Trusts OR Industrial Combinations IN THE United States Ernst VON Halle ^ fyxmll Uttivetisitg pitotg THE GIFT OF U:^ .ar.....fa:.Mv:dU... A^..A.1.U.5(c < erg ilol ssS§ c5 1 3 3 B P E2. 3 CD 2h CO SO 1 a o pi p- 3 o D pi o o CD ??eo CD 92 ii 1? CD 00 p 9 1- 1 1 CD B p s o 3 CD 2. 3' » 1 1 in B 1 c,g » B ■■ ^'„ ?" 5"" S CO ■ 1 CO « ll p B ^ P-" 11 a' 11 II CO* 3 1 1 i CO ■»»g It! ---^■^ c B CO cr B 1 3* 1 B ? U 498 85 93 — — — — — — 50 36 37 42* 18+ — ~ ~ ~~ 65 32 71f fl04 Hiioi 34 73f 71} 94} 97 lOOf — — — — ■ — — — — — — — ^ 1890, trust changed to company : first row common stock, second row pre- ferred stock, third row trust receipts. 2 1891, trust changed to company. * 1890, trust changed to company, row 1 stock, row 2 trust receipts. * 1891, row 1 common stock, row 2 preferred stock. fi Eow 1 common stock, row 2 preferred stock. Eeorganized 1894; has now the name United States Cordage. 84 INDUSTRIAL COMBINATIONS. QUOTATIONS OF TRUST CERTIFICATES AND STOCKS. 1892 1893 1894 Names. 1 1 1 1 o 3 S 'f o 1 o 3 CO 1, s 1 ■s o 3 W. U. Tel. . lOOf 82 95| 101 67} 82 1 92} 80} 87 47J 82} 43J 51} 24 281 34f 21} 23 Am. Cot. Oil . 87} 63} 82} 84 50 H 79| 63 68} Distill'g&C. F. 72 1 44} 66} 66| 10] 23 30| 7^ 10 Nat. Lead . . jsif I99t 30 1 81 46 93} 52} 95J 18 48 23 45 92} 22 67 37f 84 Sugar Refin. . 115} 107| 78} 90 111} 99} 184} 106 61| 661 81 84 114| 100} 75| 79} 89f 90} Nat. Linseed Oil 45 27 41 41 14 V 25 25 14 — Chicago Gas . 99} 71| 89| 94} 89 61f 80 58} 74 Nat. Cordage . •142} 123} 91} 100 138} 112} 27 1 269 12 42 20 23} 41 5V 8} 12 Am. Tobacco. 126 ^115 106 90 120 110 121 110} 43 75 75 92 1 107 110 69} 91} 98} r 46^ 29} 31 34 1 6 — 12 5} — Nat. Starch . 4 106 100 102 103} 49 — 56 40 — 1109 97 102 103 3f 23 — 35 20 — U. S. Rubber . 48| 36| 45 J60| '199} 17 50 90 45} 99} el ^^ 33 79} 8 44| U. S. Leather " ~ 52} 60| 1 Row 1 preferred, row 2 common ^tock. * Both rows iucluae now assessment of $ 10. 8 Row 1 common stock, row 2 preferred stock. * Row 1 common stock, row 2 trust preferred stock, row 3 second preferred stock. 6 Row 1 common stock, row 2 preferred stock. 8 Row 1 "common stock, row 2 preferred stock. NATURE AND EFFECT OP TliUSTS. 85 QUOTATIONS OF STOCKS IN 1893.1 Jauuaky. rEBStTAEY. Makch. Names. 1 1 o hi 1 1 1 5 w Amer. Cotton Oil Co. Pref Amer. Sugar Eef. Co. Pref Amer. Tobacco Co. . Pref 47| 83i 1.32 1 104i 121 llOi 94^ 66f 114i 143J 118i- 41 52J 96 34| 103i 103i 199f 84i 50 46^ 99 101 42i 82 mi 991- 113 10o| 85J 36 1 109| 135| llOJ 38 44i 92f 251 102 96i 196i 83 50 42J 941- 94| 51 84 134i 104 117i 108 92f 44^ 111| 147 75 117 40 50 95 27 101 93 1 198 J- 84i 56^ 465- 97' 98 J 45| 80 lllj 99f 104 104|' 85| 32 103 i 136 57 109 36 i 38i 88 20i 894 82 192^ 83| 54f 43 921- 94|: 51i 83i 126f 102 107^ 106 91| 371 107f 6il 111 37| 42i 91i 24| 90 197-1 83| 58J 99 96 1 46 79 x92J x94 90 99f Chicago Gas Co. . . Dividend scrip. . . DistiU'g & Cat. F. Co. General Electric Co. Pref National Cordage Co. New certificates 1st assessment paid 2d assessment paid Pref 1st assessment paid 2d assessment paid Nat. Linseed Oil Co. . Nat. Lead Co. . . . Pref Nat. Starcli Mfg. Co. 1st pref x84f 30 98 105J 341 35 78J 20J 2d pref Pullman Palace Car . . Silver Bullion Certifs. . U. S. Eubber Co. . . . Pref Western Union Tel. . 82 190J 821 42 93 921- 1 Compiled from tlie Commercial and Financial Chronicle, Vol. Iviii, No. 1489. 86 INDUSTRIAL COMBINATIONS. QUOTATIONS OF Apeil. May. JlJNB. Names. 1 ■a 5 O 1 w 1 •s 1 Amer. Cotton Oil Co. . Pref Amer. Sugar Ref. Co. . Pref Amer. Tobacco Co. . . Pref Chicago Gas Co. . . . Dividend scrip . . . Distill'g & Cat. F. Co. . General Electric Co. . . Pref National Cordage Co. . New certificates . . 1st assessment paid 2d assessment paid . Pref 1st assessment paid 2d assessment paid . Nat. Linseed Oil Co. . . Nat. Lead Co Pref Nat. Starch Mfg. Co. . 1st pref 2d pref Pulman Palace Car . . Silver Bullion Certifs. . Southern Cotton Oil . . U. S. Rubber Co. . . . Pref Western Union Tel. . . 50J 82| 107f lOOJ 101 102| 93 33i 108f 69 llOJ 37 44f 87i 28 93 88i 206 83i 60f 99 96,| 42 1 78 98 1 96 764 102 82f 22i 97 57f 101 30 36f 79f 19i 93 85 197^ 82| 5H x90 88i 44 78i 99i 96J 78 96i 83f 25f 97J 57 101 31 37i 81 17 87 180 841 44 67i 91 88i 30 68 62 68 58 88J 59 13 58 9f 39 25 26 67 12 80 170 84 43| 33 69 80J 38 93 88J 67 88 74J 24^ 75J 88 17i 54 22^ 33 12^ lOi 60 62 174f 83J 46 811 84i 33 68 77^ 77 53J 84 65J 15i 65J 88 n 40 19J 27 65J H 60 25 164 62 70 79i NATUKE AND EFFECT OF TEXJSTS. 87 STOCKS IN 1893. July. August. September. OOTOBEK. November. Deoembek. M i3 1 a 1 1^ 1 ■s 3 1, a 1 ■s i 1 .£3 a 1 3 353- 24 33* 25 36 32 39} .33* 38* 29 31 26* 66^ 50 65 54^ 72 64 77* 69 77* 70 69} 60 85f 61:^r 86 64* 93 1 82 105* 86* 102* 80 m x78| 82 f 66?, 85* 68 90 82} 94 86 92* 81* 85* x81* 65 43 73* 50 80 69 92 77* 92| 79* 82* 68 83 75 82* 75 92 86 100 93 99* 97* 99* 90 70 1 39 55 40 64} 52f 69f 56} 68 58} 69* 59f — — — — 1.30 1.10 1.25 1.10 1.50 1.15 140 120 24i 12 23f 14 27 18J 35} 25J 33} 25* 30} 18f 72i 30 51* 36 49i 37* 52 40| 48* 33* 39* 31} 11 u T" I — I I — — I — 15 10 iif 7 — — — — — — . — — — 23* 13 30J: 21| 29} 20} 261 18* m 16* 69 48 35 46 22 46 — — — — — — _ 69 54 65} 46 54* 49 48 42 21^ 14* 19?- 14^ 19* 16* 19 17^ 20} 17 29 20} 31 18* 29J 21* 32* 24* 29| 25} 28} 22| 26 21 69 48 69* 53 74} 67* 80* 70 78 63 71 63 9 6 8} 6 IH 8 IH 8 12 49 55 10} 49 40 6* 6 31 23 25 23 , , _ , _ 163 J^ 133 155 132 173} 155 177 166 175} 170* 175 162 75^ 69 78* 72| 75} 73 74 73f 70* 70* — — 38 25 29 17 35 29 45 29} 44} 38 47f 39} 77 65 68 51 77 75 89* 75 89 83* 90} 84 83 67i 81 72i . 84f 78 93| 80} 91* 85| 92} 81 88 INDUSTRIAL COMBINATIONS. paid by the above companies in the years after 1890.1 The opinion of financial circles as to the value of securities of that sort may be seen from a table of quotations for a longer period; a third table gives, for the same securities, the monthly quota- tions during the panic-year 1893, with the addi- tion of a few other leading companies, and the price of silver bullion certificates in New York. The foregoing tables show remarkable features, which will be discussed later from a general point of view.^ A great and striking difference exists in the position of the several companies, in consequence of their methods of management. Some of them, as the American Tobacco Company and the Stand- ard Oil Trust, are model organizations, which look forward only to a continual betterment of their position. The same is true of the reorgan- 1 From BradstreeVs. 2 The financial results have by no means been in all instances as favourable as were expected. This may to some extent be ascribed to the enormous salaries voted to the managers by the boards, i.e. their friends. A disproportionate amount of the earnings is absorbed in this manner ; and this, of course, ab- sorbs a good deal of the benefits derived from economies. On the other hand, it is argued that men possessed of extraordinary business ability would not otherwise be induced to offer their services. NATURE AND EFFECT OF TRUSTS. 89 ized Cotton Oil Company, and as far as business management is concerned, of the Sugar Refining Company, and others. Some, however, have been subject to the most scathing criticism. Thus far two great disasters have gone on record: in 1889 the old Cotton Oil Trust suspended payments, and on May 4, 1893, the National Cordage Com- pany went to pieces. Both were ruined through very apparent mismanagement. The managers misused the companies' funds for gambling pur- poses on the exchanges, and did not concern them- selves with the development of legitimate business, but with Credit Mobilier transactions, and specu- lations for rapid gains. It is one of the most dis- astrous holes in the corporation law of the United States, that stock companies are not forbidden to buy or sell their own securities. In Europe such transactions have been punishable for many years. It has occasionally happened in the United States that managers, when successful in opera- tions on the exchanges, have pocketed the profits, but when unsuccessful, have thrown the loss on the stockholders. In the Whiskey, Linseed Oil, and Starch trusts, actual crises have not yet occurred; but in 1892 the Distilling and Cattle Feeding Company was very near the verge of ruin, and to-day it is again 90 INDUSTRIAL COMBINATIONS. a question whether it will not go to pieces en- tirely.^ The two others were both, during 1893 and 1894, regarded as being in a situation but little less delicate. How little confidence the public has in the so- called " Industrials " may be seen from the fact that the second preferred stock of the American Tobacco Company, which has always regularly paid 12% dividend, was quoted during the crisis not much above 60%. Again, there was the rapid fall in values by which the disaster of the National Cordage Company was reflected in all the other trusts.^ The cordage shares fell, be- tween May 1 and May 7, 1893, from 57 to 15|-, preferred from 101 to 39. General Electric com- mon declined from 79^ to 58 ; American Sugar 1 Since the above was written the progi-ess of events has been rapid. In 1894 the Eastern wholesale merchants in the liquor trafS.c, dissatisfied with the business methods of the Distilling and Cattle Feeding Company, combined and started distilleries of their own. For a while it seemed as if the two parties were about to come to terms again, but recently the war has been reopened. The leaders of the Whiskey Trust declare this and the recent bad times to be the causes of the impending disaster, which they propose to avert by a new assessment on the stock. Their opponents think the troubles are due to inside specula- tions on the exchanges. ^ The Financial ncvicrv, 1894, pp. 105, 106 ; The Financial and Commercial Chronicle, vol. Iviii., May 7, 1893. NATURE AND EFFECT OP TRUSTS. 91 common from 99|- to 62 ; Chicago Gas from 83| to 59 ; Whiskey from 25| to 13; National Lead from 37^ to 26; Cotton Oil from 50^ to 30.i Before going into a further discussion of the details, we must, in a few words, touch upon the formal changes which have taken place in conse- quence of the recent anti-trust legislation. 1 The Financial Beview, 1894, pp. 105, 106 ; The Financial and Commercial Chronicle, vol. Iviii., May 7, 1893. 92 INDtTSTEIAL COMBINATIONS. CHAPTER VI. THE LATEST PHASE OF COKPOEATION LAW, AND ITS EFFECT ON THE FORM AND NATTJKE OF COMBINATIONS. I. The essential provisions of the anti- trust legislation passed in the different states are sum- marized by Mr. Dodd^ as follows (the word " persons " being used for " persons, corporations, associations, and partnerships," and the word " agreement," or " attempt," for " contract, com- bination, conspiracy, understanding, arrangement, or act ") : — In sixteen states, it is a criminal conspiracy for two or more persons to agree to regulate or fix the price of any article, or to fix or limit the quantity of any article to be manufactured, mined, produced, or sold. Regulating and fixing prices necessarily include increasing and reducing prices, but in most of the statutes these are also specified as criminal. In six states, it is a crime for two or more persons to enter into any agreement whereby " full 1 "Present Legal Status of Trusts," Harvard Law Beview, vii. p. 164. CORPORATION LAW. 93 and free competition in production and sale" is prevented. In two states and one territory, it is a crime for two or more persons to " attempt to monopolize " any article. In Nebraska, two or more persons are guilty of conspiracy if they agree to suspend or cease the sale, of any manufactured products, or if they agree that the profits of any manufacture or sale shall be made a common fund, to be divided among them. In Texas and Mississippi, besides the crimes of fixing, regulating, increasing, and reducing prices, it is also a crime for persons to settle the price of any article between themselves, or between themselves and others. In New York, it is a crime to enter into any contract whereby competition in the supply or price of articles m common use for support of life and health may be restrained or prevented for the purpose of advancing prices. ^ The bias of public opinion against trusts proper was bound to produce some effect; especially as some decisions of the courts^ gave rise to 1 Anti-Trust Laws of the United States, Illinois and Texas ; Appendices IV. -VII. ^ People versus North Eiver Sugar Refining Company, 121 94 INDUSTRIAL COMBINATIONS. the fear that the judiciary would not be found willing to recognize the legality of the "trust" agreements. It was considered wise to yield in the matter of form. The trusts were transformed into companies. Already in 1887 Cook pointed out^ that although in New York and several other states a stock company could not own the stock of other companies, this has always been permitted in some other places. "Maine, Connecticut, and New Jersey, since time immemorial, had been the snug- harbour of roaming and piratical corporations. Afterwards they were outdone by Kentucky and West Virginia, whose corporation statutes are marvels of alluring attractiveness for the incor- poration of enterprises located in other states."^ Seeing what financial advantages these states enjoyed in consequence of their liberality, what large revenues they drew from their incorporated "guests," many of the others followed them in changing their legislation and practice. As citi- zens of one state may establish a stock company in any other state, and as a stock company, in consequence of the interstate comity, is free to New York, 582 ; State versus Standard Oil Company, 30 XJ. S. Rep. 279. 1 "Trasts," p. 6. 2 Cook, "Corporation Problem," pp. 107-110. COEPOKATION LAW. 95 transact business all over the country,^ — with the one exception of ^'wasi'-public corporations, such as railroads, gas companies, etc., — ^it has been very easy to find a new and more com- fortable home for prosecuted trusts. We now had the strange spectacle of the enact- ment of the most severe laws against trusts and combinations on the one hand, and on the other of a transformation of the corporation law which facilitated a remodelling of the trusts, and their continued transaction of business in the state. Meanwhile a change in the taxation laws was pro- vided in many states, favourable to foreign corpo- rations.^ This removed the very difficulty which had been one of the chief reasons why originally the form of " trusts " had been chosen ; the old laws of several states would have compelled a foreign company to pay taxes on its full sto.ck or transactions. The most popular states for chartering companies are at present New Jersey and Illinois. The former has attracted across the river nearly all corporations doing business in New York. In New York, the courts and public opinion are in favour of large companies ; but the charter is too expensive, taxation too high, and 1 Cook, " Stocks and Stockholders," §§ 237-240. 2 Coolc, "Corporation Problem," pp. 102-107. 96 INDUSTRIAL COMBINATIONS. the liabilities of stockholders and officers are too far-reaching. In New Jersey the incorporation fee is one-fiftieth of one per cent of the par value of the capital stock ; the annual tax is one-tenth of one per cent of the same ; and a charter can be obtained for " any lawful business or purpose whatsoever." Only one director need be a resi- dent of the state ; the amount of capital stock is unlimited ; there is no liability on the part of the stockholders for corporate debts; property and property rights can be made the basis of a stock issue ; and annual reports of the business are not required to be made public.^ Similar provisions are contained in the Illinois law. But the proceedings instituted against a num- ber of " trusts " by the attorney-general makes it likely that, if such proceedings continue, the corporations will no longer feel safe in Illi- nois ; some of them have already announced their intention to abandon their Illinois charter and take out one in New Jersey. In West Vir- ginia, the fee is only $56 ; the annual tax, <^50 ; no director need be resident; annual and other meetings may be held outside the state, etc. 1 William H. Corbin, "The Act concerning Corporations in the State of New Jersey," .lersey City, 1891. COEPORATION LAW. 97 " Therefore ^ all the tramp and bubble companies seem to have gravitated to her jurisdiction." The manufacture of corporations for the purpose of enabling them to do all their business else- where seems to be the policy of this "young and enterprising state," and it has become the "Mecca of irresponsible corporations." But the largest corporations have nevertheless preferred to this charter or that of Kentucky the more expensive, but seemingly more respectable, char- ters of the states before mentioned. II. The transformation of the trusts into cor- porations has been mainly brought about by pro- ceedings of a formal character. A former trustee and present director of one of them, has told the author that he is not aware of the slightest change in his position, or in its meaning. After a com- mittee had decided upon the preliminaries, a charter was taken out ; the trustees became direc- tors ; the officials of the trust were appointed officers of the new company ; the trust certificates were exchanged for shares, through the agency of some trust company, on the basis of a stipu- lated triangular agreement. The parties to this agreement were the trustees, a certificate holder's ' Cook, "Stocks and Stockholders," p. 1604. 98 INDUSTRIAL COMBINATIONS. committee, and the trust company. ^ The latter issued, sometimes to the individual companies, and sometimes to the trust certificate holders, an amount of stock of the new company represent- ing the corresponding value of trust certificates deposited with it for that purpose. Attempts of certain individuals hostUe to trusts to have a receiver appointed for liquidating the trust affairs (as in the case of the Standard Oil Trust) did not meet with the approval of the courts. All former trusts have passed through this metamorphosis with the exception of the Chi- cago Gas Trust {vide supra), and of the Standard Oil Trust, whose position was a different one, inasmuch as its nine trustees owned personally more than 50% of the total capital stock. Their motion, at the general meeting of trust certificate holders, on March 21, 1892, to dissolve the Stand- ard Oil Trust, and to restore to the individual trust certificate holders a proportionate share in the individual companies, was practically A\ath- out significance. The proposition was accepted ; the "equitable interest" of the trust certificate holders as registered in the books of the company was retransformed into a " legal ownership " of 1 Appendix XI. COEPORATION LAW. 99 corresponding amounts of stock, and recorded in the books of the individual participating under- takings. All previous actions of the trustees wexe accepted and approved. These officers were com- missioned to wind up affairs in such way as they deemed fit; to file, as "attorneys in fact," all necessary papers ; and to report periodically. Four months after the passage of that motion, the voting power of the trustees was to expire. In September, 1893, at a new meeting, informa- tion was given that more than 50% of the trust certificates had been exchanged in the proposed manner. Considering the fact that the resolu- tions do not ask for, but only permit, a change of the certificates ; that the trustees own more than 50% of the capital stock as their private property ; and, finally, that there is no reason why the other trust certificate owners should have lost their confidence in the former trus- tees, — we may feel justified in assuming an identity of the trust certificates retransferred, with that private property of the trustees. Of the other certificate holders, it is not likely that many have felt an inducement to make the change. Thereby it is explained why the Standard Oil managers did not see the necessity of re-estab- lishing a new large company. By means merely 100 INDtrSTRIAL COMBINATIONS. of their proprietary rights, they cohere firmly enough ; they look upon their securities as perma- nent investments, and do not use them for gambling purposes. The large owners now, as formerly, control the management of all the companies. No changes have taken place in the general admin- istration, nor is it expected, in the near future, that anything like one centralized institution will be re-established. In the aforesaid meeting of September, 1893, one of the stockholders put the question whether in future the individual companies would practically compete with each other. The administration maintained a diplo- matic silence : that was to be left to the future.^ The stock of about twenty refining and trans- portation companies, of establishments for the manufacture of by-products and packing mate- rials was finally held ready for distribution. If ever serious attempts should be made to attack the large companies by legal proceedings, the Standard Oil institution would offer the least pur- chase in its formal organization. The advisers 1 Before the expiration of the voting power of the trustees, and before the formal dissolution of the trust, a number of smallet- corporations were dissolved or amalgamated with larger ones. (Proceedings of meeting held at 26 Broadway, New York City, on March 21, 1892.) COEPOEATION LAW. 101 of the Standard Oil Company seem still to be as superior to those of other companies, as they were twelve years ago. At that time they avoided the introduction of any of the clauses into the original deed, which later on the Sugar and Cotton Oil Trust introduced as an improve- ment. It was this very improvement which enabled the attorney-general to point out the illegal tendencies of the combinations.^ The Sugar Trust ^ would have been able to take the same course as the Standard Oil Trust, because here, too, the trustees owned a controlling interest. But it was preferred to give the trust an imme- diate successor in the American Sugar Refining 1 The Standard Oil Trust deed did not contain detailed state- ments of any especial purposes of the trust, except such as are of the very nature of every common law trust. The Sugar Trust deed added a number of details, such as: to promote economy of administration ; to reduce the cost of refining, thus enabling the price of sugar to be kept as low as is consistent with reasonable profit ; to give to each refinery the benefits of all appliances and processes known to the others, or used by others, and useful to improve the quality and diminish the cost of refined sugar ; to furnish protection against unlawful com- binations of labour ; to protect against inducements to lower the standard of refined sugar ; and to generally promote the interest of the parties hereto in all lawful and suitable ways. (U. S. House Keports, No. 3112, Sugar Trust, p. 3.) ''■ Details about the Sugar Trust, though not from sources altogether reliable, in "The Sugar Trust," Tariff Reform, Au- gust, 1894. 102 INDUSTRIAL COMBINATIOKS. Company. The uncertainty of the American tariff policy made it very desirable to the trus- tees to be in a position to rapidly dispose of their property, whenever a change in the tariff threatened a decrease in values. In such a case, the stock of a large company naturally would be more marketable.^ The following is the outline of the present organization of the large combinations : At their head we find a president, with a board of admin- istration and a staff of officers, as required by the respective corporation laws. The board is 1 Events proved their course to have been the right one. The tariff debates of 1894 at one time caused the fear of an aboli- tion of all sugar duties. This abolition would have considerably decreased the value of the American Sugar Eeflning Company's property. At the time of the last general meeting in January, 1894, it was found that, in anticipation of these events, the principal stookliolders in the board had already rid themselves of a large part of their holdings. The measures adopted by the Standard Oil Trust tend of course in a direction exactly oppo- site to that intended by the anti-trust movement. Public hos- tility had been aroused because in a trust there was no one who could be held responsible in case of unlawful operations. More publicity was desired. The trust seemed to yield ; the anti- trust laws required dissolution, and so it dissolved. But in fact this was nothing but a complete withdrawal from the field of publicity. Nothing shows more clearly the mistakes of the present anti-trust legislation. Both groups, Standard Oil and Sugar, Cotton Oil, etc., comply with the letter of the law only to more safely circumvent its intentions. CORPORATION LAW. 103 usually divided into two chief departments, one of which takes charge of the financial, the other of the technical side of the undertaking. They are subdivided ^ into committees on sales, on purchases, on the technical supervision of especial branches, and so on. The individual undertak- ings are run with a certain degree of indepen- dence, which occasionally extends to their very organization. In general, the central office buys the raw material, fixes the selling price of the manufactured goods, and apportions larger orders. The branches take smaller orders directly, and decide upon most of the details of their man- agement. Continuous intercourse is kept up with the central office, and regular reports are filed. For example, in the Whiskey Trust the branches send daily statements of production, sales, and deliveries. Most of the organiza- tions encourage a spirit of independence and of rivalry among their branches, in regard to im- proving and cheapening the process of produc- 1 The board of the United States Leather Company, for ex- ample, consists of twenty-seven members, with an executive committee of nine. The other eighteen preside over the admin- istration of the individual tanneries. The executive committee is divided into committees on finance, on purchase of green hides, on sales, etc. The technical processes are left to the individual members. 104 INDUSTRIAL COMBINATIONS. tion. The reports of the American Cotton Oil Company ^ give a very complete inside view of its organization. The company has fifteen directors, eleven of whom live in New York, two in New .Jersey, one in St. Louis, and one in Atlanta, Georgia. The president is chosen from among the members of the board; not so the vice- president, the secretary, and the treasurer. The administration has an attorney of its own. The executive offices are in New York City; execu- tive officers besides those just mentioned are the chairman of the Board, and the three members of the finance committee (recently established). The head office is in New Jersey. A banking firm serves as transfer agent and registrar of de- benture bonds, a trust company as registrar of preferred and common stock. There is a central accounting department with a comptroller, an auditor, and a statistician, and there are also departments for sales, transportation, insurance, and advertising. A chemist is in charge of a central laboratory. The Holland American Cot- ton Oil Company has been opened as an inde- pendent branch with a Dutch charter a year ago, and the former foreign representative of the 1 Reports presented to the stockholders of the American Cot- ton Oil Company, at tlieir annual meetings, for the fiscal years ending August 31. CORPORATION LAW. 105 Cotton Oil Company has been appointed its president. The headquarters of the foreign re- presentative have, in consequence, been transferred from Hamburg to Rotterdam. Nine state com- panies, operating crushing mills, exist in Alabama, Arkansas, Georgia, Mississippi, Texas, North Car- olina, South Carolina, Tennessee, and Louisiana; they are managed by vice-presidents. Of nine refineries, two are situated in New Jersey, one in Chicago, one in St. Louis, one in Cincin- nati, one in Providence, one in Memphis, one in Louisville, and one in Louisiana. Two of them, the Wilcox Lard and Refining Company and the N. K. Fairbank Company, are in them- selves establishments of a world-wide reputation. They maintain branches devoted to a further utilization of cotton oil. They have their own staff of officers, sales agents, etc. One hundred and twenty manufacturing properties are located in sixteen states. They are divided into : Eunning, Dormant. Dismantled. Total. Crude Oil Mills 49 5 18 72 Kefineries 10 5 15 Laid and Cottolene Plants . 4 , 4 Soap Factories 8 1 9 "Cotton Ginneries 11 4 15 Cotton Compressors .... 2 1 3 Fertilizer Mixing Establishments 2 2 Total 120 106 INDUSTRIAL COMBINATIONS. The company owns one tank steamer of 4300 tons and 2300 horse power, 355 tank cars, 23 box cars, and one barrel car. A table in the report for 1894 1 gives a comparison between the cash value of the property and the good will, and shows the proportion, borne by each, to the capital stock. From 45.2% in 1891, the actual value of the property rose to 48% in 1892, 50% in 1893, 50.8% of the capitalization in 1894. From this we may conclude that at the time of establishment of the trust and even up to its reorganization, the actual value of the under- taking, minus the good will, was not much more than from one-fourth to one-fifth of the capital stock. 2 A calculation in the report for 1893 shows that the actual property then represented a security on the preferred stock equal to 125% of its par value ; the common stock was repre- sented by the 25% surplus above the par value of the preferred stock, all other increment of property, and surplus earnings over the 6% preferred stock dividends, and also by the good will, franchises, leases, contracts, patents, proc- esses, brands, and kindred, assets of the business. 1 p. 23. 2 This agrees with the testimony of Mr. John Scott before the New Yorli State Committee in 1888. COKPORATION LAW. 107 This statement is important for the understanding of the morphology of a ■well-managed giant under- taking of that sort.^ The rubber combination has adopted a peculiar organization. For a number of years, negotiations were pending which, after the failure of several pools, led, in 1892, to a preliminary understanding. But not until 1893 was strength and vitality infused into the combination, when the head of the most prominent concern in the rubber manu- facture, which at that time joined the pool, was elected president of the whole. To-day it in- cludes all rubber-shoe companies of the country, and a few other rubber-goods factories. The United States Rubber Company owns only its own stock, and they pretend to be run independ- ently. Practically it exercises a complete and uniform control ; it buys the rubber on a large scale through its agents in the South American markets, imports it in shiploads, and furnishes it to the individual factories. To avoid even the semblance of a combine, all the officers of the "■ It is said to be customary for the preferred stock in all kinds of American stock companies to represent the money value of land, plant, materials, products, etc., whilst the com- mon stock at the beginning represents good will, rights, etc., to which by and by accumulated profits add a more tangible basis. 108 INDaSTBIAL COMBINATIONS. several companies are left in their positions. The sales are entrusted to a company in New York, while the financial affairs are managed by a third firm. The company has closed several of the factories, and in order to keep the remainder in touch with each other without transgressing the corporation laws, the United States Rubber Ad- vancers' Club has been formed, composed of the managers of the various factories. They began by paying a joint visit to each establishment, and in- vestigating the best methods of production. Since then they have met " socially from time to time, in an informal manner, and have en passant discussed business affairs." Besides the savings resulting from the wholesale purchases and the doing away with middlemen, much stress is laid by the man- agers upon the technical improvements effected. On account of the short time of the combina- tion's existence, it is not yet possible to form a definite judgment of its working. The same may be said about the United' States Leather Company. It may be mentioned that these two companies, and also the Diamond IMatch Com- pany, the American Typefounders' Company, the American Tobacco Company, the new United States Cordage Company, and a few others, have never been trusts in the strict legal sense, but joint stock companies from the beginning. CORPORATION LAW. 109 III. Mr. Cook seems to be right in regarding it as a great moral victory for public opinion, that the trusts have been compelled to intrench them- selves under the cover of corporate charters. ^ The secrecy of the trusts, their power to refuse information, and their complete lack of responsi- bility was indeed a very great danger. But the most important legal questions still remain unset- tled. No serious investigator of this question attributes great weight to the anti-trust statutes in their present shape. More may perhaps be expected finally from the decisions of the courts. Legal judgments depend upon the conception of public policy; and, as this conception is subject to change, the law-creating action of the courts is likely to change also. That this is possible, and indeed is done by a process of quiet and natural progress, is the very thing that consti- tutes the strength of the English common law. It is not to the disadvantage of conservative development that the decisions of the judges are occasionally somewhat behind the advanced demands of the age. It has been well remarked that a judge who has to render a decision on modern problems received his education in eco- nomics twenty-five to fifty years ago, when condi- 1 W- W. CooJc, " Corporation Problem," p. 245. 110 INDUSTRIAL COMBINATIONS. tions and views were very different. Therefore he is very likely to take a mistaken attitude towards a recent movement. In a comparatively short time, however, there will sit on the benches a race of judges who have received a modern eco- nomic training. They will be able to decide such a case from a practical standpoint and with due consideration for time and place. The most important recent decisions of the United States courts already show a changed tenor. 1 They declare the anti-trust legislation in its present shape to be entirely unserviceable. In his report for the year 1893,^ the attorney- general of the United States expresses his views regarding the Sherman anti-trust law. He con- siders this law illegal. Though a member of the Democratic party, he apparently does not expect very much from any sort of anti-trust legislation of the present form.^ He thinks that an exact defi- nition of the punishable acts is almost impossible, and that what is said about monopolies can be applied just as well against individual business 1 Dodd, " Present Legal Status of Trusts," p. 167-169. 2 p. 26. 8 As the former attorney of the Whiskey Trust, he has, of course, had the opportunity to study the trust question from a practical standpoint. CORPORATION LAW. Ill transactions. He quotes for his support the con- clusions of a judge in the United States Court for the Southern District of Ohio, recently elected an associate justice of the Supreme Court : " (1) that Congress cannot limit the right of state corpora- tions or of citizens in the acquisition, accumula- tion, or control of property; (2) that Congress cannot prescribe the prices at which such property shall be sold by tlie owner, whether a corporation or individual; (3) that Congress cannot make criminal the intents and purposes of persons in the acquisition and control of property which the states of their residence or creation sanction ; (4) that monopoly as prohibited by the statute means an exclusive right in one party coupled with a legal restriction or restraint upon some other party which prevents the latter from exercising or enjoying the same right; (5) and that con- tracts in restraint of trade and commerce as pro- hibited are contracts in general restraint thereof, and such as would be void at common law, inde- pendently of any statute." This decision must be accepted and acted upon as a precedent, until it is reversed by a tribu- nal of last resort. The attorney-general finally directs attention to the fact that an attempt has been made to treat strikes as coming within 112 INDUSTRIAL COMBINATIONS. the provisions of this law, and even to declare illegal upon this ground a paragraph^ on the statutes of the Brotherhood of Locomotive Engi- neers. In other words, these measures of restric- tion were invoked even to solve the great problem of capital and labour! It is generally believed that the final decisions of the Supreme Court will move on the lines of the attorney-general's report. l§12. PUBLIC OPINION AND COMBINATIONS. llS CHAPTER VII. PUBLIC OPINION AND THE COMBINATIONS. I. The Theorists. There are many who disapprove of trusts and combinations upon general anti-centralistic and individualistic reasons, and as a matter of prin- ciple. They regard the trusts as hideous and rapacious monopolies, which annihilate the indi- vidual, and by heaping up wealth stolen from the people, and by their entire organization, play into the hands of socialism.^ "They are things to be feared. They antagonize a leading and most valuable principle of industrial life, in their attempt to curb competition and bring it under strict control. And when we witness the heart- less manner in which some trusts have closed manufactories, and turned men willing to be industrious into the street, in order that they may increase profits already reasonably large, we can- not help asking ourselves whether the trust, as we see it, is not a public enemy, whether it is '■ Such are the views of writers like Professor JSadley. See his Speech hefore XIX. Century Club, New York, December, 1894. 114 INDUSTRIAL COMBINATIONS. not teaching the labourer dangerous lessons, whether it is not helping to breed anarchy."^ These views are upheld by a number of the older "Manchester men"; their arguments are most clearly summed up in the statement of Gen. Roger A. Pryor before the New York Senate Committee.^ "1. Competition between buyers of the raw material enhances the price to the producer. " 2. Competition between sellers of the manu- factured article reduces its price to the consumer. "3. Reduction of price multiplies the number of consumers. " 4. Increase of consumption stimulates produc- tion to supply the increased demand. "5. Increase of production implies an increase in the employment of labour. "6. Competition between the employers of labour enhances the wages of labour. "7. Enhancement of the wages of labour in- volves the material and moral amelioration of the condition of the labouring class. " 8. Competition to sell stimulates to improve- ments in the quality of the article offered. "9. Competition to sell urging reduction in the cost of the article, ingenuity is quickened to 1 Judge CooUy in Belforfs Magazine, June, 1888. 2 "Trust Combinations," p. 54. PUBLIC OPINION AND COMBINATIONS. 115 the invention of expense-saving and labour-saving machipery, and so a stimulus is applied to the progress of the useful arts and sciences. " In short, competition ministers to the welfare of all classes of the community, and augments the resources and power of the state. But the evil of excessive competition is counteracted and arrested by the principle of self-interest and the operation of the law of supply and demand. On the other hand, by monopoly all these salutary results are arrested and prevented. " 1. There being but a single buyer of the same material, he dictates to the producer what price he pleases. " 2. There being but a single seller of the fin- ished article, he extorts from the consumer an exorbitant price. " 3. The increased price to the consumer dimin- ishes the number of consumers and restricts consumption. "4. Diminished consumption necessitates di- minished production. " 5. Diminished production diminishes the em- ployment of labour. "6. There being but a single employer of la- bour, he hires it at his own reduced price. " 7. Monopolizing the market, and assured of a 116 INDUSTRIAL COMBINATIONS. sale in any event, the seller has no motive for improving the quality of the article, and so it necessarily deteriorates. "8. Monopolizing the market, and so com- manding his own price, and assured of his profit, the manufacturer has no motive to reduce the cost of production by the invention of labour-saving and expense-saving machinery. "9. Monopolizing the production and the market, and so commanding what profits he pleases, the manufacturer has no motive to in- crease production, but, on the contrary, is urged by interest to save the expense of, to him, un- necessary production, and so takes factories in the combine for the purpose only of dismantling and stopping them. " In one word, monopoly despoils and oppresses all classes of the community and debilitates and impoverishes the state. " But the political effects of the monopoly are even more menacing than are its economic results, — as is illustrated by the impressive warning of the late Judge David Davis. Great corporations and consolidated monopolies are fast seizing the avenues of power that lead to the control of the government. It is an open secret that they rule states through procured legislatures and corrupted PUBLIC OPINION AND COMBINATIONS. 117 courts, that they are strong in Congress, and that they are unscrupulous in the use of means to con- quer prejudice and to acquire influence. This condition of things is truly alarming, for unless it be changed quickly and thoroughly, free institu- tions are doomed to be subverted by an oligarchy resting upon a basis of money and corporate power." On the other hand, we find in favour of com- binations most of the younger economists of the country who have studied the question thoroughly. Under the influence of historical thought, they feel convinced that the movement is an unavoida- ble step in an organic development, and that it finds its justification in the tendencies of modern capitalism and its technical auxiliary, — the large undertaking. To such opinions they have been led by the observation of facts. They are fully aware that in the modern mechanism of trusts there are many defects and faults, and these they strongly condemn. But they think that all these drawbacks are not inherent, but rather tempo- rary. According as they are influenced by their professional position or their conception of indus- trial society, they ask either for laissez /aire, or for legal recognition and regulation. The former standpoint is taken by Mr. Dodd.^ He breaks 1 "Aggregated Capital." 