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provision for selling the remainder of the domestic production at a remunerative price. These so-called pools were not stable. Ordinarily, within a year, some one of the parties to the agreement would be discovered distilling more than his proportion of the normal output, or selling at a price below that agreed upon, and the result would be a break in the pool.

Agreements for fixing the price of the product or for dividing territory were perhaps most common. A noteworthy case is that of the Addyston Pipe Company,* in which the different parties agreed not to enter into competition with one another. The contract was to be carried out in the following way: a committee consisting of a representative from each corporation entering into the agreement set the price for each job of work, and the corporation that offered to the combination the largest bonus for the job, secured it, the others putting in higher bids to make an apparent competition. After payment of expenses the bonus was then divided among the remaining corporations. It will be seen that, although in this agreement there was no uniform fixing of price or of profits, competition was done away with, and the agreement may fairly be considered as one tending to create a monopoly, or, at any rate, to bring about all the evil effects of a monopoly and to oppress the consumers.

An agreement of a quite different nature was formed some years ago among coal dealers in one of our cities. A committee of several of the leading dealers determine the price at which coal shall be sold by all wholesalers and retailers. They also keep a supervision of the trade, seeing that full weight is given, that the quality of coal is exactly as represented, and that the consumers are protected against dishonest dealers as well as the dealers against excessive competition. If any dealer cuts the price to any of his consumers, he is heavily fined by the central committee. If he refuses to pay the fine, an agreement with the mines stops his securing a sufficient supply of coal to meet the needs of his customers. The initial cause of this agreement was said to be excessive competition. Some of the dealers, finding the prices so low that they could not make a profit, came to the conclusion that some others must be giving light weight. An investigation and a reweighing of several loads proved this. The combination was then formed, which may be said to exist primarily to protect the dealers and incidentally the consumers against this unfair kind of competition, which resulted to the detriment of both. Prices are fixed at a rate which is said to give only moderate profits to retailers and wholesalers, and fair prices to the consumers; while the consumers, as has been said, are secure against light-weight loads and poor quality of coal. It should be noted that those who fix the "fair" prices are interested parties; but experience may have shown them what is really wise and fair for all. All those dealers who are willing to conduct their business fairly and honorably at the rates fixed are allowed to make a reasonable profit. An experience of several years seems to justify this regulative combination which, through arrangements with mines, also has been able to do effective work.

*United States v. Addyston Pipe and Steel Co., et al. 78 Fed. 712, 85 Fed. 2711 175 U. S. 211.

Owing to the fact that ordinary pools and agreements of the kind mentioned above cannot usually be well enforced, the Standard Oil Company in 1882 organized the Standard Oil Trust, a form followed afterward by the so-called Whiskey Trust (the Distillers' and Cattle Feeders' Trust), and also by the Sugar Trust. The form of organization was substantially this: the stockholders of each of the separate companies assigned their stock to a certain number of trustees—seven or nine giving thus an irrevocable power of attorney to these trustees to vote the stock as they saw fit. The trustees issued trust certificates to the stockholders in lieu of their assigned stock, and it was upon these certificates that profits were divided. All of the net earnings from all of the different members of the combination were put into a common treasury, and whether one of the manufacturing establishments was running or closed made no difference in the profits received by the stockholders of that special company. The trustees, by having in their hands the voting power of all of the separate corporations, of course elected whatever officers of the corporations they saw fit, and directed thus, as seemed to them wise, the affairs of each separate corporation.

The decision* of the New York Court of Appeals against the Sugar Trust, declaring that the act of a corporation in thus putting its stock into the hands of trustees and abdicating its own independent power of selfdirection, was ultra vires, together with hostile legislation in other states and an apparent hostility of public

The People of the State of New York v. The North River Sugar Refining Co.' 121 N. Y., 582.

opinion, led the old Trusts to give up this form of organization and to reorganize. The Sugar Trust and the Whiskey Trust organized as individual corporations, the certificate holders becoming stockholders in a new corporation which owned all of the plants that had been owned by the individual corporations before the formation of the Trust. In both cases there was substantially no change in the management, the trustees of the former Trust becoming directors of the new corporation and the officers of the new corporation remaining substantially the same as the officers of the Trust. It was a change in name, a change in technical legal form, but no change as regards the practical management of the organization.

The Standard Oil Trust followed a different plan. It so happened that the nine trustees of the Trust owned a large majority of the Trust certificates. The Trust then dissolved into separate corporations, the holders of Trust certificates being given shares pro rata in each one of the twenty corporations into which the Trust was divided. Inasmuch, however, as the former trustees then owned a majority of the stock in each one of these twenty different corporations, they were enabled, without any formal organization among themselves, to direct the affairs of all these corporations in perfect harmony just as efficiently as they had done while acting as trustees and holders of a majority of the Trust certificates. Here, again, there was a change in form; but in this case, instead of the Trust becoming a single corporation, it became twenty corporations, the majority of the stock in each being held in the same few hands, and all of the corporations being managed in perfect harmony.

Later another change in this company of a different kind was made. One of the separate corporations, the New Jersey corporation, increased its stock, and so arranged that it could take control of the business of all of the different companies. The stocks of the separate companies were then exchanged gradually for the stock of the New Jersey corporation, and in the course of time this one corporation owned substantially all of the stocks of the twenty different corporations, so that the management thereafter became not merely practically one, but also technically and legally one under the directors of one corporation, they voting all the stock of each of the corporations. It is practically a return to the Trust form in all but name. This was the third period, that of the “holding" corporation. Again in 1911 as the result of a suit by the United States Government orders were given by the Supreme Court of the United States for the dissolution of the company not because its form as a holding company was illegal but because its practices which were enumerated in the decision had resulted in monopoly leading to undue restraint of trade, thus bringing it within the act. It was, therefore, broken into 38 companies which are not to have common directors or officers. The new companies have, however, largely common owners, and there seems still to be harmony of action. The profits and stocks have increased in value and no result of importance seems to have been reached.

A voting Trust, somewhat different from the kinds of Trusts described before, is also frequently found. In this form the Trust applies ordinarily only to one corporation. The holders of a majority of the stock of this

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