FINANCE, INDUSTRY, TRANSPORTATION. 



461 



Company," a corporation to have the monop- 

 oly of the trade with Spanish South America, 

 a part of the capital stock of which was to be 

 the new fund. But Spain, after the treaty of 

 Utrecht, refused to open her commerce to 

 England, and the privileges of the "South 

 Sea Company " became worthless. There were 

 many men of wealth who were stockholders, 

 and the company continued to flourish, while 

 the ill success of its trading operations was 

 concealed. Even the Spanish war of 1718 did 

 not shake the popular confidence. Then in 

 April, 1720, Parliament, by large majorities 

 in both houses, accepted the company's plan 

 for paying the national debt, and after that a 

 frenzy of speculation seized the nation, and the 

 stock rose to 300 a share, and by August had 

 reached 1,000 ashare. Then Sir John Blunt, 

 one of the leaders, sold out, others followed, 

 and the stock began to fall. By the close of 

 September the company stopped payment, and 

 thousands were beggared. An investigation 

 ordered by Parliament disclosed much fraud 

 and corruption, and many prominent persons 

 were implicated, some of the directors were 

 imprisoned, and all of them were fined to an 

 aggregate amount of 2,000,000 for the bene- 

 fit of the stockholders. A great part of the 

 valid assets was distributed among them, yield- 

 ing a dividend of about 33 per cent. 



Trusts. A " Trust," in its broad sense, 

 is a combination of individuals or corpora- 

 tions for controlling the price of a commodity. 

 It seeks to do this by restricting production or 

 by "cornering" the market, and strives to 

 accomplish its end without incurring the pen- 

 alties of the law. This endeavor to keep within 

 the law has given rise to many forms of 

 "trust " agreements. The simplest is a mere 

 naked contract between manufacturers or deal- 

 ers that each shall carry on his business in his 

 own way, but that none shall sell below an 

 agreed minimum price. Examples of this are 

 agreements between the coal producers of 

 Pennsylvania and the trades union agreements. 

 Another simple form of combination is an 

 agreement that all shall carry on their business 

 independently, but that profits shall all be 

 turned into a common fund and divided in a 

 definitely agreed on ratio, no matter what the 

 profits of each individual may actually have 

 been. Of such a nature are railroad pools. 

 Another kind occurs when a corporation leases 

 the works, or contracts to take all the products 

 of other corporations, or enters into partner- 

 ship with them. In all of these cases, how- 

 ever, there is a danger of overstepping the 

 bounds of legality. Courts in all parts of the 

 country have repeatedly refused to enforce such 

 contracts if deemed to be injurious to the pub- 



lic , &,n<i some authorities have declared them 

 criminal, if dangerous to the common good. 

 This has led to the invention of a subtile and 

 elusive form which we may call the " Trust " 

 proper. In this, the stock of all the stock- 

 holders of all the corporations comprising it is 

 placed in the hands of a few men as trustees, 

 thus securing to a dozen or so persons the 

 ! absolute control of stock representing many 

 millions of dollars and possibly thousands of 

 owners. The Standard Oil Trust and the 

 Sugar Trust illustrate this form, the Standard 

 Oil being probably the pioneer in this line, 

 and now one of the most powerful moneyed 

 institutions in the world. Whether this 

 " Trust" will stand the attacks of its enemies 

 or, in its turn, will be decided to be illegal, it 

 is too soon to judge. In a recent case the New 

 York Supreme Court has declared it illegal 

 and the charters of its constituent corporations 

 liable to forfeiture. As has been said, a 

 " Trust " is not a corporation, nor subject to 

 the restrictions placed by law on incorporated 

 companies. 



Strikes, Statistics. The plan of settling 

 labor difficulties by strikes is a very old one.' 

 The first strike in the United States occurred 

 in New York city in 1803, when a number of 

 sailors struck for an advance of wages. Ac- 

 cording to " Bradstreet's Commercial Reports " 

 there were 697 strikes in 1888, involving 211,- 

 841 employees a decline from 1887 of 23 

 per cent, in the number of strikes and of 38 

 per cent, in strikers. Against 1886 the de- 

 crease in number of strikers is 52 per cent. 

 Higher wages or fewer hours were the cause of 

 strikes by 68 per cent, of the strikers in 1888, 

 against 62 per cent, in 1887. Trades union 

 questions were behind the strike of 17 per 

 cent, of the men involved in 1888, against 22 

 percent, of the year before. About 45 per 

 cent, of striking was in Pennsylvania in 1888, 

 against 32 per cent, in 1887. Only 38 per 

 cent, of the strikers of 1888, involving 50 per 

 cent, of the whole number who went out, re- 

 sulted in favor of the employees, against 42 

 per cent, of the strikes and 38 per cent, of 

 those involved in 1887. In 1888 there were 

 74,837 employees locked out, against 46,000 

 in 1887. The number of days' labor lost by 

 striking and locked out employees in 1888 was 

 7,562,480, against 10,250,921 in 1887. If the 

 labor be placed at $1 .50 per man, the estimated 

 loss of wages to striking and locked out em- 

 ployees in 1888 would be $11,343,720, against 

 $15,880,881 in 1887 a decline of 25 per 

 cent. 



Watering 1 Stock. The credit of having 

 originated the process of watering the stock of 

 railroad companies belongs unquestionably to 