118 INDUSTRIAL COMBINATIONS. into a panegyric on the progress which has been derived from the application of large capital and from the centralization of undertakings. He shows how humanity, by means of organization and combination, is led from "thatched huts, without chimneys or glass," from a state where "naked women chanted wild measures, while the men with brandished clubs danced a war dance, " to the highest blessings of civilization.-' He emphatically declares that all state interference is unlawful, unnecessary, and hampering; he tries to defeat the anti-trust wing of the laissez- faire party on their own ground, by urging that the play of natural forces and the endeavours of individuals in furtherance of their own and the common interest ought to be left unchecked. President Andrews, Professor Jenks, and Mr. George Gunton, likewise, all approve of the ten- dencies towards organization, which they believe to be necessary, but they think that control, and protection against the frequent abuses of combi- nations, are badly needed.^ Mr. Gunton warns them not to employ unjust methods, which cannot 1 " Aggregated Capital," p. 54. 2 Andrews, " Trusts according to Oificlal Investigation " ; Oun- ton, "Economic and Social Aspect of Trusts"; Mem., "The Economic Errors of Trusts" ; Jeiiks, "Capitalistic Monopolies." PXJBLIC OPINION AND COMBINATIONS. 119 but result — so he declares — in their annihila- tion. Their only justification he finds in their constant effort towards the cheapening and im- proving of products. Professor Jenks admits the great importance of cheaper prices ; he finds, how- ever, this to be only one of many justifications for the rise of combinations and urges that the mere fact of an increase in prices is not a sufficient reason for denouncing trusts as an evil per se. The radical socialists, especially the European immigrants with social-democratic tendencies, favour trusts, in so far as they appear to be a progress along the lines of their Marxian creed, and a step in the direction of their future system of production, in accordance with Marx's theories. The large capitals concentrated in a few hands, the masses impoverished, — ■ that will hasten the nationalization of all private property.^ Against the present controllers of the trust these men of course protest most decidedly. The author has attempted to learn the gpinions of the anarchists in regard to trusts, ^ but he has ' Vide PowrJerly, "Trusts," p. 24. 2 Besides the Kussian-Polish immigrants there are some native Americans who from theoretical and ideal considerations have been led into the ranks of anarchism. For instance, Mr. Ben. R. Tucker, in his " Instead of a Book, a Fragmentary Ex- planation of Philosophic Anarchism." I cannot help thinking 120 INDUSTRIAL COMBINATIONS. not succeeded in understanding them. They declare the capitalistic organization of produc- tion to be extremely harmful, as well as all capital and all organization. But what they desire to put in its place they are unable to say. II. The Politicians. ' The great political parties differ in their views about the usefulness of large combinations, accord- ing to their general doctrines. The Democrats, who are anti-centralistic, regard them as a great danger to the institutions of the country. They refer to innumerable cases of bribery, of undue influence upon the courts and the legislatures, which are directly ascribable to the trusts. In this point some of their adversaries agree with them; but Mr. W. W. Cook, who is himself a Democrat, believes this to be a danger which will diminish steadily with the progress and de- that these men, who are not so frenzied as the Italian and French anarchists, have been led into anarchism simply by seeing the enormous-corruption of the administration around them. They are mostly to be found in New York and Illinois. It does not seem inexplicable that men who have never seen a good Euro- pean government, and are too near-sighted to conceive of one, but have for a long time witnessed the failures of attempted domestic reforms, arrive at the conclusion : rather no govern- ment than such a one ! This, of course, applies only to a small minority ; the major- ity can hardly be credited with such ideas of an ethical nature. PUBLIC OPINION AND COMBINATIONS. 121 velopment of legislation. "They are not seek- ing glory, or honour, or 'even power for tlie sake of power ; they are seeking property. . . . They are in politics for business only. ... If government could afford to have nothing to do with their property, they would have nothing to do with government. . . . Government is seeking to rule the corporations, and the cor- porations are seeking to control the govern- ment. . . . This source of political corruption, however, will decrease, as time goes on. The points of controversy between the corporations and government will grow less and less, and, as these disputes diminish in number and in- tensity, so also will diminish the motives and reasons of the corporations for interfering with government." 1 The Republicans are more in favour of combi- nation from the very nature of their principles. They strive for organization and centralization where the individual has proved insuiificient. Wherever combinations employ illegal methods, as the trusts frequently have done, they are will- ing to restrict them. Otherwise they regard them as a natural outgrowth of modern economic 1 Cook, "Corporation Problem," p. 247. 122 INDUSTKIAL COMBINATIONS. life.^ But public prejudice made it appear wise to them not to confess too openly their feelings, and the platforms of 1894 contain, as well on the Republican as on the Democratic side, strong denunciation of trusts. The Populists detest every sort of capitalistic organization. They deemed it fit, however, in the Texas anti-trust law, whilst forbidding combina- tions in manufactured goods, to exempt the agri- cultural products in the hands of the farmers from this restriction. So far as they appreciat^ the un- avoidable character of the movement, they ask for state control or ownership of the monopolies.^ To thoughtful men of whatever party, the rise of a plutocracy, in consequence of the greater ease with which wealth can now be accumulated appears to be a source of weighty objection from the standpoint of economic polic3^^ This is one of the largest questions forced to the front by the 1 Opening address of the Republican Congressional campaign in Boston by George 0. Shattuck, October 2, 1894. ^ H. D. Lloyd, " Wealth against Commonwealth," Chapter XXXV. * Economists like Professor Sumner do not consider this to be dangerous at all. He expresses his astonishment, in the Forum, 1894, at the fact that a man can hold a professorship of economics in a leading German university who points out in his lectures that the increasing ineqviality in the distribution of wealth may prove a great danger in social politics. PUBLIC OPINION AND COMBINATIONS. 123 modern economic system, and it covers a muchi wider field than our problem. Some like Mr. Cook,i who are well aware of the danger, regard the corporate investment of wealth as likely to avert it. " Corporations are created by the state ; as soon as they abuse their privileges, the people can restrict or annihilate them. The plutocrat gives bonds to keep the peace when he acts through the corporation." Mr. Dodd, also, remarks that the middle classes, and even the workingmen, are enabled to partici- pate in the largest combinations by acquisition of their stock, and. he tries to show by statistics that this very often occurs. The figures published by the Sugar, Cotton Oil, and some other companies seem to justify this view to a certain extent. ^ During the past few years the subject of trusts and monopolies has begun to play an important role in political gampaigns. It was one of the factors which, together with the silver question and the tariff, brought the Democrats in 1892 back ^ Cook, "Corporation Problem," p. 279. 2 To ascertain whether the increase of stockholders is not largely due to a more general distribution of the individual securities among a relatively very small group of capitalists who gradually diversify their investments, would require a very minute comparison of the lists of stockholders in the various companies. 124 INDUSTRIAL COMBINATIONS. into power. 1 There is no doubt that in the near future, the trust question will prove a still more important issue. In the last two or three campaigns the matter has come to the front, not so much directly, as in its connection with free trade and protection. The free traders have skilfully, and with a good understanding of their effectiveness, directed vio- lent attacks against protection and trusts together. ^ Their arguments are, that the tariff favours the trusts, that the latter impoverish the people by raising domestic prices, whilst selling more cheaply to foreign countries, that they depress wages, and even dismiss workingmen, and force them to be- come tramps. Instead of increasing production, as was intended by the tariff, of opening new es- tablishments, and employing more hands, the trusts are alleged to have limited and restricted industrial progress. Some Republicans, such as Senator Sherman, have therefore declared their willingness to abolish the protective tariff in industries con- trolled by trusts. During the recent tariff debates 1 Vide D. A. Wells, "Trusts and Monopolies." 2 See the pamphlets of the New York Reform Club : " The Trusts and the Tariffs"; "Labour, Wages, and Tariff"; " Tramps, Trusts, and Tariff " ; " Tariff Trusts plead guilty " "Labour, Wages, and Trusts" ; "Trusts cs. Wages." PUBLIC OPmiOK AND COMBINATIONS. 126 of Congress, the House of Representatives voted for free coal, sugar, and iron, chiefly because of the combines therein, but the combinations se- cured the services of the Senate, and" defeated this attempt. 1 The free traders think that, once the duties are abolished and the extra profits thence accruing are removed (profits which in the Sugar Trust recently amounted to 120,000,000 a year 2), trusts will no longer pay, and so will collapse. III. The Jurists. Their opinions have already been touched upon in former chapters. Some of them have remained strictly on the basis of the old English law, and, 1 The proceedings in the Senate, especially those in connec- tion with the sugar schedule, make it worth while to remember Cook's words : " They have controlled nominating conventions, carried elections, dictated appointments, tampered with alder- men and municipal authorities, bribed judges, legislators, and other public officers, and made their influence felt in Congress and in eveiy branch of the national government. . . . Politics and bribery are to them a matter of business." — " Corporation Problem," p. 246. But Professor Jenks is right when he calls events of that sort political phenomena, which originate not from the character of the trusts, but from the character of prevailing political morality. 2 Vide "The Sugar Trust" in Tariff Beform, August, 1894. Twelve to thirteen millions, according to Mr. Havemeyer's testimony before the Stock Gambling Investigation Committee, p. 324. 126 INDUSTRIAL COMBINATIONS. according to their views, that maxim is still valid which two hundred and fifty years ago declared the trusts " very dangerous and obnoxious to divers arts and artisans." Formerly this was Cook's standpoint, and to-day it is that of Spelling. But the body of lawyers friendly to combines has of late grown both in number and weight. Promi- nent among its leaders are to be mentioned the late Professor Dwight, Austin Abbott, and Ch. F. Beach, Jr.i Undeniably the decisions of the courts have been influenced by considerations of a merely political nature, — which may be attributed to the practice in many states of electing judges and public attorneys by popular vote and only for a limited period. IV. Among business men the trust has met with many enemies who felt themselves put at a disadvantage by its existence. They noticed with sorrow how they were being deprived of their busi- ness, and exposed pitilessly to the arbitrariness of the magnates. Seeing their bread vanish, they cried out that the whole country was going to starve. Numberless are their complaints, con- tained in the reports of the various investigations, 1 Th. W- Dwight, "Legality of Trusts"; Austin Abbott, "Condition of the Law as to Combinations." PUBLIC OPINION AND COMBINATIONS. 127 in law-suits, and in newspaper articles, and many of them seem well justified by the methods which the trusts have employed, and by their secret agreements with railroads and individuals. ^ Yet it must be remembered, as Jenks says,^ that under a system of the freest competition, many of the businesses would have been destroyed which have come to grief from the action of the trusts. The public has complained about some sudden rises of price. The Sugar Trust was once accused of having kept back from the market the due supply, in order to advance prices artificially; but it urged as its defence poor crops and the non- arrival of raw materials. The Whiskey combine has doubtlessly displayed a great deal of arbitra- riness. Complaints have been made about the deterioration of the trust-made products; for in- stance, recently against the Standard Oil combine. The latter answers that this is only temporary, and due to the introduction of the new Ohio oil, which is much more impiire, and cannot at once be refined to the highest degree. Generally the trusts claim to have raised steadily the standard of quality, whilst it is well known that formerly 1 H. D. Lloyd, " Wealth against Commonwealth," Chapters II., IV., VIII., IX., XII., etc. 2 "Capitalistic Monopolies," p. 500. 128 INDUSTRIAL COMBINATIONS. an exaggerated competition served as an induce- ment for adulteration. Flour was mixed with the sugar; leaves of a poorer quality, and even of other plants, with good tobacco ; fusel oil and water with alcohol ; cotton oil with mixed lard products ; and lime with starch, etc. The Whiskey Trust for a good while has put out more than 75% of the total alcohol produced by the country. Eighty-five per cent of this is compounded by the admixture of fusel oil, chem- icals, liquors, fruit juices, water, and sugar into all sorts of spirits — whiskey, cordials, and every kind of wine — by specially licensed rectifiers. These compounded goods are sold everywhere under the pretence of being original products; but the Distilling and Cattle Feeding Company denies any connection with these practices, which had been common before its establishment and were legally authorized by " compounders' and rectifiers' licenses. "^ All other attacks the trusts try to meet Avith explanations, or, if this is not possible, with com- plete silence. On the other hand, they boast of their technical achievements, the introduction of better and cheaper methods of production, the ' Whiskey Trust Investigation of 1892, specially pp. iii- iv, 1-7, 67-74, 82-6, 87-90. PUBLIC OPINION AND COMBINATIONS. 129 lower prices, improved quality, and safer condi- tion of the undertaking. They declare that they are able to ward off crises, and to guarantee the steadiness of trade. They show how they have furthered the export trade of the country. They demand credit for having at certain periods exported at a rate cheaper than they asked at home ; though this has not everywhere been a characteristic of such organizations, since while Standard Oil and Cotton Oil have done a good deal in this line, on the contrary, the establishment of the trust has just stopped such practices in the whiskey trade. But if there should occur a decrease in consumption in the country, they would be enabled by this method to continue pro- duction, and thus to avoid a depreciation of their plants and a dismissal of their workingmen. One of the arguments which, economically, is of great interest, the saving of national wealth by means of regulated and steadily improved produc- tion and the advantage which thereby accrues to the community, the author has, to his surprise, found nowhere definitely expressed.^ Economy 1 Vide Losch, "Nationale Produktion und Nationale Pro- duktionsgliederung." He tries to figure out how rQUch saving could be effected by the application of centralized processes of production on a large scale. 130 INDUSTRIAL COMBINATIONS. in the use of raw material has not yet become a fundamental maxim in this country, where one meets throughout with an enormous waste of the natural wealth. Jenks makes some suggestion in this direction and acknowledges its fundamental bearings. He shows the enormous cost of adver- tising e.g. in the tobacco industry, of gifts in the grocery business, of travelling salesmen, etc.^ V. The Workingmen. The trusts claim to have much improved the condition of their workingmen by reducing hours of work, increasing wages, and securing steady employment. Their opponents allege that the first step of the trust has always been to dismiss many labourers, and then, in consequence of the in- creased number of the reserve army of working- men and their competition for work, to extend the hours of labour, or to reduce the wages together with the hours of labour. Of this the Demo- cratic tariff reformers have endeavoured to gather as many instances as possible.^ We have, indeed, seen that at the beginning numerous workingmen were discharged ; but the information given by the workingmen themselves seems to prove that generally a reduction of the hours of work, seldom 1 " Capitalistic Monopolies," pp. 488-90. '^Holt, "Trusts vs. Wages." • PUBLIC OPINION AND COMBINATIONS. 131 a reduction of wages, and occasionally an increase, have taken place, especially where the working- men were well organized themselves. This they are in the railroad, petroleum, iron, and sugar industries. In other industries subject to trusts the organization of workmen has as yet gone but a little way.i It is pretty clear that the labourers in centralized undertakings have not been worse off than in decentralized ones. Mr. Gompers, ex-president of the American Federation of Labour, believes that the combina- tions of producers are necessary, and that their consequences are, at least, not harmful. He realizes the blessings of a more stable condition of things. The grand-masterworkman of the Knights • of Labour is not in favour of trusts ; he is in favour of the nationalization of the great enterprises like coal-mining, oil-refining, railroads, gas works, etc. The heaping up of vast capitals seems to him to be to the disadvantage of the workingmen. Dodd, on the other hand, thinks that much more can be done in the interests of the workingmen when capital is united in the hands of experienced men. How little, he says, 1 In the cotton oil industry the majority of the workingmen are negroes ; in the cigarette, match, and biscuit factories women are generally employed. 132 INDUSTRIAL COMBINATIONS. would the prosperity of the workingmen be in- creased by those fortunes which to-day, in the hands of a Vanderbilt, a Stanford, a Rockefeller, or a Carnegie, have liberally established univer- sities, museums, institutions of art and charity, and which have again and again opened new fields to productive labour. The men in control of the trusts have over and over declared that they were fully conscious of their duties toward their workingmen. Being almost the only employers within their branches, they were in a position different from that of an individual employer surrounded by competi- tors. Furthermore, — and that is really the key- stone, — nothing would be more suicidal in their fight against public opinion, than to • be con- victed of an unjust pressure on their working- men. There is hardly any doubt that in view of the importance to the political parties of the votes of the workingmen, the legislatures would proceed very draconically against the oppressors of labour. The workingmen do not as jet form a political party of their own ; they are Demo- crats, Republicans, or Populists ; they are divided on the tariff and most of the other questions ; and they have not yet taken a uniform position in regard to the trust question. In the crisis of PUBLIC OPINION AND COMBINATIONS. 133 1893 the workinginen in industries organized under trusts and the like seem to have suffered less than in unorganized ones, as is shown in the difference between the anthracite and bituminous coal regions. VI. The Trusts and the Exchanges. On the exchanges, principally on those of New York, all the financial interests of the large undertakings are concentrated. Naturally the great combinations exercise a considerable influ- ence there. Though in part not officially recog- nized, they were all admitted by the backstairs of a quotation among the unlisted securities. In the beginning the stock exchanges probably wanted to avoid the odium and the responsibility that might be attached to the official admission of securities which were but too often of a rather dubious character. But they were neither- will- ing nor able to forego the vast profits accruing from transactions with these corporations. Trust papers, soon after their introduction, gained the leadership in the speculative stock market ; eco- nomically expressed, they became the medium by which demand and supply are usually made to balance one another in the money market. In regard to the trust question, the members of the exchanges are divided into two parties. To 134 INDXJSTEIAL COMBINATIONS. the one it seems desirable to deal -with large units and concerns, where there is an opportunity for a uniform supervision of the entire business. They have more confidence in them ; and furthermore the power derived from a connection with such an undertaking is one of the mainstays of their position. These are the magnates of the ex- changes. The medium-sized or smaller brokerage and banking concerns, which formerly did busi- ness for the smaller undertakings, of course find themselves nearly excluded from the transactions with the giants. Only as second-hand represen- tatives, or surreptitiously, when the leaders do not want to act personally, are they employed. Therefore they are opposed to the new concerns. Moreover, the expectation that the trusts would provide the smaller capitalists with a very remu- nerative and safe kind of investment, has, so far, not been realized at all.^ It is a thorn in the side of some great financiers that the trusts are enabled, by their centralized power, to obtain more favourable terms of credit, and that thus their opportunity for individual gain is lessened. They do not like transactions involving great risks, and they see that the risk 1 Jenks, " Capitalistic Monopolies." PUBLIC OPINION AND COMBINATIONS. 135 is greatly increased in dealings with the trusts. They think the whole stock-exchange, that busi- ness life itself, is threatened. They admonish the public to take warning by the disasters in the administration of the cotton oil and cordage com- bines,^ where it is clearly shown what may happen in other cases. How terrible have been the panics resulting from the collapse of the Cordage Trust, from the failure of the large railway systems ! It was just the uncertainty of the original trust and its secret methods which aroused the oppo- sition of almost all parties. The spirit of uncer- tainty originating from it, was, in consequence of the well-known nervousness of the exchanges, dis- seminated throughout the whole business world. The organizers of some trusts, as we have seen, had no other purpose than the creation of a marketable paper, of an enlarged opportunity for speculation, of which they abundantly availed themselves. Manipulating now on the bull and now on the bear side, their influence was decidedly dem'oralizing. They invited the disaster which befell the undertakings. Therefore the adminis- trators of many of the bankrupt railway systems and combinations have by many been declared largely responsible for the recent crisis. The well-managed combinations have passed 136 INDTJSTEIAL COMBINATIONS. through the hard times much better than they were expected to do, principally those which were placed upon a sound financial basis, i.e. not bur- dened with a great funded indebtedness of bonds or mortgages, and not in need of extensive credit. Wherever vast current expenses had to be met, and for that purpose recoui'se to extensive credits was necessary, — as in the Distilling and Cattle Feeding Company to carry their large stock and pay the accumulated rebates,^ — there have been moments of great anxiety. Only those giant undertakings whose financial power was indepen- dent of outside help have proved reliable in hard times. The endeavour of the combinations is as a rule to give and employ as little credit as possible. Wherever they must avail themselves of it, as in the importation of raw materials, they enter into vast transactions with first-class finan- ciers at New York or London. It is the avowed purpose of the trusts to restrict and regulate 1 Again the Distilling and Cattle Feeding Company lias to pass through a great internal crisis. It is impossible for the outsider to get a clear idea about these endless proceedings in the courts, rumours about bankruptcy, plans of reorganization, action taken by groups of stockholders, etc. Certainly the business methods around this concern cannot do very much to strengthen the arguments of the advocates of centralization or to refute the enemies of gambling on the exchanges. PUBLIC OPINION AND COMBINATIONS. 137 the credit granted to their customers, and to deal as much as possible on a cash basis. One of the most striking features of the American stock markets in connection with this problem are the reorganization committees. It is generally known what is their purpose. Besides those who are largely interested in the bankrupt undertaking either for themselves or as repre- sentatives, there are many who only try, in one way or the other, to make money out of the job. The numberless reorganization committees within the last years, and the way in which they have settled affairs, have not always been samples of sound business policy. Under the present con- ditions all depends upon the quality and the standing of the men of whom they are composed, what interests are represented in them, and what intentions work beneath the surface. The ex- changes and the public seem rather tired of this system. It has sometimes proved satisfactory, very often, not. It is alleged that companies have occasionally been wrecked in order to give a chance to the spoliation of "reorganizers." The cotton oil^ and cordage ^ reorganization com- mittees needed months to clean out the Augean 1 Appendix XI. ^ Appendix XIV. 138 INDUSTRIAL COMBINATIONS. stables of the old administrations. Payment of new assessments on the stock, reduction of the fixed liabilities as well as of the original capital, and the issue of new preferred securities, were the principal elements of the final settlement. The administration was changed, and better financial advisers taken into the board of directors. Ap- parently the majority of the existing combinations had to pass through disasters and reconstructions, though of a less radical character, before they settled on firm ground. ^ 1 It may finally be said that it is not very advisable to refer to the newspapers as representatives of public opinion as to trusts. As far as they are not in the pay of the one or the other, the papers, for the sake of cheap popularity, are almost unanimous in condemning them, without any attempt to do justice to the real situation. They know that nothing is more interesting than attacks upon "the robbers of the people," and for that purpose they collect all kinds of statements with no sort of critical selection. The author has hardly seen one good and reliable newspaper article on trusts. CONCLUSIONS. 139 CHAPTER VIII. CONCLUSIONS, The course of the foregoing investigation has shown that our subject has an importance far beyond its temporary and local aspect. Through- out it is linked to all the momentous problems of our time, — indeed to the problem of the whole future organization of our economic life. Large undertaking versus small workshop, centralization and regulation versus individualism, the distribu- tion of wealth among the masses, and, finally, the relation of all this to the form of government, — such are the questions that are involved. An attempt at present to prophesy whither the movement will lead can only be guess-work; for not only do opinions differ, but also the facts. In every direction we witness the collapse of fresh attempts. Numberless combinations come into existence and break down, come once more and go again, and innumerable are the reasons upon which all these movements depend. Now great business geniuses succeed in uniting large 140 INDUSTRIAL COMBINATIONS. branches ; then, after they have disappeared, some- times their creations disappear also ; whilst, in other cases, these survive in consequence of their centripetal gravity, grouped around capital and property and sustained by improved technical efficiency. What changes will the near future bring in the economic life of the country, and in the organization of enterprises ? We hear about the newly discovered iron regions of the Mesaba range. A great concern has been established for their exploitation. The iron ore penetrates to the surface, in apparently inexhaustible quantities and the greatest possible purity. No mining is necessary ; it simply needs to be digged. Will this lead to a concentration of all iron produc- tion ? — What discoveries and inventions will the technical development of the next years bring to light? We have just witnessed at Niagara Falls a first attempt to utilize the natural water power for productive purposes on the largest scale, so as to provide the smallest and most distant under- taking with a cheap and effective motive power. Does this indicate a step in the direction of de- centralized production ? While, in the manufacturing industries, the victory of production on the large scale seems as- CONCLUSIONS. 141 sured, in the cotton cultivation of the southern states the small producer, the farmer, outstrips the plantation owner. The large undertaking and the hired labour of the plantation yield less than the small farm, where the proprietor, in a limited area, uses nothing but his own physical and intellectual working power. The large planter becomes impoverished, the farmer secures a safe position. The average size of the cotton plantation decreases. The same is true wherever American agriculture proceeds to "in- tensive " methods. • And even in the cotton oil industry we see a relapse into decentralized pro- duction, at least as far as the production of raw oil and its by-products is concerned. Outside of the American and the Southern Cotton Oil Com- panies a number of small, independent mills have been recently established which claim to yield better results than the large companies with their staff of highly paid officials. No definite judgment about the trust question is possible as yet. It is too recent, and its phases undergo rapid and constant changes. But one thing is certain, the mere form of organization is irrelevant, — possibly effect, surely not cause. Armour or Chicago Gas Companies or Sugar Trust; Carnegie, or the separated Standard Oil 142 INDUSTRIAL COMBINATIONS. Companies under uniform management, or the American Cotton Oil Company — ■ the form of ownership or control is of a secondary importance economically. The issue proper is, and will be for the near future: shall it be small or large undertakings, or to what extent shall there be compromises between them? In the United States, public opinion has to decide finally about the meaning and nature of things. It will not be able, in the long run, to lean upon mere theories and maxims; it will be forced by the actual development to undergo changes, to reform and to remodel itself in cor- respondence with the great laws of historical prog- ress. The old ideas about the infallibility and exclusive desirability of individual and unre- stricted activity have begun to fade. The masses still adhere to them, and are supported therein by the newspapers and politicians who prefer popular- ity to thoroughness and thought, and by the cheap economics of old-fashioned every-day economists, who are not able to perceive that, since the time of their youth, there has been any change or prog- ress in practical life, as well as in the scientific interpretation of it. But whosoever tries to understand the times, at once perceives the dif- ferent character of modern problems, and the necessity of new standards of judgment. CONCLUSIONS. 143 A good while will probably elapse before the majority of the public has learned to account for what has happened, and to draw its conclusions correspondingly. This process possibly will take longer, and witness more painful expe- riences, than in countries where an institution exists, whose purpose it is to gather informa- tion impartially and to impart it to the public. The earlier attempts to deal with the problem have been fruitless, because they were dictated by mere theory and by partisan views as to what ought to be, and were not based upon a suf- ficient and intelligent weighing of facts. No definite settlement can follow before the results of such an examination have entered into the public mind, and every attempt will be thrown away which tries to block the road of economic evolution. Marx is mistaken in saying that the development of society has been caused exclu- sively by economic forces. But doubtless an attempt to interfere with economic forces for the sake of general principles is not very prom- ising to-day. It must either remain unsuccess- ful, or turn out disastrous to the nation which passes through it. In the United States, past experiences make it more likely that the former result will be the fate of every arbitrary, restric- 144 INDUSTRIAL COMBINATIONS. tive legislation. In Europe, it has come to be seen that legal interference can only to a limited extent create an economic situation. It can pre- pare, accompany, or follow it, and can adapt existing institutions to the exigencies of a novel situation. European legislators, and Congress in this country, to be sure, command very good lawyers; but trade will always be able to paj^ better ones, who will show how to legally cir- cumvent laws which prove impracticable. And success, if the undertaking attains it, will show afterwards that they were right. The situation differs too widely from the Euro- pean for there to be much chance for socialism in the form it takes in America. Biit the social idea of organization has, during the last few years, spread in many directions. The progress of na- tional development, the increase of the popula- tion of the country, the closer and closer contact between men and their interests, — all this in- creases the need for a new regulation of the rela- tions of individuals. The evident result of the concentration of modern undertakings has been the unavoidable advance into new lines of legis- lation, such as the attempts of the intei-state commerce and anti-trust legislation. Wherever a great public interest of an economic order arises, CONCLTTSIONS. 145 public regulation is bound to follow. To-day the centralizing movement in industry has not yet reached its height. The tide is apparently still rising. Therefore an increased need of legislation during the next few years is more than probable. The existing trusts, as described, are no ideal beings. Like all human creations, they show virtues and vices. They come because they must ; their influence is diversified^ their effect not yet sufficiently comprehensible. Wherever they ap- pear, they call forth a wild excitement and the natural resistance against everything unusual. Now they prove useful in the hands of an able con- trol, now dangerous and hurtful to their own leaders, as well as to guiltless outsiders. The misconception of their nature, which took them for something altogether exceptional, whilst they were really only one form of a group of phe- nomena, did not make feasible a just apprecia- tion of them. A better understanding will replace horror and malediction with an attempt to check their abuses, to extend their utility. The first reasonable propositions have already been made. In a form which corresponds to the character of the people and constitution, the rail- road problem has been entrusted to a controlling commission ; a similar measure is asked for to-day. 146 INDUSTEIAL COMBINATIONS. in view of the great capitalistic organization of production. The means by which it is at- tempted to settle the great social problems are in many respects identical all over the world. For problems are involved which concern the civiliza- tion of the world. It is not a mechanical regu- lation of business life, which would lame the individual and make him subservient to a vast machine, that is sought for ; but a display of the rights of the nation, by means of a control in the hands of the community, and in the full light of publicity. No author has conceived better the meaning of the corporation problem for the commonwealth than Henry C. Adams. He asks for publicity, publication of the results, and the ways in which they were reached, a control through public bodies, and a responsibility of the individ- ual member of the administration of the cor- poration for the observance of the necessary restrictions. The leaders of the large companies have power and honour, but are not kept face to face with sufficient public supervision. The idea of an imposition of higher taxation has already made way even beyond the ranks of the extreme radicals. What seems to the author indispensable for the beginning of an effective solution of the difficulties is, above all, a uniform CONCLUSIONS. 147 commercial code, Or at least a uniform corpo- ration law for the whole United States. A uni- form practice is indispensable considering thiit the activity of the great enterprises has extended far over the boundaries of individual states. It can only be a question of time, until, by an amend- ment of the constitution, the corporation law shall have been brought within the reach of congres- sional legislation.^ Meanwhile, the repeal of the present anti-trust legislation seems desirable. Passed as they were merely for political purposes, even those politi- cians who sought by their passage to soothe popu- lar feeling, do not expect them to be complied with. And the multiplicity of laws of such a character is a great danger to the community. It explains to a large extent the astonishing im- morality in politics and in the political thought of large classes. The necessity of circumventing so many laws because they prescribe things simply impossible must in the long run undermine the sense of legality and respect for law. 1 The American Bar Association has already established a Committee on Uniform State Laws, to whioh twenty-two states and territories have delegated members. Here the attempt will probably be made to prepare the laws uniformly and to pass them in the individual states, as had been done with the Com- mercial Code of Germany before the establishment of the Empire. 148 INDUSTRIAL COMBINATIONS. Whatever experiences the next few years may- bring, the entire character of the movement which this investigation has tried to follow makes it evident that the American people will by and by realize the meaning of the facts, proceed in the same direction, and adapt its actions to given con- ditions. Wise economic policy does not take a second step before the first. As long as one does not feel sure of a complete victory of the large undertakings, one must avoid making more concessions than are really called for by the situ- ation. A progress is manifest, but also increased dangers; an increase of the large undertakings, and the augmentation of the masses dependent on large capital; the growth of the colossus, and an increase of that tendency towards self- destruction which is innate in all things. It is satisfactory to witness the genuine impulse in the American people to push on towards further self-development, and to secure progress by an evolutionary transition into new forms of society, upon the basis of present conditions, which can- not at once be radically changed. Ready as it is to wait, the people may be able meantime to equip itself with the administrative machinery of a re- formed civil service ; for this will probably have to play a very important part in the time to come. CONCLUSIONS. 149 Without it, great reforms can hardly be made effective. It is my belief that the future belongs neither to the prophets of individualism, nor to the ideals of the social-democrats. Its next phases belong to social reorganization. And the probability is that this vi^ill show a corporate character, and will be sustained and controlled by public super- vision. APPENDICES. APPENDIX I. THE STANDARD OIL TRUST AGREEMENT. This agreement, made and entered upon this second day of January, a.d. 1882, by and between all the per- sons who shall now or may hereafter execute the same as parties thereto, Witnesseth : I. It is intended that the parties to this agreement shall embrace three classes, to wit : Is*. All the Stockholders and members of, the fol- lowing Corporations and Limited Partnerships, to wit : Acme Oil Company (New York), Acme Oil Company (Pennsylvania), Atlantic Refining Com- pany, of Phila. ; Bush & Co. Limited, Camden Consolidated Oil Company, Elizabethport Acid Works, Imperial Refining Company, Limited, Chas. Pratt & Co., Paine, Ablett & Co., Limited, Standard Oil Company (Ohio), Standard Oil Co. (Pittsburg), Smith's Perry Oil Trans. Co., Solar Oil Company Limited, Sone & Fleming Manu- facturing Co. Limited. Also all the Stockholders and members of such other Corporations and Limited Partnerships as may hereafter join in this agreement at the request of the Trustees herein provided for. 153 154 INDUSTRIAL COMBINATIONS. 