C. Legally the legislation has failed of its purpose, pp. 117, 118. Social effects of the legislation, pp. 118, 119. D. E. Economic effects of the legislation, p. 119. F. Proposed remedies, pp. 120-124. a. Greater publicity. b. C. Rely on common law rather than anti-trust statutes. Discard theory of a corporation as an artificial personality distinct from its stockholders etc. d. Guiding principle should be regulation, not destruction. CHAPTER I The Origin of the Trustl American legislation against "trusts," monopolistic corporations and railway consolidations has had as its chief aim the regulation or destruction of the monopolistic element in these forms of business enterprise. By a monopo ly is meant a business which is not limited by competition? It may consist of a single firm or of many firms bound by an agreement not to compete. If the parties merge their separate existence in that of a single larger corporation in which the absolute control of the property of the different interests is placed in the hands of trustees, to be managed by them for the advantage of all concerned, this 1. In tracing the origin of the trust we have not attempted to assign definite dates to the different transitions. Much that we have given in sequence, as a matter of fact went on at the same time. When the modern corporation appeared, joint-stock companies, partnerships, associations of individuals were also in existence. While the trust may be the principal form of business unit manifesting monopolistic tendencies, associations of individuals or partnerships may maintain a similar control within a given locality and industry. Working agreements, pools, trusts, exist concurrently. We have, however, attempted to select the salient characteristics of the development and to present them in a logical order. Though in tracing this development we have to a large extent relied upon secondary authorities, we have verified them whenever possible. 2. Ely, Outlines of Economics, p. 295. 1 technically speaking, is called a "trust. In its later use, however, the term has acquired a broader and more general signification. According to Beach it is used to designate "any corporation, association or other combination, the object of which is to create a monopoly, either complete or partial, with a view to increasing prices by suppressing competition and obtaining control of the market."2 Mr. Dodd, writing in the Harvard Law Review for November, 1893, attributes to the term an even wider signification, for he says it embraces "every act, agreement, or combination of persons or capital believed to be done, made or formed with the intent, effect, power or tendency to monopolize business, to restrain or interfere with competitive trade, or to fix, influence, or increase 3 the prices of commodities." The courts have also given the term a broad scope. The Supreme Court of Missouri in 1899 said, "A trust is a contract, combination, confederation or understanding, express or implied, between two or more persons, to control the price of a commodity or service, for the benefit of the parties thereto, and to the injury of the public, and which tends to create a monopoly. There 1. Central Law Journal, XXVIII, p. 533, quoting from Report of New York Legislative Committee of the Senate, 1889. 2. Beach, Monopolies and Industrial Trusts, p. 4. 3. S. C. T. Dodd, The Present Legal Status of Trusts, Harvard Law Review, VII, p. 158. |