The new dominion. [volume] (Morgantown, W. Va.) 1876-1904, 1889-11-30
TRUSTS AND MoNoPOLIEs.
Remedies by State Action-PreventiOn
by Tariff Reduction.

If there be difficulty in legislatin,
directly for the suppression of trust
or for the punishment of those VIII
form them, or if the legislation pro
posed may invade fundamental prin
ciples which are part of our free
dom, or impair what must now b.
accepted as the legitimate and nee
essary machinery of modern indus
try, how may government intervene
to save the people from the power O
monopoly?
The analogy Of the interstate com
merce law has suggeted to some thu
answer that we must strip the vel
of secrecy from the trust, recognize
it as lawful organization. expose
all its machinery and operations to
public inspection and exact from il
equal dealing with all men. But i,
has not been made clear as a practi.
cal question how all this is to be ac-
complished, and especially how ii
can be done with proper recognition
of the established partition of pow
ers between the State and the gener-
al governments.
1t will, however, be as unnecessary
to develop this scheme as it is to re-
sort to remedies that may fail in the
test of trial, or that may be unsound
in principle, if it can be shown that
trusts, SO far as they menace public
injury, can be dealt with by exist
ing and familiar remedies, and by
legislation, wherever legislation is
necessary, not in the direction Of
lmpairing, but in that Of broadening
and maintaining the liberties of the
people.
The essential structure of the trust
as we have examined it, shows the
point toward which State action can
and should be directed, and forum
ately the example of the State of
New York, in the great test case al
ready made there, shows as conclu-
sively as can be shown, without the
decision of the court of last resort,
both the case and the certainty of
its application.
The essential conditions for the
rise and maintenance of trusts, as
we have examined them, not less
unerringly suggest the appropriate
and effective method of relief by the
federal government.
The State can destroy an existing
trust; the United States can remove
the conditions out of which spring
most of the trusts. The power Of
the one is remedial or repressive;
the power of the other is preventive
STATE ACTION.
Let US now recall the structure of
the great trusts we have examined
1t will be remembered that their
common basis is the corpol alton.
The original scheme for the Stand
ard Oil trust required the formation
Of single corporation in each State,
which should hold and manage all
the property and interests of the
trust in that State. The deed under
which the sugar trust was organized
required that all the refineries should
first become corporations, and that
all subsequent applicants for admis-
sion should qualify themselves in
like manner. Indeed, it may be af-
firmed that no great and permanent
trust can be constructed on any less
solid basis. Combinations very eff
fective, possibly, for some temporary
purpose, or within limited area,
may be formed by individuals or
partners, such as the "pools" we
have heretofore had, or even after
the scheme of the trust proper, but
they will be subject to all the con-
tingcncies of death or bankruptcy
of individuals and bad faith or vol
untary withdrawal. Those which
are to become menace to the public
cannot be built upon any foundation
so Enthusiastically and shifting
Moreover, the individual capitalist
has disappeared in the corporation
The latter alone offers the aggrega-
tion of means, the exemption from
physical death and the unity of con-
troll that are indispensable for the
gigantic enterprises of modern pro-
duction and trade. All the trusts
examined in these articles are found
ed upon corporations-the Standard
Oil, the sugar, the cottonseed oil
and the whisky trust Upon that
basis it is possible to secure not on
ly solid support, but, what is equal
ly necessary, efficient and centraliz-
ed control. In respect to this latter
attribute it may be remarked, in
passing, that the growth of the trust
out of pools and other earlier forms
of commercial combinations may be
likened to the growth of the federal
government out of the old confedera-
ton. 1t is the replacement of vol
untary league, resting on the good
faith of the parties to it, by an ire
vocable Judgment of power and au-
thority in a central directory.
THE STATES MAKE THE CORPORATIONS.
Now the corporation is creature
of the State, brought into being by
it and clothed with just such power
and capacities as the State chooses
to bestow upon it. The State then
has not only the undoubted right,
but rests under the undoubted duty,
of making it useful, law abiding
citizen, contributing to the welfare
of society, while strictly confined to
the field of activity assigned it.
Whether Incorporated by special
Legislative act or, as is now almost
universally the case, under general
laws, the franchise is granted for a
definite purpose and upon the condi-
ton that in the pursuit of that pur-
pose the private gain Of the corpora
tors shall consist with and promote
the general well-being of the com
munity. Strict construction of cor.
porate franchise is therefore the rule
of law. "ln grants by the public
said Chief Justice Marshall s'noth,