Trust (19th century)

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A special trust or business trust is business entity formed with intent to monopolize business, to restrain trade, or to fix prices.^[1] Trusts gained economic power in the U.S. in the late 19th and early 20th centuries. Some but not all were organized as trusts in the legal sense. They were often created when corporate leaders convinced (or coerced) the shareholders of all the companies in one industry to convey their shares to a board of trustees, in exchange for dividend-paying certificates. The board would then manage all the companies in 'trust' for the shareholders (and minimize competition in the process). Eventually the term was used to refer to monopolies in general. In 1898, President William McKinley launched the 'trust-busting' era when he appointed the U.S. Industrial Commission. The report of the Commission was seized upon by Theodore Roosevelt, who based much of his presidency on "trust-busting".

Prominent trusts included Standard Oil,^[2] U.S. Steel,^[3] the American Tobacco Company^[4] and the International Mercantile Marine Company.^[5]

This kind of trust led to the term "antitrust laws" in the United States for what the rest of the world calls "competition laws." The pioneering United States antitrust laws, especially the Sherman Antitrust Act, were initially aimed at breaking up these trusts.

[edit] References

[edit] Bibliography

• John Moody (1904). The Truth About The Trusts: A Description and Analysis of the American Trust Movement. New York: Moody Publishing, XIII. OCLC 1832950. 

[edit] See also

• Cartel, a modern implementation