2nd. The following individuals, to wit : W. C. Andrews, Jno. D. Archbold, Lide K. Arter, J. A. Bostwick, Benj. Brewster, D. Bush- nell, Thos. C. Bushnell, J. IST. Camden, Henry L. Davis, H. M. Flagler, Mrs. H. M. Flagler, H. M. Hanna, and Geo. W. Chapin, D. M. Harkness, D. M. Harkness, Trustee; S. V. Harkness, Jolin Huntington, H. A. HutcMns, Chas. F. G. Heye, O. B. Jennings, Charles Lockhart, A. M. McGregor, Wm. H. Macy, Wm. H. Macy, jr., estate of Josiah Macy, jr., Wm. H. Macy, jr., executor; 0. H. Payne, 0. H. Payne, Trustee ; Chas. Pratt, Horace A. Pratt, C. M. Pratt, A. J. Pouch, John D. Eocke- feller, Wm. Rockefeller, Henry H. Rogers, W. P. Thompson, J. J. Vandergrift, William T. Ward- well, W. G. Warden, Jos. L. Warden ; Warden, Frew & Co., Louise C. Wheaton, Jvilia H. York, Geo. H. Vilas, M. E. Keith, Geo. F. Chester, Trustees. Also, all such individuals as may hereafter join in this agreement at the request of the Trustees herein provided for. 3rd. A portion of the Stockholders and members of the following Corporations and Limited Partner- ships, to wit : American Lubricating Oil Co., Baltimore Uuited Oil Co., Beacon Oil Co., Bush & Denslow ]Manuf'g Co., Central Refining Co., of Pittsburg ; Chese- brough Manuf'g Co., Chess-Carley Co., Consoli- dated Tank Line Co., Inland Oil Co., Keystone APPENDIX I. 155 Eefining Co., Maverick Oil Co., National Transit Co., Portland Kerosene Oil Co., Producers' Con'd Land and Petroleum Co., Signal Oil Works Lim- ited, Thompson & Bedford Co. Limited, Devoe Manuf'g Co., Eclipse Lubricating Oil Co. Limited, Empire Refining Co. Limited, Franklin Pipe Co. Limited, Galena Oil Works Limited, Galena Earm Oil Co. Limited, Germania Mining Co., Vacuum Oil Co., H. C. Van Tine & Co., Limited, Waters- Pierce Oil Co. Also, Stockholders and members (not being all thereof) of other Corporations and Limited Partner- ships who may hereafter join in this agreement at the request of the Trustees herein provided for. II. The parties hereto do covenant and agree to and with each other each in consideration of the mutual covenants and agreements of the others, as follows : (1) As soon as practicable a Corporation shall be formed in each of the following States, under the laws thereof, to wit: Ohio, New York, Pennsylvania and New Jersey ; provided, however, that instead of organ- izing a new Corporation, any existing charter and organization may be used for the purpose when it can advantageously be done. (2) The purposes and powers of said Corporations shall be to mine for, produce, manufacture, refine and deal in petroleum and all its products and all the materials used in such business and transact other business collateral thereto. But other purposes and 156 INDUSTKIAL COMBINATIONS. powers shall be embraced in tlie several charters such as shall seem expedient to the parties procuring the charter, or if necessary to comply with the law, the powers aforesaid may be restricted and reduced. (3) At any time hereafter, when it may seem advis- able to the Trustees herein provided for, similar Cor- porations may be formed in other States and Territories. (4) Each of said Corporations shall be known as the Standard Oil Company of (and here shall follow the name of the State or Territory by virtue of the laws of which said Corporation is organized). (5) The Capital Stock of each of said Corporations shall be fixed at such an amount as may seem necessary and advisable to the parties organizing the same, in view of the purpose to be accomplished. (6) The shares of stock of each of said Corporar tions shall be issued only for money, property or assets equal at a fair valuation to the par value of the stock delivered therefor. (7) All of the property, real and personal, assets and business of each and all of the Corporations and Limited Partnerships mentioned or embraced in class first shall be transferred to and vested in the said several Standard Oil Companies. All of the property, assets and business in or of each particular State shall be transferred to and vested in the Standard Oil Com- pany of that particular State, and in order to accom- plish stich purpose, the Directors and Managers of each and all of the several Corporations and Limited Partnerships mentioned in class first, are hereby author- ized and directed by the Stockholders and members APPENDIX I. 157 thereof (all of them being parties to this agreement) to sell, assign, transfer, convey and make over, for the consideration hereinafter mentioned, to the Stand- ard Oil Company or Companies of the proper State or States, as soon as said Corporations are organized and ready to receive the same, all the property, real and personal, assets and business of said Corporations and Limited Partnerships. Correct schedules of such property assets, and business shall accompany each transfer. (8) The individuals embraced in class second of this agreement do each for himself agree, for the consider- ation hereinafter mentioned, to sell, assign, transfer, convey and set over, all the property, real and per- sonal, assets and business mentioned and embraced in schedules accompanying such sale and transfer, to the Standard Oil Company or Companies, of the proper State or States, as soon as the said corporations are organized and ready to receive the same. (9) The parties embraced in class third of this agreement do covenant and agree to assign and trans- fer all of the stock held by them in the Corporations or Limited Partnerships herein named, to the Trustees herein provided for, for the consideration and upon the terms hereinafter set forth. It is understood and agreed that the said Trustees and their successors may hereafter take the assignment of stocks in the same or similar Companies upon the terms herein provided, and that whenever and as often as all the stocks of any Corporation and Limited Partnership are vested in said Trustees, the proper steps may then be taken 158 INDUSTRIAL COMBINATIONS. to have all the money, property, real and personal, of such Corporation or Partnership assigned and conveyed to the Standard Oil Company of the proper State on the terms and in the mode herein set forth, in which event the Trustees shall receive stocks of the Standard Oil Company equal to the value of the money, prop- erty and business assigned, to be held in place of the stocks of the Company or Companies assigning such property. (10) The consideration for the transfer and convey- ance of the money, property and business aforesaid to each or any of the Standard Oil Companies shall be stock of the respective Standard Oil Company to which said transfer or conveyance is made, equal at par value to the appraised value of the money, property and business so transferred. Said stock shall be delivered to the Trustees hereinafter provided for, and their suc- cessors, and no stock of any of said Companies shall ever be issued except for money, property or business equal at least to the par value of the stock so issued, nor shall any stock be issued by any of said compa- nies for any purpose, except to the Trustees herein provided for, to be held subject to the trusts herein- after specified. It is understood, however, that this provision is not intended to restrict the purchase, sale and exchange of property of said Standard Oil Com- panies as fully as they may be authorized to do by their respective charters, provided only that no stock be issued therefor except to said Trustees. (11) The consideration for any stock delivered to said Trustees as above provided for, as well as for APPENDIX I. 159 stocks delivered to said Trustees by persons men- tioned or included in class third of this agreement, shall be the delivery by said Trustees, to the persons entitled thereto, of Trust Certificates hereinafter pro- vided for, equal at par value to the par value of the stocks of the said Standard Oil Companies so received by said Trustees, and equal to the appraised value of the stocks of other Companies or Partnerships de- livered to said Trustees. [The said appraised value shall be determined in a manner agreed upon by the parties in interest and said Trustees.] It is under- stood and agreed, however, that the said Trustees may, with any trust funds in their hands, in addition to the mode above provided, purchase the bonds and stocks of other Companies engaged in business similar or collateral to the business of said Standard Oil Companies on such terms and in such mode as they may deem advisable, and shall hold the same for the benefit of the owners of said Trust Certificates, and may sell, assign, transfer and pledge such bonds and stocks whenever they may deem it advantageous to said Trust so to do. III. The trusts upon which said stocks shall be held, and the number, powers and duties of said Trustees, shall be as follows: (1) The number of Trustees shall be nine. (2) J. D. Eockefeller, 0. H. Payne and Wm. Eock- efeller are hereby appointed Trustees, to hold their office until the first Wednesday of April, a.d. 1886. (3) J. A. Bostwick, H. M. Flagler and W. G. War- 160 INDUSTRIAL COMBINATIONS. den are hereby appointed Trustees, to hold their o£B.ce until the first Wednesday of April, a.d. 1884. (4) Ghas. Pratt, Benj. Brewster and Jno. D. Arch- bold are hereby appointed Trustees, to hold their office until the first Wednesday of April, a.d. 1883. (5) Elections for Trustees to succeed those herein appointed shall be held annually, at which election a sufficient number of Trustees shall be elected to fill all vacancies occurring either from expiration of the term of office of Trustee or from any other cause. All Trustees shall be elected to hold their office for three years, except those elected to fill a vacancy arising from any cause, except expiration of term, who shall be elected for the balance of the term of the Trustee whose place they are elected to fill. Every Trustee shall hold his office until his successor is elected. (6) Trustees shall be elected by ballot by the own- ers of Trust Certificates or their proxies. At all meet- ings the owners of Trust Certificates who may be registered as such on the books of the Trustees may vote in person or by proxy, and shall have one vote for each and every share of Trvist Certificates standing in their names, but no such owner shall be entitled to vote upon any share which has not stood in his name thirty days prior to the day appointed for the election. The transfer books may be closed for thirty days im- mediately preceding the annual election. A majority of the shares represented at such election shall elect. (7) The annual meeting of the owners of said Trust Certificates for the election of Trustees, and for other business, shall be held at the office of the Trustees, in APPENDIX I. 161 the City of New York, on the first Wednesday of April of each year, unless the place of meeting be changed by the Trustees, and said meeting may be adjourned from day to day until its business is com- pleted. Special meetings of the owners of said Trust Certificates may be called by the majority of the Trustees at such times and places as they may appoint. It shall also be the duty of the Trustees to call a special meeting of holders of Trust Certificates when- eyer requested to do so by a petition signed by the holders of ten per cent, in value of such certificates. The business of such special meetings shall be con- fined to the object specified in the notice given there- for. ISTotice of the time and place of all meetings of the owners of Trust Certificates ^hall be given, by personal notice as far as possible, and by public notice in one of the principal newspapers in each State in which a Standard Oil Company exists, at least ten days before such meeting. At any meeting, a majority in the value of the holders of Trust Certificates rep- resented consenting thereto, by-laws may be made, amended or repealed relative to the mode of election of Trustees and other business of the holders of Trust Certificates, provided, however, that said by-laws shall be in conformity with this agreement. By-laws may also be made, amended and repealed at any meeting, by and with the consent of a majority in value of the holders of Trust Certificates, which alter this agree- ment relative to the number, powers and duties of the Trustees and to other matters tending to the more efficient accomplishment of the objects for which the 162 INDTJSTKIAL COMBINATIONS. Trust is created, provided only that the essential in- tents and purposes of this agreement be not thereby changed. (8) Whenever a vacancy occurs in the Board of Trustees more than sixty days prior to the annual meeting for the election of Trustees, it shall be the duty of the remaining Trustees to call a meeting of the owners of the Standard Oil Trust Certificates for the purpose of electing a Trustee or Trustees to fill the vacancy or vacancies. If any vacancy occurs in the Board of Trustees, from any cause, within sixty days of the date of the annual meeting for the election of Trustees, the vacancy may be filled by a majority of the remaining Trustees, or, at their option, may remain vacant until the annual election. (9) If, for any reason, at any time, a Trustee or Trustees shall be appointed by any Court to fill any vacancy or vacancies in said Board of Trustees, the Trustee or Trustees so appointed shall hold his or the respective oflB.ce or oflELces only until a successor or successors shall be elected in the manner above pro- vided for. (10) Whenever any change shall occur in the Board of Trustees, the legal title to the stock and other prop- erty held in trust shall pass to and vest in the suc- cessors of said Trustees without any formal transfer thereof. But if at any time such formal transfer shall be deemed necessary or advisable, it shall be the duty of the Board of Trustees to obtain the same, and it shall be the duty of any retiring Trustee or the admin- istrator or executor of any deceased Trustee to make said transfer. APPENDIX I. 163 (11) The Trustees shall prepare Certificates -which shall show the interest of each beneficiary in said trust, and deliver them to the persons properly entitled thereto. They shall be divided into shares of the pax value of one hundred dollars each, and shall be known as Standard Oil Trust Certificates, and shall be issued subject to all the terms and conditions of this agree- ment. The Trustees shall have power to agree upon and direct the form and contents of said Certifi- cates, and the mode in which they shall be signed, attested and transferred. The Certificates shall con- tain an express stipulation that the holders thereof shall be bound by the terms of this agreement, and by the by-laws herein provided for. (12) No Certificates shall be issued except for stocks and bonds held in trust, as herein provided for, and the par value of Certificates issued by said Trustees shall be equal to the par value of the stocks of said Standard Oil Companies, and the appraised value of other bonds and stocks held in trust. The various bonds, stocks and moneys held under said Trust shall be held for all parties in interest jointly, and the Trust Certificates so issued shall be the evidence of the interest held by the several parties in this Trust. No duplicate Certificates shall be issued by the Trus- tees, except upon surrender of the original Certificate or Certifi'cates for cancellation, or upon satisfactory proof of the loss thereof, and in the latter case they shall require a sufficient bond of indemnity. (13) The stocks of the various Standard Oil Com- panies held in~ trust by said Trustees shall not be sold. 164 INDUSTRIAL COMBINATIONS. assigned or transferred by said Trustees, or by tlie beneficiaries, or by botli combined, so long as the Trust endures. The stocks and bonds of other Corporations, held by said Trustees, may be by them exchanged or sold and the proceeds thereof distributed pro rata to the holders of Trust Certificates, or said proceeds may be held and reinvested by said Trustees for the pur- poses and uses of the Trust, provided, however, that said Trustees may from time to time assign such shares of stock of said Standard Oil Companies as may be necessary to qualify any person or persons chosen or to be chosen as Directors and Ofl&cers of any of said Standard Oil Companies. (14) It shall be the duty of said Trustees to receive and safely to keep all interest and dividends declared and paid upon any of the said bonds, stocks and moneys held by them in trust, and to distribute all moneys received from such sources or from sales of trust prop- erty or otherwise by declaring and paying dividends upon the Standard Trust Certificates as funds accumu- late, which in their judgment are not needed for the uses and expenses of said Trust. The Trustees shall, however, keep separate accounts and receipts from interest and dividends, and of receipts from sales or transfers of trust property, and in making any distri- bution of trust funds, in which moneys derived from sales or transfers shall be included, shall render the holders of Trust Certificates a statement showing what amount of the fund distributed has been derived from such sales or transfers. The said Trustees may be also authorized and empowered by a vote of a APPENDIX I. 165 majority in value of holders of Trust Certificates, whenever stocks or bonds have accumulated in their hands from money purchases thereof, or the stocks or bonds held by them have increased in value, or stock dividends shall have been declared by any of the Companies whose stocks are held by said Trus- tees, or whenever from any such cause it is deemed . advisable so to do, to increase the amount of Trust Certificates to the extent of such increase or accumular tion of values and to divide the same among the per- sons then owning Trust Certificates pro rata. (15) It shall be the duty of said Trustees to exer- cise general supervision over the affairs of said sev- eral Standard Oil Companies, and as far as practi- cable over the other Companies or Partnerships, any portion of whose stock is held in said Trust. It shall be their duty as Stockholders of said Companies to elect as Directors and Officers thereof faithful and competent men. They may elect themselves to such positions when they see fit so to do, and shall endeavour to have the affairs of said Companies managed and directed in the manner they may deem most condu- cive to the best interests of the holders of said Trust Certificates. (16) All the powers of the Trustees may be exer- cised by a majority of their number. They may appoint from their own number an Ex- ecutive and other Committees. A majority of each Committee shall exercise all the powers which the Trustees may confer upon such Committee. (17) The Trustees may employ and pay all such 166 INDUSTRIAL COMBINATIONS. Agents and Attorneys as they may deem necessary in the management of said trust. (18) Each Trustee shall be entitled to a salary for his services not exceeding twenty-five thousand dol- lars per annum, except the President of the Board, who may be voted a salary not exceeding thirty thou- sand dollars per annum, which salaries shall be fixed by said Board of Trustees. All salaries and expenses connected with or growing out of the Trust shall be paid by the Trustees from the trust fund. (19) The Board of Trustees shall have its principal oflice in the City of New York, unless changed by a vote of the Trustees, at which office, or in some place of safe deposit in said City, the bonds and stocks shall be kept. The Trustees shall have power to adopt rules and regulations pertaining to the meetings of the Board, the election of Officers and the management of the Trust. (20) The Trustees shall render at each annual meet- ing a statement of the aif airs of the Trust. If a termi- nation of the Trust be agreed upon, as hereinafter provided, or within a reasonable time prior to its ter- mination by lapse of time, the Trustees shall furnish to the holders of the Trust Certificates a true and perfect inventory and appraisement of all stocks and other property held in trust, and a statement of the financial affairs of the various Companies whose stocks are held in trust. (21) The Trust shall continue during the lives of the survivors and survivor of the Trustees in this agreement named, and for twenty-one years thereafter, APPENDIX I. 167 provided, however, that if at any time after the ex- piration of ten years two-thirds of all the holders in value, or if after the expiration of one year ninety per cent, of all the holders in value of Trust Certificates shall, at a meeting of holders of Trust Certificates called for that purpose, vote to terminate this Trust at some time to be by them then and there fixed, the said Trust shall terminate at the date so fixed. If the holders of Trust Certificates shall vote to terminate the Trust as aforesaid, they may, at the same meeting, or at a subsequent meeting called for that purpose, decide by a vote of two-thirds in value of their num- ber the mode in which the affairs of the Trust shall be wound up, and whether the trust property shall be distributed or whether part, and if so, what part shall be divided and what part sold, and whether such sales shall be public or private. The Trustees, who shall continue to hold their oflB.ces for that purpose, shall make the distribution in the mode directed, or, if no mode be agreed upon, by two-thirds in value as afore- said, the Trustees shall make distribution of the trust property according to law. But said distribution, how- ever made, and whether it be of property, or values, or of both, shall be just and equitable, and such as to insure to each owner of a Trust Certificate his due proportion of the trust property or the value thereof. (22) If the Trust shall be terminated by the expira- tion of the time for which it is created, the distribution of the trust property shall be directed and made in the mode above provided. (23) This Agreement, together with the registry of 168 INDUSTRIAL COMBINATIONS. Certificates, books of accounts, and other books and papers connected with the business of said Trust, shall be safely kept at the principal ofl&ce of said Trustees. [SIGNATUEES.] SUPPLEMENTAL AGREEMENT. Whereas in and by an agreement dated January 2nd, 1882, and known as the Standard Trust Agree- ment, the parties thereto did mutually covenant and agree, inter alia, as follows, to wit : That Corporations to be known as Standard Oil Companies of various States should be formed, and that all of the property, real and personal, assets and business of each and all of the Corporations and Limited Partnerships mentioned or embraced in class first of said Agreement should be transferred and vested in the said several Standard Oil Companies ; that all of the property, assets and business in or of each particular State should be trans- ferred to and vested in the Standard Oil Company of that particular State, and the Directors and Man- agers of each and all of the several Corporations and associations mentioned in class first were authorized and directed to sell, assign, transfer, and convey and make over to the Standard Oil Company or Companies of the proper State or States, as soon as said corporar tious were organized and ready to receive the same, all the property, real and personal, assets and business of said Corporations or Associations; and ichereas it is not deemed expedient that all of the Companies and Associations mentioned should transfer their property APPENDIX I. 169 to the said Standard Oil Companies at the present time, and in case of some Companies and Associations it may never be deemed expedient that the said trans- fer should be made, and said Companies and Associar tions go out of existence; and whereas it is deemed advisable that a discretionary power should be vested in the Trustees as to when such transfer or transfers should take place, if at all. Now, it is hereby mutually agreed between the parties to the said Trust Agree- ment, and as supplementary thereto, that the Trustees named in the said Agreement and their successors shall have the power and authority to decide what Companies shall convey their property as in said Agreement contemplated, and when the said sales and transfers shall take place, if at all, and until said Trustees shall so decide, each of said Companies shall remain in existence and retain its property and busi- ness, and the Trustees shall hold the stocks thereof in trust, as in said Agreement provided. In the exer- cise of said discretion the Trustees shall act by a majority of their number as provided in said Trust Agreement. All portions of said Trust Agreement relating to this subject shall be considered so changed as to be in harmony with this supplemental Agreement. In witness whereof, the said parties have subscribed this Agreement, this 4th day of January, 1882. [Duly signed by the same parties.] 170 INDUSTRIAL COMBINATIONS. APPENDIX II. BY-LAWS or THE TRUSTEES OF THE STANDARD OIL TRUST. ARTICLE I. ELECTION OF TRUSTEES. Trustees shall be elected by ballot by the owners of Trust Certificates or their proxies. Elections of Trustees to succeed those already ap- pointed shall be held annually, at which election a sufB.cient number of Trustees shall be elected to fill all vacancies occurring either from expiration of the term of office of any Trustee or from any other cause. All Trustees shall be elected to hold their ofi&ce for three years, except those elected to fill a vacancy arising from any -cause except expiration of term, who shall be elected for the balance of the term of the Trustee whose place they are elected to fill. Every Trustee shall hold his office until his successor is elected. The annual meeting of the holders of Trust Certifi- cates and the election of Trustees shall be held at the office of the Trustees in the City of New York on the first Wednesday in April of each j'ear, unless otherwise ordered by the Trustees, and the said meet- APPENDIX II. 171 ing may be adjourned from day to day until its busi- ness is completed. Special meetings of the holders of Trust Certificates may be called by a majority of all the Trustees at such time and place as they may appoint. Special meetings shall also be called by a majority of the Trustees whenever requested so to do, by a request signed by the holders of ten per cent, in value of Trust Certificates. The business of such special meetings shall be confined to the objects specified in the notice given therefor. Notice of the time and place of all meetings of owners of Trust Certificates shall be given by personal notice as far as possible, and shall also be advertised in one of the principal newspapers, published in each State in which a Standard Oil Company exists, at least ten days previous to the time of meeting. At all meetings the owners of Trust Certificates, who may be registered as such on the books of the Trustees, may vote in person or by proxy, and shall have one vote for each and every share of Trust Cer- tificates standing in their names, but no such owner shall be entitled to vote upon any share which has not stood in his name thirty days prior to the day appointed for the election. The Transfer Books may be closed for thirty days immediately preceding the annual election. A majority of the shares represented at such elec- tion shall elect. At all elections of Trustees the Board of Trustees 172 INDUSTRIAL COMBINATIONS. shall be the judges of the qualification of voters; shall prescribe rules and regulations for Toting; appoint Tellers to direct and count the votes and cause the result of the election to be entered in full on their minutes. The Trustees may commit their powers in this matter to a Committee of their own members. The election shall be held on the day designated for that purpose, unless prevented by accident, in ■which case the Trustees shall designate another day for the election. ARTICLE II. BOAED OP TRUSTEES. The Board of Trustees at their first meeting after their annual election shall elect by ballot from their own number a President, Vice-President, Treasurer and Secretary, and such of&cers shall hold their offices during the pleasure of the Board. Whenever a va- cancy occurs in the Board of Trustees more than sixty days prior to the annual meeting for the election of Trustees, it shall be the duty of the remaining Trustees to call a meeting of the holders of the Trust Certificates for the purpose of electing a Trustee or Trustees to fill the vacancy or vacancies. If any vacancy occurs in the Board of Trustees from any cause within sixty days of the date of the annual meeting for the election of Trustees, the va- cancy may be filled by a majority of the remaining Trustees, or at their option may remain vacant until the annual election. APPENDIX II. 173 The Board may also appoint an Assistant Treasurer, Assistant Secretary, Auditor and such additional offi- cers, agents, executive and other committees as it may deem advisable and remove the same at its pleasure. In the absence of the President and Vice-President, the Board may appoint a Chairman pro tem,pore; during a prolonged absence or inability of the Presi- dent or any other officer, the Board may appoint substitutes pro tempore, and on the death or resigna- tion of the President or other officers, it shall fill the vacancy. A majority of the Trustees shall be required to constitute a quorum for the transaction of business, but less than a quorum may adjourn from time to time and from place to place. Eegular meetings of the Board of Trustees shall be held on the first Wednesday of January, April, July and October of each year, unless the same shall be a legal holiday, in which event the meeting shall be held . on the day following. ARTICLE III. THE PRESIDENT. The President shall preside at all meetings of the owners of Trust Certificates or Trustees if present; appoint or remove all officers and agents other than those elected by the owners of Trust Certificates or the Board of Trustees ; call meetings of the Board of Trustees, when requested by a majority of the Trus- tees in writing ; sign all certificates of shares, and have a general care, super-vision and direction of the affairs 174 1ND0STKIAL COMBINATIONS. of the Trust. He shall have power to call meetings of the Board from time to time when he shall think proper; to sign certificates of shares in blank and leave them with the Treasurer in sufficient numbers to provide for the prompt transfer of shares. In the event of the death, absence or inability of the President to perform the duties imposed upon him by these by-laws and the orders of the Board of Trus- tees, the Vice-President may exercise his powers and perform his duties, subject to the control of the Board of Trustees or Executive Committee. AETICLE rv. THE SECEETART. It shall be the duty of the Secretary to notify the members thereof of all meetings of the Board of Trus- tees, when required by the President or by a majority of the Trustees in writing ; to attend such meetings when practicable ; keep true records of the proceed- ings ; attest such records after meeting, by his signar ture ; safely keep all documents and papers which shall come into his possession and truly keep the books and accounts of the Trust appertaining to his office, so as at all times to show the real condition of the Trust affairs, and shall present statements thereof when required by the Board. He shall keep books in which transfers of shares may be made by any owner of Trust Certificates or his Attorney duly constituted in writing ; also a share Ledger and Certificate Book ; prepare new certificates upon the transfer of shares and surrender of the old certificates, and keep a regis- ter of all the certificates issued. APPENDIX II. 175 On the day of the annual election the Secretary shall furnish for the use of the inspectors an alphabetical list of the names of all the owners of Trust Certificates who shall have been registered as such for thirty days prior to said election. The Assistant Secretary shall perforin such of the duties of the Secretary as may be required of him by the Board of Trustees. ARTICLE V. TREASTTKER. It shall be the duty of the Treasurer to keep and account for all moneys, funds, and property of the Trust which shall come into his hands, and he shall render such accounts and present such statements to the Trustees and Executive Committee as may be re- quired of him. Disbursements shall only be made by him under resolutions of the Board of Trustees, or by the Execu- tive Committee, or upon vouchers approved by the proper oflS.cers. He shall sign certificates of shares when presented to him after they shall have been signed by the President. The Assistant Treasurer shall perform such of the duties of Treasurer as may be required of him by the Board of Trustees. ARTICLE VI. EXECUTIVE COMMITTEE. The Executive Committee shall possess and exercise by a majority of all its members all the powers and 176 INDUSTRIAL COMBINATIONS. duties of the Board of Trustees, but only when the Board shall not be in session. They shall keep a rec- ord of all their proceedings, which shall be certified by the Secretary under his hand, which record shall be read at the next ensuing meeting of the Board of Trus- tees. The Secretary shall call meetings of this Com- mittee on the requisition of the President of the Board or of any of its members. ARTICLE VII. The fiscal year of this Trust shall be the calendar year. ARTICLE VIII. These by-laws may be altered, amended or repealed at any meeting of the owners of Trust Certificates by a vote of majority in value of all the owners repre- sented, provided, however, that all by-laws relative to formal meetings and formal duties of the Trustees and Ofiicers may be altered by the Board of Trustees. APPENDIX nr. 177 APPENDIX III. STATUT DEE DEUTSCH-AMEEIKANISCHEN PETEOLEUM-GESELLSCHAFT. ' {G-edrucU 1891.) I. ALLGEMEINE BESTIMMUNGEN. § 1. Die Deutsch-Amerikanische Petroleum-Gesellschaft bezweckt den Betrieb von Petroleumhandel. Ziun Geschaftsbetrieb der Gesellschaft gehoren ins- besondere : 1. der Erwerb, die Bebaming oder sonstige Einrich- tung Ton Grundstticken fiir die Zwecke der Gesellschaft im In- und Auslande, 2. der Erwerb von Schiffen, Eisenbahn-waggons, und sonstiger Betriebsmittel fiir die Zwecke der Gesell- schaft, 3. die Be- und Verfrachtung der der Gesellschaft gehorigen Schiffe, die Charterung und Vercharterung von fremden Schiffen, 4. der Kauf und Verkauf von rohem Petroleum und samtlichen daraus zu gewinnenden Produkten, ins- besondere von raffiniertem Petroleum, sowie der Handel mit Waren ahnlicher Art, 178 INDUSTRIAL COMBINATIONS. 5. der Betrieb von Kommissionsgescliafteii jeder Art, 6. der Betrieb von Geschaften, sowie die Beteiligung an Unternehmungen, welche nach dem Ermessen von Vorstand und Aufsichtsrat mit dem Unternehmen in Verbindung stehen oder den Zwecken desselben forder- lich. sind. § 2. Die Aktiengesellschaft hat ihren Sitz in Bremen. Die Errichtnng von Zweigniederlassimgeu ist zulassig. Die Dauer des Unternehmens ist unbestimmt. § 3. Laut Vertrag vom 22. Februar 1890 erwirbt die Aktiengesellsehaft von den Herren Wilhelm A. Eiede- mann in Geestemilnde, Franz Ernst Schiitte und Carl Schiltte in Bremen die in den, dem Vertrage angefiigten Specifikationen aufgeflihrten Aktiven zu dem Gesamt- preise von 5,000,000 Mark, der dnrch Barzahlung in Hohe von 3,000,000 Mark und durch tjbergabe von Aktien der Gesellschaft im Nominalbetrage von 2,000,000 Mark, welche fiir veil eingezahlt gelten, beglichen wird. § 4. Alle namens der Gesellschaft zu erlassenden Be- kanntmachungen erfolgen durcli einmalige Veroffent- lichung im Deutschen Eeichsanzeiger. APPENDIX in. 17!9 n. GEUNDKAPITAL, AKTIEN. § 6. Das Grundkapital der Gesellschaft betragt 9,000,000 Mark; eingeteilt in 9000 auf den Namen lautende Aktien a 1000 Mark. Die Aktien werden mit genauer Bezeichnung des Inhabers nach Namen, Wohnort und Stand in das Aktienbuch der Gesellschaft eingetragen. Im Ver- haltnis zu der Gesellschaft sind nur diejenigen Inhaber von Aktien zur Ausiibung ihrer Eechte legitimiert, welche im Aktienbuche verzeichnet sind. 1st eine auf den Namen lautende Aktie auf einen anderen uber- tragen, so ist dies unter Vorlegung der Aktie und des Nachweises des tJberganges bei der Gesellschaft anzu- melden und im Aktienbuche einzutragen. Vor dem 31. Marz 1905 ist eine tjbertragung von Aktien der Gesellschaft gegeniiber nur rechtswirksam, wenn die tJbertragung von dem Vorstande imd dem Aufsichtsrate genehmigt ist. § 6. Soweit die Aktien nicht laut § 3 dieses Statutes den Herren Wilhelm A. Eiedemann, Franz Ernst Schiitte und Carl Schiitte als Gegenleistung ftir iibertragene Werte iibergeben sind, sind die Aktien von den Grlin- dern unter Einzahlung von 25 % des Nennwertes ilber- nommen. Die Einzahlung des Eestbetrages erfolgt an den vom Vorstande festzusetzenden Terminen. 180 IJSDUSTlilAL COMBINATIONS. § 7. Die Aktien werden tinter fortlaufenden Eummem ausgefertigt und mit der faksimilierten oder eigen- handigen Unterschrift eines Mitgliedes des Vorstandes und eines Mitgliedes des Auf sichtsrates versehen. § 8. Die Auszahlung der Dividende erfolgt gegen Aus- handigung des Dividendensclieines. Vorstand und Aufsiclistrat sind jedoch bereclitigt, falls der Verlust eines Dividendenscheines iknen glaubhaft gemacht wird, die Auszahlung an denjenigen vorzunehmen, auf dessen Namen die Aktie in das Aktienbuch der Gesell- scbaft eingetragen ist ; mit dieser Auszahlung erloscten alle Rechte aus dem Dividendenscbein. Der Vorstand ist berecbtigt, neue Serien von Divi- dend enscbeinen an denjenigen auszugeben, auf dessen Namen die Aktie eingetragen ist, wenn der zur Erbe- bung bestimmte Talon nicbt bis zum Falligkeitstermine des zweiten der Dividendenscbeine der neuen Serie eingereicbt wooden ist ; mit dieser Ausgabe verliert der nicbt eingereicbte Talon seine Gultigkeit. Ein offentlicbes Angebot und eine Kraftloserklarung von Dividendenscbeinen und Talons, abgesondert von den Aktien, zu denen sie geboren, findet nicbt statt. III. ORGANE DER GESELLSCHAET. § 9. Organe der Gesellscbaft sind : a. der Vorstand, b. der Aufsicbtsrat, c. die Generalversammlung. APPENDIX III. 181 a. Der Voestand. § 10. Den ersten Vorstand bilden die Herren Willielin A. Eiedemann, Franz Ernst Schiitte und Carl Schtitte. Die Generalversammlung ist berechtigt, eine Erhohung Oder Verringernng der Zahl der Vorstandsmitglieder zu beschliessen. Die Neuwahl von Vorstandsmitgliedern erfolgt auf Vorschlag des Vorstandes durch die Generalversamm- lung; sind keine Vorstandsmitglieder im Amte, so erfolgt die ISleuwalil auf Vorschlag des Aufsichtsrates. Eine Vertretung von Vorstandsmitgliedern durch Mitglieder des Aufsichtsrates findet nicht statt. Die Bestellung eines Vorstandsmitgliedes ist nur durch Beschluss der Generalversammlung wider- ruflich. § 11. Willenserklarungen des Vorstandes bediirfen, um fiir die Gesellschaft verbindlich zu sein, der Mitwirk- ung zweier Vorstandsmitglieder, 'wenn es sich handelt um Ankauf, Verpfandung oder Verausserung von Grundstllcken und Schiffen, um Vertrage, welche die Gesellschaft auf langer als ein Jahr verpflichten, um Aufnahme von Anliehen, um Errichtung oder Auflosung von Zweigniederlassungen, um Beteiligung an dritten Unternehmungen oder den Erwerb solcher, um Bestellungen von Prokuristen und Generalbevoll- machtigten ; in alien anderen Fallen sind Willenser- klarungen des Vorstandes fiir die Gesellschaft verbihd- 182 INDUSTRIAL COMBINATIONS. lich, wenn dieselben von einem Vorstandsmitgliede abgegeben werden. § 12. Der Vorstand bedarf der Genekmig^g des Auf- sichtsrates : 1. zum Erwerb, zur Verpfandung und Verausserung von Grundstticken und Schiffen, 2. zu Neubauten und baulichen und maseldnellen Anderungen, sofern die Kosten einen Betrag von 100,000 Mark libersteigen, 3. zur Aufnahme von Anliehen, 4. zur Errichtung oder Aullosung von Zweignieder- lassungen, 5. zur Bestellung eines Prokuristen, 6. zur Beteiligung an dritten Unternelimen. Der Vorstand soil das Reclit haben, mit Geneh- migung des Aufsichtsrats Genussscheine auszugeben, ■welche zu einem Anteil an dem Gewinn und dem Vermogen der Gesellschaft in Gemassheit naherer Bestimmungea bereclitigen sollen, -welclie von dem Vorstand und dem Aufsichstrat festzustellen sind. b. Der Aufsichtseat. § 13. Der Auf sichtsrat besteht nach naherer Bestimmung der Generalversammlung aus drei bis sieben Mitglied- ern, welclie von der Generalversammlung in geheimer Abstimmung mit absoluter Majoritat gewahlt werden. Bei StimmengleicKheit entscbeidet das Los. Eine APPENDIX III. 183 Wahl durcli Acclamation ist zulassig, wenn in der Generalversammlung kein Widerspruch. dagegen er- hoben wird. § 14. Der zuerst gewahlte Aufsichtsrat verbleibt bis zum Ablaufe des zweiten, am 31. Dezember 1891 endigenden Geschaftsjahres im Amte. Piir die Polgezeit werden die Mitglieder alljahrlieh gewahlt, und endet ihre Amtsdauer in der nachsten ordentlichen Generalver- sammlung. Die Wiederwahl ausgeschiedener Mit- glieder ist statthaft. Scheidet ein Mitglied wahrend seiner Amtsdauer aus, so hat innerhalb drei Monaten eine Neuwahl zu erfolgen, venn ohne dieselbe der Aufsiclitsrat aus weniger als drei Mitgliedern bestehen -wiirde. § 15. Der Aufsichtsrat wahlt alljahrlieh aus seiner Mitte mit relativer Majoritat einen Vorsitzer und einen stellvertretenden Vorsitzer. Bei Stimmengleichheit entscheidet das Los. § 16. Die Sitzungen des Aufsichtsrates finden in Bremen oder in New- York statt. Zu den Sitzungen werden die Mitglieder vom Vorsitzer, bezw. dessen Stellver- treter schriftlich berufen, so oft es diesem erforderlich erscheint. Er ist zu der sof ortigen Berufung verpflich- tet, wenn die Mehrzahl der Mitglieder oder der Vor- stand schriftlich die Berufung beantragen. 184 INDUSTRIAL COMBINATIONS. Der Vorsitzer ist berechtigt, Beschlussfassimgeii des Aufsichtsrat auf schriftlichem Wege herbeizufiihren, falls niclit von seiten eines Mitgliedes des Aufsichts- rates \Vidersprucli dagegen erhoben wird. Zm- Gliltigkeit eines auf diese Weise herbeigefiihrten Beschlusses ist Zustimnmng der Mekrheit der Mit- glieder des Aufsichtsrates erforderlich. § 17. Der Auf sichtsrat ist beschlussfabig, falls -wenigstens drei seiner Mitglieder anwesend sind. Den Vorsitz in den Versammlungen des Aufsichtsrats filhrt der Vor- sitzer Oder dessen Stellvertreter, oder, falls beide am Erscheinen verbindert sind, ein von einem derselben beaixftragtes Mitglied des Aufsichtsrats. Die Beschliisse werden mit absoluter Stimmemnebr- beit gefasst, bei Stimmengleichbeit entscbeidet die Stimme des Vorsitzenden der betreffenden Versamm- lung. Die gefassten Bescblusse sind in ein Protokollbucb einzutragen und von dem Vorsitzenden der betreffenden Versammlung zu unterzeicbnen. § 18. Ausfertigungen und Bekanntmacbungen des Auf- sichtsrats werden namens desselben von dem Vorsitzer oder dessen Stellvertreter erlassen. § 19. Der Aufsichtsrat ist berechtigt, die "Walirnehmungen ihm obliegender Geschafte, insbesoudere die Einsicbt APPENDIX III. 185 der Bucher und Schriften der Gesellschaft einem oder niehrereii seiner Mitglieder dauernd oder voriiberge- hend zu iibertragen, soweit eine derartige tJbertragung gesetzlich zulassig ist. § 20. Die Mitglieder des Aufsichtsrats erhalten fur ibre Tbatigkeit keine Verglitung, jedoch Ersatz barer Aus- lagen. c. Die Generalteesammltjng. § 21. Die GeneralTersammlung werden von dem Vorstande berufen und finden in Bremen statt. Eine Versammlung ist ordnungsmassig berufen, wenn die Einladung zu derselben wenigstens einen Mo- nat vor dem flir die Generalversammlung bestimmten Tage im Deutschen Eeichsanzeiger veroffentlicht ist, und wenn die Mitglieder des Aufsicbtsrates zu dieser Versammlung geladen sind. Zum nachweis, dass ein Mitglied des Aufsiclitsrates ordnungsmassig geladen ist, genllgt die von der Postanstalt erteilte Bescbeini- gung, dass wenigstens einen Monat vor Abbaltung der Generalversammlung ein eingeschriebener Brief an das betreffende Mitglied des Aufsicbtsrats abgesandt ist. § 22. Jede in das Aktienbuch der Gesellschaft eingetragene Aktie gewabrt eine Stimme ; die Vertretung abwesen- der Aktionare ist nur durch schriftliche Vollmacbt zulassig. 