Orleans County monitor. [volume] (Barton, Vt.) 1872-1953, 1904-08-08

a particular line of business. 1t was
first formed under an agreement by |
which holders of stock In corpora |
ton transferred a maj GRITTY of such |
stock to certain trustees who in turn |
issued to the former owners what |
were called trust certificates. The |
trust certificates 50 issued were trans |
ferable like the stocks of the corpora
ton but the shares of stock which were |
in the hands of the trustees were not |
transferable. These trustees by hold |
ing majority of the stock of the sew
eral corporations had the right to
vote and were able to control the |
business operations of all the corpor-
atoms in the combination. 1t was by
reason of this feature that the trusts
were able to eliminate the deadly
competition which existed before the
merger. The property of the several
corporations was transferred to the
trustees and the trust certificates
which were issued were in effect first
mortgages upon the property con-
veyed. Up to this point in their his
tory the trust diff 5red from the cor
poration in that it had no legal status
while the corporation derives it's
whole power through Iegislativ
enactment. Such was the original
formation of the trust. But real
abuses of power along many lines, but
more especially in the treatment
of competitors who refused to join
| the combination, soon led to an
agitation in favor of restraining the
trusts. In 1877 the legislature of
Georgia passed an act in restraint Of
trusts. This was the first legislation
of the kind in America. The first real
hostile antitrust laws were passed in
1889 when eight states and three ter
ritories passed such laws, and by 1894
! twenty two had come into line with
more or less stringent measures
against the trusts, The aim of these
laws was to secure free competition
in business. The form of the laws
|
made it criminal offence for two or
more persons to combine for the pur-
pose of regulating the price of an
article or to regulate the supply of
any commodity on the market. In
the early nineties congress followed
the lead of the states and passed the
present Sherman Anti Trust Act
which is now the only legislation of
the kind on the statute books of
America. These laws however only
compelled the trusts to adopt new
form of organization, while their
methods of doing business remained
the same. Under the law the United
States Supreme Court held that it was
illegal for the different corporations
to transfer majority of their stock
| to the trustees of the combination.
/ The Standard Oil Trust and the Chi
cago Gas Trust were the only trusts
which did not change their formation.
These were formally dissolved but
they still maintained their old work
ing order in secret.
In the trusts which did change, the
Transformation was simple. A char
ter was taken out for a new company
and the trustees of the old combina
ton became the officers of the new
corporation. The trust certificates
were exchanged for shares of stock
and what was once trust, in both
name and form, became corpora
ton in name only, chartered and
legalized by law but still endowed
with all the powers which it held I'M
der its old formation, and the at
tempts to legislate the trust out of
existence had utterly failed. Since
this new method of forming the trust
was adopted it has become hard to
distinguish between the real trust and
the legitimate corporation. The real
difference seems to be in the motive
rather than in the manner of their
formation. If the motive was to Sc
cure a monopoly of certain trades and
markets and to control the supply OF
any commodity the organization is q
;, trust. If the motive was to bring
about centralized management and
:, thus save the expenses of separate
. management and to take advantage
of large scale production, then the
organization is legitimate corpora
% ton. But this distinction is of n,
Is working value since the management
y of each and every trust would declar,
L that their motives were those of legit
u innate corporations. No officials woul,
admit that their organization was TO
e the purpose of creating a monopol,
= and thus sustain high prices, bu
" would declare it to be for the purpos,
l. of securing to themselves the man,
advantages which truly belong to tn
u corporation method of doing husinoee