212 GOOD AND BAD TRUSTS. GOOD AND BAD TRUSTS. Mr. Currier's paper on "The Evolution of Industry, or the Formation of Trusts," contains a carefully studied description of a "bad trust" with an equally careful examination of the methods and industrial effects upon the people of a "good trust." The concluding section contains a complete copy of the charter of one of the great iron trusts, showing what unlimited powers are delegated by charter to corporations under the laws of New Jersey, and a bibliography which will be of service to those who wish to study the trust question closely. While the organizers and managers of the trusts are being investigated by economists and official commissions, while they are being denounced by the press, from the campaign platform and in legislative halls, by far the most serious difficulties with which they have to contend are those which they have been organized to overcome and which they are denounced for having overcome-trade conditions and competition. The lesson is being surely taught by an inexorable law that millions of inflated values are a heavy handicap in industrial undertakings. If earnings on an actual investment are large enough to keep an overcapitalized issue at par, if the issues were not greater than the investment, the soundness of the undertaking and the surplus it could put aside for ten years FEDERAL EXAMINERS OF TRUSTS. 213 would give to it a stability that could remove its securities absolutely from the speculative, and place them deservedly in the investment list. The laws of trade will do more to eliminate the abuses of corporate power than legislation can. FEDERAL EXAMINERS OF TRUSTS. "Why not have a federal examiner of trusts?" This question is asked by the New York Journal in its editorial of June 30, 1900. In this connection the Journal says: "We have a state bank examiner, whose duty it is to see that our banking business is conducted prop,erly, and that the people are not swindled. Then why not have a federal examiner of trusts? It would be just as proper and far more beneficial to the people." State examiners examine state banks only. They have nothing to do with national banks. National examiners, under the direction of the comptroller of the currency, examine national banks only. They have nothing to do with state banks. We cannot have "federal examiners of trusts" until we have provided for the incorporation of trusts under national charters. In the act providing for their incorporation regulations can be embodied that will require the business of the corporation to be conducted properly, and insure the people against being swindled, by a well devised system of national examination. That is the way we developed the national banking system. First an act providing for the incorporation of national 214 FEDERAL EXAMINERS OF TRUSTS. banks, then the organization of a system of examination of all banks taking charters under the act. An act providing national charters for business corporations doing an interstate and an international business is as necessary to a proper industrial development of commerce as the incorporation of national banks was to a proper credit development of finance. Every business man understands the importance of a currency having a national basis as compared with a currency having a state basis. State banks have not ceased to exist because national banks have been created, nor will business corporations operating under state charters cease to exist when such corporations are chartered under a national law. The sphere of action for both classes of corporations is well defined. The general welfare will be well served by having both classes of corporations correctly developed. State examiners for state corporations, national examiners for national corporations, is the true course of correct organization. The states should never permit federal examiners to invade the privacy of domestic corporations of their own creation. If the states have not the ability properly to regulate corporations of their own creation they should be prohibited from creating them. TRUSTS IN THE TOILS OF THE LAW. 215 TRUSTS IN THE TOILS OF LAW. The United States Supreme Court has upheld the Texas Anti-Trust Law in the case of the WatersPierce Oil Company, involving its right to do business in that state. The opinion sustains the decisions of the state courts. It did this upon the ground that the state laws imposed a condition which the oil company had accepted, and, therefore, was without ground of complaint. The suit grew out of the charge that the oil company violated the statutes of the state of 1889 and 1895 against illegal combinations in restraint of trade, thereby incurring a forfeiture of its permit to do business in the state. A case under the anti-trust law of Arkansas, enacted by the last Legislature, was decided by Justice Meisner of Little Rock, June 8, 1900. It was a test case brought by R. W. Walker & Co. against Dickinson Brugman, editor of the Arkansas Gazette, for an ice bill amounting to $20. Brugman did not deny owing the money, but asserted that the contract was void, inasmuch as Walker was a member of a pool or combination known as the Ice Trust. Ice dealers and manufacturers were placed on the witness stand, who testified that all manufacturers and dealers sold ice at a certain price and required retailers to do likewise. The court read that part of the statute which provides that if there shall be an understanding between individuals to regulate or fix the price of any manu 216 TRUSTS IN THE TOILS OF THE LAW. factured article they shall be deemed guilty of a conspiracy to defraud, and held that there was an understanding among the six ice dealers of the city to regulate the price of ice, and, consequently, could not maintain an action for the price of the article sold because it is a contract made in violation of the antitrust act. Mr. Brugman's object in not paying the bill was to test the law. A blow at trusts, industrials and all kinds of corporations formed to control some specific commodity has been given in a decision of the appellate division of the Supreme Court of New York. This decision forbids executors, administrators and guardians of trust estates to invest those funds in the stock of a trust or industrial corporation. It is held by the court that combinations formed to control the market prices are illegal and unauthorized. The decision was reached in the case of the controversy over the estate of the late Alvah Hall. Portions of the funds were invested in the umbrella trust, which collapsed after an existence of two years. The decision requires that the trustees shall pay over to the estate the sum put into the umbrella trust. Judge Hutchinson has found the Photo-Engravers' Association of Chicago guilty of conspiracy under the anti-trust law of Illinois. The punishment is a fine of from $200 to $1,000, or one year in the county jail, or both fine and imprisonment. This evidence shows that trusts can be controlled by law and that it is being done. |