Omaha daily bee., 1899-08-13
DECLARES WAR ON TRUSTS
Attorney General smyth Begins Action
Against Standard Oil Company.
PROPOSES TO DRIVE IT FROM NEBRASKA
Says Action Has Been Delayed on Ac.
count of Other Work, but All
Trusts VIII Now De
Prosecuted.

The antitrust law that has been operative
in Nebraska since July 10, 1897, has been
invoked by Attorney General Smyth in a
suit that he filed in the district court of
Douglas county yesterday, in which
he asks that the Standard OIL company Of
Indiana be restrained from doing business
In this state. The petition is q voluminous
document that deals at length with the
nature and manner OF organization OF the
defendant corporation and points out In
detail the methods by which 1t is alleged
to violate the law. II includes a list OF
all the minor corporations that united to
form the trust, a copy OF the original
trust agreement and reproductions OF
various resolutions and amendments since
adopted by the aggregated corporation.
According to the showing thus recorded
the company was organized under the
laws OF Indiana, June Is, 1889. Under its
articles Of incorporation it was formed for
the purpose OF manufacturing the products
of crude petroleum, to transport and sell
the same and to erect such buildings and
construct such machinery as was neces-
sary to carry on this business. 1t Is de-
clared that the company has conducted this
business in Nebraska for several years past
as we'll as engaged In the illegal pursuits
on account of which the action is brought.
1t is represented that in January. 1882,
the corporations, limited partnerships and
others interested became parties to the
trust agreement In violation Of law and have
since acted under that agreement. The
parties interested in the agreement are
enumerated at length in the body Of the
document, which provides that each corpo-
ration shall be known as the Standard Oil
company OF whatever state 1t was incor-
-NraNal To- --1 49, III
business and property of each concern
shall be transferred to the Standard Oil
company Of that particular state. In con-
eideration for this transfer 1t Is provided
that the central organization shall transfer
to each party an amount OF the capital
stock OF the Standard Oil company equal
to the value of the property that 1t has
transferred to the trust. The affairs of the
corporation are to be managed by a board
Of nine trustees, to be elected for three
years by the holders Of trust certificates,
The original board Of trustees consisted of
j. d. Rockefeller. o. H. Payne, William
Rockefeller, J. A. Boetwick, H. M. Flagler,
w. G. Warden, Charles Pratt, Benjamin
Brewster and John D. Archibald. Each
trustee is entitled to a salary Of $25, 900 a
year, and the president of the board may
receive $50, 900. y
q supsequeut agreement IL S SuR-
gested that, since it does not appear ad-
visable that all the companies should
transfer their property to the trust at that
time, the trustees be given authority to
exercise their discretion in the matter and
that each subordinate company remain IN
existence until the trustees decided that it
was expedient to receive 1t into the trust.
Plan Was Carried Out.
CanAtt.~ -,
that the Indiana c~oncern-that Is, the de-
PENDANT In this case-was organized Under
this trust agreement, that its stock was
transferred to the trust and that 1t received
in return an equal amount In par value OF
the trust certificates. Consequently the
board OF trustees held and controlled the
bulk of the stock of the Indiana company
and was able to dictate the selection OF its
board of directors. The trustees also re-
ceived the dividends that were paid on the
stock held by them and from the proceeds
of dividends received from this and the
other companies that belonged to the trust
the dividends on the trust certificates were
paid. 80
TIL trust was managed in this manner
untn March 81, 1899. when, at a meeting of
the board of trustees in New York, a resolu-
tion was passed that apparently contem-
pldtcu IL ufocOiutlOu VI lue trust. lulS
resolution provided that the affairs of the
organization should be wound up by the
trustees and that all property held by the
trust, except stocks of corporations, should
be sold at private sale and the proceeds dis
tributed to holders of stock certificates &C
cording to their respective interests. The
stocks were then to be distributed among
the. holders of trust certificates by calling in
the certificates and returning the stocks that
had been originally turned in to form the
trust. g."
The attorney general asserts that this res
olution was merely calculated to effect the
purpose of preserving the trust under the
guise OF liquidation in order to stave off
litigation tending to have it declared illegal;
that all the trust stock that was not required
to take up these certificates still remains in
the hands of the trustees and that the stock
was transferred back to the defendant COM
pany on its books, again passed into the
hands of the trust by assignments of legal
title and the trust still controls the affairs
Of the company.
Who Compose the Trust.
On this showing 1t Is commended that the
affairs of the Standard OIL company of In
diana are still dominated by a trust and that
this trust will continue to illegally control
them. The trust is composed of the follow
ing separate and distinct concerns, each Of
which Is under the management of the board
OF trustees practically as contemplated in
the original trust agreement: Anglo Ameri-
can Oil company, limited; Atlantic Refining
company, Buckeye Pipe Lin company.
Eureka Pipe Line company. Forest Oil COM
pany, Indiana Pipe Line company, National
Transit company, New York Transit COM
pany, Northern Pipe Line company, North
western Ohio Natural Gas company, Ohio
Oil company, Solar Refining company. South
ern Pipe Line company. South Penn OIL COM
pany, Union Tank Line company and the
Standard Oil companies, respectively Of In
diana, Kentucky. New Jersey, New York and
Ohio. ..., ' -'
The further contention of the state is that
the purpose OF this trust is to create and
carry out restrictions in trade, to Increase
or diminish the price OF petroleum and its
products and to prevent competition In the
manufacture, sale and purchase Of the COM
modify. 1t is alleged that the defendant
company is bound by its trust agreement not
to SELF the product below a certain figure and
that 1t Is engaged in a conspiracy against
trade and business in violation OF the laws OF
Nebraska.
1t is asked that service may be had on
any other Of the companies concerned In the