TRUST 



5894 



TSCHAIKOVSKY 



of this subject is laid bare. Most of the trusts 

 are engaged in interstate commerce, and the re- 

 strictions placed on them by the individual 

 states are of little effect. The body which pos- 

 sesses the greatest powers over the trusts is the 

 Congress of the United States. 



Sherman Anti-Trust Law. The first impor- 

 tant law of an anti-trust character was the 

 Interstate Commerce Act of 1887, but this law 

 applied only to public carriers. The Sherman 

 Law of 1890 applied to all interstate trade. 

 Aimed directly at the growing powers of trusts, 

 it declared that any combination, in the form 

 of voting trusts or otherwise, or any conspiracy 

 in restraint of interstate or international com- 

 merce, is illegal ; also that all such combinations 

 must be dissolved by the courts, if proof of vio- 

 lation of the law is offered by the Attorney- 

 General of the United States. The maximum 

 penalty for violations is a fine of $5,000 or a 

 year's imprisonment, or both, for each offense. 

 Furthermore, any person "injured in his busi- 

 ness or property" by illegal acts of a combina- 

 tion may bring suit against it for three times 

 the amount of damages sustained by him. The 

 law expressly states that the term person in- 

 cludes corporations. 



Under the terms of this law there have been 

 about 150 suits against corporations, some suc- 

 cessful, some unwarranted. One case of general 

 public interest was the case of the Northern 

 Securities Company, which had been formed 

 to assume control of the Great Northern and 

 the Northern Pacific railways. These were 

 competing lines, and the Supreme Court in 1904 

 held that a combination of them was illegal. A 

 second great case involved the Standard Oil 

 Company. This suit was begun in 1906, and 

 was finally settled in favor of the government 

 in May, 1911, dissolution of the company within 

 six months being the court's order. Other im- 

 portant suits decided in favor of the govern- 

 ment resulted in the dissolution of the Ameri- 

 can Tobacco Company (the tobacco trust), the 

 Du Pont de Memours Co. (powder trust), and 

 the International Harvester Company (har- 

 vester trust). 



Also as the result of the government's ef- 

 forts the Union Pacific Railway was compelled 

 to sell the control of the Southern Pacific; the 

 American Telephone and Telegraph Company 

 surrendered control of the Western Union Tele- 

 graph Company and also agreed to furnish 

 connections to independent telephone com- 

 panies; twenty-nine officials of the National 

 Cash Register Company were convicted of un- 



fair business methods involving the suppression 

 of competition ; and the New York, New Haven 

 & Hartford Railway agreed to dispose of its 

 steamship lines, its electric lines, and also of the 

 Boston & Maine Railroad, thus practically end- 

 ing its monoply of the transportation business 

 in New England. 



The noteworthy feature of trust regulation in 

 the United States is that the courts have almost 

 uniformly regarded combinations as illegal. It 

 might almost be said that the burden of proof 

 has rested on the combination to prove that 

 it is not a trust. The Sherman Law gave the 

 courts ample powers to deal with combinations, 

 but interpretation of the law has varied. That 

 trusts were generally illegal because of tlirir 

 very nature became an accepted theory, but 

 just what constituted a trust was not clear. In 

 the Harvester Trust case, for example, it was 

 argued that the proportion of business con- 

 trolled is no proof of violation of the Sherman 

 Law. The company argued that it had lowered 

 prices, raised wages, increased production and 

 built better machines. It had not been over- 

 capitalized, and was not making excessive prof- 

 its. The court, however, declared that these 

 features, while true, did not destroy the ille- 

 gality of the corporation. W.F.Z. 



Consult Ripley's Trusts, Pools and Corpora- 

 tions; Crowell's Trusts and Competition; Du- 

 rand's The Trust Problem. 



TRUSTEE, truste', a person to whom the 

 management of property has been legally com- 

 mitted. A trust may be created by will, by 

 deed or by oral statement, but trusts affecting 

 real estate must be in writing. One named as 

 trustee may decline to accept, but once having 

 undertaken a trust he cannot release himself 

 unless the deed contains a provision enabling 

 him to do so, or a competent court grants such 

 discharge, or permission is given by all persons 

 interested. A trustee must keep account of all 

 moneys, collect debts, keep funds properly in- 

 vested, and render an account at stated times to 

 the beneficiaries or those for whom he is act- 

 ing. He also is liable for consequences arising 

 from violation of orders of the court, or wrong- 

 ful uses of trust funds; misappropriation of 

 funds is punishable as one of the statutory 

 forms of embezzlement. Trust companies and 

 banks, as well as individuals, may act as 

 trustees of estates. 



TSCHAIKOVSKY, chikawj'skc, PETER ILICH 

 (1840-1893), a composer, was born at Votkinsk, 

 Russia. He was educated in Saint Petersburg 

 (now Petrograd), and afterwards employed in 



