St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1890-02-24
TRUST ANATOMY.

TRUST ANATOMY.
The secrecy that has usually been OBJ
served in the organization and opera
ton of trusts has a good deal TODD with
creating the popular impression that
these industrial octopi are not pursuing
strictly legitimate business, but that
they are organizations whose sole pur-
pose it is to gouge the public and to
pocket dividends that have never been
earned. 1t is, perhaps, with view of
dispelling the impression that the Ma
tional Lead trust has adopted the policy
of publishing and circulating not only
the annual reports of its officers, show
ing an exhibit of its operations since its
organization, but they also publish in
pamphlet the agreement under which
the trust was effected and the conStitu-
ton and bylaws by which it is governed.
A trust agreement is something of a
novelty to the public eye: therefore we
have taken the pains to give this one q
careful examination, and will present
its main features for the information of
our GLOBE readers who may be curious
to know something of the inner secrets
of trust organization. The article of
agreement is itself brief and business
like document, setting forth the partic-
ular purposes of this trust-to secure a
more intelligent cooperation in the bus
mess Of smelling, refining, corroding,
manufacturing, vending and dealing in
lead and all its products, and carrying
on all other business incident thereto.
The trust thus created is vested in nine
trustees divided into three classes, each
class holding Office one, two ana three
years. respectively. The various COM
panies constituting the trust agree
to surrender their property at
a valuation agreed upon, and to take in
lieu thereof trust certificates to the
amount Of the valuation of the property
surrendered. Provision is made for the
issuing and transfer of certificates SINH
lar to what is usually made in the Or
ganization of corporations. The sole
management Of the trust is committed
to the nile trustees, who are required to
render to the holders of trust certificates
at each annual meeting statement of
the affairs of the trust; and they shall
also, when demanded by 67 per cent in
value of the holders of trust certificates.
furnish true and perfect inventory and
appraisement of all property held in
trust, and statement of the financial
affairs of the various companies whose
stocks are held in trust. A modest pro-
vision is that the salary ola trustee shall
be limited to $500 per annum. The limit
OF the trust is fixed at twenty-one years
from the date of the organization, with
prOYiso that it shall continue there
after until it is terminated by vote of
81 per cent in value of the holders of
certificates at a meeting called for the
purpose: and whenever it is decided to
terminate the trust 81 per cent in value
of the holders of certificates shall de-
termine the mode in which the affairs of
thu trust shall be wound up. Thus it
will be seen that the trust answers all
the purposes of corporation, and yet
enjoys the advantage of being placed on
the footing of private partnership.
In his annual report submitted to the
board of trustees the 5th of this month,
President THOMPSON says that the Ma
tional Lead trust now holds majority
of the stock of thirty-one different COM
panies, including three large smelters,
one refinery, and the most complete
in the country, for the produc-
tiou and refining of pig lead,
three linseed oil mills. and the rest of
the companies are for the manufacture
of white lead and oxides in all their
different forms, and also lead pipe and
sheet lead. The output for the year 1889
was n, 10 tons, with a capacity for g.
600 tons. He also submits an exhibit
showing that for three years previous
to the 1st of January, 1889, the COM
panies associated in the trust made
losses. But in the first six months in
1889 the profits were over 100000, and
during the last six months there was a
net profit of nearly $4,000, while the
actual cash assets held by the trust
over and above all liabilities, after pay
ing for all of the plant are $3.50, 600.
The trust is capitalized at $50. All. 800,
and yet the aggregate valuation of the
properties bought into the trust only
amounted to S22, SCI. 900. On this point
President THOMPSON says: SIN my
Judgment it was improvident to expand
the capitalization of the companies to
so great an extent. The lead business
usually increases each year from to
20 per cent. 1t, of course, has limita-
tons, and it is not to be expected that
within any reasonable length of time
the property can be made to increase to
such an enormous extent as will justify
the belief that value anything like
equal to the present capitalization
at par can be reached" In accordance
with this recommendation, the lead
trust climbed down from its $50, ZOO, 900
perch and recapitalized on basis of
$50. 900, and will now perhaps be
able to float its certificates at par. The
president expresses his belief that the
trust is engag ed IN perfectly legal,
proper enterprise, and that it is their
purpose. in all cases, to invoke the aid
Of the laws of the states in which their
companies are operating, in the firm
belief that "the doctrine of Intelligent
cooperation through trust organiza-
ton will finally meet the favor and
protection Of the government of each
of the states, and of the United States"