Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1907-07-13
OF THE GOVERNMENT
TO THROW uNRULY CORPORA
TloNs INTO OFFICIALS HANDS
A FAR REACHING POLICY
PURDY, A KNOX PUPIL
ORIGINATES SCHEME
His Plan is the Most Startling Thing
Vet Suggested in the Long Distance
Race Between the Trusts and the
Trust Busters.
washington Buree,..
The OttumWa COurie,
Washington D. C.. July IL.

washington Buree>.
The Ottumwa Courier,
Washington D. c.. July IL.
The startling proposal Of the gov
eminent to throw into receivers hands
the trusts which cannot otherwise be
reached effectively. has been in con-
siderable degree misunderstood; but
none the less it is accepted as the
most startling thing in trust busting
policy yet invented,
1t is understood pretty definitely,
that this proposal is the invention or
Assistant Attorney General Milton d..
Purdy. Mr.. Purdy Is a pupil OF Phil
ander c. Knox in the trust prosecution
business. He has been at the head OF
this division of work in the department
for several years and it is probable
there is not today man in the coun-
try better informed of law and prac-
tlce of intercorporate relationship
than he He knows trusts and monop-
oily decisions and laws by rote, and has
given much study to the problems In
volved in big commercial organiza-
lions, entirely aside from the mere In
cident of enforcing present laws. MI
Furdy has found out at close range
the difficulties Of the trust busting
business. and in devising the scheme
of receiverships for trusts he is be-
lieved to have made real contribu-
ton.
1t must not be understood that all
trusts or even all bad ones can be
thus treated. Neither is it to be as
sumed that the government is certain
to achieve it's real end if the courts
permit ii to place trusts in control OF
receivers. A brief recounting in out
line OF the developments, step by step,
In the race between the trusts and the
busters will show just what this
means.
The Evolution of the Trust.
First came the simple agreement
between competitors not to compete,
the "gentlemen's agreement" 1t failed
because the gentlemen would compete
on the SLY when they saw a chance to
edo" each other. So next came the
trust proper; that is, the arrangement
| by which the owners Of competing es-
| Establishments turned their manage
ment over to agreed trustees, to be
operated in the common interest:
This was the old Standard Oil trust OF
1SSS-1s99. 1t was great success un'
til the courts outlawed it.
Next came the holding company
plan. tested and defeated in the
Northern Securities case. The holding
company owned control of the com
| peting concerns and dictated their poll
/ cies, suppressing competition.
/ Next was the plan of unified owner
ship, illustrated very well in the to-
| OF ,. the
International Harvester company. AT
] first it owned the stock of subsidiary
4 companies as holding concern. rms
became dangerous, and so one by one
| the International absorbed the actual
property of these subsidiary concerns
and dissolved them. This has been
carried so far that the Harvester trus,
Is understood now to have ceased
j practically to be holding company
J arrangement. The international sim
i ply owns directly the properties once
| owned by the various subsidiary cor
i porations.
There is a variation Of this scheme
/ In the tobacco trust. Here, out Of 6
large number of subsidiary corpora.
tions held by the holding concern, ONT
was selected to become an operating
i company. This operating compan!
gradually took over the properties O
i the other subsidiary concerns, ant
;. dissolved them, until the operatins
company had come into control o
about all the underlying property. Thu
stock of the operating company, mean
while, was held by the holding com
pany. There was thus reached
situation in which the number Of cor
porations had been reduced to two
and as the holding company is un
necessary in this situation, it coul'
easily agree to decree dissolving it
the effect on the property would no
be important because the one operat
ing company has by this time come t
own all the physical property TIL
holding company could go out o
business without a jar to the bushes
or any change in the control.
What Standard May Do
This is just what the government
suspects the Standard Oil compan
) will undertake to do if it is defeate
in the ST. Louis litigation. In tina
, case the government suspects tn
dissolution of the Standard Oil com
shall be an honest dissolution of til
property into its original physical unit
This is the real aim. A prosecutio
that further solidifies the ownership {
all the means of producing oil, or max
, ing and selling harvesters would M
exactly commend itself as Dustin
? entorp.isc: yet that is what is threat
8 ened in these cases.
The Receivership Plan.
SO the proposal to place the who
), aggregated business in the hands of
, receiver, and to impose upon him tt
!, pany of New Jersey--tne S100,000,0t
: holding company The governmel
!. expects confidently to accomplish tn
end. But meanwhile the Rockefelle
!. > RACERS group is expected to reorgal
1. ia the nrnnarty hy having one of II