On Combinations of Masters against the publicby@charlesbabbage

On Combinations of Masters against the public

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A species of combination occasionally takes place amongst manufacturers against persons having patents: and these combinations are always injurious to the public, as well as unjust to the inventors. Some years since, a gentleman invented a machine, by which modellings and carvings were cut in mahogany, and other fine woods. The machine resembled, in some measure, the drilling apparatus employed in ornamental lathes; it produced beautiful work at a very moderate expense: but the cabinetmakers met together, and combined against it, and the patent has consequently never been worked. A similar fate awaited a machine for cutting veneers by means of a species of knife. In this instance, the wood could be cut thinner than by the circular saw, and no waste was incurred; but 'the trade' set themselves against it, and after a heavy expense, it was given up. The excuse alleged for this kind of combination, was the fear entertained by the cabinetmakers that when the public became acquainted with the article, the patentee would raise the price. Similar examples of combination seem not to be unfrequent, as appears by the Report of the Committee of the House of Commons on Patents for Inventions, June, 1829. See the evidence of Mr Holdsworth. 377. There occurs another kind of combination against the public, with which it is difficult to deal. It usually ends in a monopoly, and the public are then left to the discretion of the monopolists not to charge them above the growling point—that is, not to make them pay so much as to induce them actually to combine against the imposition. This occurs when two companies supply water or gas to consumers by means of pipes laid down under the pavement in the street of cities: it may possibly occur also in docks, canals, railroads, etc., and in other cases where the capital required is very large, and the competition very limited. If water or gas companies combine, the public immediately loses all the advantage of competition, and it has generally happened, that at the end of a period during which they have undersold each other, the several companies have agreed to divide the whole district supplied, into two or more parts, each company then removing its pipes from all the streets except those in its own portion. This removal causes great injury to the pavement, and when the pressure of increased rates induces a new company to start, the same inconvenience is again produced. Perhaps one remedy against evils of this kind might be, when a charter is granted to such companies, to restrict, to a certain amount, the rate of profit on the shares, and to direct that any profits beyond, shall accumulate for the repayment of the original capital. This has been done in several late Acts of Parliament establishing companies. The maximum rate of profit allowed ought to be liberal, to compensate for the risk; the public ought to have auditors on their part, and the accounts should be annually published, for the purpose of preventing the limitations from being exceeded. It must however be admitted, that this would be an interference with capital, which, if allowed, should, in the present state of our knowledge, be. examined with great circumspection in each individual case, until some general principle is established on well-admitted grounds.
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Charles Babbage

English Polymath—mathematician, philosopher, inventor and mechanical engineer, father of computers.

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by Charles Babbage @charlesbabbage.English Polymath—mathematician, philosopher, inventor and mechanical engineer, father of computers.
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