Grocers or clothiers are not able to combine with the same effect, for the consumer is far less dependent on local distribution for these wares.  But wherever such retail combinations are possible they are found.  Among large producers and large distributing agencies the same tendency prevails, especially in cases where the market is largely local.  Free competition of prices among coal-owners or iron-masters gives way under the pressure of common interests, to a schedule of prices; competing railways come to terms.  Even among large businesses which enjoy no local monopoly, there are constant endeavours to maintain a common scale of prices.  This condition of loose, irregular, and partial co-operation among competing industrial units is the characteristic condition of trade in such a commercial country as England to-day.  Competitors give up the combat a outrance, and fight with blunted lances.

Sec. 3.  Syndicates and Trusts.—­But it is of course extremely difficult to maintain these loose agreements among merchants and producers engaged in intricate and far-reaching trades.  A big opportunity is constantly tempting one of them to undersell; new firms are constantly springing up with new machinery, willing to trade upon the artificially raised prices, by under-selling so as to secure a business; over-production and a glut of goods tempts weaker firms to “cut rates,” and this breaks down the compact.  A score of different causes interfere with these delicate combinations, and plunge the different firms into the full heat and waste of the conflict.  The renewed “free competition” proves once more fatal to the smaller businesses; the waste inflicted on the “leviathans” who survive forms a fresh motive to a closer combination.

These new closer combinations are known by the names of Syndicate and Trust.  This marks another stage in the evolution of capital.  In the United States, where the growth is most clearly marked, the Standard Oil Trust forms the leading example of a successful Trust.  In 1881, this Standard Oil Company having maintained for some ten years tolerably close informal relations with its leading competitors in the Eastern States, and having crushed out the smaller companies, entered into a close arrangement with the remaining competitors, with the view of a practical consolidation of the businesses into one, though the formal identity of the several firms was still maintained.  The various companies which entered into this union, comprising nearly all the chief oil-mills, submitted their businesses to valuation, and placed themselves in the hands of a board of trustees, with an absolute power to regulate the quantity of production, and if necessary to close mills, to raise and lower prices, and to work the whole number as a joint concern.  Each company gave up its shares to the Trust, receiving notes of acknowledgment for the worth of the shares, and the total profits were to be divided as dividend each half-year.  This Trust has continued to exist, and has now a practical monopoly of the oil trade in America, controlling, it is reckoned, more than 90 per cent. of the whole market, and regulating production and prices.