The Regulation of Industry

By Dudley F. Pegrum | Go to book overview

CHAPTER VII
Integrated Combinations

The Trustee Device

COMBINATIONS in the United States have taken on a variety of different forms. They may be conveniently grouped, however, into two main types: (1) those that arise from integration under single ownership or control, and (2) those that are the result of some form of agreement or understanding among otherwise independent concerns. The first type is dealt with in this chapter; the second in the following one.

Most of the present-day industrial giants have emerged from the combining of previously independent enterprises under single ownership. In the earlier stages of the movement the trustee device was the most common method employed to bring about integration. It was used solely, however, as a means of effecting monopoly in a particular field. The example was set by the Standard Oil Company of Ohio, which established a trust in 1879. To the trust, which was administered by nine trustees, the stocks of competing oil companies, which controlled some 90 per cent of the refining capacity of the country, were transferred in return for trust certificates. The success of the Standard Oil trust invited imitation, and in the course of the next ten years a large number of other combinations were formed on the same basis. 1

This method of organizing combinations came to an early end as the result of unfavorable court decisions. The sugar trust was dissolved by the decision in New York v. North River Sugar Refining Company ( 1890). 2 The New York Court of Appeals held that the trust was in substance and effect a partnership of twenty corporations and that it was a violation of law for a corporation to enter into a partnership. The court ordered the forfeiture of the charter and the liquidation of the corporation. This was a common-law decision.

The Standard Oil trust was dissolved by a decision of the Supreme

____________________
1
See above, Chap. VI, pp. 128 and 143.
2
121 N.Y. 582 ( 1890).

-158-

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The Regulation of Industry
Table of contents

Table of contents

  • Title Page iii
  • Preface vii
  • Table of Contents xi
  • Chapter I - The Problem and Its Setting 1
  • References 15
  • Chapter II - Institutional Arrangements 17
  • References 42
  • Chapter III - Forms of Business Organization 44
  • References 72
  • Chapter IV - The Scale of Enterprise 74
  • References 100
  • Chapter V - Price Policies 102
  • References 125
  • Chapter VI - The Combination Movement in The United States 127
  • References 156
  • Chapter VII - Integrated Combinations 158
  • References 173
  • Chapter VIII - Combination by Agreement 175
  • References 195
  • Chapter IX - The Law and Industrial Control 197
  • References 231
  • Chapter X - Anti-Trust Legislation 233
  • References 258
  • Chapter XI - Judicial Enforcement of The Anti-Trust Laws 260
  • References 310
  • Chapter XII - The Federal Trade Commission 312
  • References 359
  • Chapter XIII - Patents 361
  • References 387
  • Chapter XIV - International Combinations 389
  • References 421
  • Chapter XV - Control of the Corporation 423
  • References 439
  • Chapter XVI - The State and Economic Life 440
  • References 458
  • Chapter XVII - The Problem of National Policy 461
  • References 481
  • Table of Cases 483
  • Index 489
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