CHAPTER VI. 



THE FARMER AND THE TRUSTS. 



THE term "Trust," in popular usage, lias come to mean 

 any consolidation of large industrial or other enter- 

 prises under one management. It will be used in that 

 sense in this chapter. This use of the term originated in the 

 l)ractice of effecting a practical consolidation by placing a 

 controlling majority of the stock of each of the concerns which 

 it was desired to consolidate " in trust" in the hands of a new 

 corporation especially created for this purpose. It was neces- 

 sary that the Trusts be corporations, for individuals might 

 die, or become unable to perform the duties, in which case it 

 would be necessary for all parties to agree upon new trustees, 

 which might or might not be possible. The Trust was 

 always created for some definite term of years, during which 

 the real owners of tiie stock could not withdraw it from the 

 Trust. The new corporation, by means of its control of the 

 stock of the consolidated companies, could select their man- 

 agers and control or consolidate their management, thus avoid- 

 ing any competition between them, and dividing the net 

 profits of all among the stockholders of the different com- 

 panies, according to the terms of the Trust. The Trust corpo- 

 ration was always composed of members of the companies 

 consolidated. In due time litigation ensued in regard to those 

 Trusts, which were attacked as "in restraint of trade," and the 

 courts held them illegal on the ground that while corporations 

 could be formed to carry on any kind of business, they could 

 not, in the states where the litigation occurred, be formed for 

 tiie sole purpose of controlling the business of other corpora- 

 tions. As stringent "anti-Trust" laws were promptly enacted 

 in most of the states, and by Congress, the Trusts were dis- 

 solved and the practice was abandoned. 



Nothing came of the anti-Trust movement, however, except 



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