The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1889-11-19
TRUSTS AND MoNoPoL1Es.
Federation of Capitalists--TheC Central
ization of Industries.
Hoao Factories May be Closed and Stock
hslders Get Dividends Production
Cheapened and Prices Increased.
From the Baltimore SUM-

Cheapened and Prices Increased.
From the Baltimore SUM-
NUMBER vi.
What, then, is a trust? Not every
device or scheme by which competi-
tion transmits itself into combination,
but actually speaking such as are built
upon the general lines sketched in my
former papers. The trusts examined
are types of which we have secured
authentic photographs, and from these
we may judge all others, for while
their features differ as becomes sisters,
the general family likeness is unmis-
taxable. According to these types, a
trust is an arrangement" under
which parties engaged in the inde-
pendent and competing pursuit of the
same line of business consolidate their
properties, their business and their
skill into one great organization, whose
control and management are vested
in small central committee or board.
HOW TRUSTS ARE FORMED.
The general and approved method
of forming trust is as follows:
The several concerns or companies
become corporations, if they are not
such already. The owners of the
shares of stock in these corporations
transfer all their stock to small num-
Der Of trustees, generally selected
from the chief stockholders in the
several companies. These trustees
thus become the stockholders of all
the companies, possessing as to each
one the legal power and authority
which belong to the stockholders Of
any corporation. They elect it's Off
GERS and receive all its divends. By
previous agreement capitalization is
agreed upon for the entire organiza-
tion that may be increased as new
members enter, which generally repre-
sents not only all the properties put
into it. z5ut liberal addition, of water.
For this capital certificates of shares
in the "trust" are issued and appor-
toned in the quotas agreed upon to
the several companies for distribution
to the former stockholders in the
same, according to their respective
amounts of stock held therein. The
several companies preserve their iden-
tity and continue their business, each
under it's separate and independent
management-at least in theory
paying their respective net earnings
toIthe trustees, who receive and dis
tribute them to the certificate holders,
who are now no longer stockholders
in any particular company, but share
holders in all.
sUBTLETIEs OF THE ARRANGEMENT.
This arrangement, as it appears
on it's face, would seem to contemplate
nothing more than a general pooling
Of earnings or profits in the hands of
committee for distribution upon a
common basis, while every company
pursued, as before, it's own business
career, for the trustees, being simply
the common stockholders of these
companies, can exercise their authority
but once year-at the annual elec-
tion of officers, displacing an unsatis-
factory or continuing satisfactory
management. But here appears one
of the subtleties of the trust. In the
board Of directors of each one of the
corporations will appear enough of
the trustees to control it's manage
ment. In all the deeds made public,
and especially in that of the sugar
trust, the power and authority of the
trustees are left conveniently indef-
mite, appearing to be just what the law
vests in the stockholders of corpora
tion. 1t was proved that these trus-
tees had meetings, but kept no minute
of their proceedings, had no Office or
known place of business, but gathered
informally at the place of busi
ness OF any member Of the
board. It was difficult to
elicit anything definite as to these
gatherings. A president of two of
the sugar refining companies, who is
also trustee, denied that any vote
was had, any action taken or any
order given for the shutting down of
refneries, the controlling of produc-
ton, the rising or lowering of prices.
In his words, the trustees "just felt
each other" but took no action; hence
there was no necessity for keeping
minutes, all of which looks merely
like passing the time of day" be-
tween the Individual stockholders in
v,,,po bor 0f Joint 1,o~+-.oo
But the fact that these trustees
were also officers in the several COM
panies, and their meeting in the guise
of trustees or stockholders was really
a meeting of actual managers of the
companies, will show that 1t was only
necessary for them to feel each
other" without formal vote or minute,