1903.] PATTERSON—THE PROBLEM OF THE TRUSTS. 15 
THE PROBLEM OF THE TRUSTS. 
BY C. STUART PATTERSON. 
(Read April 2, 1903.) 
The ‘* Trusts’? in the popular, though not in the technical 
acceptation of the term, are the trading corporations, and combi- 
nations of such corporations, which control the production or 
the sale of one or more natural or manufactured products. 
‘*Trusts’’ thus defined do not include banks, nor other merely 
financial institutions, nor those ‘‘ Public Service Corporations ’’ 
which exercise the power of eminent domain, or which occupy 
public highways for their own purposes, as by laying rails, pipes 
or conduits. 
The ‘‘ Trusts’’ are the necessary result of an industrial evolution, 
whose successive stages have been individual ownership, partner- 
ships, limited partnerships, corporations and combinations of cor- 
porations, Partnerships supersede individual ownership because of 
the advantages of the combination of the capital or services of two 
or more individuals. Limited partnerships are organized to facili- 
tate the borrowing of capital by giving to the lender a compensa- 
tion for the use of his money exceeding the current market rate of 
interest, while limiting his liability to creditors to the amount of 
the capital loaned. The same advantages of co-operation with 
limitation of liability, and with added exemption from adverse and 
discriminating regulation in other States, can be secured by asso- 
ciation under *‘the Boston Trust Device.’’* Corporations are 
organized to assure continuity of administration ; to obtain by the 
issue of shares, and sometimes bonds, the use of capital contributed 
by a larger number of persons than can conveniently be brought 
together as partners; to secure to shareholders exemption from the 
individual liability zz sof#do of partners; and to render the shares 
negotiable zzfer vivos, and transferable, after the death of the 
owner, to personal representatives, or legatees, without the inter- 
vention of a court of equity in the settlement of partnership 
accounts. 
In recent years the country has enjoyed a degree of material 
prosperity which has far exceeded the most hopeful anticipations. 
1 The Financial Chronicle, Vol. 75, p. 314, article by Richard W. Hale, Esq. 
