FOR more than a third of a century the trust

question in the United States has been in the forefront of unsettled public issues. From the time when the Legislature of Pennsylvania (1872) revoked the charter of the South Improvement Company-a precursor of the Standard Oil-down to the flood of anti-trust bills recently before Congress, there has not been a year in which the subject was without consideration in legislatures, courts, or political conventions.

Probably not over a generation ago there was no question as to the title of competition to be recognized as the law of ultimate appeal in things economic. The late Edward Atkinson expressed this principle of economic freedom as well as any one. "The natural law of free exchange and competition," he declared, “evolves high wages, low prices, large product, and a lessened margin of profit on each unit of prod

That is the law of progress." Within a quarter century or less there has arisen in commerce, in industry, and in finance a compar


atively modern form of corporate organization. A combination of capital resources, of mechanical equipment and of national or international market control has found embodiment in what is known as "Big Business," or "The Trusts." In its short history it has apparently proved its capacity in many different fields to subordinate to its sway the principle of competitive regulation.

1. Typical Trust Definitions

In the ordinary sense a trust is correctly understood to be a combination of corporations occupying under public charter a more or less dominant position in its own field of economic service. The legality or illegality of its operations depends on the purpose of its practices or agreements in its dealings with other interests. "The object and intent of the combination," as the United States Court says, "determines its legality."

Hobson, the British economist, defines trusts as "a class of syndicates which have established a partial or total monopoly in certain productive industries by securing the ownership of a sufficient proportion of the instruments of production to enable them to control prices." *

A trust, according to S. C. T. Dodd, the wellknown Standard Oil attorney, "embraces every

*Gold, Prices, and Wages, J. A. Hobson. Methuen & Co., London,

act, agreement, or combination of persons or capital believed to be done, made, or formed with the intent, power, or tendency to monopolize business, to restrain or interfere with competitive trade, or to fix, influence, or increase the prices of commodities.” *

Easily the most elaborate definition of the trust is in the New Jersey laws of 1913, Chapter 13, in which a trust is defined as a combination or agreement to do any one of six distinct acts, each of which is declared to be illegal and indictable.

Probably the most striking feature in the trust situation has thus far been the apparent contradiction between contemporary legal standards and the main tendencies of economic life as they relate to values and prices. The core of the question is the location of power over prices of commodities and services. Here we see wrought out within comparatively few years a re-partition of modern business between the two colossal forces in economic policy—combination and competition. The great industrial governments of the world are divided on the question as to which side of the scale the State should cast in the weight of its influence. Great Britain manifestly regards her policy as following the traditional lines of competitive freedom. Germany, on the other hand, is confessedly the

* The Truth About the Trusts, John Moody. Moody Publishing Co., New York, p. xiii.

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