186 INDUSTRIAL COMBINATIONS. Ohne besondere Vollmaclit konnen vertreten werden: Handlungshauser oder Kommanditgesellsch.afteiidureli einen Geschaftsinhaber oder Prokuristen, Ebefrauen duroh. ihre Ebemaimer, Witwen durch einen ilirer grossjahrigen Sobne, Minder jahrige oder sonst Bevor- mundete durch einen ihrer Vormllnder oder Pfleger, Korporationem, Institute und Aktiengesellscliaften dujch. einen ilirer gesetzlicben Vertreter. § 23. Die ordentlichen Greneralversammlungen finden all- jabrlich in der ersten Halfte des Geschaftsjabres statt. Ausserordentlicbe Generalversammlungen werden berufen, wenn der Aufsicbtsrat oder der Vorstand es filr erforderlich eracbtet. § 24. Ein Mitglied des Vorstandes oder des Aufsicbtsrats fubrt den Vorsitz. Uber die Versammlung ist ein gericbtlicbes oder notarielles Protokoll aufzuuebmen. § 25. Gegenstande der ordentlicben Generalversammlung sind: 1. Entgegennabme der Eecbnung und des Bericbts des letzten Gescbaftsjabres. 2. Bescblussfassung ilber die Gewinnverteilung. 3. Wablen fur den Aufsicbtsrat. 4. Bescblussfassung liber etwa sonst gesteUte An- trage. APPENDIX in. 187 Die Generalversammlung ist berechtigt, zur Prilfung der Bilanz- tiiid der G-ewinn- luid Verlustrechnung Eevisoren zu ernennen. Die Wahl erf olgt in geheimer Abstimmung mit absoluter Stimmeiiniehrheit. § 26. Bescliliisse der Generalversammlung werden mit absoluter Stimmenmehrheit gefasst ; ilber die nach- stehenden Gegenstande kann ein Beschluss nur gefasst werden, wenn der Antrag vom AufsicHtsrate gestellt ist, und ftlr die Annahme desselben dreiviertel des in der Generalversammlung vertretenen Grundkapitals sich erklart : 1. Abanderung und Erganzung des Statuts ; 2. Vergrosserung des Grundkapitals bezw. eine Herabsetzung Oder teilweise Zurilckzalilung desselben; 3. Vereinigung der Gesellschaft mit einer anderen Oder Auflosung derselben. Ausserdem ist eine Mehrheit von dreiviertel Stimmen des in einer Generalversammlung vertretenen Aktien- Kapitals in alien Fallen erforderlicli, wo das 'Gesetz sie verlangt. § 27. Jahresreclinung, Bilanz und die VorscMage zur Ge- winnverteilung gelten als genehmigt, wenn die Gen- eralversammlung nicht das Gegenteil beschliesst. 188 INDUSTRIAL COMBINAIIONS. IV. GESCHAITSJAHR, BELANZ, EErNGEWINN- VERTBILUNG. § 28. Das G-eschaftsjalir ist das Kalenderjalir, das erste Geschaftsjalir lauft bis zum 31. Dezember 1890. Auf den 31. Dezember eines jeden Jahres muss vom Vorstande die Eechmmg abgescUossen imd sodann binnen drei Monaten eine Bilanz nebst Inventar, eine G-ewinii- und Verlustrechmmg, sowie ein den Ver- mogensstand iind die Yerhaltnisse der Gesellsehaft darlegender Bericht dem Aufsichtsrate zur Genehmi- gung eingereiclit warden. Vorstand und Aufsichtsrat sind berechtigt, die Vor- nahme ausserordentlicher Abschreibungen, sowie die Bildung von Specialreserven gemeinschaftlich zu be- schliessen. § 29. Die .Vorlagen sind von dem Vorstande nebst den Bemerkungen des Auf sichtsrats in dem Geschaftslokale der Gesellschaft auszulegen, und werden sodann der Generalversammlung vorgelegt. § 30. Der bilanzmassige Eeingewinn wird wis folgt verteilt : 1. 5 % an den gesetzlichen Reservefonds, bis derselbe die gesetzliche Hohe erreicht hat, APPENDIX III. 189 2. der Rest soil, insofern der Vorstand und der Aufsichtsrat nicht dessen Verwendung zu besonderen Reserven beschliessen, als Dividends unter den Aktio- naren und Inhabern von G-enussscheinen zur Verteilung gelangen. V. tfBEEGANGSBESTIMMUNGEN. § 31. Der Vorstand ist ermachtigt, mit Zustimmung des Aufsichtsrats alle Anderungen und Zusatze der Sta- tuten mit verbindlicher Kraft filr alle Aktionare zu beschliessen, "welche zum Zwecke der Eintragung der Gesellschaft in das Pirmenregister vom Registerrichter verlangt werden sollten. 190 INDUSTRIAL COMBINATIONS. APPENDIX IV. UNITED STATES ANTI-TRUST LAW. AN ACT TO Pkotect Trade and Commerce against XJNLAWFnL Restraints and Monopolies. Be it enacted by the Senate and House of Represen- tatives of the United States of America in Congress assembled, Sec. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every per- son who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanour, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court. Sec 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a mis- APPENDIX IV. 191 demeanour, and, on conviction thereof, shall be pun- ished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court. Sec. 3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is hereby declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanour, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprison- ment not exceeding one year, or by both said punish- ments, in the' discretion of the court. Sec. 4. The several circuit courts of the United States are hereby invested with jurisdiction to pre- vent and restrain violations of this act ; and it shall be the duty of the several district attorneys of the United States, in their respective districts, tmder the direction of the Attorney-General, to institute proceed- ings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the par- ties complained of shall have been duly notified of 192 INDUSTRIAL COMBINATIONS. such petition the court shall proceed, as soon as may be, to the hearing and determination of the case ; and pending such petition and before iinal decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises. Sec. 6. Whenever it shall appear to the court before which any proceeding under section four of this act may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not ; and subpoenas to that end may be served in any dis- trict by the marshal thereof. Sec. 6. Any property owned under any contract or by any combination, or pursuant to any conspiracy (and being the subject thereof) mentioned in section one of this act, and being in the course of transportation from one State to another, or to a foreign country, shall be forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for the forfeiture, seizure, and con- demnation of property imported into the United States contrary to law. Sec. 7. Any person who shall be injured in his business or property by any other person or corporar tion by reason of anything forbidden or declared to be imlawful by this act, may sue therefor in any cir- cuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three APPENDIX IV. 193 fold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee. Sec. 8. That the word "person," or "persons," wherever used in this act shall be deemed to include corporations and associations existing under or author- ized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country. Approved July 2, 1890. 194 INDUSTRIAL COMBINATIONS. APPENDIX V. ILLINOIS ANTI-TRUST LAW. POOLS, TEUSTS, AND COMBINES PROHIBITED. AN ACT TO Provide for the Punishment of Persons, CoPAKTNEnSIIII'S OR CORPOEATIONS FORMING POOLS, TRUSTS AND COMPINES, AND MODE OF PrOCEDDKE AND RULES OF Evidence in Such Cases. Sec. 1. Be if enacted by the People of the State of Illinoif:, represented in the General Assembly: If any corporation organized under the laws of this or any other State or country, for transacting or conducting any kind of business in this State, or any partnership or individual or other association of persons ■whoso- ever, shall create, enter into, become a member of or a party to any pool, trust, agreement, combination, con- federation or understanding with any other Corpora- tion, partnership, individual, or any other person, or association of persons, to regulate or fix the price of any article of merchandise or commodity, or shall enter into, become a member of or a party to any pool, agreement, contract, combination or confedera- tion, to fix or limit the amount or quantity of any arti- clc\ commodity or merchandise to be manufactured, mined, produced or sold in this State, such corporar APPENDIX V. 195 tion, partnership or individual or other association of persons shall be deemed and adjudged guilty of a conspiracy to defraud, and be subject to indictment and punishment as provided in this act. § 2. It shall not be lawful for any corporation to issue or to own trust certificates, or for any corpora- tion, agent, officer or employees, or the directors or stockholders of any corporation to enter into any com- bination, contract or agreement with any person or persons, corporation or corporations, or with any stock- holder or director thereof, the purpose and effect of which combination, contract or agreement shall be to place the management or control of such combination or combinations, or the manufactured product thereof, in the hands of any trustee or trustees, with the intent to limit or fix the price or lessen the production and sale of an article of commerce, use or consumption, or to prevent, restrict, or diminish the manufacture or output of any such article. § 3. If a corporation or a company, firm or associar tion shall be found guilty of a violation of this act, it shall be punished by a fine in any sum not less than five hundred dollars (f 500) nor more than two thou- sand dollars (f 2000), for the first offence ; and for the second offence not less than two thousand dollars ($2000), nor more than five thousand dollars ($6000), and for the third offence not less than five thousand dollars (f 5000), nor more than ten thousand dollars ($10,000) ; and for every subsequent offence and con- viction thereof, shall be liable to a fine of fifteen thousand dollars (f 16,000) : Provided, that in all cases 196 INDXTSTRIAL COMBINATIONS. under this act either party shall have the right of trial by jury. § 4. Any president, manager, director or other of- ficer or agent or receiver of any corporation, company, firm or association, or any member of any company, firm or association, or any individual found guilty of a violation of the first section of this act, may be pun- ished by a fine of not less than two hundred dollars ($200), nor to exceed one thousand dollars (f 1000), or be punished by confinement in the county jail not to exceed one year, or both, in the discretion of the court before which such conviction may be had. § 6. Any contract or agreement in violation of any provision of the preceding sections of this act, shall be absolutely void. § 6. Any purchaser of any article or commodity from any individual, company or corporation transact- ing business contrary to any provision of the preceding sections of this act, shall not be liable for the price or payment of such article or commodity, and may plead this act as a defence in any suit for such price or pay- ment. § 7. The fines hereinbefore provided for may be recovered in an action of debt, in the name of the People of the State of Illinois. If, upon the trial of any cause instituted under this act to recover the penalties as provided for in section three, the jury shall find for the people, and that the defendant has been before convicted of a violation of the provisions of this act, they shall return such finding with their verdict, stating the number of times they find defend- APPENDIX V. 197 ant so convicted, and shall assess and return with their verdict the amount of the fine to be imposed upon the defendant in accordance with said section three : Provided, that in all cases under the provisions of this act, a preponderance of evidence in favour of the people shall be sufficient to authorize a verdict and judgment for the people. § 8. It shall be .the duty of the prosecuting attor- neys in their respective jurisdictions, and the Attorney General, to enforce the foregoing provisions of this act, and any prosecuting attorney of any county, secur- ing a conviction under the provisions of this act, shall be entitled to such fee or salary as by law he is al- lowed for such prosecution. When there is a convic- tion under this act, the informer shall be entitled to one-fifth of the fine recovered, which shall be paid him when the same is collected. All fines recovered under the provisions of this act shall be paid into the county treasury of the county in which the suit is tried, by the person collecting the same, in the manner now provided by law, to be used for county purposes. Appkoted June 11, 1891. 198 INDXJSTBIAL COMBINATIONS. APPENDIX VI. AMENDMENT TO THE ILLINOIS ANTI- TEUST LAW. ENFOKCING TRUST LAWS. AN ACT TO AMEND AN AOT ENTITLED " AN AcT TO PKOVIDE FOB THE Punishment of Persons, Copaktneeships ob COKPORATIONS FORMING PoOLS, TRUSTS AND COMBINES, AND Mode of Procedure and Rules of Evidence in Such Cases," appkoved June 11, 1891, and in Force July 1, 1891, be and the Same is hereby amended by ADDING Two New Sections — 7a and 7b, kespectitely — AND making an Appropriation for the Purpose op CARRYING into EfFECT THIS AcT. Section 1. Be it enacted by the people of the State of Illinois, represented in the General Assembly: That an act entitled " An act to provide for the punishment of persons, copartnerships or corporations forming pools, trusts and combines, and mode of procedure and rules of evidence in such cases," approved June 11, 1891, and in force July 1, 1891, be and the same is hereby amended by two new sections, as follows : — Sec. 7a. It shall be the duty of the Secretary of State, on or about the first day of September of each year, to address to the president, secretary, or treas- urer of each incorporated company doing business in this State, whose post office address is known or may APPENDIX VI. 199 be ascertained, a letter of inquiry as to whether the said corporation has all or any part of its business or interest in or with any trust combination or association of persons or stockholders, as named in the preceding provisions of this act, and to require an answer, under oath, of the president, secretary or treasurer, or any director of said company. A form of affidavit shall be enclosed in said letter of inquiry, as follows : — affidavit. State of Illinois, 1 County of ) I, , do solemnly swear that I am the (president, secretary, treasurer or director) of the corporation known and styled , duly incorporated under the laws of on the of , 18 — , and now transacting or conducting business in the State of Illinois, and that I am duly authorized to represent said corporation in the making of this affidavit; and I do further sol- emnly swear that the said , known and styled as aforesaid, has not, since the day of (naming the day upon which this act takes effect), created, entered into or become a member of or a party to, and was not, on the day of , nor at any day since that date, and is not now, a member of or a party to any pool, trust, agree- ment, combination, confederation or understanding with any other corporation, partnership, individual or any other person or association of persons, to regu- late or j&x the price of any article of merchandise or 200 INDTTSTRIAL COMBINATIONS. commodity ; and that it has not entered into or become a member of or a party to any pool, trust, agreement, contract, combination or confederation to fijc or limit the amount or quantity of any article, commodity or merchandise to be manufactured, mined, produced or sold in this State ; and that it has not issued and does not own any trust certificates, and for any corporation, officer or employee, or for the directors or stockholders of any corporation, has not entered into and is not now in any combination, contract or agreement with any person or persons, corporation or corporations, or with any stockholder or director thereof, the purpose and effect of which said combination, contract or agree- ment would be to place the management or control of such combination or combinations, or the manufactured product thereof, in the hands of any trustee or trus- tees, with the intent to limit or fix the price or lessen the production and sales of any article of commerce, use or consumption, or to prevent, restrict or dimin- ish the manufacture or output of any such article. [^President, Secretary, Treasurer or Director.'^ Subscribed and sworn to before me, a within and for the county of , this day of , 18 [Seal.] And on refusal to make oath in answer to said inquiry, or on failure to do so within thirty days from the mailing thereof, the Secretary of State shall certify that fact to the Attorney General, whose duty it shall APPENDIX VI. 201 be to direct the State's Attorney of the county wherein such corporation or corporations are located, and it is hereby made the duty of the State's Attorney, under the direction of the Attorney General, at the earliest practicable moment, in the name of the People of the State of Illinois, and at the relation of the Attorney General, to proceed against such corporation for the recovery of a penalty of fifty dollars for each day after such refusal to make oath, or failure to make said oath, within thirty days from the mailing of said notice. Or the Attorney General may, by any proper proceedings in a court of law or chancery, proceed, upon such failure or refusal, to forfeit such charter of such incorporated company or association incorporated under the general laws, or by any special law of this State, and to revoke the rights of any foreign corpora- tion located herein to do business in this State. Sec. 7b. It shall be the duty of the Secretary of State, at any time, upon satisfactory e,vidence that any company or association of persons, duly incorporated under the laws of this or any other State, doing busi- ness in this State, has entered into any trust, combi- nation or association in violation of the preceding section of this act, to demand that it shall make the afi&davit, as above set forth in this act, as to the con- duct of its business. In case of failure of compliance on the part of the corporation, then the same pro- cedure shall ensue as is provided in Section 7a of this act : Provided, that no corporation, firm, association or individual shall be subject to any criminal prosecu- tion by reason of anything truthfully disclosed by the 202 INDUSTRIAL COMBINATIONS. afl&davit required by this act, or truthfully disclosed in any testimony elicited in the execution thereof. The Secretary of State is hereby authorized and required to charge and collect of each corporation a fee of one dollar for receiving and filing the affidavit herein provided for, to be accounted for as other fees received by him : Provided, that corporations organized under the Building, Loan and Homestead Association laws of the state are excluded from the provisions of this act. Approved June 20, 1893. APPENDIX Via. 203 APPENDIX Via. ILLINOIS LETTER OF INQUIRY. Office of The Secretary of State OF Illinois. Springfield, III., Sept. 1, 1893. To the President, Secretary or Treasurer of Has the corporation to which this letter of inquiry- is addressed, all or any part of its business or interest in or with any trust, combination or association of persons or stockholders, as named in the proyisions of an act entitled " An act to provide for the punishment of persons, copartnerships or corporations forming pools, trusts and combines, and mode of procedure and rules of evidence in such cases," approved June 11, 1891, in force July 1, 1891, a copy of v^hich is enclosed ? You are required to answer under oath, and a form of affidavit is enclosed for that purpose. This affidavit should be filled out, signed and sworn to, and sent to this office within thirty days after the mailing of this letter. The fee for filing the affidavit is one dollar, and must be sent with the affidavit. EespectfuUy, H. H. HINRICHSEN, Secretary of State. 204 INDUSTRIAL COMBINATIONS. APPENDIX VII. TEXAS ANTI-TETJST LAW. TRUSTS — CONSPIRACIES AGAINST TRADE. 1. Defines trusts. 2. Corporations to forfeit ciiar- ter for violation of this law. 3. Duty of attorney-general, etc. 4. Foreign corporations violat- ing this act forbidden to do business. 5. Quo warranto proceedings. 6. Conspiracy against trade. 7. Requisites of indictment. 8. Requisites of proof. 9. Persons out of the state liable to indictment. Sbo. 10. Associations violating this act to forfeit SoO a day, recoverable on suit. 11. Contracts or agreements in violation hereof void. 12. The provisions hereof cumu- lative. 13. Exempts live stock and agri- cultural products in hands of producers. 14. Emergency clause. Chap. 117. — [S. H. Bs. Nos. 9, 117, 136, 192, and313.] An act to define trusts, and to provide for penalties and punishment of corporations, persons, firms, and associations of persons connected with them, and to promote free competition in the state of Texas. Section 1. Be it enacted by the Legislature of tJie State of Texas : That a trust is a combination of capi- tal, skill, or acts by two or more persons, firms, corpo- rations, or associations of persons, or of either two or more of them for either, any, or all of the following APPENDIX VII. 205 purposes : First — To create or carry out restrictions in trade. Second — To limit or reduce the production, or increase or reduce the price of merchandise or com- modities. Third — To prevent competition in manu- facture, making, transportation, sale, or purchase of merchandise, produce, or commodities. Fourth — To fix at any standard or figure, whereby its price to the public shall be in any manner controlled or established, any article or commodity of merchandise, produce, or commerce intended for sale, use, or consumption in this state. Fifth — To make or enter into, or execute or carry out any contract, obligation, or agreement of any kind or description by which they shall bind or have bound themselves not to sell, dispose of, or transport any article or commodity, or article of trade, use, merchandise, commerce, or consumption below a common standard figure, or by which they shall agree in any manner to keep the price of such article, com- modity, or transportation at a fixed or graduated figure, or by which they shall in any manner establish or settle the price of any article or commodity or trans- portation between them or themselves and others to preclude a free and unrestricted competition among themselves or others in the sale or transportation of any such article or commodity, or by which they shall agree to pool, combine, or unite any interest they may have in connection with the sale or transportation of any such article or commodity that its price might in any manner be affected. Sec 2. That any corporation holding a charter under the laws of the state of Texas which shall vio- 206 INDUSTRIAL COMBINATIONS. late any of the provisions of this act shall thereby forfeit its charter and franchise, and its corporate existence shall cease and determine. Sec. 3. For a violation of any of the provisions of this act by any corporation mentioned herein it shall be the duty of the attorney-general or district or county attorney, or either of them, upon his own motion, and without leave or order of any court or judge, to insti- tute suit or quo warranto proceedings in Travis County, at Austin, or at the county seat of any county in the state, where such corporation exists, does business, or may have a domicile, for the forfeiture of its charter rights and franchise, and the dissolution of its corporate existence. Sec. 4. Every foreign corporation violating any of the provisions of this act is hereby denied the right and prohibited from doing any business within this state, and it shall be the duty of the attorney-general to enforce this provision by injunction or other proper proceedings in the district court of Travis County, in the name of the state of Texas. Sec. 5. That the provisions of Chapter 48, General Laws of this state, approved July 9, 1879, to prescribe the remedy and regulate the proceedings by quo warranto, etc., shall, except in so far as they may conflict herewith, govern and control the proceed- ings when instituted to forfeit any charter under this act. Sec. 6. Any violation of either or all the provisions of this act shall be and is hereby declared a conspiracy against trade, and any person who may be or may APPENDIX VII. 207 become engaged in any such conspiracy or take part therein, or^ aid or advise in its commission, or who shall, as principal, manager, director, agent, servant, or employe, or in any other capacity, knowingly carry out any of the stipulations, purposes, prices, rates, or orders thereunder or in pursuance thereof, shall be punished by fine not less than fifty dollars nor more than five thousand dollars, and by imprisonment in the penitentiary not less than one nor more than ten years or by either such fine or imprisonment. Each day during a violation of this provision shall constitute a separate offence. Sec. 7. In any indictment for an offence named in this act, it is sufB.cient to state the purposes or effects of the trust or combination, and that the accused was a member of, acted with or in pursuance of it, without giving its name or description, or how, when, or where it was created. Sec. 8. In prosecutions under this act it shall be sufB-cient to prove that a trust or combination as defined herein exists, and that the defendant belonged to it or acted for or in connection with it, without proving all the members belonging to it, or proving or producing any article of agreement or any written instrument on which it may have been based, or that it was evidenced by any written instrument at all. The character of the trust or combination alleged may be established by proof of its general reputation as such. Sec. 9. Persons out of the state may commit and be liable to indictment and conviction for committing any 208 INDUSTRIAL COMBINATIONS. of the offences enumerated in this act which do not in their commission necessarily require a personal pres- ence in this state, the object being to reach and punish all persons offending against its provisions whether within or without the state. Sec 10. Each and every firm, person, corporation, or association of persons, who shall in any manner violate any of the provisions of this act shall for each and every day that such violation shall be committed or continued forfeit and pay the sum of fifty dollars, which may be recovered in the name of the state of Texas in any county where the offence is committed or where either of the offenders reside, or in Travis County, and it shall be the duty of the attorney-general or the district or the county attorney to prosecute for and recover the same. Sec. 11. That any contract or agreement in vio- lation of the provisions of this act shall be abso- lutely void and not enforceable either in law or equity. Sec. 12. That the provisions hereof shall be held cumulative of each other and of all other laws in any way affecting them now in force in this state. Sec. 13. The provisions of this act shall not apply to agricultural products or live stock while in the hands of the producer or raiser. Sec. 14. Whereas the people of this state are with- out a remedy against trusts, therefore an emergency and imperative public necessity exists requiring that the constitutional rule which requires that all bills shall be read on three several days be suspended, and APPENDIX VII. 209 that this act take effect from and after its passage, and it is so enacted. [Note. — The foregoing act originated in the House, and passed the same by a vote of 86 yeas, no nays ; and passed the Senate by a vote of 26 yeas, no nays.] Approved, March 30, 1889. 210 INDUSTRIAL COMBINATIONS. APPENDIX VIII. BEADING COAL COMBINE. This agreement, made this thirtieth day of April, 1892, by and between the Lehigh and Wilkesbarre Coal Company, a corporation of Pennsylvania, herein- after called the Wilkesbarre Company, party of the first part, and the Philadelphia and Reading Coal and Iron Company, also a corporation of Pennsylvania, hereinafter called the Eeading Company, party of the second part. Whereas the Wilkesbarre Company is the owner or , lessee, by certain indentures of lease, of various lands, mines, and improvements, situate along or near the railroad and branches of the Lehigh and Susquehanna Eailroad; and Whereas the Port Eeading Railroad Company, as lessee of the Central Railroad Company of New- Jersey, has arranged with the Eeading Company for the transportation of all anthracite coal consigned by the Reading Company over the lines and branches of the Lehigh and Susquehanna Railroad Company and of the Central Railroad Company of New Jersey, for and during the continuance of the said lease to the said Port Reading Railroad Company ; and Whereas it is proposed on the part of the Wilkes- barre Company to sell and deliver the entire product APPENDIX viir. 211 of its collieries, now operated or hereafter to be opened and operated by it, to the Reading Company to be shipped to market over the lines and branches of the Lehigh and Susquehanna Railroad and the Central Rail- road Company of New Jersey, and the Reading Company has proposed to purchase and pay for the same : — Now, therefore, this agreement witnesseth: That the said parties hereto, in consideration of the sum of one dollar by each of the parties paid to the other, and the mutual covenants and stipulations herein con- tained and written, have agreed and do hereby cove- nant agree to and with each other as follows, that is to say : — First. The said Wilkesbarre Company hereby sells and agrees to deliver to the Reading Company the entire product of its collieries now opened and here- after to be opened and operated, for and during the entire period hereinafter fixed and determined, and the Reading Company hereby agrees to take, receive and pay for the product of the said collieries and of each of them_, for and during the entire term of this agreement, as hereinafter provided; and to ship the same in accordance with the existing agreements be- tween the Lehigh Coal and Navigation Company and the Central Railroad Company of New Jersey. Second. The Reading Company agrees that from its allotment of cars which it shall receive from time to time from the Central Railroad Company of New Jersey, or any lessee thereof, it shall and will at all times during the continuance of this contract cause to be distributed to the collieries operated by the 212 INDUSTRIAL COMBINATIONS. Wilkesbarre Company such number of cars as will enable the Wilkesbarre Company to mine and ship monthly, in as nearly daily quantities as practicable (Sundays and legal holidays excepted), such an amount of anthracite coal as it can produce from said collieries as a whole, by working the same for as many days and to as full a capacity in each month as the Reading Company works its own collieries. It being under- stood and agreed that the Wilkesbarre Company shall have the right, from month to month, to apportion its entire product among its various collieries as it shaU deem best. And further, in case the collieries located on the lines and branches of the Lehigh and Susquehanna Eailroad, other than those of the Wilkesbarre Com- pany, should not, for any cause, continue to ship the same proportion of the total tonnage of the whole anthracite region over the said lines which was shipped from them in 1891, then, and in that case, the Wilkes- barre Company shall be at liberty to mine and deliver, and the Heading Company shall receive and pay for an amount equal to the deficiency, in addition to the quantity hereto provided to be mined and sold and received and paid for, and the Reading Company shall cause sufficient cars to be supplied therefor; so that there shall always continue to be shipped monthly over the said railroads of the central system an amount of anthracite coal equal in proportion of the total production of anthracite coal in the whole anthracite region to the total proportion shipped on the said system in the year ending December 31st, 1891. APPENDIX VIII. 213 Third. The Reading Company agrees to pay and the Wilkesbarre Company agrees to accept monthly the following prices for the said coal, when prepared in accordance with the standard hereinafter mentioned and delivered in railroad cars at the said breaker, viz. : — For all sizes larger than pea coal, sixty (60) per cent, of the average "free on board" price received for said sizes at tide points at or near New York between Perth Amboy and Hoboken both inclusive, for the Wyoming and Lackawanna coals of the Lehigh Valley Coal Company, and the Lehigh and Wilkes- barre Coal Company (hereinafter called Wyoming Coal) when the said f. o. b. price is four dollars ($4) per ton or less ; when the said average f. o. b. price is more than four dollars ($4) per ton, forty (40) per cent, of the increase above four dollars ($4), until the f . o. b. price realized reaches four dollars and fifty cents (f 4.60), after which the Wilkesbarre Company shall receive thirty (30) per cent, of any advance in the said f. o. b. price above four dollars and fifty cents ($4.50). For example : — When the f. 0. b. price is, Wilkesbarre Company- will receiTe, Reading Company will receive, Wben the f. 0. b. price is. Wilkesbarre Company will receive. Eeading Company will receive, 13.80 12.28 $1.52 14.50 $2.60 11.90 3.90 2.34 1.56 4.60 2.63 1.97 4.00 2.40 1.60 4.70 2.66 2.04 4.10 2.44 1.66 4.80 2.69 2.11 4.20 2.48 1.72 4.90 2.72 2.18 4.30 2.52 1.78 5.00 2.75 2.25 4.40 2.56 1.84 etc. etc. etc. 214 INDUSTRIAL COMBINATIONS. In cases where tlie said average f. o. b. price received for any size or sizes of Wyoming coal is less than f 4 per ton, and for other sizes the said price is at or above $ 4 per ton, it is understood that settlement shall be made on the coal shipped by the Wilkesbarre Company in the manner indicated in the following example : — 10 tons of broken, at an average f. o. b. price of 8 3.50 $35.00 20 tons of egg, at an average f. o. b. price of .? 3.75 75.00 40 tons of stove, at an average f. o. b. price of $4.30 172.00 80 tons of nut, at an average f. o. b. price of §4 120.00 S 402.00 Or an average of $ 4.02 per ton ; proportion to be paid the Wilkesbarre Company will be 60 per cent, of ^4 and 40 per cent, of 2 cents — $ 2.408. For pea coal, forty-five (46) per cent, of the said f. o. b. price at tide points at or near New York realized for Wyoming coal when the said price is two dollars and fifty cents (f 2.50) or less ; and for each advance of ten (10) cents per ton in the said f. o. b. price above two dollars and fifty cents (f 2.50), the proportion paid the Wilkes- barre Company shall be increased one (1) per cent., until the said f. o. b. price reaches the price of any of the larger sizes, after which the said proportion shall be adjusted on the basis of the price received for such larger sizes. For example : — When the f. o. b. price at tide for Wyoming pea is two dollars and fifty cents (f 2.50) or less, the Wilkes- barre Company will be paid forty-five (45) per cent, of the same ; when the said f . o. b. price is two dollars APPENDIX vni. 215 and sixty cents ($2.60) the proportion thereof paid the Wilkesbarre will be forty-six (46) per cent. ; when the said f. o. b. price is two dollars and seventy cents (f 2.70), the proportion thereof paid the Wilkesbarre Company will be forty -seven (47) per cent., and increas- ing in the manner and proportion as above provided. For buckwheat coal, thirty-two (32) per cent, of the average f. o. b. price at tide points at or near New York when the said price is two dollars (f 2) per ton or less ; and for each advance of ten (10) cents per ton in the said f. o. b. price, the proportionate price paid the Wilkesbarre Company shall be increased two and six-tenths (2.6) per cent., until the said f. o. b. price reaches two dollars and fifty cents (f 2.60), after which the proportionate price paid the Wilkesbarre Company shall advance one (1) per cent, of each ten (10) cents advance in the f. o. b. price above two dollars and fifty cents ($2.60), as in the case of pea coal above men- tioned. Tor example : — When the price realized for Wyoming buckwheat is two dollars ($2), the Wilkesbarre Company shall be paid thirty-two (32) per cent, of that sum, or sixty- four cents ; when the price is two dollars and ten cents ($ 2.10), the Wilkesbarre Company shall be paid thirty- four and six-tenths (34.6) per cent, of that sum, or seventy-two and §ixty-six one hundredths (72.66) cents; when the f. o. b. price is two dollars and twenty cents (f 2.20) per ton, the Wilkesbarre Com- pany shall be paid thirty-seven and two-tenths (37.2) per cent., or eighty-one and eighty-four one hundredths 216 INDUSTRIAL COMBINATIONS. (81.84) cents ; when the f. o. b. price is two dollars and fifty cents ($2.50), the Wilkesbarre Company shall be paid forty-five (45) per cent., or one dollar and twelve and one-half cents (f 1 .12^) ; when the f . o. b. price is two dollars and sixty cents ($2.60), the Wilkesbarre Company shall be paid forty-six (46) per cent, of said price, and so on as in the case of pea coal above men- tioned. For No. 2 buckwheat coal and smaller sizes (if marketed and sold by the Reading Company), twenty (20) per cent, of the said average f. o. b. price shall be paid the Wilkesbarre Company when the said price is f 1.20 per ton or less ; and for each advance of ten cents per ton in the said price the Wilkesbarre Com- pany shall receive one and one-half per cent, increase, until the said price reaches two dollars (f 2) per ton, after which the price paid the Wilkesbarre Company shall advance two and six-tenths per cent, for each ten cents advance in the said price above two dollars per ton, advancing from that point in the same manner and in the same proportion as buckwheat coal. Provided, however, that on Honey Brook and other Lehigh coal of like grade, the price to be paid to the Wilkesbarre Company by the Reading Company shall be based on the average net f. o. b. price received for the Honey Brook and other Lehigh coals of the Lehigh Valley Coal Company and Wilkesbarre Coal Company, at said tidal points at or near New York, anything herein contained to the contrary notwith- standing. The amounts so to be paid shall be without any APPENDIX VIII. 217 deduction wliatsoever for demurrage or charges other than commissions paid, and the payments thereof shall be made monthly on the twentieth (20th) day of each month for all coal delivered to the Reading Company during the next preceding month, and the said aver- age prices on which the amount paid is based shall be the average prices for coal sold and delivered during such preceding month. The Reading Company shall and will keep full and true accounts of the sales of all coal delivered to it by the Wilkesbarre Company under the provisions of this contract, specifying the price realized for each size of coal from each of the mines or collieries, as far as reasonable and practicable, and the results, both gross and net, of the sales of said coal, all of which said accounts shall be open to the examination and inspection of the ofS.cers and agents of the said Wilkesbarre Company at all reason- able times. Fourth. The percentages of the various sizes of coal to be delivered under this agreement shall be the same as those produced at the collieries of the dis- trict in which the mines are respectively located, but the Reading Company shall not be required to take a greater amount of lump and steamboat sizes than in proportion to the whole amount of such sizes sold for the time being by the Reading Company. Fifth. In determining the quantity of coal sold and received under this agreement, twenty-two hundred and forty (2,240) pounds shall constitute a ton, and the same shall be weighed on the scales of the Central Railroad of New Jersey, and the amount of coal con- 218 INDUSTRIAL COMBINATIONS. tained in each car shall be determined by the certifi- cate of the weighmaster at such scales, it being agreed that he shall deduct from the gross weight of the coal one per centum for waste ; provided that the require- ments of any leases to or held by the Wilkesbarre Com- pany as to the mode of weighing coal mined thereunder shall be strictly observed. Sixth. The Wilkesbarre Company covenants and agrees that the said coal (not including culm) shall be properly prepared for market and shall be delivered on board the cars at the breakers in good merchantable condition, free from dirt, and shall not at any time contain a greater amount of bone or slate than is usually present in good merchantable coal of the re- spective sizes, and the same shall be subject to inspec- tion by a competent inspector, to be appointed and paid by the parties hereto jointly, whose decision as to the quality of coal shall be final and conclusive upon both parties. Such inspector when so appointed shall be subject to removal on the request of either party. The different sizes of coal shall in no case contain more than the following percentage of refuse (consist- ing of slate, rock, fire-clay and bone with less than forty per cent, of fixed carbon), viz. : Broken, one per cent. ; egg, two per cent. ; stove, four per cent. ; nut, an average of not more than five per cent, and at no time to exceed a maximum of seven per cent. ; pea, ten per cent. ; buckwheat, fifteen per cent. No more than the following percentage of bone containing a propor- tion of fixed carbon ranging between forty and seventy per cent., viz. : broken, two per cent. ; egg, two per APPEKDIX Till. 219 cent. ; stoye, three per cent. ; nut, five per cent. Pea and buckwheat coal shall not contain such proportion of said bone as to reduce their price below the aver- age market prices of those sizes. If the condition of the trade shall at any time or times require a higher standard of preparation than as aforesaid, the Wilkesbarre Company shall prepare the coal so as to conform to such high standard ; provided, however, that if they shall claim that they should be reimbursed for any increased expenses involved, and the parties shall not agree as to the amount of such reimbursement, the question shall be referred to ar- bitrators, to be appointed as hereinafter provided. When the inspector is making a test for impurities in the coal he shall, whenever possible, take the sam- ple from the coal as it flows from the chute into the car. If at any time the first test is unsatisfactory to either party the inspector shall make two other tests of the coal in question and the average of the three tests on one car shall then be final. If at any time it is necessary to test a car after it leaves the chute, a sample shall be obtained by taking equal quantities of coal from the middle and each side and end of the car, in order to ascertain the average quality of the coal tested in that car. The cost of all inspections shall be equally divided between the parties hereto, except that the chief inspector shall be paid by the Eeading Company. Seventh. The Eeading Company shall and will cause all the coal purchased under the provisions of this con- tract to pass to or towards its market over and by the 220 INDUSTRIAL COMBINATIONS. lines of the Central Kailroad of New Jersey system, it being the intention hereof to provide that the Reading Company, consignor and shipper of said coal, shall not and will not divert or cause to be diverted from the transportation lines or terminals comprising the sys- tem of the Central Eailroad Company of New Jersey the present traf&c of said Central Eailroad Company of New Jersey, or any trafl&c which would naturally go to or towards its destination by or over the said system. Eighth. It is mutually agreed that if by reason of strikes among employees of either party or of the rail- road company or companies over whose lines the coal is to be shipped, or by reason of any injury to the works, buildings, fixtures, or other property of either party, or of stich railroad companies, either party shall be temporarily disabled from furnishing or transport- ing coal as hereinbefore provided, the party so disabled shall not be liable for such nonfulfilment of its con- tract as shall result therefrom, but shall make every reasonable exertion to remove such disability as promptly as possible. Ninth. It is further agreed that, if at any time dur- ing the continuance of this contract the selling price of coal at tide-water shall be so low that the said sixty (60) per centum thereof shall not be sufB.eient to pay the cost of mining the same, together with a reason- able allowance for royalties, then the Wilkesbarre Company shall be at liberty to suspend deliveries of coal thereunder until the prices to be paid therefor shall be sufficient to pay the cost of mining and such reasonable royalties, without liability to payment of any damages for such suspension of deliveries. APPENDIX VIII. 221 Tenth. The Wilkesbarre Company shall have the right to sell coal at its breakers at retail to be taken by ■wagons, but not to be shipped in railroad cars except for delivery under royalty agreement as hereinbefore provided. Eleventh. Should any disagreement arise between the parties hereto as to any matter or thing arising under or in consequence of this agreement and the operations carried on hereunder, or if the parties hereto shall fail to agree as to what ought to be done or omitted, in respect to any matter or thing not specif- ically covered by the express provisions of this con- tract, but coming within the general scope and true intent and purposes thereof, every such disagreement shall be determined by arbitration, one arbitrator to be appointed by the Wilkesbarre Company and the other to be appointed by the Reading Company, and the finding of such arbitrators shall be final and conclusive upon the parties hereto as to such controversy. In any case where the arbitrators are to be appointed hereunder, and either the Wilkesbarre Company or the Eeading Company shall neglect or refuse to make an appointment for a period of ten days after being re- quested in writing by the other party to make such appointment, which request shall set forth specifically the matter or thing to be submitted, then the arbitra- tor appointed by the party not in default in making such appointment shall appoint an arbitrator for the party so in default, and the two arbitrators so ap- pointed shall have the same power as though one of them had been appointed by each of the said parties, 222 INDUSTRIAL COMBINATIONS. and in case where the arbitrators so chosen shall disa^ gree, they shall have the right to appoint an umpire, and the decision of a majority of the three shall have the same force and effect as though the two arbitrators first appointed should have agreed upon such decision as their finding. In case the two arbitrators first chosen by either method cannot agree, and do not agree, within five days after such disagreement, and do not select an umpire as above provided, then upon application by either the Wilkesbarre Company or the Eeading Company, such umpire may be appointed by the president judge of the court of common pleas of any county of the State of Pennsylvania. Twelfth. This contract is expressly upon condition that the Reading Company shall not transfer, assign, or pledge it in any manner, or interest or associate therein any other person or persons, body politic or corporate, without the written consent of the Wilkes- barre Company first had and obtained. And that no judicial or other sale or transfer of any kind whatever, whether upon or under any writ, order, or decree issued by or out of any court, or by any justice of the peace, alderman, or other judicial officer or tribunal, or by virtue of or in compliance with any order or decree of any court of equity or chancery or any proceedings in insolvency or bankruptcy, shall have the effect of trans- ferring the interest of the Eeading Company herein for any time or term whatever to any person or per- sons, body politic or corporate, without the written consent of the Wilkesbarre Company first had and obtained. APPENDIX VTII. 223 Thirteenth. In case of the failure of the Reading Company for thirty days to make any payment here- under when and as the same shall become due and pay- able, or in ease of any breach of covenant on its part, and thirty days' notice thereof given by the Wilkes- barre Company to the Reading Company if the same be not fully compensated within such period of thirty days, then the Wilkesbarre Company may at its option declare this contract at an end, and thereupon all rights of the Reading Company hereunder shall cease and determine : provided, that the delay or omission of the Wilkesbarre Company at any time or times to exercise the rights conferred by this clause of this contract shall not be construed to be nor to operate as a waiver of any such right or rights in respect to existing or subsequent defaults of the Reading Company, and that any annulment or determination of this contract as aforesaid shall be without prejudice to the right of the Wilkesbarre Company to recover damages past or future for any breach thereof by the Reading Company. And the Reading Company hereby covenants and agrees that it will forthwith, after notice of the exer- cise of such option and of an intention to declare this contract at an end on the part of the Wilkesbarre Company, immediately execute and deliver to the Wilkesbarre Company all agreements and assignments that may be necessary or proper to reinvest the Wilkes- barre Company' with all rights under any agreements or contracts aforesaid as fully as they were held and enjoyed by the Wilkesbarre Company at and before the time this agreement was made. 224 INDUSTRIAL COMBINATIONS. Fourteenth.. It being the intention hereof and of the parties hereto that this contract shall continue for a period coincident with the term of the above recited lease from the Central Railroad Company of New- Jersey to the Port Beading Railroad Company, it is hereby further mutually covenanted and agreed that this contract shall be binding upon and enure to the benefit of the parties hereto and their successors and assigns respectively for and during the period of nine hundred and ninety-nine (999) years from the date hereof, imless the said lease of the Central Railroad Com-pany of New Jersey to the Port Reading Railroad Company shall be cancelled or annulled before the ter- mination of that period, and that in that event this contract shall, at the option of either party thereto and upon written notice by such party to the other of its intention to exercise that option, cease to be in force at and upon the termination, cancellation, or annulment of the said lease. In witness whereof the parties hereto have caused their corporate seals to be hereunto affixed, attested by their secretaries, and these presents to be signed by their respective presidents, the day and year aforesaid. Witness : THE LEHIGH AND WILKESBARRE COAL COMPANY, By J. K. MAXWELL, President. Attest : W. T. ZELL, Secretary. [SEAL.] THE PHILADELPHIA AND READING COAL AND IRON COMPANY, By A. A. McLEOD, President. Attest : P. P. KAERCHER, Secretary. [SEAL.] APPENDIX IX. 225 APPENDIX IX. ABSTRACT PROM LEGAL PROCEEDINGS AGAINST THE READING COAL COMBINE. IN CHANCERY OF NEW JEESEY. John P. Stockton, Attokney Gisneeal of New Jersey, Informant, vs. The Central Railroad Company of New Jersey, The Port Reading Railroad Company, and the Philadelphia and Reading Railroad Company, De- fendants. • (1) A corporation, created by statute, possesses no rights and can exercise no powers wliioli are not expressly given or to be necessarily implied. (2) Such a corporation can not lease or dispose of any fran- chise needful in the performance of its obligations to the State without legislative consent. (.3) The act of March 11, 1880, which amends the seven- teenth section of the act entitled "An act to authorize the formation of railroad corporations and to regulate the same" (Rev., 930), is free from constitutional infirmity in its title, and is sufficiently broad in its terms to confer power upon railroad corporations chartered by si^eoial law. (4) The act of May 2, 1885, entitled " An act respecting the leasing of railroads" is constitutional. (5) Equity looks at the substance, and will disregard names and penetrate disguises of form, to discover and deal with it. 226 INDUSTRIAL COMBINATIONS. (6) Where a corporate excess of power tends to the public injury, or to defeat public policy, it may be restrained in equity at the suit of the attorney general. (7) A railroad company of this State leased its franchises and roads to the railway corporation of another State. The lease was not only unauthorized, but was expressly forbidden by law. Its effect was to combine coal producers and carriers and to partially destroy competition in the production and sale of anthracite coal, a staple commodity of the State. Held, to be a corporate excess of power which tends to monopoly and the public injury. Ou order to show cause why injunction shall not issue ; heard upon information, exhibits, and afiB-da- vits, answers of the defendants, aflSdavits, and limited proofs taken under order of the chancellor in con- formity with the provisions of Rule 121. The object of the information is to have a certain indenture of lease made between the Central Railroad Company of New Jersey and the Port Eeadiag Rail- road Company, and also a certain tripartite agreement between the Central Railroad Company of New Jersey, the Port Reading Railroad Company, and the Philar delphia and Reading Railroad Company decreed to be ultra vires, and therefore void ; and void also upon the ground of public policy, in that they tend to create a monopoly of the anthracite coal trade within the State, by stifling competition between the contracting cor- porations, and thereby to increase the price of anthra- cite coal to the inhabitants of the State. And to effectually destroy the effect of such lease and agreement, under which the property and the APPENDIX IX. 227 franchises of the Central Railroad Company of 'New Jersey have already been delivered to the Port Eead- ing Railroad Company, it seeks a mandatory decree vfhich shall enjoin the Port Reading Railroad Com- pany to surrender and return to the Central Railroad Company the Corporate franchises and property, and a restrictive decree which shall perpetually restrain the Port Reading Railroad Company from hereafter controlling and intermeddling with such franchises and property, and the three corporate defendants, from all future combinations to do that which will arbitrarily increase or tend to increase the price of coal to the inhabitants of New Jersey. I am asked to now issue an injunction that will temporarily, at least, effect all these ends. The Central Railroad Company of New Jersey was incorporated by special act of the Legislature of this State entitled " An act to incorporate the Somerville .and Easton Railroad Company," approved February 26, 1847. Before then, on the 9th of February, 1831, the Elizabethtown and Somerville Railroad Company had been incorporated, with power to construct a rail- road from Elizabethtown to Somerville. The Somer- ville and Easton Railroad effected a continuation of railroad communication from Somerville to Phillips- burg on the Delaware River opposite Easton, Pa. By a supplement to the charter of the Somerville and Easton Railroad Company, approved February 22, 1849, that company was authorized to purchase the Elizabethtown and Somerville Railroad, and it was provided that the two railroads should be con- 228 INDUSTBIAL COMBINATIONS. trolled by the charter of the Somerville and Easton Railroad Company, and that the controlling com- pany should thereafter be called the Central Rail- road Company of New Jersey. The purchase was consummated on the 1st day of April, 1849. In 1860, by another legislative act, the Central Railroad Company was authorized to extend its road to the New York Bay at or south of Jersey City. From time to time, by legislative act, the cap- ital of the company was increased, until now the stock outstanding amounts in round figures to about $22,600,000 of an authorized capital of $30,000,000. Besides this large capital, the company has an indebt- edness of upwards of $46,000,000. It owns, leases, or controls more than forty tributary railroads. It has a large and prosperous business and earns a respectable dividend upon its capital stock beyond the payment of the interest upon its indebtedness and its other fixed charges. Its assets exceed in value its out-, standing capital stock and its indebtedness, which together aggregate, as has been indicated, more than $67,000,000. In 1871 it leased the Lehigh and Sus- quehanna Railroad, running from Wilkesbarre to Easton, in Pennsylvania, from its owner, the Lehigh Coal and Navigation Company, a corporation of Penn- sylvania, and also purchased the rolling stock and other equipment of that road. This leased railroad extends through a valuable portion of the anthracite coal region in Pennsylvania. About the same time the Central Railroad Company also invested in coal lands by organizing or causing to APPENDIX IX. 229 be organized the Lehigh and Wilkesbarre Coal Com- pany, and becoming the owner of all or substantially all of its capital stock. This coal company issued bonds -which the Central Railroad Company guaranteed. In virtue of its interests in the anthracite coal region and the advantageous location of its roads, the Cen- tral Eailroad Company has become a considerable coal carrier, not only from the mines of the company in which it is interested, but also from the mines of other miners not having railroad facilities in and through the States of New Jersey and Pennsylvania to the New York Harbour, which is the greatest dis- tributing point for anthracite coal in the United States. The Philadelphia and Reading Company, a corpo- ration of the State of Pennsylvania, is also possessed of railroads running into the anthracite coal region of Pennsylvania, and is an extensive coal carrier. Save a few shares used to qualify directors, it is the owner of the entire capital stock of the Reading Coal and Iron Company, which, in the year 1891, produced from its collieries 8,203,465 tons of coal, being one-fifth of the total produce of anthracite coal from Pennsylvania during that year. Along the lines of the Philadelphia and Reading's railroads there are also other coal miners who find a market for their coal by the means of transportation it affords. The capital stock of the Philadelphia and Reading Company, at par, amounts to about $40,000,000, and its indebtedness to more than f 160,000,000, all of which is balanced by assets alleged to be of equal value. The annual report of 230 INDUSTRIAL COMBINATIONS. the directors of this company for tlie year ending November 30, 1891, referring 'to the coal lands con- trolled by that company, contains this statement : "The coal lands comprise in extent about 32 per cent, of the entire anthracite coal fields of the State, and taking into account the aggregate thickness of the veins on the company's lands and the greater propor- tionate depletion of the estate in the other regions which has been going on for many years, it must be conceded that we have at least 50 per cent, of the entire deposit remaining unmined." Throughout this report and reports similar, when- ever the lands of the Beading Coal and Iron Company are alluded to, they are spoken of as the property of the Philadelphia and Beading Bailroad Company, and that company itself, as the property of the railroad. It appears also that the Philadelphia and Beading Bailroad Company has become the lessee of the Lehigh Valley Bailroad Company, a corporation of the State of Pennsylvania, which in turn is the lessee of the Easton and Amboy Bailroad Company, a corporation of this State, having a line of railroad from Easton, Pa., to Perth Amboy. The Lehigh Valley Bailroad Company is a miner of coal to some extent, and pos- sesses a railroad which runs through the anthracite coal region of Pennsylvania, and affords facilities for transportation of coal there mined to markets in this and adjoining States. For several months past competition between these three roads, in the procuration and transportation of coal, and between each of them and the Delaware, APPENDIX IX. 231 Lackawanna and Western Railroad Company, the Delaware and Hudson Canal Company and the Penn- sylvania Railroad Company, each of which is possessed of interest in the anthracite coal region and the means of transportation of coal therefrom, has materially re- duced the price of coal to consumers in this State and elsewhere, to the loss of considerable profit to each of the companies named, which would not have been suf- fered if competition between them had not existed. It further appears that anthracite coal is a necessity to the people of New Jersey, being the fuel that is most abundantly and cheaply obtainable and most universally used in their homes and manufactories. The Philadelphia and Reading Railroad Company operates in this State among other railroads, the Dela- ware and Bound Brook Railroad, which extends from Bound Brook to the Delaware River, at Yardleyville, a few miles above Trenton, connecting with railroads to the anthracite coal region. It possessed and oper- ated this road prior to the year 1890. On the 3d of November, 1890, A. A. McLeod, I. A. Sweigard, William R. Taylor, D. Jones, Robert S. Davis and John Walker, Jr., all of whom were offi- cers and employees of the Philadelphia and Reading Railroad Company, with others, orga.nized the Port Reading Railroad Company, under the general rail- road law of this State, designating in the certificate of incorporation its capital at $2,000,000, divided into 20,000 shares of the value of f 100 each. The Corporators named became six of its directors with six other persons who were also connected with 232 INDUSTRIAL COMBINATIONS. or friendly to the PhiladelpHa and Eeading Eailroad Company. The real business office of the company was fixed at the office of the Philadelphia and Eead- ing Eailroad Company in the city of Philadelphia, and a nominal office, to comply with the law of this State, was maintained at Kaighn's Point Ferry, in the city of Camden, belonging to the Philadelphia and Eeading Company. On the same day that this railroad company was organized, Albert Foster, James K. Landers, W. H. Blood, F. W. Stone, and Charles H. Quarles, under the general corporation law of this State, formed the Port Eeading Construction Company, with a capital of $ 100,000, divided into 2,000 shares of the value of $50 each. The incorporators of the company were all officers or agents of the Philadelphia and Eeading Eailroad Company. Forty shares of the stock, in all of the value of $ 2,000, were subscribed for, and with that amount of money the company commenced busi- ness. The business office of this company was the office of the Philadelphia and Eeading Eailroad Com- pany in the city of Philadelphia. Shortly after the organization of these two companies under the general laws of New Jersey, the Port Eead- ing Construction Company contracted with the Port Eeading Eailroad Company to build its railroad, from a point in the Delaware and Bound Brook Eailroad, to a point on the Arthur Kill, opposite Staten Island, a distance of 20 miles, for f 1,500,000 in mortgage bonds of the Port Eeading Eailroad Company and all the capital stock of the latter company, save -400 APPENDIX IX. 233 shares which had been subscribed for by its corporar tors, the proceeds of which subscription were paid to the State treasurer in pursuance of the requirements of the statute, that f 2,000 for each mile of road to be constructed shall be deposited with the treasurer of the State at the time of the organization of the company. Previous to the formation of these companies the Philadelphia and Reading Railroad Company had pur- chased 300 acres of land at the proposed terminal of the Port Reading Railroad upon the Arthur Kill, and after the organization of the two companies this land was transferred to the Port Reading Railroad Com- pany. When the contract for the construction of the Port Reading Railroad was executed, a mortgage for $1,500,000 was made by the Port Reading Railroad Company upon its property and franchises, and the bonds secured thereby were transferred to ' the con- struction company, and that company thereafter imme- diately commenced to procure a right of way for the railroad company and to construct its road. The moneys required in the prosecution of the work were had by loan to the construction company from the Philadelphia and Reading Railroad Company, and as well when the Bonds of the Port Reading Railroad Company could be negotiated from the sale of them. In the official report by the president of the Philar delphia and Reading Railroad Company to the stock- holders of that company, for the year ending November 30, 1890, the president says : — " In another place in this report the lack of means 234 INDXJSTKIAL COMBINATIOilS. of placing the product of your mines upon the markets, and the consequent shrinkage of production in propor- tion to that of competing fields, is commented upon. A marked illustration of the necessity of providing additional facilities for the distributing of anthracite coal in New York Harbour and all tide-water points tributary thereto is found in the fact that at the time of writing this report there are more than 1,000 cars loaded with coal standing on the side tracks in Jersey City, because of the lack of dock facilities for trans- ferring coal to vessels, and on account of the restriction which these limitations impose upon your traffic, the management is now obliged to transport coal from Port Richmond through the Delaware River and around New York Harbotir, encountering all the perils of coast navigation at this season of the year and at an expense largely in excess of all-rail freights. " With the view to meeting these wants and other disabilities under which your company has laboured ever since the day it opened its mines, for want of unrestricted access to the waters of New York Bay, the greatest distributing centre in the country of anthracite coal, your board has determined to promote the construction of a line of road, to be under the control of your company, to extend from the vicinity or the terminus of the Bound Brook Railroad near Bound Brook, N.J., to deep water in Arthur Kill, a distance of 20 miles, at a point readily accessible to the waters of New York Baj' and New England ports by large vessels. Plans have been completed for the construction of this line, with adequate terminals for APPENDIX IX. 235 the storage and shipment of coal in quantities limited only by the demands of the market. Over 300 acres of land have been acquired for terminal purposes, bordering on the waters of the Arthur Kill. Work will be speedily commenced and prosecuted with vigour. Conservative estimates show that the earnings of this line will be sufficient to meet all charges on its cost and leave a large surplus ; it will furnish the means of supplying the markets with your proportion of the coal tonnage at all times. " The advantage of the construction of this line in the increase of tonnage on nearly all other parts of the system, without regarding the increase of product of the coal and iron company, can scarcely be esti- mated, but it is certain that it will add a large increase of traffic earnings. It was anticipated that work on this line could have been commenced before this time, but it was found necessary to make several surveys in order to avoid all grade crossings of other railroads, and your board is pleased to announce that the line adopted is of favourable grades and of almost perfect alignment, the maximum grade being only 16 feet to the mile." On the 12th of January, 1892, while the Port Bead- ing Railroad Company was yet incomplete, only a few miles of a single track having been laid upon an unfin- ished road-bed, and it was without rolling stock of any kind, or depots, and its stock and bonds were substan- tially all in the hands of the Port Reading Construc- tion Company, the Central Railroad Company of New Jersey entered into a lease with it, whereby it trans- 236 INDUSTRIAL COMBINATIONS. ferred to it for nine hundred and ninety-nine years its entire railroad, together with the right to maintain and operate more than forty tributary railroads, which it controlled by leases or through the ownership of the majority of capital stock, together with all laterals, extensions, sidings, turnouts, tracks, bridges, viaducts, culverts, rights of way, water rights and privileges, lands, shops, machinery, fixtures, depots, passenger, freight, and water stations, houses, buildings, struct- ures, improvements, tenements, and hereditaments of whatever kind or description and wherever situate, appertaining to the operation, maintenance, and re- newal of said railroads which where then laid, leased, or owned by the Central Eailroad Company, or which at any time thereafter, during the term of the lease, might be acquired by that company for railroad pur- poses. Together also with all its ferries and rights of ferriage then belonging or thereafter to be acquired by it, and all the stationary and locomotive engines, and the cars, tenders, trucks, and other rolling stock of the company, tools, implements, machines, and personal property of every kind and description in use, or intended or adapted for use upon or about the railroads and premises demised, or the business thereof ; and also the rights, powers, and franchises (other than the franchise of being a corporation) and all the privi- leges which then, or at any time thereafter during the term of the lease, might be lawfully exercised and enjoyed by it touching the premises demised, includ- ing all rights in telegraph lines upon the railroad or the several branches thereof. The Central Company APPENDIX IX. 287 reserved to itself its office building in the City of New York, known as the "Central Building," and lauds owned by it which are not adjacent to the railroad, or if adjacent and not in railroad use ; provided, how- ever, if the last mentioned lands, or any of them, should be subsequently needed by the lessee, they also would be surrendered. The Port Reading Railway Company covenanted to pay the Central Railroad Company, annually, enough money to enable it to pay its fixed charges and 7 per cent, upon its capital stock then issued, and such capi- tal stock as should be issued thereafter under specified circumstances, and also pay it 60 per cent, of the les- sor's earnings through the instrumentalities of the rail- ways of the Central, in excess of the fixed charges and 7 per cent, upon the capital stock, up to 3 per cent, upon the outstanding capital stock of the Central. And also agreed to pay the taxes which should be assessed upon the capital stock and dividends of the Central, to keep the premises demised in repair, to insure the property, to save the Central harmless from all damages by reason of the operation of its road or by reason of any failure in the performance of the duties required of it, and to provide and maintain terminals, stations, repair shops, and equipments and- maintain rolling stock and tools equal to the rolling stock delivered to it, so marked as to identify them. Bet- terments were to be made by the Central Railroad Company; if it pleased, it was to have 5 per cent, annually upon the moneys it should pay for the bet- terments and was to be permitted to mortgage the 238 INDUSTRIAL COMBINATIONS. demised property to secure the repayment of moneys it should borrow to enable it to make them. The Port Reading also agreed to keep accounts which should be open to the Central's inspection and to perform all the Central's existing contracts relating to the demised premises ; also to procure traffic over the Lehigh and Susquehanna Railroad to a specified amount. It covenanted that it would not divert nor permit the diversion from the Central of the Central's then traffic or of any traffic which should thereafter be naturally tributary to it, but that it would foster and strive to increase traffic and the earnings of traffic over the Central's road and the earnings of that road. It also covenanted that individual coal miners on the line of the Central's roads should have transportation for their coal without discrimination against them ; that cars and transportation should be furnished to all coal miners who should be naturally tributary to the Central's system, and that the rates charged for trans- portation should be as low as the rates charged at any time for similar transportation by the Philadelphia and Reading Railroad Company from the SchuylkUl region. All the stocks of various companies owned by the Central Company were, so far as concerned cor- porations,^ included within the lease, to remain the property of the Central Company, and be used by it to enable the Port Reading Company to control those cor- porations. The lease was not to be assigned without the Central Railroad Company's consent. It was to take effect as of January 1, 1892, and the right of re-entry was secured to the Central in case of any APPENDIX IX. 239 default upon the part of the Port Reading Railroad Company in the performance of its undertaking. Upon the same day that this lease was executed, a tripartite agreement between the Central Railroad Company, the Port Reading Railroad Company, and the Philadelphia and Reading Railroad Company, in which the lease just referred to was incorporated, was entered into. This agreement recited that the lines operated by the three railroad companies were con- nected in New Jersey and Pennsylvania and form continuous lines ; also that the Central Railroad Com- pany was willing to lease to the Port Reading Com- pany if the Philadelphia and Reading would guarantee the performance of the Port Reading's covenants in the proposed lease ; that the Port Reading was willing to lease if the Philadelphia and Reading would insure the increase of traffic that the lease contemplated, and the Philadelphia and Reading was willing to guarantee the lease because of the advantage it would have in the terminals of the Central Railroad and in the interchange of traffic with it. And it was thereupon agreed that the lease should be executed ; that the consent of the stockholders of the Central and Port Reading Companies to the lease should be procured as counsel of the Philadelphia and Reading Company should instruct ; that possession of the demised premises should be immediately given; that the payments to be made by the Port Reading Company and the covenants to be performed by it were guaranteed by the Philadelphia and Reading Company ; that the Philadelphia and Reading would 240 INDUSTRIAL COMBINATIONS. make the payment if the Port Reading should not make them, and that it would cause the Port Eeading to perform its covenants ; that the Port Reading Com- pany should provide or procure, at Jersey City, and in New York and Brooklyn, and on the Arthur Kill, terminal facilities for the Philadelphia and Reading traffic, the Central Railroad Company having the privilege to provide such facilities, except at the Port Reading's terminal on the Arthur Kill, as bet- terments; that the traffic, which would thereafter naturally go to the Central as its direct route, should be secured to that road ; that coal, naturally tributary to the Central, should go over it for as long a distance as possible ; that coal, naturally tributary to the Phila- delphia and Reading, which was destined to the New York Harbour, north of Elizabeth, should go over the Central's road, at least, from Bound Brook Junction; that coal, for delivery on line of the Central's road, from mines tributary to it, should go over the Central, or in event of its not going over the Central, that an equivalent for the loss of the freight rates should be credited in the Central's account; that traffic on the Easton and Amboy Railroad and upon other Lehigh Valley lines, destined to the Central terminals, should go over the Central at least as far as from Roselle Junction to the terminal; that other traffic, as then interchanged, should be continued to interchange ; that the Port Reading and the Philadelphia and Reading would maintain the present traflB.c of the Central and increase it ; that the Philadelphia and Reading would put $ 2,000,000 of securities in trust to secure its per- APPENDIX IX. 241 formance of the agreement; that in ease of a termi- nation of the lease and agreement, the Central shall have an interest equal to the Reading in the Central, New England and Western Eailroad Company, and in the Poughkeepsie Bridge Company upon its paying to the Reading one-half its expenditure for the Read- ing's interest, and assuming a due proportion of the obligations assumed by the Reading in securing that interest. The agreement of guarantee and assurance of traffic ■was to continue as long as the lease should last, and in case the lease should be forfeited, the agreement should then be void. The lease was executed upon the part of the Port Reading Railroad Company by A. A. McLeod, its president, and William R. Taylor, its secre- tary, and the agreement of guarantee and assurance was also executed by those gentlemen as president and secretary respectively, not only of the Port Reading Railroad Company, but also the Philadelphia and Reading Railroad Company. On the 8th of April, 1892, the board of directors of the Central Railroad Company reported to the stock- holders of that company that their railroads were then being operated by the Port Reading Railroad Company. Commenting upon the advantages of the lease and agreement, this report says : " It is intended to secure for your railroad its pres- ent traffic and its natural growth and development, and, in addition, by the guarantee of common interest, the benefit of whatever traffic is controlled and influ- enced by the Reading system and is naturally tributary 242 INDTJSTKIAL COMBINATIONS. to your road and terminals. It prevents a diversion of traf&o wliicli might otlierwise have resulted from the lease of the Lehigh Valley Eailroad by the Philadel- phia and Reading Company. " It is fair to expect, as the further results of this alliance, -with the co-operation of other large coal-pro- ducing companies, greater uniformity in the prices of coal, steadier employment for the labouring classes in the coal regions, the avoidance of needless and expen- sive competition between producers and the establish- ment of economies which, without undue burden to consumers, will bring to the stockholders adequate returns for their capital. "In both the lease and traffic contracts every safe- guard had been provided for the preservation and development of your property. " The independent organization of the Central Eail- road Company will be maintained to discharge its obligations directly to the stockholders and bondhold- ers, as well as to see that the provisions of the agree- ment are observed and the maximum rentals thereby secured." The testimony of Mr. A. A. McLeod, who was presi- dent of both the Philadelphia and Reading and the Port Reading Companies when the lease and tripartite agreements were executed, has been put in the case upon the part of the informant. In it Mr. McLeod states, among other things, that the lease does not put it in the power of the Philadelphia and Reading road to raise or lower the price of coal without the co-operation of other coal carriers, but that it will possibly facilitate APPENDIX IX. 243 such co-operation. It would itself, he says, undoubt- edly affect prices of coal at some points. In point of fact the price of coal has risen at several places in New Jersey since the lease and agreement were made. Whether this is attributable to the lease does not distinctly appear, but it is quite clear that it is the purpose of the coal companies in which the rail- roads involved are interested to demand a greater price for the coal they sell. While the facts above recited remain admitted or uncontroverted, the answers deny that the defendants, or either of them, own any coal lands, or mine or sell any coal, and also that they, acting either separately or conjointly, can fix or increase the price of anthracite coal, or create a monopoly in the business of mining or selling anthracite coal, or put an end to competition in the price or sale of coal. . . . 