appleton & Co., under the title of "Recent Economic Changes, and their Effect on the Production and Distribution of Wealth and the Well-being of Society."
From advanced sheets we are enabled to lay before our readers the following illustrations of the quality of the new material that Mr. Wells has incorporated in his forthcoming volume.—Editor.
ON THE ORIGIN AND SEQUENCE OF TRUSTS.
It was formerly a general assumption that, when price no longer equaled the cost of production and a fair profit on capital, production would be restricted or suspended; that the less favored producers would be crowded out, and by the relief thus afforded to the market normal prices would be again restored. But this doctrine is no longer applicable to the modern methods of production. Those engaged in great industrial enterprises, whether they form joint-stock companies or are simply wealthy individuals, are invested with such economic powers that none of them can be easily pushed to the wall, inasmuch as they can continue to work under conditions that would not permit a small producer to exist. Examples are familiar of joint-stock companies that have made no profit and paid no dividends for years, and yet continue active operations. The shareholders are content if the plant is kept up and the working capital preserved intact, and, even when this is not done, they prefer to submit to assessments, or issue preference shares and take them up themselves rather than go into liquidation, with the chance of losing their whole capital. Another feature of such a condition of things is, that the war of competition in which such industrial enterprises are usually engaged is mainly carried on by a greater and greater extension of the market supply of their products. An illustration of this is afforded in the recent history of the production of copper. When in 1885 the United States produced and put on to the market seventy-four thousand tons, as against forty thousand tons in 1883, the world's prices of copper greatly declined. A large number of the smaller producers were compelled to suspend operations, or were entirely crushed; but the great Spanish and other important mines endeavored "to offset the diminution of profit on the unit of quantity" by increasing their production; and thus the price of copper continued to decline until it reached a lower figure than ever before known in history.
Under such circumstances industrial over-production—manifesting itself in excessive competition to effect sales, and a reduction of prices below the cost of production—may become chronic;
