Oxford eagle. (Oxford, Lafayette Co., Miss.) 1876-current, 1888-01-05
TRUSTS OF ALL KINDS.
A Noted Jurist's Opinion On IN. Recent
Combinations of Special Interests.

Combinations OF Special Interests.
The formation Of several combine
tions OF special interests, under tn,
title Of trusts" for the alleged pur
pose Of preserving those interests. has
attracted the attention Of both Legal
and commercial minds. and a re-
porter called on Mr.. Austin Abbott,
whose works on law aud reports 81
law courts have been acknowledged by
the judges of the Court Of Appeal
and others connected with tho bench
rs authority in all matters before tho
courts. 10 ascertain the nature Il thes,
trusts. Said he:
The mystery which in tho minds oi
some obscures this subject is a BUSH
ness mystery. not a legal one. Each
of the legal principles which have
rendered these combinations possible
is easily comprehended and generally
famil lar. Nearly all of them have
long been recognized and fire.
q%uently separately applied. The
modern spirit Of organization has
recently discerned the results that can
be ked out through the combina-
tion Of these familiar principles. aud
the secrecy which has attended the
operation Of the device is simply Q
matter Of business policy. Hereto
fore efforts TO obtain concert Of action
among corporations have been princi.
pally made either by one corporation
taking stock in another. by ono leas.
ing the property Of another. or bg
contracts between the boards of di.
rectors having one or more common
mombers. These involve, in one form
or another. embarrassments arising
out of the limits Of the powers Of cor
porations and their directors, and also
out Of the fiduciary relation of direct.
ors to stockholders. and the incapaciy
Of n director In two boards to sanction
n contract between them. II was the
fact that stockholders have not hither-
To been regarded as holding any idu-
ciary relation to each other. or 10 their
company. that has led to the invcn-
ton Of these trusts of stock for the
control Of corporations"
What is n trust?r
IA trust so called, Is n device to.
secure concert Of action among anum-
Der of corporations Of similar inter.
ests. by separating the voting power
and the ownership Of the stock. in each
one, TO a sufficient extent to conccn-
trate the voting power Of n majority
OF the stock, in each corporation, in tho
hands of y single committee or asso-
citation. whose policy will. therefore,
animate all the boards of directors. or
who may even put the same persons
in the several boards. so that the cor
porate action of all may be identical
without contract. Under this
ment IL is intended that tho bone
hcial interest in tho stock, minus
the voting power, shall rest where it
was before. while the pecuniary value
Of the stock may be enhanced by the
termination of all competition between
tho corporations thus brought under
ono control. and by the consequent
advantage gained from the combined
corporations in their competition with
corporations and individuals in the
same business, but not in the combina-
ton"
Are such combinations legalp"
''The legal principles upon which
this device rests are in the first place
the characteristic features of corporate
organization; in the next hat the cor
porate combination by a trust needs
no corporate act; next the alleged JUS
~titication OF tho objects of trusts
next tho legal theory of the trusts
and lastly. the function Of the
trustees. Half the stock. plus one share.
can elect n board Of direction, TO
whose hands ali the ordinary powers
of that body are transferred. leaving
the other half no right either of on
troll or voice in tho board. These
directors are trustees Of the franchise
granted by ahe State. but can not
bind the corporation by contract
TO exercise corporate powers in
consistent with the property
rights Of the stockholders. Hence all
attempts TO secure ccncer of ac-
ton between such boards are of un-
certain duration, rs is seer in the pool
ing arrangements Of CARRYING COM
panies. But if the power to elect the
boards In the several companies be
lodged in n hand, then no contract
is necessary. The directors who would
not act in concert would simply be
dropped at the next election. and
others more subservient take their
places. This leaves the corporations
in a legal sense free. but the boards of
direction act In concert, without en-
tering into any contract in restriction
OF their franchises. consequently the
conduct Of the different directories a
not be impeached. The trusts are
alleged to be justified by the fact that
the object Of the concert Of action is
the enhancement Of the value Of The
stock. rs the proprietorship remains
where 1t was, the owners having only
parted with their right to vote for the
purpose OF enhancing the security of
the prospects of dividends. The mis-
chiefs felt or feared from these trusts
are not in the injury to the interests Of
the stockholders. but in the aggran-
dizement of a corporate power result
ing from this concert of action. OF
course. the remarkable power which
such combinations WELD, both in en-
HANGING the business Of the compa-
MES thus securing the benefits Of a
common experience and conoert nj
action, and in crushing out. one after
another. competitors not in the com.
bination, has Invita- nuhlic atton,on