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EDWIN BURRITT SMITH.

SPECIAL ADDRESS.

TRUSTS.

EDWIN BURRITT SMITH, OF CHICAGO.

The word “Trust” has become a term of indefinite meaning. It was appropriately employed a few years ago to designate the holding by trustees of the controlling stocks of several competing corporations to effect their practical consolidation. The oil and sugar trusts were notable illustrations of this form of industrial combination to limit or destroy competition, The term "Trust," as now used, may be loosely de. fined as a combination of the productive forces in a given industry to create a monoply by means of which to control production, reduce expenses, and raise prices. Its final and most perfect form is the monopoly corporation to own and operate all the properties involved. True, the term covers all "pools," "associations," "understandings," "gentlemen's agreements," and combinations of every sort to restrict production, reduce expenses, and control prices. These are, however, but steps in a vast industrial evolution, or revolution. They are steadily

, . making way for the incorporated trust. The real question lies between organized society on the one hand and the mighty monopoly corporation on the other. When the final issue is joined it will be found that the forces of monopoly have retired from the open field of clearly illegal engagements to the strongly fortified camp of incorporation.

SPECIAL ADDRESS.

Every lover of definite language, every lawyer who cherishes the grand old word “trust” as used in equity jurisprudence, joins with Mr. Aldace F. Walker, in deploring its transformation in popular speech into a term of opprobrium. To lawyers it will hereafter have two distinct meanings, one definite and true in equity jurisprudence, the other indefinite and opprobrious to describe combinations for ends hostile to public policy.

The recent rapid formation of trusts, “the rush to industrial monopoly," is the source of great and growing popular apprehension. It seems to be working in our midst a stupendous industrial revolution. The end cannot be foreseen. The gathering storm may prove to be a destroying cyclone, or but the precursor of a better industrial day. Be this as it may, it is now both possible and wise to inquire into the legal status of the monopoly corporation and to take stock of the resources with which organized society is equipped to meet this modern form of feudalism. This calls for a somewhat elementary inquiry into the nature and function of the corporation and its proper relations to the individual and to organized society.

The individual is the natural industrial unit. In a state of entirely free competition each individual would freely compete with all others. None would receive aid from any other or from the law of the land. Whether these conditions long prevailed anywhere, or were indeed possible save in primitive society, we need not here inquire. Whether they were ever, or would now be, desirable, it is too late to consider. We may note in passing that the assumption by the courts that they are still largely both possible and desirable lies at the root of many decisions at common law touching the illegality of “monopolies” and agreements in restraint of trade.

If they had prevailed, every business would be owned and conducted by an individual.

The land, its control and cultivation, long almost exclusively occupied man. Trade was limited and mainly local.

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