Monopolies and the People | Page 6

etc.) in the hands of a board of
trustees, who are empowered to direct the operations of production and
sale, as if the properties were all under a single ownership and
management.
The novel characteristic of the trust is not the fact that it is a monopoly,
but that it is a monopoly formed by combining several competitors
according to a new plan. The process of placing property in the hands
of trustees is familiar to every business man. In the formation of a trust
the different firms or companies who have been competing with each
other in the production and sale of goods agree to place the
management of all their several properties in the hands of a board of
trustees. The powers of this board and its relation to the owners of the
various properties are ingeniously devised to evade the common law,
which declares that contracts in restraint of competition are against
public policy, and illegal.
The first of the modern trusts was the Standard Oil Trust, which was a
combination formed among several of the refiners of crude petroleum
in the States of Pennsylvania and Ohio in the year 1869. The original
combination grew out of the control of certain important patents
connected with the process of refining. It pursued its course for a
number of years without attracting much attention outside of the centre

of its operations; but of late years so much has been published in regard
to it that the very word "Standard" has come to be almost a synonym
for monopoly. It is probable that certain branches of the iron and steel
trade were the next to be combined by means of a trust, but as these
were arrangements between private firms, not much information as to
the time of their origin has reached the public. The second great trust to
attract general public attention was the American Cotton Oil Trust, in
which some of the same men who have so successfully engineered the
Standard Oil combination are heavily interested. These two great trusts,
the Cotton Oil and the Standard, have attracted widespread attention,
and, to a certain extent, the public has become familiar with their
organization and plan of operation; but popular feeling on the subject
was not fully aroused until 1887, when the newspapers of the country
made generally known the fact that the trust principle of combination
was being rapidly adopted by the manufacturers of a large number of
important lines of goods. The effect which these monopolies were
believed to have upon the public welfare was pointed out by writers
and speakers, and Congress and the State Legislatures were besought to
investigate these combinations and seek to suppress them. Meanwhile it
seems to be true that the popular agitation has had no effect in
lessening the number of trusts, or checking their formation and growth;
and they continue to increase and to gather their profits, while the
public impotently wonders what it is going to do about it. Let us be
careful, however, to make no assumption that the trust is injurious to
the public at large. That is a matter which is before us for investigation.
It is safe to assume that the reader is somewhat familiar with the
general charges which have been brought against the trusts; but even if
this side of the story has not been heard, it is not unfair to look at them
first from the standpoint of the men who make and manage them. In
order to do this, suppose we select some particular trust which will
serve as a type, and imagine that some frank, candid manufacturer, who
is a member of this trust, comes before us to give an account of its
formation and operations. This man comes, we suppose, not as an
unwilling informant, or as one on trial. He is frank, honest, and
plain-spoken. He talks as man to man, and gives us, not the specious
argument of an eloquent pleader in defence of trusts, but just that view

of his trust and its work that his own conscience impels him to take.
Certainly, then, he deserves an impartial hearing.
A number of years ago the principal manufacturers of linseed oil in the
United States formed an association. It was started largely for social
ends, and was very successful. Business men are generally most
interested in their own plans and operations; and those who are familiar
with the same topics and have similar interests and purposes are apt to
make agreeable companions for each other. We discussed many points
connected with the management of our business at the meetings, and by
interchanging with each other our views and experiences with different
devices, methods of management, etc., we were able to get much
valuable information, as well as social pleasure,