It would be incorrect to gain an impression from what has just been said that the monopolist has nothing to fear, or that he can always fix a price that will bring him the largest net reward irrespective of outside influences. Three limitations tend to keep the monopolist from going beyond reasonable bounds in dealing with the public: (1) competition, (2) substitution, (3) legal interference.

No monopolist is ever free from the dangers of competition, and the more excessive his exactions the greater the danger. In a highly developed industrial country like the United States, capable business men are constantly on the alert to engage in profitable undertakings. They quickly sense the source of high returns, and no risk is too great for them to take if the promised reward is sufficiently large. The history of American industry furnishes numerous examples of successful attempts on the part of competing enterprisers to secure trade from monopolies; and oftentimes these struggles between giants have developed into bitter trade wars featured by excessive price-cutting. At one time the sugar trust found its way blocked by a combination of independent refineries; the history of the Standard Oil Company is characterized by its struggles with independent rivals; while the steel trust has found effective competition at the hands of the Bethlehem Steel Company. No monopoly, whatever its financial strength and prestige may be, is justified in feeling its position to be secure against successful competition, for a new invention or some other unforeseen occurrence may give a watchful rival an opportunity to secure a portion of its business.