§ 16. Growing conception of fair competition. Any in dustrial trust that was able to gain domination and monopoly power only by the use of such practices, or any part of them, can hardly be deemed the result of a "natural evolution." If "artificial" means the use of artifices, surely this develop ment deserves the adjective. Yet, even if not natural, this development may be thought to be "inevitable," human na ture being as it is. But the bald fact is that while the great trust movement was in progress no effort worthy of the name was being made to enforce even the then existing laws and to oppose this artificial development. The same allegation of inevitableness was once commonly made of discriminatory railroad rates and rebates, evils that have been in large part remedied only since the period 1903-1906, when at last in telligent action was taken.
To those who came to see the problem in this light, accept ance of industrial monopoly, with its complex task of fixing by public commission the prices on innumerable kinds and qualities of goods, seemed at least premature. Rather, the first step toward a solution seemed to be the vigorous preven tion of unfair practices, and the next step a positive regular izing of "fair competition." The fundamental idea in this is the enforcement of a common market price (plus freights) at any one time to all the customers of an enterprise. By this plan, potential competition would become actual, and small enterprises that were efficient might compete success fully within their own fields with large enterprises that main tained prices above a true competitive level. Even general lowering of prices by a large enterprise with evident purpose of killing off smaller competitors is unfair competition under this conception. It was for years recognized that the realiza tion of this policy required legislation regarding uniform prices and the creation of a commission for the administra tion of the law.
§ 17. The trust issues in 1912. The campaign of 1912 presented in an interesting manner the three policies above outlined. The Republican party, led by President Taft, stood for the policy of monopoly prosecuted; its program was the vigorous enforcement of the Sherman law. The Progressive party, led by Mr. Roosevelt, stood in the main for the policy of "monopoly accepted and regulated"; its program called for minimizing prosecution and for retaining trusts under a system of regulation. The Democratic party, led by Mr. Wilson, stood for the policy of competition maintained and reguiated, and the problem was to find means to strengthen and regularize the forces of competition.
In practice these programs doubtless are less divergent than they appear. All alike proposed the retention of the Sherman law. The two proposals to go further were pre sented as mutually exclusive alternatives, whereas they nec essarily must supplement each other in some degree. The
Progressives did not expect all industries to become monopo lies, and the Democrats tacitly conceded to monopoly accepted the large field of transportation and local utilities it already had occupied. But there was a real difference in the angle of approach and a real difference in emphasis. The Demo cratic program (though somewhat unclearly) showed greater distrust of monopo'y and greater faith in the possibilities of creating fair conditions of competition (which never had fully prevailed) in which efficiency would be able to prove its mer its and monopoly would work its own undoing. It is more logical for the country to give this policy an adequate trial before adopting irrevocably the policy of general industrial monopoly. In either case, competition actual or potential is the fundamental principle by which prices have to be regu lated. Where competition is enforced it is by applying some general rules that create a general market price instead of discriminatory prices, but the fixing of the price is left to the competitors. Where monopoly is accepted prices must be fixed with reference to an estimated competitive standard, that which under hypothetically free conditions would just suffice to attract and retain private enterprise and capital.