244 INDUSTRIAL COMBINATIONS. APPENDIX X. DISTILLING AJSTD CATTLE FEEDUSTG CO. A. REBATE VOUCHERS. Peoria, III., , 189 . No. . Subject to the conditions named herein, and for the purpose of securing the continuous patronage of the within-named purchaser, the successors and assigns of the same, for its products, the Distilling and Cattle Feeding Co., six months from the date of this purchase voucher, will pay to of purchaser, dollars, (f ) being a rebate of seven cents per proof gallon on proof gallons of the Distilling and Cattle Feeding Company's product purchased this day. This voucher will be valid and payable only upon condition that the above-named purchaser, the suc- cessors and assigns of the same, from the date of this voucher to the time of its payment, shall have bought their supply of such kinds of goods as are produced by the Distilling and Cattle Feeding Company, and all compounds thereof, exclusively of one or more of the dealers named on the back hereof, until further noti- fied, and shall also have subscribed to the certificate on the back hereof. APPENDIX X. 245 When due, forward to the German American Na- tional Bank of Peoria, 111., where this voucher is pay- able without exchange or other charge. DISTILLING AND CATTLE FEEDING CO., By J. B. GKEENHUT, President. (Stamped across the face.) 42 Not transferable or negotiable. Proof gallons. Amount. No Date 189 . . Name Location Proof gallons . Amount of Rebate . It is hereby certified that from the date of this voucher to the maturity thereof the within-named purchaser and the successors and assigns of the same have purchased all of their supply of such kind of goods and their compounds as are produced by the Distilling and Cattle Feeding Co., exclusively from one or more of the dealers named hereon. Dated ■ James A. Webb & Son New York, N. Y. Curtiss & Co " " 246 INDUSTBIAL COMBINATIONS. Thomas B. Kerr New York, N. Y. Ross & Keaney " " J. L. Hasbrouck & Co " " Eastern Distilling Co. and Ridgewood Re- Distilling Co " " Geo. W. Kidd & Co " " E. N. Cook & Co Bufialo, " Columbia Distilling Co Albany, " H. & H. Reiners Brooklyn, " Carstairs, McCall & Co Philadelphia, Pa. Dougherty & Downs Nicholas J. Griffin R. J. Allen, Son & Co Charles S. Hahs Boyle & MoGlynn Beattie & Hay Empire Distilling Co Boston, Mass. D.T. Mills & Co A. L. Webb & Son Baltimore, Md. James Walsh & Co Cincinnati, Ohio. Maddux, Hobart & Co Milloreek Distilling Co Union Distilling Co Hoffheimer Bros Elias Block & Sons Freiberg & Workum The Old '76 Distilling Co W. W. Johnson & Co Henry W. Smith & Co Hirsch, Loewenstein & Levi Fleisohmann & Co W. L. Weller & Sons Louisville, Ky. Terre Haute Distilling Co Terre Haute, Ind. Chicago Distilling Co Chicago, 111. United States Distilling Co " " Abel, Ames & Co " " Empire Distilling Co " " APPENDIX X. 247 The Riverdale Distillery .' Chicago, 111. Henry H. ShuJEeldt & Co " " The Calumet Distillery " " Corning & Co Peoria, " H. Schwabaoher " " John Meiners & Son Milwaukee, Wise. National Distilling Co , . " " The St. Paul Distillery South St. Paul, Minn. Mound City Distilling Co St. Louis, Mo. Teuscher & Co " Kansas City Distilling Co Kansas City, Mo. Her & Co Omaha, Nebr. Lilienthal & Co San Francisco, Cal. C.W.Craig " " Jones Mundy & Co " " J. & A. Freiberg Cincinnati, Ohio. Mihalovitch, Fletcher & Co " " Rheimstrom Bros " " The Cook & Bernheimer Co New York, N. Y. C. H. Graves & Sons Boston, Mass. Thos. E. O'Keefe Oswego, N. Y. The Wm. Bergenthal Co Milwaukee, Wis. 248 INDUSTRIAL COMBINATIONS. APPENDIX Xa. Daily statement of Distilling and Cattle Feeding Company's rebate vouchers issued on its product sold this day of 189- by , of . No. of PUHOHASER. Leave blank for rebate office. Proof gallons. Amount voucher. Name. Location. rebate. Total APPENDIX XI. 249 APPENDIX XI. AGREEMENT EOE THE EEOEG-ANIZATION OF THE AMERICAN COTTON OIL TRUST. This Agreement, made this sixth day of November, 1889, by and bet-ween Frederic P. Olcott, Samuel Thomas, Edward D. Adams, Nicholas Sheldon, James H; Benedict and William L. Bull, a Committee of the Certificate holders of The American Cotton Oil Trust, hereinafter called The Committee, parties of the first part ; and such of the Certificate holders of the said The American Cotton Oil Trust as shall become parties to this Agreement, parties of the second part ; and The Central Trust Company of New York as Depositary, party of the third part ; Witnesseth : Whbebas, The American Cotton Oil Trust was heretofore created under and by virtue of an Agree- ment or Deed of Trust, and there have been issued" thereunder Trust Certificates now outstanding to the amount of $42,185,238; And whbebas. It is the desire and purpose of the parties hereto to effect a reorganization of The Ameri- can Cotton Oil Trust by the merger and incorporation of the Trust and the property and assets thereof, in whole or in part, into The American Cotton Oil Com- pany, a corporation organized and existing under the 250 INDUSTRIAL COMBINATIONS. laws of tlie State of New Jersey, or that such Trust Certificates be sold, exclianged-or transferred directly for shares of said Company, or that such other method or plan be adopted as may be considered by said Com- mittee calculated to accomplish the following general result and basis, viz. : GENERAL BASIS OF REORGANIZATION OF THE AMERICAN COTTON OIL TRUST. The American Cotton Oil Company to issue Six per cent.. Non-cumulative Preferred Stock, redeemable at 105 per cent., secured by the shares of all companies received on such merger or acquisition, or by property or Trust Certificates, as may be determined by the Committee, and limited to f 15,000,000 in amount — $4,454,000 thereof (or any balance in excess of the amount required on the exchange) to be held, used and disposed of by the Directors for the purposes of the Company ; and Common Stock to the amount of $21,092,000. All such stock to be entitled to Uke voting power. The American Cotton Oil Trust Certificates to be exchanged for such shares in the following proportion, viz. : For each share of Trust Certificates, 60 per cent, thereof in such Common Stock $21,092,000 And 25 per cent, thereof in such Pre- ferred Stock $ 10,546,000 Now, THEEEFOEE, in Consideration of the sum of one dollar each to the other in hand paid, and of their APPENDIX XI. 251 mutual agreement, and of other val\iable consideration, the receipt whereof is hereby acknowledged, the parties hereto, and such other certificate holders as shall come in and participate under the terms of this Agreement, either by executing the same, or by de- positing their Certificates hereunder, hereby mutually covenant and agree (each for himself and not for the other), to and with each other, and with the said Com- mittee, parties of the first part, and with said Central Trust Company, party of the third part, as follows : I. That they are the owners, or legal or personal representatives of the owners, of Certificates of The American Cotton Oil Trust, to the amounts set oppo- site their respective names, or deposited hereunder respectively ; and that they will in all cases deposit said Certificates owned, or represented by them, or either of them, in good faith, on or before the twen- tieth day of November, 1889 (or within such further period as may be granted by said Committee), with the Central Trust Company of the City of New York, which is hereby designated as the Depositary of said Committee for said purpose, and that they will respec- tively accept in lieu thereof negotiable Certificate or Certificates of Deposit of said Central Trust Company, issued in such form as may be approved by the Com- mittee; and that they and each of them will in all cases execute legal and sufficient transfers of their Trust Certificates to the Committee, parties of the first part, and deposit the same with their said Trust Certificates, so that the, legal title to said Trust Cer- tificates shall be and become vested in said Committee, 252 INDUSTRIAL COMBINATIONS. for the use and subject to the control of said parties of the first part, or a majority of them, or their suc- cessors, as such Committee ; provided, however, that if any holders of American Cotton Oil Trust Certifi- cates shall fail to surrender and transfer their said Trust Certificates in accordance herewith, or in any other respect fail to comply with the terms of this Agreement, they and each of them shall, from and after such omission or failure, have no right to par- ticipate in the benefits of this Agreement, without the express consent of said Committee. By the acceptance of such Certificates of Deposit above referred to, the several parties of the second part respectively depositing their American Cotton Oil Trust Certificates with said Central Trust Com- pany, become parties to this Agreement with the same force and effect as if they had severally afl&xed their signat\ires and seals at the foot of this instrument. II. The assenting stockholders hereby constitute the Committee, said parties of the first part, and their successors and substitutes, as their Committee, Trus- tees and Agents to carry out the general plan of reorganization above generally set forth, in such man- ner, and by such methods, means and proceedings, as in their judgment may seem advisable ; to possess and exercise all the title, interests,- rights, powers and privileges of such certificate holders appertaining to such Certificates under the Deed of Trust, or other- wise, including the power and right to vote and act (either in person or by proxy) at any and all meetings of certificate holders of said Trust upon any measure APPENDIX XI. 253 or subject, ■whether previous notice thereof be given or not, and to assent to, act upon and co-operate in the dissolution and winding up of said Trust, and the transfer and sale of any or all the assets thereof — all in such manner and upon such considerations as they deem best ; and to prescribe the form and provisions of such Preferred and Common Stock Certificates, and determine with what shares, property or Trust Cer- tificates such Preferred Stock shall be secured and the manner thereof. Also to prosecute or defend any and all legal pro- ceedings which said certificate holders personally, or any of them, could have instituted, conducted or be parties to, and for any of the purposes or ends for which such certificate holders might have instituted or conducted the same; to employ and determine compensation of such assistants, agents, attorneys and counsel and incur such other expenses for advertising, printing and otherwise, as they may deem necessary for the accomplishment of the purposes herein gener- ally expressed ; and in general to devise and execute means for the reorganization of said Trust, and to do and perform each and every act which they may deem necessary or desirable to consummate such reorganiza/- tion, and the general purposes hereinbefore recited, and full discretion is conferred upon them in the premises. It is expressly provided and agreed, that such Com- mittee shall not be confined to any single method of accomplishing the conversion of such Trust Certificates into shares of said corporation, but shall have and is 254 INDUSTRIAL COMBINATIONS. hereby given plenary power and discretion to bring about such result by sucL method and in such manner as they may consider practicable and advantageous to the certificate holders; and that the enumeration of specific powers anywhere in this Agreement shall not be construed to limit or restrict the general powers herein mentioned. III. Said Committee shall have power to add to their number from time to time, to such limit as they deem judicious, and to fill any vacancy which may arise in the Committee by death, resignation or other- wise. They shall select of their number a Chairman and Secretary, who shall perform the duties usually appertaining to such offices. They shall be and are hereby empowered to act in all respects and upon all questions and matters by the afiirmative vote of a majority of their number; and all the interests, rights, duties, powers and discretion herein conferred upon the parties of the first part, shall extend to and be possessed and exercised by any successor, substi- tute or additional member of said Committee as fully as if such person or persons had been originally named herein. They shall have power to nominate and appoint an agent, agents or sub-committee, through whom they may act, and they may delegate any neces- sary authority as well as discretion to such agent, agents or sub-committees. IV. This Agreement, and all the provisions thereof, shall be binding upon all parties hereto, and depositors of Certificates hereunder, and shall be carried out without regard to any fixed proportion or amount APPENDIX XI. 255 of Trust Certificates that may be deposited here- under. The Committee shall be the sole judge as to whether the assent of the holders of such American Cotton Oil Trust Certificates has been obtained to this Agreement sufficient in amount to warrant them in carrying out the same ; and they shall have power, and it shall be their duty, to execute and consummate any such plan, and the provisions of this Agreement, for and in behalf of such holders as may become parties hereto, and without any regard to any fixed proportion or amount of such Certificates ; and this Agreement shall continue in full force and effect until all of its pur- poses and provisions are accomplished; provided, however, that said Committee, in their absolute dis- cretion and judgment, may at any time and at any stage of their duties, bring this trust in whole or in part to a close, wind up the same in whole or in part, and distribute, pro rata, among the holders of such Central Trust Certificates, the shares, certificates or other property that may be in their hands at the time. V. And it is expressly agreed that, if said Commit- tee should consider it preferable, for any reason or cause, so to do, they are specifically authorized and empowered to sell and dispose of, from stage to stage, and at any time or times, all or any part of the Ameri- can Cotton Oil Trust Certificates deposited hereunder to said American Cotton Oil Company, for its Com- mon and Preferred Stock of the general description aforesaid, and upon such considerations as they may deem best; and they are fully empowered to enter 256 INDUSTRIAL COMBINATIONS. into any agreement and make such arrangements with, said Company as they may consider desirable to such end, and to determine with what shares, property or Trust Certificates such Preferred Stock shall be secured and the form and manner thereof. And they are fully and specifically authorized and empowered to hold, manage, represent and be vested with the legal title to such shares required on any such sale or on such merger and dissolution of the Trust; and to continue therewith to pursue the pur- poses aforesaid, until such merger and dissolution and the purposes of this Agreement are completely accomplished, and said Trust is wound up and liqui- dated, or at their discretion, to make distribution thereof as hereinbefore authorized. And the said Committee shall possess and exercise all the title, interest and rights, powers and privileges of such stockholders of said Company, including the power and right to vote and act (either in person or by proxy) upon any measure, matter or subject, in such manner as they may deem best, either in writing or at any meeting of stockholders of said Company, with or without previous notice thereof, and to repre- sent said stock in every respect. And all the powers anywhere in this Agreement contained are made applicable to the provisions of this Article as fully as if set forth therein. VI. It is expressly understood and agreed that any of the provisions of this Agreement other than Article IV., and that any detail of said general basis of reor- ganization, may be altered, amended, or added to in APPENDIX XI. 257 any respect by the assent of tlie holders for the time being of at least three-fotirths in amount of the said Central Trust Certificates of Deposit issued hereunder, expressed either in writing or by a vote had at a spe- cial meeting of such holders called for that purpose by such Committee in the manner hereinafter provided ; and any and every such alteration, amendment or addition shall become, and be deemed to be, a part of this Agreement, as fully and effectually in every respect as if the same had been originally so provided herein. VII. The holders of Trust Certificates of said The American Cotton Oil Trust may avail themselves of the benefits of this Agreement, by depositing their Trust Certificates hereunder on or before the twentieth day of November, 1889 ; and after that date the hold- ers of Trust Certificates, who have not deposited their Certificates as aforesaid, shall be precluded from en- joying the benefits of this Agreement, unless said Committee shall extend the time within which the same may be so deposited; and said Committee is hereby granted full power and authority to extend the time within which such Certificates shall be deposited, upon such terms and penalties, and in such cases as they, in their absolute judgment, may consider best, and may waive penalties in any case. VIII. Said Committee shall have power to call meetings of the holders of such Central Trust Certifi- cates of Deposit, for any purpose and upon at least three days' notice to be given by publication of such call in two or more newspapers of general circulation 258 INDUSTRIAL COMBINATIONS. published in the City of New York ; and such publi- cation shall be the only notice of such meetings requi- site hereunder, and shall be deemed and taken to be actual and sufficient notice thereof to the holders of such Central Trust Certificates and the respective depositors hereunder. IX. No member of said Committee, party of the first part, nor said Depositary, party of the third part, shall be responsible or liable for any act or default of the other of them, or of any agent employed by them or either of them; and they shall respectively be en- titled to proper and reasonable compensation for all services by them respectively rendered in the execu- tion of the powers and duties herein provided for, and to reimbursement for any expenses they may deem it proper to incur in the execution of said trusts, powers and duties; and they or either of them may become pecuniarily interested in any of the properties or matters which are the subject of this Agreement. X. And the said Committee, party of the first part, and said Depositary, party of the third part, do hereby respectively accept and agree to the trusts, powers and duties upon them respectively conferred or imposed hereunder, and will carry out the same to the best of their respective abilities ; but it is expressly under- stood that they assume no legal responsibility for the execution of any such plan of reorganization. XI. This Agreement may be printed and copies thereof may be signed ; and all of said copies so signed shall be deemed and taken as constituting one original contract. APPENDIX XI. 259 XII. This Agreement shall bind and extend to the parties hereto, the depositors hereunder, and their and each of their successors, executors, administrators and assigns. In witness whereof, the said parties have here- unto set their names or affixed their corporate seals, and have written opposite to their respective names or seals the amount of Certificates of the American Cotton Oil Trust held by them. F. P. OLCOTT, SAMUEL THOMAS, EDWARD D. ADAMS, \ Meorganization JAMES A. BENEDICT, | Committee. WM. L. BULL, NICHOLAS SHELDON, Signed, sealed and deliv- 1 ered in the presence of — I Wm. Nelson Cromwell. CENTRAL TRUST COMPANY OF NEW YORK, corporate 1 By E. E. HYDE, 2d Vice-Pres., Depositary. 260 INDTTSTEIAL COMBINATIONS. APPENDIX XII. CHAETEE OF THE DISTILLING AND CATTLE FEEDING COMPANY. STATE OF ILLINOIS. DEPARTMENT OF STATE. Isaac N. Pearson, Secretary of State. To all to whom these presents shall come, greeting : Whereas a statement duly signed and acknowledged has been filed in the office of the secretary of State, on the 31st day of January, a.d. 1890, for the organ- ization of the Distilling and Cattle Feeding Company, under and in accordance with the provision of "an act concerning corporations," approved April 18, 1872, and in force July 1, 1872, and all acts amendatory thereof, a copy of which statement is hereto attached. And whereas a license has been issued to Joseph B. Greenhut, Adolph Woolner, and George J. Gibson as commissioners to open books for subscription to the capital stock of the said company ; And whereas the said commissioners have on the 11th day of February, a.d. 1890, filed in the office of the secretary of State a report of their proceedings APPENDIX XII. 261 Tinder said license, a copy of whicli report is hereto attached : Now, therefore, I, Isaac N. Pearson, secretary of State of the State of Illinois, by virtue of the powers vested in me by law, do hereby certify that the said Distilling and Cattle Feeding Company is a legally organized corporation under the laws of this State. In testimony whereof I hereto set my hand and cause to be fixed the great seal of State. Done at the city of Springfield this eleventh day of February, in the year of our Lord one thousand eight hundred and ninety, and of the independence of the United States the one hundred and fourteenth. [SEAL.] I. N. PEARSON, Secretary of State. State of Illinois, Peoria County, ss. : To Isaac N. Pbaeson, Secretary of State : We, the undersigned, Joseph B. Greenhut, Adolph Woolner, and George J. Gibson, propose to form a corporation under an act of the general assembly of the State of Illinois, entitled "An act concerning corporations," approved April 18, 1872, and all acts amendatory thereof ; and for the purpose of such organization we hereby state as follows, to wit : 1. The name of such corporation is Distilling and Cattle Feeding Company. 2. The object for which it is formed is to carry on a general business of distilling, redistilling, and recti- fying high wines, alcohol, spirits, gins, and whiskies 262 INDUSTRIAL COMBINATIONS. of every kind and description, and deal in the same, in the State of Illinois and elsewhere, and owning the property necessary for that purpose; also to engage in feeding and dealing in cattle and other live stock ; also malting, dealing in malt, and doing any other business incident to the main purpose of this corpo- ration. 3. The capital stock shall be 135,000,000.00. 4. The amount of each share is one hundred doUars. 5. The number of shares three hundred and fifty thousand. 6. The location of the principal oflBce is in Peoria, in the county of Peoria, State of Illinois. 7. The duration of this corporation shall be ninety- nine years. JOSEPH B. GREENHUT. ADOLPH WOOLNER. GEORGE J. GIBSON. To Isaac N. Peaeson, Secretary of the State of Illinois. The commissioners duly authorized to open books of subscription to the capital stock of Distilling and Cattle Feeding Company pursuant to license hereto- fore issued, bearing date the 31st day of January, A.D. 1890, do hereby report that they opened books of subscription to the capital stock of said company, and that the said stock was fully subscribed ; that the following is a true copy of such subscription, viz. : We, the undersigned, hereby severally subscribe for the APPENDIX XII. 263 number of shares set opposite our respective names, to the capital stock of Distilling and Cattle Feeding Company and we severally agree to pay the said com- pany, for each share, the sum of one hundred dollars as the same shall be called for. Namea. Amount. Joseph B. Greenhut . Warren H. Corning . Wm. N. Hobart . . Lewis H. Greene . . H. L. Terrell . . . Adolpli Woolner . . Peter J. Hennessy . Nelson Morris . . . H. M. Kingman . . 43,750 14,375,000 43,750 4,375,000 43,750 4,375,000 43,750 4,375,000 43,750 4,375,000 43,750 4,375,000 43,650 4,365,000 43,350 4,335,000 500 50,000 That on the eleventh day of February, a.d. 1890, at 207 North Jefferson ave., Peoria, 111., at the hour of 10 a.m., they convened a meeting of subscribers aforesaid, pursuant to notice required by law, which said notice was deposited in the postofS.ce properly addressed to each subscriber, ten days before the time fixed therein, a copy of which said notice is as follows, to wit: You are hereby notified that the capital stock of Distilling and Cattle Feeding Company has been fully subscribed, and that a meeting of the subscribers of such stock will be held at 207 North Jefferson ave., Peoria, 111., on the 11th day of February, a.d. 1890, 264 INDUSTRIAL COMBINATIONS. at 10 o'clock, a.m., for tlie purpose of electing a board of directors for said company, and for the transaction of such other business as may be deemed necessary. (Signed.) JOSEPH B. GREENHUT, ADOLPH WOOLNER, GEORGE J. GIBSON, CorriTnissioners^ That said subscribers met at the time and place in said notice specified and proceeded to elect directors, and that the following persons were duly elected for the term of one year, viz. : Joseph B. G-reenhut, War- ren H. Corning, Wm. IST. Hobart, Lewis H. Greene, H. L. Terrell, Adolph Woolner, Peter J. Hennessy, Nelson Morris, H. M. Kingman. JOSEPH B. GREENHUT, A. WOOLNER, GEORGE J. GIBSON, Commissioners. State of Illinois, County of Peoria, ss. : On this 11th day of February, a.d. 1890, person- ally appeared before me, a notary public in and for said county in said State, Joseph B. Greenhut, Adolph Woolner, and George J. Gibson and made oath that the foregoing oath by them subscribed is true in sub- stance and in fact. [SEAL.] N. B. D. HIGGINS, Notary Public. APPENDIX XII. 265 State of Illinois, Peoria County, ss. : 1, Francis G-. Minor, clerk of the circuit court in and for the county of Peoria and State of Illinois, and ex- officio recorder of deeds in said county, do hereby certify that the annexed instrument was filed for record in my office on the 12th day of Feb'y, a.d. 1890, at 9 : 19 o'clock a.m., and has been duly recorded in book 3 on page 64 in said recorder's office. In witness whereof I have hereunto set my hand, at my office in Peoria, the day and year above written. E. G. MINOR, Clerk and Recorder, By J. P. DUEKnsr, Deputy. 266 INDUSTRIAL COMBINATIONS. APPENDIX Xin. BY-LAWS OF THE UNITED STATES LEATHER COMPANY. AS ADOPTED MAY 16tH, 1893. ARTICLE L MEETINGS OF STOCKHOLDEES. § 1. The anmial meeting of the Stockholders shall be held at the principal office of the Company, in the State of New Jersey, on the fourth Wednesday in February, at the hour of twelve o'clock noon of said day in each year, for the purpose of electing twenty- seven directors to serve for the ensuing year, and for the transaction of such other business as may come before such meeting. At least twenty days' notice of the time and place of such meeting shall be given by the Secretary to each Stockholder by mail to such address as may be on record in his office. But no failure to give such notice shall be held or taken to invalidate the proceed- ings at such meeting, when the same shall be held at the time and place hereby fixed and established, and such meeting may be adjourned from day to day, until its business is completed. APPENDIX XIII. 267 If for any reason there should be a failure to hold such meeting, or to elect a Board of Directors thereat, a meeting may be held at said place at any time there- after for the said purpose, on the call of the Board of Directors, or by the holders of a majority of the stock on twenty days' notice thereof, to be given to each Stockholder by personal service or by mail. Any of the books and papers of the Company which shall be required by the holders of a majority of the stock, present, shall be exhibited at such meetings. § 2. Special meetings of the Stockholders may be called at any time for any lawful purpose, on the order of a majority of the Board of Directors, and shall be called by the President on the request, in writing, of the holders of a majority of the stock issued, stating the object for which the meeting is to be called, and the business transacted at any special meeting shall be given to each Stockholder by personal service or by mail at least twenty days before the day fixed for such meeting. § 3. At all meetings of Stockholders the vote shall be by ballot, unless the same is waived, and each Stockholder shall be entitled to one vote, to be cast in person or by proxy, for every share of stock stand- ing in his name on the books of the Company, and a majority of the votes cast shall determine the question or questions submitted to vote. § 4. At their meeting next proceeding any meeting of Stockholders, the Board of Directors may appoint from the Stockholders three Inspectors, whose duty it shall be to receive and count the votes cast by the 268 LNDUSTEIAL COMBINATIONS. Stockholders at such meeting, to report the result thereof in writing to such meeting, and to deliver the ballots cast upon each question to the clerk of the meeting with their report. But it shall be competent for the holders of a majority of the stock represented at any meeting to appoint Inspectors to act at such meeting. § 5. Should the holders of the requisite amount of stock be unrepresented at any meeting where the vote of any definite proportion of the stock is required, it shall be competent for the Stockholders present or represented to adjourn the meeting from time to time until the requisite amount of stock shall be repre- sented. § 6. At all meetings of the Stockholders the holders of a majority of the outstanding stock of the Company or their representatives shall constitute a quorum, but a less number may adjourn from time to time until a quorum shall be convened. The majority of the stock represented by those present may elect a Chairman and Clerk, but the President of the Company, if pres- ent, shall act as Chairman, unless the meeting shall, by a majority vote, elect a Chairman. The Secretary shall, if present, act as Clerk of the meeting, unless the meeting shall, by a majority vote, elect its own Clerk. In either case, it shall be the duty of the Clerk to keep a true and faithful record of the proceedings of the meeting, and to certify the same under his hand to the Board of Directors at their next meeting. APPENDIX XIII. 269 ARTICLE II. EOAED OF DIKECTOKS. § 1. The management of the affairs of the Company, and the control of its business shall be vested in a board of twenty-seven Directors, each of whom shall, at the time of his election and during his continuance in office, be a bona fide holder of stock standing in his name on the books of the Company. § 2. Fourteen members of the Board shall consti- tute a quorum, who, whenever and wherever convened in conformity to the provisions of the By-Laws, shall have full power to transact business. But a less num- ber may adjourn from time to time until a quorum shall be convened. § 3. At the first meeting of the Board of Directors after their election, or at any subsequent meeting when the same shall not have been done at the first meeting, they shall choose by ballot from their num- ber a President and a First and a Second and a Third Vice-President who shall respectively hold their offices until their successors shall be duly chosen. They shall also elect a Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, Auditor, an Executive Committee, and such additional officers and agents as they may deem advisable, ^yhose duties shall be defined by the By-Laws, and who shall respectively hold their offices during the pleasure of the Board. One person may hold more than one office. § 4. It shall be the duty of the Board of Directors to present, at each annual meeting of the Stockholders, 270 INDUSTRIAL COMBINATIONS. a full and clear statement of the business and afEairs of the Company. § 5. The Board of Directors shall fix or approve the compensation of the of&cers of the Company, and of the several heads of departments. The wages of sub- ordinates and other agents and employees shall be fixed by the Executive Committee, subject at all times to the action of the Board. § 6. Vacancies in the Board of Directors shall be filled by the Board from time to time, and in case of any failure to elect a Board of Directors at the time or in the manner herein provided, the existing Board, for the time being, shall continue in ofB.ce until their successors shall be elected. § 7. The Board of Directors shall hold regular meetings at the office of the Company in the City of New York, State of New York, on the fourth Tuesday of the months of March, June, September and Decem- ber, for the transaction of such business as may come before them. Special meetings of the Board may be called at any time or place by the President, and shall be called by him or one of the Vice-Presidents on the written request of nine members of the Board, stating the object of such meeting. Notice of not less than four days from date of notice, by mail, or two days by tele- graph, of all special meetings shall *be given to each Director, in which the object of the meeting shall be stated, and no business shall be transacted except such as shall have been so stated in the notice. § 8. At all meetings of the Board, the President, or APPENDIX XIII. 271 in his absence a Vice-President, present, shall act as Chairman, and in their disability to act, one of the Directors present may be chosen to preside. The presiding oflB.cer shall preserve order and regulate all discussions in accordance with parliamentary usage. § 9. At all meetings of the Board, the order of busi- ness shall be : 1st. Reading of the minutes of the previous meeting. 2d. Eeports of Officers and Committees. 3d. Unfinished business. 4th. 'New business. § 10. Any officer, agent or employee may be at any time removed at the pleasure of the Board, except the President, who may be removed by a vote of eighteen of the members of the Board. § 11. During a prolonged absence or disability of any officer the Board may appoint a substitute pro tem- pore, and on the death or resignation of any officer the Board shall fill the vacancy. ARTICLE III. THE EXECUTIVE COMMITTEE, § 1. There shall be an Executive Committee of nine, consisting of the President and the three Vice-Presi- dents for the time being, and of five other members to be chosen by the Directors from their own number. The President, or in his absence one of the Vice-Presi- dents shall preside at the meetings of the Committee. The remaining members of the Committee shall have power to fill vacancies in its membership, subject to 272 INDDSTEIAL COMBINATIONS. the approval of the Board of Directors at its next meeting. There shall be regular meetings of the Committee at least once a week at a time and place to be fixed by the Committee, and the Committee may make such rules as it thinks best with reference to special meet- ings and the notice thereof, but the President may call a special meeting at any time and the President or any of the Vice-Presidents shall do so at the request of fouj members of the Committee. Five of the members of the Committee shall consti- tute a quorum for the transaction of business, and a majority vote of all the members present at a regular meeting of the Committee, or at any meeting of which due notice has been given to all the members, shall be decisive, and the unanimous vote of seven members shall be valid and decisive at any meeting, even though no notice thereof was given to the members not present. The Executive Committee shall possess and exercise all the powers of the Board of Directors during the intervals between the meetings of the Board, subject to the orders and resolutions of the Board. Reports of the proceedings shall be submitted to the Board at their next meeting. § 2. Subject to the orders and resolutions of the Board, the Executive Committee shall have charge and control of all the affairs and business of the Com- pany, and of all its books, papers and property, and also of the corporate seal. They may appoint custo- dians of the same, and remove them or any of them at pleasure. APPENDIX XIII. 273 They may appoint Committees to aid in the conduct of the affairs and business of the Company, and the majority in each such Committee shall be members of the Board of Directors ; but the other members of each such Committee may be Stockholders or employees. They may appoint a temporary or acting officer to discharge, under their direction, the duties of any officer who by reason of any disability cannot act, except those of the President, whether there be a vacancy in such office or not, and the acts of such tem- porary officer shall be as valid and effectual as those of the officer whose duties he shall perform. ARTICLE IV. PRESIDENT. § 1. The President shall be the chief executive offi- cer of the Company, and shall exercise general super- vision over all its affairs, officers and employees subject to the direction of the Board of Directors and of the Executive Committee. He shall have power to call special meetings of the Board of Directors and of the Executive Committee to be held at such times and places as shall be designated by him, and it shall be his duty to call meetings of the Board immediately on the written request of nine members thereof stating therein the object of such meeting. He shall also call special meetings of the Board upon the written request of four of the members of the Executive Committee. The said call for said special meeting shall be issued by him forthwith, and shall conform with said request 274 INDUSTRIAL COMBINATIONS. as to time, place and object of such meeting. He shall preside at all meetings of the Board and of the Exec- utive Committee when present thereat. He shall be careful that all the business and affairs of the Com- pany are conducted in conformity to law, and that the By-Laws and rules and resolutions of the Board are faithfully executed. § 2. He shall have power, with the concurrence of the Board of Directors or of the Executive Committee, to negotiate, execute and deliver all contracts, and shall sign all agreements, contracts and other docu- ments, except where the signing, execution or delivery of such contract or document is otherwise provided for, and shall generally exercise and perform the powers and duties such as are usually exercised by and de- volved upon the President of an incorporated company, except as herein otherwise provided. In case a vacancy occurs in the oiHce of President the same shall be fiUed by the Board of Directors without delay. ■§ 3. The President shall prepare an annual report of the affairs and business of the Company, and sub- mit the same to the Board of Directors at their meet- ing next before the annual meeting of Stockholders. ARTICLE V. VICE-PRESIDENTS. § 1. In case the oflB.ce of President shall become vacant by death, resignation or otherwise, or in case of the absence of the President or other disability to dis- charge the duties of his o£B.ce, the same shall in all APPENDIX XIII. 275 things for the time being devolve upon the Vice- Presidents in their respective order, who shall exercise all the powers and duties of the President, and the three Vice-Presidents shall respectively do and per- form such other acts as the Board of Directors or Executive Committee may from time to time authorize them to do. ARTICLE VI. SECRETARY AND ASSISTANT SECRETARY. § 1. It shall be the duty of the Secretary to attend all the meetings of the Board of Directors, and keep a true and faithful record of all their proceedings, and enter the same in a book to be provided and kept for that purpose. He shall give due notice, as hereinbe- fore provided, of all the meetings of the Directors and Stockholders. § 2. He shall, subject to the control and direction of the Executive Committee, have the custody of the corporate seal, and shall affix the same to all docu- ments which shall require sealing, and which shall have been duly authorized or approved by the Board of Directors or the Executive Committee, and shall perform such other duties from time to time as shall be presented to or required of him by the Board of Directors, Executive Committee or the President. § 3. The Assistant Secretary shall perform such duties from time to time as shall be presented to or required of him by the Board of Directors, Executive Committee or the President. 276 INDUSTRIAL COMBINATIONS. ARTICLE Vn. TKEASnKER AND ASSISTANT TREASnEEE. § 1. It shall be the duty of the Treasurer to keep and account for all moneys, funds and property of the Company which shall come into his hands, and he shall render such accounts and present such statements to the Directors, the President and Executive Committee as may be required of him. He shall deposit all funds of the Company which may come into his hands in such bank or banks as the Board of Directors or Exec- utive Committee may designate ; he shall keep his bank accounts in the name of the Company, and shall exhibit his books and accounts to the President, the Vice-Presidents or any Director upon application at the ofiB.ce during ordinary business hours ; he shall pay out money as the business may require upon the order of the properly constituted officer or officers of the Company, taking proper vouchers therefor : Provided, however, that the Board of Directors or the Executive Committee shall have power by resolution to delegate any of the duties of the Treasurer to other officers, and to provide by what officers all bills, notes, checks, vouchers, orders or other instruments shall be signed. § 2. The Assistant Treasurer shall perform such duties from time to time as shall be presented to or required of him by the Board of Directors or the Executive Committee. § 3. All officers and employees designated by the Board of Directors shall give security to the Company for the faithful performance of their duties, in such APPENDIX XIII. 277 form and in such an amount as shall be prescribed by the Board. ARTICLE VIII. § 1. The Auditor shall have supervision of .the books of account of the Company, and of all books and papers relating thereto, subject to the Executive Committee, and shall examine all vouchers and audit all accounts. He shall keep such records of the busi- ness of the Company as will at all times show the condition of the accounts. § 2. He shall render statements to the President and to the Executive Committee as may be required, showing all receipts and disbursements, and the amount of money due to the Company from all sources or otherwise remaining to the credit of the Company, and he shall make such other reports and statements as may be required of him from time to time. ARTICLE IX. TRANSFEK AGENT. § 1. There shall be a transfer agency established and maintained in the City of New York, under the direc- tion and control of the Executive Committee for the registration of transfers of stocks and bonds, and keeping accounts of the same. § 2. Transfers of stock shall only be made on the books of the Company, either in person or by attorney, but no certificate shall be issued to an assignee, unless 278 INDUSTRIAL COMBINATIONS. the certificate representing the stock assigned shall be surrendered and cancelled, except when the Board of Directors or Executive Committee, being satisfied of the loss or destruction of any certificate, shall authorize the issue of a duplicate thereof. ARTICLE X. CORPORATE SEAL. § 1. A Corporate Seal shall be prepared and shall be kept by the Secretary in the office of the Company. The impression of the seal may be made and attested by either the Secretary or an Assistant Secretary, or by any other person duly authorized by the Board of Directors or by the Executive Committee, for the authentication of contracts and other papers requiring the seal and bearing the signature of the President or a Vice-President. ARTICLE XL AMENDMENTS. § 1. Any of these By-Laws may be amended, altered, added to, repealed or annulled by the concurrent vote of a majority of all the outstanding stock present at any meeting of Stockholders, where notice of the pro- posed alteration or amendment shall have been given in the call for such meeting; and at any time these By-Laws may be amended, altered, added to, repealed or annulled by the unanimous vote of all the members of the Board of Directors present at any meeting when the amendment, alteration or addition shall have been APPENDIX XIII. 279 proposed to the Board and entered upon its minutes at a meeting at least thirty days previous to the meeting at which the same shall be adopted, of which minutes at least four days' notice shall have been given to each Director by mail. § 2. Every . person who becomes a Stockholder in this Company shall be deemed to assent to these By-Laws, and shall designate to the Secretary the address to which he desires that the notices herein required to be given may be sent, and all notices mailed to such addresses, with postage prepaid, shall be con- sidered as duly given at the date of mailing, and any person failing to so designate his address shall be deemed to have waived notice of such meeting. 280 INDUSTRIAL COMBINATIONS. APPENDIX XIV. CORDAGE REORGANIZATION. 1. EEPOET OF EEOEGANIZATIOlSr COMMIT- TEE AND PLAN OF EEOEGANIZATION. New Yokk, June 15, 1893. To the Creditors and Stockholders of the National Cordage Company: The undersigned have been requested to act as a Eeorganization Committee to investigate the affairs of the National Cordage Company, and to devise a plan for its reorganization. They report as follows : Their examination into the affairs of the Company leads the Committee to believe that the chief impedi- ment to the financial success of this Company has been that of lack of adequate working capital. This did not present itself as a practical diflB.culty to the stock- holders or directors so long as the commercial and financial markets remained in a normal condition, except that it has obviously increased the Company's expenses, and, to a certain extent, diverted the atten- tion of the ofiicers and directors from the management of the manufacturing business of the Company. The great prosperity of the business, also, and the experiments attending its formative period, have in- APPENDIX XIV. 281 duced a scale of expenditure, both in purchases and in management, which may be avoided in the future. But special conditions of the money market, well understood by all parties in interest, confronted this Company about May 1st, 1893. At this time of the year stocks of merchandise in this business are always largest; the distributing season for binder twine had just arrived ; large amounts of money were required to ship this twine and to sell it on time payments ; the Company was more extended than at any other period of the whole year, and the most active season for all the other products of the Company was setting in. At this time, therefore, when the Company most needed large amounts of capital, the condition of the money market made it impossible for the Board of Directors of the National Cordage Company to find sufficient capital for the renewal of maturing obligations. Under these prevailing conditions, the sale of addi- tional preferred stock, as approved by the Board of Directors in a resolution dated April 29th, 1893, was also found to be impracticable. The emergency thus created called for prompt and radical action. There- fore, on May 4th, 1893, it was decided by the Directors and various creditors and stockholders of the Company that the Company must be put in the hands of the receivers, to protect alike the interests of creditors and stockholders. The Chancellor of New Jersey appointed Edward F. C. Young and G. Weaver Loper as receivers of the Company. After the receivers had qualified, they addressed the following communication to the prin- 282 INDTJSTEIAL COMBINATIONS. cipal creditors and some large stockholders of the Company : " Dear Sirs : " The undersigned, receivers of the National Cordage Company, find it highly desirable, in their efforts to protect the property for the benefit of all concerned, that some committee representing the creditors and the parties interested should be appointed to confer ■with them as to questions of policy, and to further some steps for the ultimate reorganization of the affairs of the Company. "We therefore address you, understanding that you have some interest directly or for others in these matters, and express our strong desire that steps should be taken in the direction indicated. " Yours truly, " (Signed) E. F. C. YOUNG, " G. WEAVER LOPEE, " Receivers." In response to this letter, a meeting, called together by the receivers, was held on the 8th day of May, at which there was unanimously appointed as a Keorgan- ization Committee Mr. George C. Magoun, of Baring, Magoun & Co. ; Mr. Ernst Thalmann, of Ladenburg, Thalmann & Co., and Mr. Gustav H. Gossler, of G. Amsinck & Co. At this meeting also, the presidents of three of the largest New York Banks consented to act as an advisory committee, in conjunction with the Reorganization Committee. The firm of Messrs. Deloitte, Dever, Griifiths & Co., APPENDIX XIV. 283 chartered accountants, of London, England, and New York, was employed to make a tliorough investigation of the books of the Company. At the same time an investigation was begun, and is now in progress, con- cerning the physical condition and value of the various properties and the legal status of the Company. This latter investigation is not yet concluded, but the im- portance of keeping the business going by a prompt reorganization is so great as to induce the Committee not to await the completion of this investigation before recommending action by stockholders and cred- itors. PRESENT CONDITION OF THE COMPANY. The increase of the production of the various mills is shown by the books of the Company to be as follows : PonNDS or Rope and Binder Twine Made. Year ending October 31, 1890, .... 