Every such report and balance-sheet shall be read before the company at the next general meeting.

Any auditor who shall wilfully or through gross negligence certify that any false or fraudulent balance-sheet or account is correct, shall be civilly responsible to any party injured.

Private Balance-sheet

The auditors of every company before making a report pursuant to the last preceding section shall require, and the directors and president of the company shall without unnecessary delay supply to the auditors, a balance-sheet, in this act referred to as the private balance-sheet, giving the details on which the shareholders' balance-sheet is founded and showing amongst other things the amount of deduction, any, for debts considered to be bad or doubtful.

if

The private balance-sheet must be signed by the president, treasurer, and by at least two of the directors of the company when there are not more than three directors, and by three at least when there are more than three directors.

The auditors may require the directors, treasurer, and president of the company to supply in writing, signed as hereinbefore provided, any further details or information affecting the balance-sheet or any particular item comprised therein, and shall sign a certificate at the foot of the private balancesheet stating whether or not all their requisitions as auditors have been complied with.

The private balance-sheet shall not be issued to the members of the company, but shall together with all such further details and information as aforesaid be kept by the directors as part of the records of the company.

Annual Report

Every corporation organized under this act shall annually file in the office of the Secretary of State for use of the

Comptroller and other state officials acting in their official capacity, but not for public inspection, and also in the registered office of the company, a report, which said report shall be at all times open to the inspection of the stockholders, upon request, and a copy of such report shall be furnished to any stockholder by the corporation upon the pre-payment of a reasonable charge for making the same, which charge shall not exceed the sum of ten cents per folio of one hundred words.

Said report shall be filed within three months after the first of January in each year; shall be authenticated by the signatures of the president and one other officer of the company, or by any two directors and shall contain more than the usual report including the balance-sheet in detail.

For failure to file the annual report the corporation shall forfeit $300, and-besides what is far more important—

If such report be not so made and filed before the time appointed for the holding of the next annual election by the stockholders, all of the directors of any such domestic corporation in office during the default shall at the time appointed for the next election, and for a period of one year thereafter, be thereby rendered ineligible for election or appointment to any office in the company as directors or otherwise.

But provision is made to exempt a director who is not at fault, and who makes personally, so far as possible, such a report.

The Secretary of State shall upon application furnish blanks in proper form and shall safely keep in his office all such statements, and issue to the corporations filing the same his certificate therefor.

Merger and Dissolution

Corporations may be merged; but only on vote of twothirds of the stock of each corporation, and any dissenting

stockholder is to have his stock taken for cash at an appraised valuation.

Provision is made for voluntary dissolution of corporations.

Monopoly Act Not Repealed

Nothing in this act shall be construed to repeal any of the provisions of the existing laws of this State regarding monopoly or the formation of monopolies.

APPENDIX D

OUTLINE HISTORIES OF REPRESENTATIVE TRUSTS IN THE UNITED STATES

1. STANDARD OIL COMPANY

2. AMERICAN SUGAR REFINING COMPANY
AMERICAN TOBACCO COMPANY

3.

4.

5.

UNITED STATES STEEL CORPORATION
INTERNATIONAL HARVESTER COMPANY

1. STANDARD OIL COMPANY*

THE Outline history of the American oil combination falls naturally into three periods: 1872 to 1882; 1882 to 1899; 1899 to the present.

In 1870 John D. Rockefeller, William Rockefeller, and several others who, prior to 1870 and under three separate partnerships had been engaged in refining and shipping oil, organized a corporation known as the Standard Oil Company of Ohio. The business of the three partnerships was transferred to this corporation. Other like businesses were acquired so that by 1872 the combination had acquired nearly all of the two score of oil refineries located in Cleveland, Ohio. Preferential railway rates were secured by this corporation and by means of this advantage, competitors were virtually forced to join or to quit business. The corporation acquired from time to time a large number of other refineries in New York, Pennsylvania, Ohio, and elsewhere.

*This story is compiled from the opinion of the U. S. Supreme Court in the Standard Oil Company of New Jersey et al. v. the United States (221 U. S. 1.), from the U. S. Bureau of Corporations Report on the Petroleum Industry, from Moody's and Poor's Manuals of Industrials, and from Stevens' Industrial Combinations and Trusts.

See p. 182 for treatment of employees by The Standard Oil Company.

Some refineries acquired were dismantled. Many of the properties acquired were kept as apparent competitors of the Standard.

Control of pipe lines for transport of oil from the oil fields to the refineries in Cleveland, Pittsburg, Titusville, Philadelphia, New York, and New Jersey was obtained by the oil combination after hard battling in the hot competitive style of the American late seventies and early eighties.

By 1882 the combination had won control of about 90 per cent. of the business of producing, shipping, refining, and selling petroleum and its products.

The second period begins with the drafting of the trust agreement in 1882. Nine trustees issued Standard Oil Trust certificates to represent the interest in the forty corporations and the various other properties held for the benefit of the combination. Under the trust agreement these nine trustees managed the entire business. They were empowered to form additional corporations in various states. Soon after they organized the Standard Oil Company of New Jersey and the Standard Oil Company of New York with capital stocks of $3,000,000 and $5,000,000 respectively, subsequently raised to $10,000,000 and $15,000,000. By 1888 the trust had interests in the following oil corporations: