The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1916-08-02
Was the First Man to Or
ganize a Trust for Big
Business
MADE HIS MONEY BY
STRAIGHT PRACTICE
Formation of Sugar Trust Was Soon
Followed By Steel Corporation
and Other Big Modern
Concerns
BY HOLLAND

E. Parsons, who died early in 1916, ac-
cumulated an estate of s2,269047. I'm
doubtedly Mr. Parsons gained a much
larger fortune than this, for it was ac-
knowledged before his death that with
out intent to evade the inheritance tax
law he distributed a considerable part of
that fortune among those who are his
heirs.
There are two or three features asso-
ciated with this estate which are of more
than local interest. 1t is of the
largest estates left by any American law
yer, at least by any one who gained
the greater part of his estate by profess
sional practice. MIR. Parsons, when at
the height of his professional prosper
ity, said that he had the finest practice
of anyone in the United States, and he
sometimes thought the best practice of
anyone at the English speaking bar. Yet
he was not esteemed to be as profound
and brilliant a lawyer as William M.
Evarts and certainly not as great law
yer as the late James C. Carter, who
at one time was at the head of the Amer
lean bar.
Other lawyers have accumulated much
larger fortunes than Mr. Parsons, but
their accommodations were due to partici-
patton in underwriting operations and
other transactions industrial and rail-
road, in which large amounts of money
were made. Mr.. Parsons devoted himself
exclusively, except in one instance, to his
professional practice 1t is in this one
instance, however, that specially inter
esting feature of his accommodations is to
be discovered. If the common estimate
be correct, Mr. Parsons gained, approx
ma tely, one-half of the amount named
by the state tax appraiser as the money
value of his estate through his profess
slonal association with the sugar refin-
ing industry identified by the name of
H. o. Havemeyer. The peculiar feature
of this association that is to become ira
ditional is the fact that Mr.. Parsons was
the first to organize a modern trust Mr..
Havemeyer contemplated a combination
of this kind. When he was thus planning
a combination Henry H. Flagler was,
according to common report working out
the principle upon which the Standard
Oil trust was afterward based.
To Mr.. Parsons was committed the task
of formulating, legally, the plans for the
combination contemplated by Mr.. Have
never. He. with John r. Dos Passos,
perfected the organization whereby the
so-called sugar trust was created. Incl
dentally the plan involved the organiza-
ton of an underwriting syndicate. A
syndicate of that kind was organized and
1T was the first of the great underwrit-
ing syndicates which within a few years
were so rapidly organized
The plan formulated by Mr.. Parsons
was found faulty by the courts so that
it was sometimes said that he failed to
create trust that could stand the test
of judicial investigation. But that was
not true, for the decision of the highest
court also pointed out the way in which
a trust could be established which could
maintain itself. This was speedily DONE
and there remained payment to Mr. Par
sons and Mr.. Dos Passos for their serv-
ices. Each was given an opportunity to
choose the manner of payment. 1t couI
be in cash or in certificates of the com
pany. Mr.. Dos Passos took cash. while
Mr.. Parsons, clearly foreseeng the fu-
ture value of the certificates in which
the fee was paid netted Mr.. Parsons not
far from 100000. The influence of this
transaction was speedily felt in financial
circles. 1t and the organization of the
Standard Oil trust, so called, were imi-
tated.
The first to follow this example upon
a large scale was the steel and iron in
dustry near Chicago, which found itself,
in the midnineties, in some embarrass-
ment. group of as brilliant and as
able business men as any ever brought
together in this country took up the
proposition which, if worked out would
quicken this organization. Among those
who took part in these proceedings were
Norman B. Ream, Marshall Field, H. H.
Rogers and two or three Chicago bank
ers.
These men knew that the American
sugar company when organized as
trust so-called, had taken over several
companies chiefly for the purpose of Sc
curing the admirable organizations which
had been perfected by these companies.
Therefore Mr.. Ream and his associates,
of whom Judge E. H. Gary was one, I'M
dertook to obtain several steel and iron
industries not for the purpose of con-
trolling their business, but. instead, of
securing admirable organizations Other
wise 1T would have been necessary to wait
several years in order to perfect organi-
cations 1t was easier to secure capital
than to create and develop good organi-
"a TONS
Soon another step was taken of much
greater span. Still bearing in mind Mr..
Parsons work and also that of the Stand
airy Oil company, proposition was made
by Mr.. Ream and others to ]. P. MorRan
and two or three others to create what
would be almost a nation wide combine
ton and to take over independent COM
panies which had built up admirable or
CARNATIONS. In that way the United
and the validity of that organization is
now before the supreme court at Wash
ngton for judicial termination.
Mr.. Parsons, of course could not have
foreseen some of the results of his pro-
fessional work in creating the so-called
sugar trust, but he was convinced that
combination of that kind whereby %
feotive organization and abundant cary
tai could be secured was essential if the
industries of the United States were fully
to meet the great opportunities which
w In a