43,411,725 pounds. Year ending October 31, 1891, .... 74,704,885 pounds. Year ending October 31, 1892, .... 130,315,156 pounds. Six months, ending April 30, 1893, . . . 80,757,197 pounds. Assets and Liabilities. Messrs. Deloitte, Dever, Griffiths & Co. have just finished their jDreliminary examination, and the Com- mittee refer to their report on the annexed sheet. As to the present financial condition of the Company, their report shows that the book value of all assets (after writing off the amounts recommended by the Com- mittee) amounts to f 25,732,617.89 and that the liabil- ities (exclusive of capital stock), amount to $ 11,986,- 284 INDUSTKIAL COMBINATIONS. 417.71. Among these assets are included, twenty mills and plants, all going concerns, of whicli eight are held under lease from the security corporation. The trans- action of increasing the common stock from $ 10,000,- 000 to f 20,000,000, as shown by the records of the Company, has not yet been carried into the books of account. When this shall have been done, an increase in the book value of assets will be shown. Whatever may be the result of the appraisement now in progress, the Committee is of the opinion that such result will show the value of these assets, as assets of a going concern, to be very considerably in excess of the amount of the liabilities. If, however, on account of the refusal of the stock- holders to assent to the present plan of reorganization, or for other reasons, it should become necessary to liquidate the affairs of the Company at once, the Com- mittee is unable, at the present stage of their investi- gation, to express an approximate opinion as to the result. The books and accountants' statement show that the dividends were declared and paid to the stock- holders as follows : For the year ended Nov. 1st, 1891 §1,300,000 For the year ended Nov. 1st, 1892, 1,450,000 For the six months ended May 1st, 1893, .... 800,000 The Committee have not thought it advisable to attempt to state a profit and loss account for the past six months, because this would involve a stoppage of the business of the various mills for the purpose of APPENDIX XIV. 285 taking an inventory, and because a detailed examina- tion of the books of the various concerns would involve a further delay of several weeks in the proposed reor- ganization, and because the present, and perhaps temporary, low price of raw materials would probably not fairly represent at the moment the real condition of the Company. As a matter of abundant precaution, however, the Committee has recommended a reduction of the book estimate of the value of merchandise assets and other items, to the extent of $ 1,601,000, which represents a reduction in value accruing since the end of the last fiscal year, and especially since the appointment of receivers. They made this reduction before reaching the figures which they have hereinbefore stated as approximately representing the condition of the Com- pany. The Committee find, on examination of the accounts, that prior to October, 1891, sundry operations in mer- chandise, of a more or less speculative character, and not likely to occur again, were made, which resulted in loss to the Company. It is due, however, to state that some of the Directors who advocated such trans- actions, voluntarily made good the loss so sustained at about the time it occurred, so that the Company itself has not been the loser thereby. The Committee do not find that any funds of the Company have been employed in any stock or other speculations other than those above mentioned. As the result of their preliminary investigation, the Committee feel justified in expressing the following 286 INDTJSTBIAL COMBINATIONS. ESTIMATE OF THE FUTURE OF THE BUSINESS. They are of the opinion that the business of the Cordage Company, under prudent and conservative management, and -with the additional working capital recommended by them, can be made to produce very satisfactory results, sufficient for the payment of inter- est on the bonds proposed to be issued and for the pay- ment of dividends upon the proposed preferred stock, and for the payment, in good years, of satisfactory dividends upon the common stock. In this connection, they call attention to the fact that the payments for interest for the year ending Octo- ber 31st, 1892, alone, amounted to f 430,102.56, and for the' six months ending May 1st, 1893, $269,250.43. The anticipated saving upon this item of interest alone would pay the interest on the proposed bonds and a portion of the dividends on the preferred stock. It is just to add that the principal officers and direc- tors of the Company, being largely interested ia it, have never received any salaries. The Committee therefore submit the following SUGGESTIONS. With a view to certain proposed changes in the business management of the Company, the number of the Board of Directors should be increased, and a majority of the present directors should resign, to make room for new members of the Board, to be approved by the Eeorganization Committee and by the United States Trust Company of New York. This having been done, radical changes and reduc- APPENDIX XIV. 287 tion of expenses in many departments can be advan- tageously effected, new business methods, especially in the financial department, introduced, unnecessary offices abolished, concentration of inanagement secured, and provision made for the protection and promotion of the business interests of the Company in all direc- tions, whether this business be continued by the present organization, or by a new organization to be formed. The Committee especially recommends that the financial part of the business should be put under the management of a finance committee in charge of this department of the business at the Home Office, as well as at branch offices. In order to continue the business of the Company, money must be provided, (1) To pay its existing debts ; (2) To supply it with adequate working capital. The simplest method for providing these necessary funds is by the voluntary action of the stockholders and creditors of the Company. If the stockholders and creditors decline to co-operate in procuring these funds, the Company can continue its biisiness only by incurring a very considerable additional debt, which would make its stocks of doubtful value, or by a judicial sale of its properties to or for the benefit of a new company, freed from some of the present obligations, or by proceedings to assess stockholders. If the reorganization which the. Committee suggests be carried out, the following, generally speaking, will be 288 INDUSTRIAL COMBINATIONS. THE PtlRPGSES OF THE PLAN. (1) To fund and extend a portion of the present debt by means of bonds to be issued ; (2) To supply an adequate working capital, mainly by the voluntary contributions of stockholders ; (3) To deliver to stockholders as a consideration for these contributions preferred stock of the Company at par ; (4) To acquire such additional properties as the stockholders and the Reorganization Committee may hereafter deem to be desirable in the interests of the Company. To carry out these purposes, the Committee pro- poses the following PLAN. 1. The National Cordage Company (or some suc- cessor corporation) will issue collateral trust first mortgage bonds having thirty years to run, secured by a mortgage on all the mortgageable property of the National Cordage Company (or its successor cor- poration), including its lease from the Security Cor- poration, to an amount not exceeding Six Million Dollars, bearing six per cent, interest, with a sinking fund of three per cent, per annum after 1895. One Million Dollars par value, or so much as may be nec- essary, of these bonds will be retained by the trustee, subject to the order of the Board of Directors evi- denced by a vote of at least two-thirds in number of the Board, for the purpose, among other things, of paying off existing prior liens on the Union Mills. APPENDIX XIV. 289 Five Million Dollars par value of these bonds, or so much thereof as may be deemed necessary by the Com- mittee, v^rill be sold and the proceeds ■ used, among other things, in paying off the existing debts of the Company, or vcill be delivered to present creditors of the Company in satisfaction of those debts, in full or in part. The bonds will be so sold or paid at the price or rate of 85%. As many as possible of these Five Million Dollars par value of bonds will be underwritten by a guaranty syndicate at 85%, for a commission of 5%. Before being offered for sale elsewhere, or to the creditors in payment of debts, the whole of these bonds will be offered to the stockholders for subscrip- tion at 85%. The stockholders of the Company, both preferred and common, will have the right, until and incltiding July 11th, 1893, to subscribe for these bonds at this price. If the issue should be oversubscribed by the stockholders, allotments will be made pro rata in the proportion which their respective holdings of stock bear to the total capital stock, both preferred and common, of the Company. 2. For the purpose of delivery to contribtiting stockholders, the preferred stock of the National Cordage Company now amounting to $ 5,000,000, will be increased to $8,000,000. This increased issue will have the same privileges as the present preferred stock. Each preferred stockholder will pay to the Eeor- ganization Committee, or its nominee, at such times V 290 INDUSTRIAL COMBINATIONS. and in such amounts as the Reorganization Commit- tee shall designate, a sum of money equal to twenty per centum of the par value of their holdings of preferred stock, and will receive in exchange for such payments preferred stock of the Company at par. Each common stockholder will pay to the Reorgani- zation Committee, or its nominee, at such times and in such amounts as the Reorganization Committee shall designate, a sum of money equal to ten per centiun of their holdings of common stock of the Company, and will receive in exchange for such payments preferred stock of the Company at par. If any of the holders of common stock prefer not to pay this sum in cash, they can make their contribution by assigning to and delivering to the Reorganization Committee, or its nominee, to be used for the purposes of the reorgani- zation, certificates for fifty per centum par value of their respective holdings of common stock, but, in this event, they will receive no preferred stock for their contribution. If, under this plan, it becomes necessary to provide for fractions of shares, either in the distribution of new preferred stock, or the payment of contributions in common stock, then the Reorganization Commit- tee will make such adjustments, through the Trust Company, by the delivery of script receipts redeemable in stock, when such receipts shall be presented and surrendered in lots of $ 100 or any multiple thereof in par value. 3. If the stockholders do not unanimously consent ^ APPENDIX XIV. 291 to the foregoing plan, or do not consent witli sufficient unanimity to satisfy the Eeorganization Committee, then the Eeorganization Committee will take such measures, either by increasing the debt of the pres- ent Company, or by winding up the affairs of the present Company, selling out its assets, and organiz- ing another company for the purchase of these assets and the continuance of the business of the National Cordage Company, or otherwise, as they think advis- able. The stockholders who assent to such plan and become parties to such reorganization agreement, however, will occupy substantially the same relative position and will have a corresponding interest in the reorganized Company or in the new Company, as is herein proposed ; but the stockholders of the National Cordage Company, whether preferi'ed or common, who do not assent to such plan and become parties to such reorganization agreement will not be represented in and will not have any right or interest in such reorganized or new company. The Committee cannot too strongly urge all interested parties, both creditors and stockholders, to co-operate in this plan of reorganization. The properties must be kept together, and the rights of creditors and stock- holders preserved and protected by keeping the assets intact and carrying on the business. It is equally clear that the shareholders, both preferred and com- mon, must agree to make such proper contribution for working capital as the circumstances of the Company demand. A prompt acceptance of this plan by all parties will avoid troublesome litigation between credit- 292 INDUSTRIAL COMBINATIONS. ors and stockholders and will very materially increase the future value of their property. GEORGE C. MAGOUN, Beorganization ERNST THALMANN, I Committee. GUSTAV H. GOSSLER, J 2. REPORT or ACCOUNTANTS. To Messks. GEORGE C. MAGOUN, 1 „ ERNST THALMANN, ^R«;'-?«»^^«''''» GUSTAV H. GOSSLER, J Committee. Gentlemen : We have had submitted to us the Treasurer's Books and Vouchers of the National Cordage Company, and from an examination of them and ^\ith the information afforded us by the Officials of the Company we find that, exclusive of the Book values of the Real Estate, Plant, and Good- will, etc., the Assets on the even- ing of the 4th May, 1893, amounted to $10,463,- 667.13, the details of which appear on the attached Statement of Assets, and their value is subject to our Notes thereon. We find the value of the Real Estate, Plant, and Good-will, etc., as recorded in the Books of Account, to be f 14,931,360.76 and the amount paid on account of the purchase of the Security Mills to be f 337,600.00, but we cannot form any opinion as to the true value of these Assets. The Security Mills were leased to the Company, APPENDIX XIV. 293 November 1st, 1891, from the Security Corporation, under a lease providing for a rental of $ 360,000 per year, and a sinking fund of $ 225,000 per year to apply upon the purchase price of the property, as represent- ing which purchase price $ 6,000,000 in bonds were issued by the Security Corporation and secured by a mortgage to the Manhattan Trust Company. By the payment of $337,600, three hundred and fifty-three bonds have been purchased and cancelled. The Liabilities, as they appear on the Books and Eeeords of the Company under date of 4th May, 1893, amount to $11,986,417.71, and we have obtained a Certificate from the Treasurer that all known Claims are included in that amount. From the following Statements, and siibject to our Notes and Remarks contained thereon, the Liabilities are in excess of the Assets by $1,522,760.58; this result, however, is before taking into consideration the value of the Real Estate, Plant, Machinery, Good- will, etc., etc., and the Security Mills, which, according to the original entries in the Books of Account, together aggregate the sum of $ 15,268,860.76. We are. Gentlemen, Your obedient servants, DELOITTE, DEVER, GRIFFITHS & CO., Chartered Accountants. 4 LoTHBXjET, London, E. C. AND 69 Wall Stkeet, New Yokk City. 10th June, 1893. 294 INDUSTKIAL COMBINATIONS. ASSETS. Particulars. Assets Pledged. Total Assets. Cash and Bank Balances, at Central Office, and at Agencies, as ac- knowledged by the Bankers and Agents. S 47,965.43 Cash deposited with the Old Colony Trust Company, viz., $ 10,000.00, as acknowledged by them, and a cash loan ol $15,000.00. 25,000.00 Note. — The Loan of $ 15,000 is un- secured. Open .\ccriunts, including an amount of f 413,842.29 due from the Chi- cago and Pittsburgh Agencies, as per the Agents' latest statements • ■ and advices. ^ 1 1-13,000.00 822,200.30 Note. — The Open Accounts, amounting to f 408,358.01, have every appiarair-e of bnng recov- erable in full, and we are as- sured that such u the case. Unearned Premiums of Insurance on Hemp Cargoes, as per Policies, and balance of Insurance due for Salvage, since paid. 43,601.64 "Value of Claims for Allowances on the purchase of Hemp, Freight Overcharges, Customs, Draw- backs, and Railroad Shortages, etc., as estimated by the Treasurer of the Company. 21,500.41 Notes Receivable : — Given by Sub-Com- panies $ 879,562.31 497,475.47 Other Notes 143,27(1.24 16,500.00 S l,022,8as.5.-. 1,022,838.55 FoRVeABD, 8 656,975.47 S 1,983,106.33 APPENDIX XIV. 295 ASSETS. (Continued.) Particulars. Note. — On the 31st May, 1893, the Notes in the possession of the Company and submitted to us amounted to The Notes out for Col- lection, as recorded in the Books, amount- ed to The Notes due and paid to the Receiv- ers and recorded in the Receivers' Books amounted to And the Notes Pledged to B ankers, for which we have their acknowledgment, amounted to Forward, $ 460,430.41 2T ,576.68 20,855.99 513,975.47 $ 1,022,838.55 The Ordinary Trade Notes, amount- ing to $ 143,276.24, appear to be good and recoverable, and none of them are overdue. Balance due from Note Brokers for the sale of Notes given by the Sub-Companies, as per statements rendered by them. Note. — Of the balance due from Note Brokers, viz. : $ 138,596.00, the collection of $134,679.49 is dependent upon the solvency of the Eastern Mills, which went into the hands of Receivers on the Sth May, 1893. It is, however, fair to state in regard to this that the Eastern Mills would be solvent if this Company discharged its in- debtedness to them, the amount of which is included in the Statement of Liabilities. Forward, Assets Pledged. $656,975.47 $656,975,47 Total Assets. $ 1,983,106.33 138,596.00 P 2,121,702.33 296 INDUSTRIAL COMBINATIONS. ASSETS. (Continued.) Particulars. Forward, Stock of Manilla, Sisal and New Zijaland Hemj) and Rope, and Stock of Binder Twine, the Mar- ket Value of 4tli May, 1893, being certified to by the President and the Treasurer of the Company. Note. — The Inventory prices are subject to Market fluctuations from day to day, but the Presi- dent and Treasurer of the Com- pany state that this same Stock of Merchandise at 10th June, 1893, would not represent a sum. less than 1 7,189,407.42. Stock of Merchandise at Pittsburgh and London Agencies, as per the Agents' Statements. Payments on account of Manilla Hemp Shipments, as per Invoices and Bills of Lading, and Insurance on Cargoes, as per Marine Insur- ance Policies. Investments (at Cost) : — Security Bonds $ 366,025.00 Hoover & Allison Twine Company 60,000.00 S 426,025.00 Note. — These Investments have been taken at Cost, and the Treas- urer of the Company has certified that they are not overvalued at .$426,025.00. Indebtedness of Mills controlled by the Company. Note. — The value of this Debt is subject to the Assets of each Mill being in excess of its Liabilities, and there is no complete evidence in this respect, as ice have not seen the Books of thesa Mills. Assets Pledged. $ 656,975.47 4,896,935.05 344,000.00 $5,897,910.52 Total Assets. » 2,121,702.33 7,189,407.42 1,221.16 329,917.29 426,025.00 395,383.93 S 10,463,657.13 APPENDIX XIV. 297 LLA.BILITIES. Particulars. Amount of Col- lateral Security. Total Liabilitios, Hemp Acceptances against Ship- ments and Sterling Acceptances. $1,209,723.81 Collateral Loans, including accrued Expenses to 4th May, 1893. 5,596,705.66 Secured by Merchandise. $4,896,935.05 " " Security Bonds. 344,000.00 " " Book Debts. 143,000.00 " " Notes Receivable. 513,975.47 Notes Payable : — Company's own Paper discounted $ 541 ,000.00 Atlantic Mutual In- surance Co. 56,010.60 $ 597,010.60 597,010.60 Due on Open Accounts, including an amount of I|{i425,8«2.39 for Manufacturing Con- tracts and interest accrued to 4th May, 1893, on the Security Bonds. 957,603.67 Due to Mills controlled by the Company : — For their Notes given to and sold by the Company $3,029,486.70 Excess of Credit Bal- ances on the several Mill Accounts in the Company's Books over the Balances due by the Mills to the Company 595,887.27 1 3,625,373.97 3,625,373.97 Note. — The Liabilities of this Com- pany to the several Mills would be increased if the off-set of Bal- ances due by the Milts to the Com- pany proved to be irrecoverable on account of the Assets of each Mill being less than its Liabilities, and there is no complete evidence in this respect, as v>e have not seen the Books of these Mills. 1 5,897,910.52 1 11,986,417.71 298 INDUSTRIAL COMBINATIONS. SUMMARY. Assets (page 296) , $ 10,463,657.13 Book Value of Real Estate, Plant, Machin- EKY, Good-will, etc., etc., and Payments ON Account of Security Mills, 15,268,860.76 Total Assets, subject to the foregoing remarks, $25,732,517.89 Total Liabilities (page 297), 11,986,417.71 $13,746,100.18 3. ABSORPTION OF THE SECURITY CORPO- RATION. Whereas, the properties of the said Security Cor- poration are at present under lease to the National Cordage Company, as specified in an indenture of lease made the second day of November, 1891, between the Security Corporation, the National Cordage Company, and the Manhattan Trust Company ; and Whereas, since the making of said lease, the National Cordage Company has become insolvent, and on the fourth day of May, 1893, Receivers thereof -were appointed by the Chancellor of New Jersey ; and Whereas, the creditors and stockholders of said National Cordage Company thereafter appointed Messrs. George C. Magoun, Ernst Thalmann, and Gustav H. Gossler, a Reorganization Committee to devise and carry out a plan for the reorganization of the affairs of said National Cordage Company ; and Whei'eas, it is proposed, that as a part of said reorganization, the business heretofore conducted by APPENDIX XIV. 299 said National Cordage Company shall in the future be conducted by a reorganized or successor corporation ; and Whereas, said Eeorganization Committee, while fully cognizant of the value of the properties of the Security Corporation, have expressed their unwillingness to recommend to such reorganized or successor corporation the assumption of said existing lease or the making of a new lease upon the same terms, stating that they consider the yearly payments, and particularly the sinking fund payments, under the present lease, too burdensome and creating too large a fixed charge upon such reorganized or successor corporation ; But, Whereas, said Eeorganization Committee have expressed their willingness to recommend to such reorganized or successor corporation, the creation and issue of its six per cent, guaranteed stock to an amount not exceeding six million dollars, to be redeemable at any time at the option of the company, at 105, on which guaranteed stock a fixed yearly dividend of six per centum per annum, payable quarterly, shall be paid by said corporation, out of the profits of the business of said corporation, before any dividends shall be set apart or paid upon any otlier stock of said company, but which guaranteed stock shall be entitled to no other or further dividend ; the holders of such guaranteed stock to have priority in case of liquidation over the holders of the preferred stock of said cor- poration; such guaranteed stock to be issued for the purchase of said bonds or of some part thereof, or of said leased property or of some part thereof, or of 300 INDUSTRIAL COMBINATIONS. other property, so as ultimately to be exchanged for said security bonds, at par, said bonds, after such exchange, to be cancelled if all of said bonds shall be so exchanged, or if not all, or substantially all so ex- changed, to be held, sold, transferred, or otherwise disposed of, subject to the order of said Reorganizar tion Committee, and as it shall deem to be for the best interests of said reorganized or successor corpora- tion, for the purpose, among other things, of ultimately acqrdring title to said mortgaged property, all obligar tions of said Committee to said depositors being in all respects fulfilled by the delivery of said shares to said depositors. Now, Therefore, we, the undersigned, owners or holders, or both, of the first mortgage consolidated gold bonds of the Security Corporation to the amounts set opposite our respective signatures hereto, which bonds are secured to be paid by an indenture of mort- gage dated the second day of November, 1891, between said Security Corporation and the Manhattan Trust Company of the City of New York, hereby severally consent and agree with the other signers hereof, and with said Reorganization Committee, and with the National Cordage Company, and with said reorganized or successor corporation, each in consideration of the consent and agreement of the other signers hereof, and of one dollar to each of us in hand paid by the others of said signers, and of other valuable consid- erations : I. That all of the bonds so held or owned by us and each of us shall, upon the demand of said Reorganiza- APPENDIX XIV. 301 tion Committee, be deposited with the Manhattan Trust Company, in trust, in exchange for suitable receipts entitling the holder thereof to receive an amount of said guaranteed shares at par, when said shares shall have been received by said Trust Company, equal to the par value of the bonds so deposited, and said bonds are hereby transferred to the said Eeorganization Committee, in trust, for the purposes herein expressed, and we, the signers hereof, hereby severally make, constitute, and appoint said Committee, or any two of them, or their successors, our and each of our true and lawful attorneys, for us and each of us, and in our respective names, places, and stead, and until the first day of January, 1894, to exercise all the powers and control conferred upon bondholders by said mortgage and by said lease, or by either, either in requesting, notifying, or directing the trustee of said mortgaged property, or otherwise, in all respects with like effect as if we were personally acting. II. Upon the receipt of said shares of guaranteed stock by said Manhattan Trust Company to be so exchanged, said Eeorganization Committee is hereby authorized and empowered as the agents and attorneys- in-fact of the signers hereof and of each of them, to assent to and arrange for the cancellation, modifica- tion, or any other disposition of said lease from said Se- curity Corporation to said National Cordage Company, and of the said mortgage so made to secure said bonds ; to cause the said bonds so deposited to be cancelled, and the mortgage securing the same to be satisfied of record; to agree with said Security Corporation for 302 INDUSTRIAL COMBINATIONS. the conveyance and transfer by it, free from the lien of said mortgage, of all or any part of the property covered thereby, including the good-will, to said National Cordage Company, or to said reorganized or successor corporation, in consideration of the cancellation of said bonds, the issue of said stock, or for such other con- sideration as said Committee may think proper ; or, in case the whole of said issue of bonds shall not be deposited, to hold, sell, or otherwise dispose of, so many of said bonds as shall be ■ so deposited, and to make such arrangements concerning the cancellation, modification, or other disposition of said lease and said mortgage, or either of them, as they may deem best. And said Reorganization Committee is hereby further authorized and empowered to take such steps, enter into such contracts, and do such things as may in their judgment be necessary or proper for carrying out the arrangement proposed by them and hereinbefore recited, whether by taking the action hereinbefore specified, or otherwise, as they may deem proper; provided, how- ever, that before taking any steps which shall deprive the signers hereof of their ownership of said bonds, or which shall alter or cancel the lien of the mortgage securing the same, the Manhattan Trust Company shall have received said shares of guaranteed stock for delivery in exchange for said bonds as hereinbefore recited, and said reorganized or successor corporation, in said certificates of stock, or otherwise, by suitable contract, shall have agreed that no mortgage or other lien prior or superior to the lien of such guaranteed stock shall hereafter be created upon the Mills or plant APPENDIX XIV. 303 of said reorganized or successor corporation by it or with its consent (except, first, to provide for existing liens on said properties, and, second, to secure the Bonds proposed to be issued as a part of the pending reorganization, the amount of which bonded issue is not yet fully determined, but which is not to exceed 3 7,500,000), without the consent of the holders of 80 per cent, in value of said guaranteed stock, and of the preferred stock of said reorganized or successor cor- poration. It is the intention of this instrument to confer upon said Committee full and absolute powers to cancel, modify, or otherwise dispose of said inden- ture of mortgage and lease, and of the property of every sort covered thereby in such manner and to such extent as they shall deem to be for the best interests of said National Cordage Company, or of said reor- ganized or successor corporation, provided, that said shares of stock are delivered to the signers hereof as herein provided. Delivery to the Manhattan Trust Company subject to the order of the signers hereof, shall constitute an effective delivery of said shares within the meaning hereof. Por all the purposes herein contemplated, the action of a majority of the members for the time being con- stituting said Reorganization Committee, as provided in the Reorganization Agreement of June 19th, 1893,. shall constitute the action of the Committee, and have the same legal effect as the unanimous action of the Committee. III. This agreement shall become binding upon the signers hereof as soon as the owners or holders of two 304 INDUSTRIAL COMBINATIONS. million five hundred thousand dollars, par value, of ■said bonds, now outstanding, shall have signed the same, and shall continue binding upon the signers hereof, until and including the first day of January, 1894. If the arrangement above outlined shall not have been carried out prior to that date, or if this agreement shall not have been signed prior to ]S'ovem- ber 1st, 1893, by the owners or holders of at least two million five hundred thousand dollars, par value, of said bonds, then, and in either of said events, said bonds shall thereupon be returned to the depositors, and this agreement shall thereupon cease, determine, and become null and void. In Witness Whereof, we have hereunto set oux hands, this day of October, 1893. 4. APPRAISAL OF GOOD-WILL. New York, November 13th, 1893. We have been requested to appraise the value of the business of the mills which will be owned and con- trolled by the United States Cordage Company. In arriving at our conclusions, we have assumed three things, viz. : APPENDIX XIV. 305 1. That the business of the United States Cordage Company will be conducted under one central compe- tent management. 2. That its various mills ■will continue to control the trade which they have controlled in the past. 3. That the United States Cordage Company will have suiScient working capital. The total number of spindles in the mills which will be owned or controlled by the United States Cordage Company will be 6104, or, if the Elizabeth- port mill is rebuilt, about 7000. This represents from 66% to 70% of the manufact- uring capacity of all the cordage mills in the United States. The consumption of cordage in the United States has increased for the past nine years at the rate of 16% per annum. We estimate that this consumption will continue to increase during the next five years at the rate of at least 10% per annum. We omit from consideration the value of the physical property, and also any increased value to the good- will of the business, resulting from the consolidation of the twenty mills under one management. We do, however, consider the economies resulting from this consolidation. We base our conclusions on the above statements, sup- plemented by the knowledge which we have acquired from many years' experience in the cordige business. We have reached the conclusion that the fair, prac- ticable way to ascertain the value of the good-will or 306 INDUSTRIAL COMBINATIONS. earning capacity of the business of the United States Cordage Company upon the above basis is to adopt the standard commonly accepted in the trade, and to use the spindles as the unit of value. We think that a conservative valuation of each spindle, for this pur- pose, is $4000. We multiply this figure by 6104, or by 7000, as the case may be, the number of spindles, which makes our appraised value of the good-will of the business of the United States Cordage Company from $24,416,000 to $28,000,000. E. M. FULTON, WM. MARSHALL, WM. B. SEWALL. New Yoek, November 20th, 1893. 5. CIRCULAE NO. 2 OF THE EEOEGANIZA- TION COMMITTEE OE THE NATIONAL COEDAGE COMPANY, TO STOCKHOLDEES. Eeorganization Committee has much pleasure in stating that, although the affairs of the National Cord- age Company are not in as good condition for imme- diate liquidation as they appeared to be on June 21st, (the date of the Committee's Circular No. 1), yet the effect of the proposed reorganization will be to greatly improve the status and intrinsic value of the property of the reorganized Cordage Company, thus rendering more secure and extended the basis upon which the reorganized Company's securities will be predicated. Many leases and contracts deemed unprofitable have been abrogated. The reorganized Company's contract APPENDIX XIY. 307 relations "will be simplified. The accounts have been analyzed and adjusted, and the absolute title has been acquired, or will be acquired, to many valuable mills and properties, a part of which have been heretofore held under lease, and over a part of which the Com- pany has heretofore had no control. These important additions to the Company's prop- erty will be made without expense either to the Na- tional Cordage Company or to the reorganized Company through which it is proposed to hereafter conduct the business. Not only have these additional properties been ac- quired without expense, but also by their acquisition the indebtedness of the reorganized Company and its annual fixed charges will be much less than if the prop- erties should be taken over subject to the leases and burdens which will thus have been done away with. Among other additional properties to be thus ac- quired are the eight mills heretofore owned by the Security Corporation, referred to in Circular No. 1. These mills represent two-fifths of all the spindles heretofore controlled by the National Cordage Com- pany, and consist of The Boston Cordage Mill, The Standard Cordage Mill, The New Bedford Cordage Mill, The Middletown Cordage Mill, The Chicago Cordage Mill, The Lawrence Eopb Works, The Field Cordage Mill, The Ohio Cordage Mill. 308 INDUSTRIAL COMBINATIONS. These properties have been heretofore held by the National Cordage Company under a twenty years' lease, expiring in 1911. This lease required the pay- ment, as rental, by the National Cordage Company of f 685,000 per annum, besides assessments, taxes, charges, water rents, expenses of operation and main- tenance and insurance. Of this rental, f 225;000 per annum was payable into a sinking fund, for the re- demption and payment of Security Corporation bonds. Thus dvLring the twenty years' term of the lease, the National Cordage Company was under obligation to pay to the Security Corporation sums which, with interest in the meantime, amounted to over $6,000,000. As the Committee regarded the annual payments called for by this lease too burdensome for the reorganized Cordage Company, it declined to recommend the as- siunption or renewal of this lease. As the result of many weeks' negotiations, the Committee has now arranged, subject to the approval of the holders of Security Corporation bonds (a large majority of whom have already given their approval), to purchase this property for the reorganized Company, freed from the $6,000,000 mortgage now upon it, and subject only to certain underlying liens, amounting altogether to about $1,385,000, payment of which vnll be provided for by the reorganization plan. This property is to be paid for by the u-se of $6,000,000 par value of the Guaranteed Stock of the reorganized Company, thus ridding it of over $6,000,000 of debt, which it would have assumed if it had renewed the lease, and of the annual fixed charge of upwards of $586,000, and vest- APPENDIX XIV. 309 ing it with the absolute ownership of these mills. This transaction is, therefore, a most advantageous one for the company and for the stockholders. Moreover, as stated in the circular to creditors, it is expected that the reorganized Company will acquire title to all the Union Mills, consisting of the Sewall & Day, Chelsea, Donnell, G-alveston, Hanover and Miam- isburg Mills, which will materially add to the value of the Company's mill properties. The reorganized Company will be called UNITED STATES CORDAGE COMPANY. The new Bonds will contain a provision for a sink- ing fund of f 100,000 per annum after 1895, and it is proposed that a like sum shall be annually set apart, out of profits only, and before payment of any divi- dend on the Common Stock, for the redemption of the Guaranteed Stock, so that, in time, both Bonds and Guaranteed Stock may be retired. Ifor the information of the stockholders, the Com- mittee's Circular No. 2, to creditors, showing the final plan of reorganization, is herewith enclosed. The suc- cess of the reorganization depends upon the creditors' assent to the proposition therein set out. The Committee also reminds the stockholders that in addition to its equity in the mills, plants and ma- chinery, and in addition to the new property of other kinds, the reorganized Company will have, as working capital, not only the contributions of the stockholders, but also all the assets of the National Cordage Com- pany remaining after the payment of its debts. 310 INDUSTRIAL COMBINATIONS. Stockholders may be disappointed with the ap- praisals put by the New Jersey Receivers upon the mills, plants and machinery inventoried by them. It must be borne in mind, however, that these items in the inventory did not include the mills, plants and machinery of either the Security or the Union Mills. Besides this, the Receivers' appraisement was made upon the basis of a forced ^ale of dead real estate, bricks, mortar, wood and machinery. In their inven- tory the Receivers say about this : " So far as the mills, plant and machinery are concerned, there are various bases of appraisement. "From the point of view of a solvent corporate owner, they would be appraised as an entirety, as the going, useful, profit- earning property of a going concern. "From the point of view of a creditor of the Company, they may be appraised on one of three bases : — "First, upon the theory that a purchaser could be found willing and able to purchase the whole property, at an adequate price, with a view of continuing to operate it in the cordage business. " Second, upon the theory that there is no purchaser, at an adequate price, for the whole of the property, but that separate purchasers can be found for the several mills, who will each buy those mills with a view of continuing the cordage business theretofore carried on at those mills. ' ' Third, upon the theory that the mills must be sold sepa- rately, at forced sale, upon a given date, without regard to the future use to be made of them. " The Receivers are of the opinion that no purchaser for these properties can be found upon the first of the above theories, unless such purchase should be made as a part of the voluntary reorganization of the Company by the creditors and stookhold- APPENDIX XIV. 311 ers. They, therefore, do not feel called upon to express any opinion as to the probable value of the mills, plant and machin- ery upon this theory. "The Eeoeivers are also of the opinion that there are not a sufficient number of persons familiar with or desiring to engage in the cordage business to justify them in expecting to effect a sale upon the second of the above theories. Thej, therefore, do not regard it as a part of their duty to express an opinion as to the probable value of the mills, plants and machinery upon this theory. "Therefore, in arriving at the appraisals shown in the follow- ing inventory, the Eeoeivers have acted solely upon the third theory above mentioned. Their appraisals are based solely upon what they have reason to believe would be the actual cost of purchasing the ground upon which the mills stand and of erecting and equipping those mills, less a proper deduction for depreciation. This appraisal is based upon the assumption that approximately these prices could be obtained upon a forced sale of these properties, in separate parcels, on a given date, and without regard to the fact that they have together formed one entire manufacturing property. " "While the Receivers are of the opinion that the amount of such an appraisal would be very largely increased if based upon either of the first or second of the theories above mentioned, and while they are also of the opinion that the good-will of the business represented by these combined mills, if owned by a solvent, properly managed corporation, would be a very great one, yet as neither of these increments of value forms a part of the appraisal which they understand it to be their duty to make, they express no opinion as to the amount by which their appraisals would be increased if these things were taken into consideration." If the Security and Union Mills should be appraised upon the same basis as the above, the entire mill property and good-will vrould, in the judgment of the 312 INDTJSTEIAL COMBINATIONS. Committee, furnish ample security for the proposed new bonds. The Committee does not think, however, that this is a proper basis of appraisement from the stockholders' point of view. As none of its members are practical cordage men, the Committee does not undertake to ex- press an opinion concerning the real value of the prop- erties and good-will of the business of the reorganized Company. It is of opinion, however, that in ascertain- ing such value, the facts should be considered that these properties will be properties of a going concern, and that they will be united and operated under a single management. At the request of some of the larger stockholders, the Committee encloses with this an appraisal which has been made for these stockholders. The mill properties, which will be owned or con- trolled by the United States Cordage Company, are: L. Wateebuey & Co., William Wall's Sons, TucKEE & Caetee Coedagb Company, Victoria Coedagb Company, Xenia Twine & Coedagb Company, J. Rinek's Sons, Laweencb Rope Woeks, Boston Coedagb Company, Standard Coedagb Company, New Bedford Coedagb Company, Middletown Twine Company, M1AMISP.UEG Coedagb Company, APPENDIX XIV. 313 Chicago Coedagb Company (formerly Wm. Deering & Co.), Ambkican Cordage Company (formerly Field Cord- age Company), Ohio Twine & Cordage Company, Sewell & Day Cordage Company, Chelsea (formerly Suffolk) Cordage Company, DoNNELL Cordage Company, Galveston Eope and Twine Company, Hanover Cordage Company, Ltd., Elizabbthpokt Cordage Company, MiAMisBURG Binder Twine & Cordage Company. Besides the foregoing, there will be various dis- mantled and dormant mill properties purchased by the National Cordage Company, in order to acquire their business. It is a noticeable fact that the creditors and stock- holders of the company have cordially and harmoni- ously united with the Committee in the proposed reorganization, and that no attempt has been made, by litigation or otherwise, to impede the reorganization, and (taking into consideration the embarrassing com- plications which have been dealt with) the Committee congratulates the stockholders upon what promises to be a satisfactory adjustment of their interests. The Committee therefore expects to complete the reorganization by the organization of the United States Cordage Company within the present year. The new Board of Directors of the United States Cordage Company has been partially selected. Among 314 INDUSTRIAL COMBINATIONS. them will be the members of tbe Advisory Committee, Messrs. Gboegb G. Williams, Geobge S. Coe and W. W. Sheemak, "who, at the special request of the Eeorgtoization Committee, have consented to serve for the first year as the representatives of creditors and bondholders. Among them also will be Mr. E. F. C. Young, one of the Receivers, and the mem- bers of the Reorganization Committee. The Board will consist of not more than fifteen members. GEORGE C. MAGOUN, l „ . . EENST THALMANN, I ^^«'-9'««'-««»<'» GUSTAV H. GOSSLER, J <^ommiUee. New York, November 20th, 1893. 