Formation of Trusts. 
131 
cates, and had indorsed upon them the usual form of assign¬ 
ment and power of attorney, coupled with a proviso to the effect 
that the assignee by accepting the transfer assented to the 
terms of the trust agreement. Each corporation was bound to 
pay over all profits to be equitably distributed. The trustees 
had general supervision of the affairs of the corporations part¬ 
nerships and manufacturers adopting the agreement, by elect¬ 
ing as apparent owners of the stock, its directors and officers. 6 
This was the character of the Standard Oil Trust, which was the 
first combination of the kind, and dates from 1869. This famous 
trust, which was originally composed of the refiners of crude 
petroleum in Pennsylvania and Ohio, now controls the entire 
American and western European market. This scheme of organi¬ 
zation was successful from the first, and the remarkable financial 
success of this trust led in the course of a few years to the ap¬ 
plication of the principle to almost every kind of industry. 
Turning to the legal aspect of the question we find that part¬ 
nerships of corporations have been repeatedly declared illegal 
because they violate the law of corporations, and also because 
they are contrary to public policy. Inasmuch as the last ob¬ 
jection applies to all three forms it will be best to defer its con¬ 
sideration until the specific legal objections to the first two 
forms have been considered. A partnership is defined by Bouvier 
as “ A voluntary contract between two or more persons for join¬ 
ing together their money, goods, etc., in some lawful commerce 
or business, under an understanding, express or implied, that 
there shall be a communion of profit and loss between them. ” 7 
A combination of corporations in the manner described above 
certainly constitutes a parternership, but corporations cannot 
legally enter into a co-partnership without violating the law of 
corporations. 
The reason why a corporation cannot legally enter into a co¬ 
partnership either with an individual or with another corpora¬ 
tion is well stated by a writer in the American Law Review for 
December, 1892. The corporation cannot lawfully give to its 
6 Full text of an agreement given in People v. North River Sugar Re¬ 
fining Co., 1890, 121 N. Y. 585. 
7 Bouv ier’s LawDictionary, vol. ii., p. 291. 
