New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1888-11-18
TALK OF THE TOWN.
THE QUESTION OF TRUSTS.
HOW A TRUST Is CREATED.


that the popular mind has not had fair opportunity
inform itself to the particular methods employed
by the parties TO Trust. Indeed, among usually
wel-lnformed persons ! have found an amazns
ignorance Of the particular purposes which Trusts
seek TO accomplish, further than that they aim 10
stihe competition. Even this idea Is Inaccurate
They do aim to check competition, but that Is not
their most serious offence. The claim that competi-
ton is the life Of trade" is Just about as true as
other rhetorical congratulations and no more So
, Enough competition is a good thing Tor inc puoi0'
Too much competition is demoralzins. 1t may MAKE
things cheaper for the moment, but In the reacuon
that Is sure to follow the public suffers. The eheei
of trusts upon competition, pure and simple Is not
| inevitably hurtful TO the public Interest
Nothing of what have thus far said must be taken
as belttllng the injuries inflicted upon the people
| hy theso gigantic monopolies The prejudice against
them unengh tened 1t Is, would hardly be dinlh-
ished were # perfectly Informed An action
at Jaw was tried before Mr.. Justice barrett IN the
Supreme Court last Wednesday, intended to bring
about the dissolution Of sugar refining company
which is one of the parties to the great sugar trust
| In the evidence then taken clear view was ior
| ibc first time given Of tho agreement under when
| Trusts operate The particular company OF which
complaint made is called the North River sugar
| Tennlng Company II Is small refinery anu was
owned principally, before the trust froze IL INTO
submission, by a man of the name Of Moeller Mr.
MoelIer ran the refinery until January of this year
He had resisted many efforts TO compel induce him
to enter the Trust and had been competing with 1t
until he found himself rapidly growing poorer. Then
an offer was made by John E. Scarles, representing
the Havcmcyers, to buy him out, and he consented
to sell for 1925 OOO. Mr. searles took tho company.
dumped It into the Trust and shut down its works.
II has not refined grain Of sugar since Mr. searles
and the Trust got hold of it.
AS TO these facts there was issue made in the
action before Judge Barrett The issue arose upon
the Interpretation that to be put upon them. The
Attorney OF the State, whose name lest most
people have forgotten it, is Tabor and General Roger
A. Pryor who has Trusts his brain are contendlng
that the failure to operate its charter is Just cause
for the companys dissolution. Mr.. John f. Parsons,
with the help Of cx-Judgc DAILY and Henry C. Carter
Is endeavorlug 10 convince Judge Barrett that the
cessation Of the company IS but temporary, caused by
of capital and by the fact that its real estate
is within the boundaries OF one of the new paris 50
that since its property is soon to be condemned for
public purposes would be folly for Mr. searlcs to
spend the money necessary to fit his purchase for
immediate use.
This defence IS OF course an evasion Of the point
sought TO be raised by state, the lawfulness
Of the Trust agreement. Sooner or later this point
must be met and shall be surprised If the time has
not already come. / have noticed what amounts to
a constitutional objection the part Of Mr. Justice
Barrett to legal suberfuges, lodges. evaslons and
things of that SORT. He has healthy way OF brush
ing them aside Mr.. Carter remarked in that lncii'
charming style Of his, that after all, the real question
before the court the motive of the North River
Refinery in shutting down. If this was done In the
exercise of sound and proper business judgment, It
could not be in violation of the charter MI carriers
remark far It went but he failed to meet
the contention that incorporated company has no
right to place Itself in position where 1t can be sus-
pended at the command Of others, and If it makes
L .-f.I fipFg rtNr
to board Of trustees, appointed from among them
all the power to stop its engines, and If the board
thus created and authorized does In fact direct that
It's engines shall stop and If It theeupon does STOP
its engines discharge its men and close up It's DOORS
think the conclusion irresistible that It has committed
an act in furtherance Of criminal conspiracy under
the common law and It's motive must be judged in the
| light OF that act.
The way Trusts are created IS this Each Of several
| perhaps majority, perhaps alD firms In the same
| line Of business becomes an incorporated company ana
issues certificates Of stock to It's parties interest
Suppose the manufacture Of cheese to be the line Of
business Of which It Is proposed to make Trust Sup
! pose Jones' Muggns d Co., Weggs Blunt Co..
! Chumps Duffy & Thistle. Bones Il Beggar wobbles.
! Bog a Dunder and Coffin, Hurdle 81 Patch, to be
| firms engaged in manufacturing cheese. Each Of
these coparnershlp firms Incorporates and becomes
company. Stock is issued to the partners accord
| Ing to the actual interest Of each. Jones' Virgins
| 81 Co. IS transformed into The NewYork City Dairy
! Product Manufacturing Company, with Mr. Jones for
| president, Mir. Virgins for treasurer and the Coz
| for secretary. A similar transformation is made I'm
the nature Of each OF the other cheesem making firms.
Then they all member Of their corporation
| TO be their representative in tho Trust. Mr. Jones
ls the representative of his company, Mr.. Wcggs Of
| his, Mr. Chumps of his, and so on. These men get
| together and form the Trust. They don't call It
| Trust. They ,ire II such name the National
| Dairy Compaog They organize company with
officers, but they do not incorporate Their name IS
less than a trade mark. 1t stands for nothing They
are not person within the meaning Of the law. But
| 70 them as a company the entire aggregated capital
stock OF all the making corporations represented
| in their body is transferred Having no personal
existence, incapable Of suing Of being sued, they
| are, nevertheless, madc the owners Of the entire
capital stock engaged in their various companies In
lieu of this stock they issue to its former holders
certificates representing each ones interest in the
aggregated pool IN this way the National Dairy
| pany becomes the of all the capital,
plant, material and product OF the companies from
which it has been made up, and from six competing
firms they are created into colossal monopoly.
Then the Trust gets down to business 1t decides
what nrice shall be paid for crude MILK and what
prce shall be paid for the manufactured cheese. 1t
decides what the output Of cheese shall BE- for the
coming year, and 1t apporions to each OF the COM
panes represented It's share OF the estimated out
nut OF course It is all one to the individual com
pany whether It produces ten pounds or ten million
mounds snce It receives its due proportion OF the
profits of the Trust whatever be the contribution
| Of its own works to tho product OF the year IN
other words the effect Of the Trust IS 10 multiply the
powers ana to dmirish the responsibilities OF capital
Take the six cheese companies, for Instance lndi-
vldually they would have particular force In
controlling the total amount Of cheese TO- be manu-
featured, in fixing the price Of IT, But roll them
into one force. add their capital Together and I'm
| mediately they become dangerous power suppose
| there is seventh great cheese firm which reiusel'
as Mr. Moeler refused. to come into the company.
II soon finds that the Trust has contracted to secure
all the az aabc milk. IL must go 10 a great distance