COMPETITION AND THE TRUSTS. 625 



nevertheless, by officers of the jdooI known as " eveners." When 

 a second term of the organization is discussed, these shippers' pref- 

 erences, as growing out of the improved management or facilities 

 of a particular line, are given weight in a revision of ratios. Were 

 pooling agreements legalized so that their terms could be enforced, 

 Mr. Fink, the first railroad authority in America, declares that 

 the principal step toward settling the railroad j^roblem would be 

 taken. In the great work which the Interstate Railroad Commis- 

 sion has accomplished, not the least benefit has arisen from the 

 publicity it has given to complaint. It is now clearly proved that 

 corporations dread condemnation at the bar of public opinion, 

 and that they often have an unsuspected sense of responsibility 

 which can be directed to curtail their abuse of power. 



With a home market safe from foreign competition, with the 

 steady swallowing of little fish by great, and the growth of these 

 from great to greater, it was only natural that the policy which 

 aimed to suppress what was deemed undue rivalry in transporta- 

 tion should be paralleled in manufacturing industry. Hence a few 

 years ago we saw associations begun to be formed among produ- 

 cers of iron, steel, paper, salt, and other articles of prime necessity, 

 all intended to regulate output and price-lists. As a rule, these 

 associations did not work well. They lacked the means to punish 

 breaches of faith to which superior facilities or management 

 might tempt one of the associates. Some more substantial bond 

 was called for if agreements were to be respected and harmony of 

 interests maintained. Then arose the "trust," with its organic 

 tie ; an industrial creation nothing short of revolutionary. In the 

 most approved form of " trust," such of the concerns to be affili- 

 ated as are not incorporated, are transformed into joint-stock 

 companies. Then all the companies, new and old, transfer their 

 property to the "trust," an unincorporated board which represents 

 each of the unified concerns. The trustees then exchange " trust " 

 certificates for the various companies' shares, usually on the basis 

 of a trebled or quadrupled valuation. Control is then exercised 

 by the board over all the operations of the industry thus organ- 

 ized ; one refinery or mill is enlarged, another is closed ; territory 

 is apportioned to each active member of the combination, output 

 is regulated, prices fixed. Let us mark the prize which tempts to 

 this apparently perilous relinquishment of direct control of its 

 affairs by each party to the union. We can see it best displayed 

 in the case of the Standard Oil Trust. 



No chapter in the history of American industry is more inter- 

 esting than the record of the rise and progress of this "trust." 

 Beginning in 1870 with an inconsiderable refinery in Cleveland, 

 its founders took diligent heed of the fact of railroad competition : 

 " special " rates were then commonly granted to any shipper who 



VOL. XXXIT. — 40 