6. CIRCULAE NO. 2 OF THE REORGAJSTIZA- TION COMMITTEE OF THE NATIONAL CORDAGE COMPANY, TO CREDITORS. PROPOSED MODIFIED PLAN OF SETTLEMENT WITH CREDITORS, Involving the sale or transfer of all the Assets of the National Cordage Company, and their afiplicatioji, in the first instance, to the payment of its debts. This also involves the jmrchase by the Reorganized Company of the Eight Security Mills, the Cancellation of the existing $6,000,000 Mortgccjc on these Mills, and the issuance of stock in lieu of the Bonds secured thereby. THE EEORGAXIZED COMPANY WILL BE CALLED UNITED STATES CORDAGE COMPANY. APPENDIX XIV. 315 PROPOSED SETTLEMENT WITH UNSECURED CREDITORS. Pay 25 per cent, of the unsecured debt in cash by January 31st, 1894. TMs will exhaust the unpledged merchandise and cash assets, learing Accounts Receiv- able and other items to be disposed of as below : Pay 65 per cent, of the unsecured debt by January 31st, 1894, in bonds at par of the United States Cord- age Company (which shall be part of an authorized issue of $7,500,000 30-year six per cent, gold bonds), secured by a mortgage on all the mills and realty, plant, machinery, good-will, trade-marks, brands and patents, acquired and to be acquired, also by pledge of all stocks of other Cordage companies owned by the United States Cordage Company. These bonds will be dated January 1st, 1894. Pay 10 per cent, (f 875,581) of the face of the total unsecured debt, and interest on the total unsecured debt, in Trust Liquidation Certificates, secured by a pledge of all the Accounts Receivable and other per- sonal assets of the National Cordage Company remain- ing after providing for the 25 per cent, payment in cash, and the expenses of receivership and reorganizar tion. These pledged Assets will be liquidated as rapidly as possible. The Trust Liquidation Certificates will entitle the holder to his pro rata share of the proceeds of these pledged Assets to an amount not exceeding this 10 per cent, and interest. These pledged Accounts Receivable and other per- 316 INDUSTRIAL COMBINATIONS. sonal assets are classified by the Committee, as fol- lows: Slow, but considered good $1,111,762 Slow and doubtful, of the face value of $1,851,076 but probably good for 600,000 $1,711,762 SECURED CREDITORS. The Committee has arranged, with a majority in value of the secured creditors, and expects to arrange with all secured creditors, for the gradual liquidation of their merchandise collateral, through the United States Cordage Company at prices to be agreed upon, and the acceptance of payment for their deficiency, if any, in these Trust Liquidation Certificates. We recommend the prompt acceptance of the above proposition. It is the best settlement of which the condition of the company permits. GEORGE C. MAGOUN, ERNST THALMAXN, GUSTAV H. GOSSLER, Reorganization Committee. To the Creditors of the National Cordage Company : The Reorganization Committee has submitted to us in detail a statement of the condition and affairs of the National Cordage Company which we have exam- ined with care. We fully concur in the conclusions reached by the Reorganization Committee, as stated in its Circular No. 2, and we recommend to all creditors the immediate acceptance of the plan of settlement APPENDIX XIV. 317 proposed. It is our opinion that this adjustment is not only most equitable and fair to all concerned, but also that it is the best that can be made under the circumstances. GEORGE G. WILLIAMS, Pres. Chemical Nat. Bank. GEORGE S. COE, Pres. Araer. Exchange Nat. Bank. W. W. SHERMAN, Pres. Nat. Bank of Commerce, Advisory Committee. To the Creditors of the National Cordage Company : As Receivers of this Company, we hereby concur in the recommendation for the adjustment of all liabili- ties of the National Cordage Company, as proposed by the Eeorganization Committee. In recommending the immediate and unanimous approval and acceptance of the settlement proposed, we do so in the interest of the creditors at large, and believing that in no other "way they could expect to obtain as favourable a liqui- dation of their claims, as the liabilities of the Com- pany, and its varied interests, are too large to be adjusted favourably through any other procedure than through the proposed reorganization and adjustment. E. E. C. YOUNG, G. WEAVER LOPER, Receivers. Various changes in the very complicated affairs of the National Cordage Company which have taken place since June 21st, 1893 (the date of our Circular No. 1), will prevent the Receivers and the Reorganization Committee from carrying out the settlement then pro- posed. A new form of settlement is necessary, which, 318 INDUSTRIAL COMBINATIONS. however, is believed to be a better settlement for the body of creditors than the one originally proposed. The settlement now proposed means the appli&ation of all the assets of every sort, in the first instance, to the payment of debts. This change in the form of settlement has become necessary for the following reasons : The time for proving claims before the Receivers expired on August 31st, 1893, and on that date and since a number of claims were filed, including claims for breach of various contracts, such as leases, manu- facturing, employment, sales, etc., not appearing on the books as liabilities, which swelled the demands against the Company to a sum considerably larger than had been anticipated. Moreover, a large number of debts, upon which the Company was only contingently liable as endorser, and which, therefore, did not appear in the accounts as liabilities, and which were not expected to become liabilities, have become actual liabilities by the failure and default of the principal debtors. A large shrinkage in both pledged and unpledged merchandise and other assets has also occurred through the unprecedented decline in the prices of fibres, rope and twine, and this loss was made still greater by the fact that, after the Receivers took possession, orders for twine, previously given to the Company, were cancelled to the extent of many thousand tons. The financial depression also caused failures among the Company's customers, which rendered numerous accounts slow, doubtful or bad, which on June 21st were considered good and quick assets. APPENDIX XIV. 319 These facts and the maturing of certain underlying liens on various mill properties have increased the total debt by the sum of $1,609,374, and made it too large to be paid in bonds at 80, as originally proposed. Tor this reason no allotment has been made, and no liability has been incurred under the underwriting agreements by the signers thereof. The underlying liens on the various properties are $1,386,000 on the Security Mills (now proposed to be purchased), and $728,000 on the Union Mills, in addi- tion to interest on both items. About $456,000 of this sum must be paid this year, and is treated as a part of the present debt. To provide for these Security liens, among other things, the authorized issue of bonds must be increased from $6,000,000 to $7,600,000. There is also a mortgage of $260,000 upon another of the Company's mills which was contracted to be con- veyed to it free of incumbrance, which amount the Receivers claim from the vendors of the property. On October 27th, 1893, the Receivers filed a detailed inventory, taken as of the date of June 30th, 1893, being their first inventory. This shows assets ap- praised by them at $12,601,561, and liabilities as of June 30th, 1893, of $11,660,617, and contingent lia^ bilities of $1,039,826. On September 30th, 1893, another inventory was made, and a statement of assets and liabilities as of that date has been made up by Mr. Seaward, Accountant of the Receivers. Until after the completion of this inventory of September 30th, 1893, and until after an examination 320 INDUSTRIAL COMBINATIONS. of the claims filed against the Eeceivers and of the Receivers' appraisements shown by their inventory- filed on October 27th, 1893, it was impracticable for the Eeorganization Committee to formulate a new proposition for settlement. In the meantime, however, the Committee has used every effort to complete a plan of reorganization, the success of which depends upon a voluntary settlement by the creditors, but which will put the reorganized Company in possession of property and business of much greater value than that of the present Company before its failure. While the changes above referred to have seriously diminished the proportion of quick assets to unsecured liabilities, and have therefore correspondingly dimin- ished the present paying capacity of the assets, never- theless, the slow assets remain, and can be utilized in time and with judgment to the advantage of creditors, while the mills, plants, machinery and good-will of the reorganized company can be made available as valuable security for the bonds offered in settlement. Mr. John Scott, on behalf of the Committee, has carefully examined the work of the Accountant above referred to, as well as the claims filed and the allow- ances which the Committee thinks will be made, and advises the Committee, that, subject to future proof of claims, not now known or anticipated, and subject to possible variations resulting from the Receivers' allowance or disallowance of claims proved, the follow- ing figures are correct, as of September 30th, 1893 : APPENDIX XIV. 321 ASSETS. Real estate, mills, plant and ma- chinery (not including good-will, trade-marks, etc.), in New Jersey Receivers' possession, and appraised by them at $2,934,388 Stocks of other Cordage Companies, in Receivers' possession, and appraised by them at 679,800 Merchandise 4,880,884 Notes Receivable 273,303 Accounts Receivable ^ 3,596,691 Mill Supplies 60,000 Security Corporation bonds 303,624 Cash 326,169 Claims against various parties 595,463 113,649,822 Less pledged assets 4,839,978 Free assets 8,809,844 LIABILITIES. Debts as per books $12,251,792 Claims filed, subject to ad- justment and allowance, estimated .f500,000 Liens due this year 456,000 Contingencies and expenses, estimated 388,000 1,344,000 Total debt |13,595,792 "Value of Collateral pledged, as of September 30th, 1893, to be applied in payment of secured debt 4,839,978 Unsecured debt 8,755,814 Apparent surplus 154,030 1 This item does not include the eight Security Mills nor the five Union Mills. 2 This includes the assets expected to be received from the Boston Eeceivers as part of the reorganization. 322 INDUSTRIAL COMBINATIONS. The pledged assets (f 4,839,978) include certain ac- counts and notes receivable, Security bonds, and also certain merchandise, the latter being of the appraised value of $4,100,489. For the purpose of raising the cash necessary to pay the 25 per cent, offered, in addition to the cash in hand, there is available free merchandise amounting to $780,396, and the unpledged accounts and notes receiv- able, and the mUl supplies. In this way all the free assets, except those rep- resenting the mill properties and good-will, will be applied to the payment of 35 per cent, of the face of the unsecured debt and interest, and the pledged assets will be applied to the payment of the secured debt. The remaining assets, representing the mill properties and good-will, and also the new mill properties to be acquired, will be mortgaged to secure the payment of the bonds mainly used in paying the remaining 65 per cent, of the unsecured debt. Thus the entire assets of the company will be utilized in the payment of its debts. Tlie above assets, amounting to $13,649,822, are not all available for immediate liquidation of debts, because they cannot now be converted into cash at adequate prices. For instance, among them are slow and doubtful assets of the face value of $2,962,838, which cannot be consid- ered for purposes of present payment, but which are believed to be idtimately good for $1,711,762. Nor can the item of mills, plant, machinery, &c., amounting to $2,934,388, nor the item of stocks of other mills, amount- ing to $697,300, be advantageously turned into cash for APPENDIX XIV. 323 the purposes of immediate liquidation. Nor can it he ascertained, at present, Jiow much can he collected of the item of claims against various parties, amounting to $595,463. In short, $6,666,860 of the unsecured debt, and the interest, must be provided for by bonds and Trust Liquidation Certificates, and provision must also be made for $1,657,000 of underlying liens on various properties, which mature at various times during the ensuing ten years, and "which are not included in the above item of total debt. If an attempt should be made to- pay the present debt at the present time, at forced sale, out of the present assets, it is obvious that creditors could not be paid in full, and a forced sale would so materially reduce the above appraised value of the assets as to pay an unsatisfactory dividend to creditors. The market price of good-will, at a forced sale of a dismembered property, is so problematical that it is not appraised. THE SECURITY MILLS. The eight mills of the Security Corporation have heretofore been operated under a lease, which re- quired the yearly payment for twenty years by the National Cordage Company to the Security Corpora^ tion of $685,000 annual rental. The payments, if continued, would retire the Security Corporation bonds of $6,000,000 with interest, at the end of the lease. Although these mills formed an important part of the Cordage Company's operated plant, it was obvious 324 INDUSTRIAL COMBINATIONS. that the terms of the lease were too burdensome for the reorganized Company. The Committee has therefore completed arrangements for a conveyance of the title of the Security Mills to the reorganized Company, subject to the approval of the holders of the bonds of the Security Corporation. A large majority, in value, of these bondholders have already assented to this conveyance, which, when made, will be free from the lien of the mortgage of the Security Corporation of $6,000,000, and will be subject only to underlying liens in the nature of purchase-money mortgages amounting altogether to $1,385,000, payment of which will be provided for by the reorganization. It is con- fidently expected that the necessary consent wiU be obtained from all the holders of Security Corporation bonds. In giving this consent, however, the holders of the Security Corporation bonds have expressly stipulated that bonds of the reorganized company should not he issued to creditors at less than par, and that the whole issue should not exceed $7,600,000. This agreement, if consummated, will place the eight Security Mills (the Boston, Standard, New Bedford, Lawrence, Middletown, Chicago, Ohio and American) under the mortgage made to secure the bonds of the reorganized Cordage Company, and, when the Union Mills are acquired, will make it a mortgage upon twenty-two mills (instead of upon twelve, as originally proposed). It will reduce the fixed annual charges by the sum of $685,000, and will relieve the reorganized Cordage Company from burdensome restrictions con- APPENDIX XIV. 325 tained in the Security lease and mortgage, and so per- mit of greater economy in managing and operating the mills. By the provision made in the reorganization for underlying liens, it is also expected that the reorgan- ized Company will acquire title to the Union Mills, ownership in a part of which has been heretofore rep- resented by capital stocks of corporations owning these properties. The remaining portion of these capital stocks is now pledged to secure payment of the under- lying liens on these properties. The stockholders of the National Cordage Company have, with practical unanimity, submitted to an assess- ment on their stock (f 20 on each preferred share, and $10 on each common share), and have paid in their contributions for working capital for the new company. The amount already paid in cash is in excess of $2,700,000, and this is expected to be increased to nearly $3,000,000. This fund, while not available for the payment of debts of the old company, will be in the treasury of the new company, and will greatly strengthen its re- sources and credit and supply it with working capital. The Committee also calls attention to the fact that in addition to the new real property of value which will be acquired for the new Company, several burden- some contracts of various kinds will be abrogated or modified, the accounts and system of business will be much simplified, the expenses will be much reduced, all of which will also add to the value of the bonds of the reorganized Company. 326 INDUSTRIAL COMBINATIONS. These facts render the bonds, now proposed to be issued, so much more valuable than the bonds orig- inally proposed, that they should be available at par for the payment of debts. The only alternative to this proposition is the dis- memberment of the properties and their sale in judicial proceedings, which would produce most unsatisfactory results. The Reorganization Committee therefore most re- spectfully urges all creditors to assent to the plan herein proposed before December 1st, 1893, and re- quests the creditors to sign and forward the enclosed assent as soon as possible. The Committee intends to proceed with this reor- ganization on or about December 1st, 1893, by the organization of a new company to carry on the former business of the National Cordage Company. This Company will be called the United States Cordage Company. In what it has heretofore said the Committee has treated the situation as it must be viewed by a creditor desiring prompt settlement. The valuations which it has been obliged to adopt for this purpose are radically different from the valu- ations which would be put upon the same properties as properties of a going concern, owned and operated by a solvent corporation ; and, in particular, they rep- resent, on the basis here adopted, much less value than will be represented by the enlarged, increased and harmoniously consolidated properties expected to be obtained for the reorganized Cordage Company, as will APPENDIX XIV. 327 appear from tlie Committee's Circular No. 2, to stock- holders, enclosed with this. TJie Committee recommends the acceptwiice of the settle- ment herein proposed. It is the best settlement of which the condition of the company permits. In saying this, it reminds you that its members are themselves creditors, and also the agents of other creditors, and that the Advisory Committee of Bank Presidents, whose recom- mendation is hereto attached, were appointed to represent all creditor banks. GEORGE C. MA60UN, 1 „ . . ERNST THALMANN, U^^°'-ff«»»««<'''« GUSTAV H. GOSSLEE, J ^o™™"««- 328 INDUSTRIAL COMBINATIONS. APPENDIX XV. PARTIAL LIST OF TRADE COMBINATIONS AND COALITIONS ACHIEVED OR ATTEMPTED, AND OF THE COMMODITIES COVERED BY THEM IN THE UNITED STATES, i I. — LIGHT, HEAT, AND POWER. Boilers, for house heating. Candle-makers. Coal: anthracite, bituminous. Coke. Electric: carbon points, 1885; candles, 1888; electric goods, national, 1887; lighting, 1882; light-fixtures, national, 1889. Gas: illuminating and fuel, local, sectional, national; fixtures, national; pipes, 1875; natural. Gasoline stoves, 1894. Governors of steam-boilers. Hot-water heaters, 1892. H&use furnaces, 1889. Kerosene, 1874. Kindling wood, Boston, 1891. Matches: international, ISIM. ParaiHne. Petroleum and its products, 1874. Radiators, steam and hot-water. Western, 1891. Steam and hot-water master fit- ters, national, 1889. Stearine. Stove-boards, zinc, national, 1890. Stoves and ranges, 1872. Stoves, vapour, national, 1884. n. — CHEMICALS. Acids, acetic, citric, muriatic, ni- tric, sulphuric, American, 1889. Alkaloids. Alum, sectional, 1889. Ammonia, 1889. Bismuth salts. Boracic acid. Borax. Chloroform. Drug manufacturers. Iodoform, 1880. Lime, acetate of, 1891. Mercurials: as calomel, corro- sive sublimate, etc. Paris-green, 1889. Potash : bichloride of. Quinine, international, 1893. Rochelle salts. Saltpetre. Santonine. Soda, bichromate. 1 From H. S. Lloyd, "Wealth against Commonwealth," pp. 537-544; the information is derived from Lloyd's most valuable collection of newspaper dip- pings. Some additions have been made b\' the author. APPENDIX XV. 329 Strychnine. Ultramarine. Vitriol, 1889. Aluminum, national, 1888. Barbed wire, 1881. Brass: sectional, 1884; rolled and sheet, sheet German sil- ver, copper rivets and burrs, copper and German-silver wire, kerosene-oil burners and lamp trimmings, and braised brass tubing. Copper: cold, bolt, rolled, sheet, 1888 ; ore. Lake Superior, 1879 ; international, 1887; bath-tubs, boilers, sinks, andgeneralware, 1891; wire. Iron: iounders; galvanized, na- tional, 1875 ; malleable, na- tional, 1882; nuts, 1884; ore, Atlantic coast, 1886, Michigan, 1882, Southern, 1884, North- western, 1887, Lake Superior, 1893; pig, Eastern, Southern, 1883, national, 1889; pipes, steam and gas, 1884; wrought iron, 1887 ; structural, national, 1881; tubes, 1884; wire-cloth, national, 1882. Lead : pig, pipe ; sheet-lead, 1888 ; white, national, 1884. Mica, national, 1887. Nickel. Quicksilver, California. Silver and lead smelters. Silver mines, Colorado, 1894. Steel : armour-plate, Bessemer beams (in existence nearly thirty years), castings, 1894; galvanized; rails (see Traffic and Travel) ; rods. United States, 1888; roUing-miUs. Tin: jobbers; American, na- tional, 1883. Zinc. IV. — SOME OTHER INSTRUMENTS AND MATEKIAIS OF IND0STKY. Alcohol. Axes and axe-poles. Belting, leather, rubber. Blankets (press), American Pa- per-makers' Felt and Jacket Association. Bobbins, spools, and shuttles, 1886, for cotton, woollen, silk, and linen mills. Bolts, 1884. Boxes, wooden, local, 1885; West- ern and Southern. Bridge-builders: Eastern, 1886; Iowa, Nebraska, Kansas, Mis- souri, 1889. Butchers' skewers and supplies. Western, 1889. Carpet yarns. Eastern, 1889. Cash-registers, national, 1890. Celluloid, lythoid, zylonite. East- ern, 1890. Chains, national, 1883. Cordage: rope, twine, 1875; na- tional, 1890. Corks. Cotton duck, national, 1891. Cotton-seed oil, national, 1884. Creels, for cloth and woollen mills, national, 1893. Damasks, Pennsylvania, 1886. Emery wheels, national. Felting. Fibre, indurated, pails, bowls, measures, water-coolers, fil- ters, etc., national, 1888. Files, 1875. Fire-brick, 1875. 330 INDUSTRIAL COMBINATIONS. Fish-oil, menhaden, New Eng- land, 1885. Forge companies, national, 1889. Glass bottles: beer. United States, 1884. Glass: flint, Western, 1891; crown, cylinder, nnpolished ; international, 1890 ; window, 1875; sectional, national, in- ternational, 1884. Glass, plate, Underwriters, 1894. Glne. Gutta-percha. Hardware manufacturers, 1884. Label printers. Leather: belting, national; board, national, 1891; hides, North- western, 1888; morocco. East- ern, 1886; patent, national, 1888; sole, 1893; Tanners' As- sociation, 1882; Oak Harness Leather Tanners, national, 1890. Linen mills. Eastern, "Western, 1892. Linseed oil : local, 1877 ; national, 1887. Manilla, international, 1887. Oil: lubricating, 1874; for cur- ing leather; menhaden; safety- burning oil for miners. Paper : local, sectional, national ; bags. Eastern and Western, 1887; book and newspaper; boxes, national, 1883; card- board, 1890; flour sacks, 1887; straw; tissue, 1892; wrapping. Western, 1878, Eastern, 1881; writing, national, 1884. Pa- per-makers' Felt and Jacket Association, national; rags. Eastern, 1883; wood-pulp. Western, 1890; New York, Eastern, 1891. Pitch, national, 1887 or earlier. Planes, carpenters'. Pumps, national, 1871. Rubber: belting, 1875; electric web goring (for shoes), na- tional, 1893; gossamers, 1887; hose, 1875 ; importers, national, 1882 ; manufacturers, national, 1882 ; stamps and stencils, na- tional, 1893. Sandpaper, emery and emery cloth, flint, garnet, ruby, sand cloth, national, 1887. Saws, national, 1890. Scales. Screws: machine, 1887; wood, national, international. Sewer pipe, 1875. Sewing-machines, 1885. Sewing-machine supplies, New York and New England, 1883. Spirits. Straw braid. Straw-board, 1887. Tacks, 1875. Talc mills. New York, 1893. Tar, national, 1886. Teasel, national, 1892. Textile manufacturers, Penn- sylvania, 1886 — embracing dress goods, ginghams, uphol- stery goods, woollens, yarns, chintzes, worsted, damasks. Tools, edge, American Axe and Edged Tool Companv, national, 1890. Turpentine, Southern, 1892. Type founders, national, 1888. Washers, 1884. Watch-cases, 1886. Well tools, for oil, gas, and arte- sian wells, 1889. Wood, excelsior, shavings for packing, national, 1889. APPENDIX XV. 831 Wooden-ware, 1883 or earlier. Wood-working machines, 1891. Wool felt. Wrenches, 1873. V. — TRAFFIC AND TRAVEL. The Road, Horse, and Wagoii. Bicycles, United States, 1893. Board of Trade formed to reg- ulate prices. Bicycle tires. Bridge-builders, 1886. Buggy pails, fibre trust, national, 1888. Carriage builders, national, 1884. Carriage hardware, 1884. Harness dealers, manufacturers, national, 1886. Liverymen's Associations, local, 1884. Paving: asphalt, 1886; brick. Western, 1892; pitch, na^ tional, 1887. Road-making machines. West- ern, 1890. Saddlery Association, national, 1891. Saddle-trees, Indiana, Missouri, 1892. Wagons, local, 1886. Wheels, Western, 1889. Whips, national, 1892. Shipping. Canal-boats, 1884. Cotton duck, sail-cloth, national, 1888. Ferries, New York and Brook- lyn. Lake carriers, Hull pool, 1886. Lake Dock Trust. Marine insurance, 1883. Naval stores. Ocean steamers : European , Asi- atic, and American ; German steamship companies, 1894; North Atlantic Steamship As- sociation. Pilotage, New York, San Fran- cisco. Steamboats: in the Cincinnati and New Orleans trade, 1884; forwarding lines along the Hudson Kiver, 1891. Railroads and Transportation, etc. Car-axles, 1890. Car-springs, steel, national, 1887. Cars, freight and cattle. Elevators, grain, local. Western, 1887. Express companies. Locomotives: national, 1892; boiler flues, 1875; tires, na- tional, 1892. Eailroad: pools, freight and passenger, sectional, national ; Eastern Eailroad Association, of 800 railroads, to fight pat- ents. Steel sleepers, 1885; steel rails, national. Street railways, local, sectional. Telegraphs, Western Union, 1851, Telephones. VI. — BUILDING. Asbestos, for paints, roofing, steam-pipe and boiler cover- ings, 1891. Beams and channels, iron and steel, national, 1875. Blinds : Northwestern, 1885 ; na- tional, 1888. Brass, gas, plumbing, steam, water goods, 1884. 332 INDUSTRIAL COMBINATIOKS. Brick: local, sectional, 1884; Ciiicago, New York, New Jersey, Washington (State) ; pressed brick, 1890. Cement: Mississippi valley, 1883; Eastern, 1884; Northwestern, 1884. Cornice-makers, national, 1884. Doors : Northwestern, 1885 ; na- tional, 1888. Fire engines, including hook and ladder trucks, hose-car- riages, heaters, carts, station- ary pumps, and other supplies, 1892. Fire insurance. Glue, national, 1894. Gypsum stucco. Eastern, North- western, 1884. Hinges, 1875. Lime, Western, 1883. Lumber: California pine, 1883; California redwood, 1883; Chicago ; Mississippi valley ; Northwestern, 1880; Pacific coast, 1883; poplar, 1889; Puget Sound, 1883; yeUow pine. Southern, 1890, Eastern, 1891; dealers, national, 1878. NaUs : Pennsylvania, 1875; West- ern Association, 1882: Atlan- tic States Association, 1883. Paint. Plaster, national, 1891. Kooiing: felt; iron; pitch, Ver- mont, national, 1887. Sanitary pottery. Sash, doors, and blinds, national. Sewer pipes, national, 1884. Stone : brown stone. Lake Supe- rior, 1890, New York, 1884; out- stone, quarry owners, Western, 1892 ; freestone ; granite, na- tional, 1891 ; limestone, rub- ble, and flag, Illinois, 1884 marble. Western dealers, 1885 Vermont marble quarries, 1889 sandstone. New York, 1883. Structural steel. Stucco, 1883. Varnish dealers, national, 1888. Wall-paper: national, 1879; in- ternational, 1882. Vn. — FARM AND PLANTATION. Agricultural implements, manu- facturers, dealers, 1891. Binders, Harvester Trust, 1883. Churns, 1884. Corn-harvesters, national, 1892 . Cotton bagging, 1888. Cotton presses, local, 1892. Drain tile, Indiana, 1894. Fencing, barbed wire, national, 1881. Fertilizers: 1888; guano; men- haden oil, New England, 1885 ; phosphate, South Carolina, 1887 ; Florida, 1891. Forks, national, 1890. Harrow manufacturers, national, 1890. Harvesting-machines, national, 1883. Hay-presses, national, 1889. Hay tools, Western and North- western, 1884. Hoes, national, 1890. Horse-brushes, prison-made, 1889. Jute grain bags, national, 1888. Mowers, national, 1883. Pails, fibre trust, national, 1888. Paris green. Ploughs, Northwestern, 1884. Rakes, national, 1890. Reapers, 1883. Scythe-makers, national, 1884. Shovels, national, 1890. APPENDIX XV. 333 Snath manulacturers, national, 1891. Threshing-macliiues, national, 1890, 1891. Twine, binding, 1887. Vehicles. Vni. — SCHOOL, LIBBARY, AND COUNTING-KOOM. Blank-hooks, 1888. Envelopes, 1888. Lead-pencils, 1878. Lithographic printers, national, 1892. Novels (paper-covered "libra- ries"), 1890. School-books, national, 1884. School-furniture, national, 1892. Slates and slate-pencils, national, 1887. Subscription-books, local, sec- tional, 1892. Type-founders, national, 1888. Type-writers. Writing-paper, national, 1884. IX. — SHOOTING MATERIALS. Ammunition, 1883. Arms, 1883. Cartridges, national, 1883. Dynamite. Fireworks, national, 1890. Gunpowder, national, 1875. Guns, 1883. Shot-tower companies, national, 1873. X. — FOR THE PERSON. Barbers' National Tonsorial Par- lour Company, organized to establish barber-shops in all the large cities of the United States, 1890. Buttons. Clothes-brushes, prison-made, 1889. Coat and cloak manufacturers: New York, 1883; Chicago, 1893. Collars and cuffs, New York, 1890. Cotton: Fall River; Southern mills, 1881; thread (spool-cot- ton), 1888. Dress-goods, Pennsylvania, 1886. Furs. Ginghams, Pennsylvania, 1886. Gloves, New York. Hats: fur, 1885; woollen, na- tional. Knit goods: New York, 1884; Western, 1889. Jewellers, national. Laundries : Chicago ; Chinese Laundry Union, New York City, 1889; St. Louis, 1893. Pocket-knives, national, 1892. Ribbons, national, 1892. Rubber hoots and shoes, national, 1882. Seal-skin, national, 1892. Shirts: Troy, New York City, 1890. Shoe: manufacturers, national, 1887 ; retailers. New England, 1885, national, 1886. Silk : manufacturers, interna- tional, 1888 ; sewing, national, 1887 ; ribbon, 1884. Trunks, national, 1892. Umbrellas, Eastern, 1891. Watch: manufacturers, makers and jewellers, national, 1886; National Association of Job- bers of American Watches and Cases, 1880. Woollens : manufacturers, 1882 ; worsteds, yarns, Pennsylva- nia, 1886. 334 INDUSTRIAL COMBINATIONS. XI. — SPIRITS AND TOBACCO, ETC. Beer, United States Brewers' Association, 1861, local in most ol the larger cities; great combination of brew- eries bouglit up by English capitalists ; St. Louis, Chicago, etc., 1889-91. Champagne, New York City, 1889; France, 1891. Meerschaum pipes, New Jersey, 1892. Soda fountains, 1890. Spittoons, fibre trust, national, 1888. Tobacco and cigars, local, sec- tional, national, 1882; cigar- ettes, 1890. Waters, mineral, national, 1889. Whiskey and "domestic" — or artificial — brandy, rum, gin, and cordials made in imitation of the genuine. Wine-growers, California, 1889. Wine and liquor dealers' associ- ations, local. XH. — DOMESTIC SUPPLIES. In General. Candles, coal, furnaces, gas, oil, matches, ranges, stoves, etc. (see Light, Heat and Power) . Carpets : Eastern, 1885. Chairs : cane, 1889 ; manufac- turers. Western, 1880; seats, perforated, national, 1888. Furniture : national, 1883 ; Chi- cago manufacturers, 1886; re- tailers. New England, 1888; national, 1893. Hair-cloth, Rhode Island, 1893. Oil-cloth, table and stair, Oil- cloth Association, 1887. Pails, fibre trust, national, 1888. Soap, national, 1890. Upholsterers' felt. Upholstery goods, textile manu- facturers, Pennsylvania, 1886. Window-shades, 1888. The Kitchen. Boilers. Bottles. Brooms, 1886. Brushes, scrubbing, prison-made, 1889. Chopping-bowls, wooden-ware, national, 1884. Crockery, national, 1883. Fruit-jars, 1891. Glass-ware, 1883. Hollow-ware, prison-made, 1888. Keelers, fibre trust, national, 1888. Kettles, prison-made, 1888. Lamp-chimneys, 1883. Measures, fibre trust, national, 1888. Pans and pots, prison-made, 1888. Potato-mashers, wooden-ware, national, 1884. Pottery, yellow-ware, national, 1889. Sinks, copper. Stamped-ware, national, 1882. Tin-ware: national, 1883. Water-coolers, filters, pails, fibre trust, national, 1888. Water-pails, wooden-ware, na- tional, 1884. Wooden-ware, national, 1884. Laundry. Borax. Clothes-pins, New York, 1888. Clothes-wringers. APPENDIX XV. 335 Soap, national, 1890. Soda, 1884. Starch: Western, 1882; national, 1890. Washboards, New York, 1888. Wash-tubs, wooden-ware, na- tional, 1884. Washing-machines, national, 1891. Water-tubs, fibre trust, national, 1888. Zinc, sheet, 1890. Bining-room. Butter-dishes, 1886. Glass table-ware, 1889. Plated-ware. Silver-plated ware. Silver-ware, national, 1892. Table cutlery, national, 1881. Table oil-cloth, national, 1888. Tables, extension-tables, na- tional, 1893. Parlour. For carpets, furniture, uphol- stery, etc., see under "In General," above. Mantel lambrequin, wool felt, 1888. Music, books and Instruments, Boston, New York, Chicago, Cincinnati, 1892. Organs, local, sectional, 1889. Parlour frame manufacturers. Parlour furniture. Western Asso- ciation, 1886. Pianos, local, sectional, 1889; national, 1893. Piano-covers, wool felt, 1888. Picture-frames, 1890. Rugs, Eastern, 1885. Table-covers, wool felt, 1888. Tapestries, Eastern, 1885. Bath-room. Bath-tubs (see Copper). Sanitary-ware, 1889. Sponges, Florida, New York, 1892. Bedroom. Chintzes, Pennsylvania, 1886. Looking-glass: International, 1890. Spring beds, national, 1890. Wire mattress : Northwestern, 1886; national, 1890. XIII. — FOOD. Bread, biscuit, crackers, local, sectional, national. Butter, local, 1889. Candy, local, national, 1884. Canned goods : Western, 1885 ; national, 1889; California canned fruit, 1891. Cider and vinegar, national, 1882. Coffee, Arbuckle trust, 1888. Corn-meal, Western, 1894. Cotton-seed oil. Dairy Association, national, 1893. Eggs, local. Fish: England, 1749 and before ; New York and New England, 1892; salmon, Alaska, 1891; salmon canners of the Paciiic coast, 1893; sardines. East- ern, 1885; international, 1890. Flour : United States, National Millers' Association, 1883 ; win- ter wheat mills, national, 1888; spring wheat mills, 1889; rye flour, local, 1891 ; flour-mills of Utah and Colorado, 1892. Food Manufacturers' Associa- tion, United States, 1891. Fruit ; bananas. Southern, 1888 ; California fruit-growers, 1892 ; 336 INDUSTRIAL COMBINATIONS. cranberries, Cape Cod, 1888; Florida, 1889; foreign fruit, New York, 188-t ; Fruit-trade Association, New York, 1882; fruit-growers of tlie Eastern and Middle States against commission-merchants, 1887 ; preserves and jellies, West- ern, 1883; American Preserv- ers' Company, 1889; prunes, California ; strawberry-grow- ers, "Wisconsin, 1892; water- melons, Indiana, South Caro- lina, 1889. Grape-growers, Northern Ohio, 189i. Grocers: wholesale, retail; local, sectional, national. Honey, local, 1888. Ice: local, sectional, 1883; arti- ficial. Southern, 1889. Lard-refiners, Eastern, 1887. Meat and cattle: beef, mutton, pork; Butchers' National Pro- tective Association ; Chicago packers; Inter-mountain Stock- growers' Association, Utah, 1893 ; International Cattle Range Association ; Live-stock Association, 1887; Northwest Texas Live-stock Association, 1878; Western Kansas Stock- growers' Association, 1883 ; Wyoming Stock-growers' As- sociation, 1874. Milk: local, sectional, 1883 ; con- densed milk. New York, Illi- nois, 1891. Oatmeal, 1885. Olive-oil. Oysters, local, 1890. Pea^nuts, 1888. Pickles, national, 1891. Produce: Produce Commission- merchants, eight large cities — North, South, East, West, 1883 ; West, 1888. Raisins, California, 1894. Rice-mills, Southern, 1888. Salt: rock; English Salt Union, 1888; international, 1889; Can- ada, 1891. Sugar, 1887. Glucose, national, 1883 ; international, 1891. Wine, California, 1894. XIV. — MEDICAL, SUKGICAL, ETC. Artificial teeth, 1889. Castor-oil, 1885. Cocoa-nut oil, American import- ers, 1881. Coffins, National Burial-case As- sociation, 1884. Dental machines and supplies. United States, 1889. Drugs: importers; druggists, re- tail, sectional, national, 1883; wholesale, sectional, national, 1884; Canada, 1874; manufac- turers, national, 1884. Ergot, 1891. Glycerine, New York, 1888. Life insurance, 1883, national, 1891. Patent medicines, national, 1884. Peppermint, local, 1887. Quinine, 1882. Tombstones, local, Brooklyn, Chicago, 1891. Vaseline. XV. — MISCELLANEOUS. Athletic clubs, 1893, to reduce charges made by prize-fighters for exhibition. Base-ball, national, 1876. APPENDIX XV. 337 Billiard-tables and furniture, 1884. Bill-posters, United States, Can- ada, 1872. Dime museums, national, 1883. News-dealers, 1884; newspa- pers, Associated Press, United Press; sectional, national. Photographers, national, 1889. Playing-cards. Printers, show and job, 1893. Racing trust, jockey club, 1894. Retailers, 1891. Small retail store-keepers of Kansas City protest against mammoth de- partment stores. Safes, national, 1892. Theatrical trust. Interstate Amusement Company, Spring- field, HI., 1894. Warehouses : Brooklyn, 1887 ; national, 1891. 338 INDUSTRIAL COMBINATIONS. APPENDIX XVI. BIBLIOGRAPHY. Abbott, Austin. — 32 Daily Reg. 1887, p. 812 ; 34 Id. 1888, pp. 484, 572. Note of Cases Syndicates and Pools, 16 Abb. N. C. 1886, pp. 380-394. Condition of the Law as to Combination, 23 Amer. Law Review, 1889, pp. 755-758. Adams, Geo. H. — The " Trusts " and the Civil Code, New York, 1888. Andrews, E. B. — Trusts according to Official Investigar tion, 3 Quar. Jour, of Economics, 1889, pp. 117-152. The Economic Law of Monopoly, Amer. Soc. Sc. Ass., Sept. 1889. The Late Copper Syndicate, 3 Quar. Jour, of Economics, Boston, 1889, p. 508. Alexander, E. P. — Pools and Combinations. Adams, H. C. — Relation of the State to Industrial Action, Amer. Econ. Assoc. Publ., 1887, No. 6. AscHEOTT, P. F. — Die amerikanischen Trusts als Weiter- bildung der Unternehmerverbande, Archiv fiir sociale Gesetzgebung und Statistik, I. 1889. Ashley, W. J. — The Canadian Sugar Combine, in the University Review (Toronto), 1891. Barret, Geo. C. — Opinion in Case of the People v. Xorth River Sugar Refining Co. with Briefs of Comisel, 22 APPENDIX XVI. 339 Abb. N. C. 1889, p. 164 ; 19 N. Y. State Rep. 853 ; 16 N. Y. Civ. Proc. R. 1 ; 22 Amer. and Engl. Corp. Cas. 511 ; 5 RaUw. and Corp., L. J. 56 ; 3 N. Y. Suppl. 401 ; 2 Lawy. Rep. Ann. 53. Beach, Chakles F., Jr. — Commentaries on the Law of Private Corporations, Vol. 1, Chap. 3, §§ 55-56. Facts about Trusts, New York, 1889, Forum, 1889, pp. 62-72. The Atchison, 7 Railw. and Corp. L. J. 1890, pp. 21-22. Trusts, their Cause and Effects, 3 Railw. and Corp. L. J., March, 1888, p. 217. Baskee, Chas. W. — Monopolies and the People, New York, 1890. Barry, W. — Monopolies and Combinations, 7 Forum, p. 424. Bruce, E. C. — Trusts, Lippincott Mag., p. 433. BoLLES, A. L., Effects of Monopolies on "Value, 117 No. Amer. Rev. 1873, p. 319. BoNHAM, John M. — Industrial Liberty, New York, 1888, pp. 96-221. Railway Secrecy and Trusts, New York, 1891. Camden, J. N. — Standard Oil Co., 136 Amer. Rev. 1888, pp. 181-190. Carnegie, A., Bugaboo of Trusts, 148 Amer. Rev. 1889, pp. 141-150. Carter, James C. — Case of the People v. North River Sugar Refining Co ; Argument for Defendants, New York, 1889. Clark, John B. — Limits of Competition, 2 Pol. Sc. Quar. 1887, pp. 45-61. Clerkb, E. M. — Syndicates, Trusts, and Corners, 21 Dub- lin Rev. 1889, pp. 385-377 ; 6 RaUw. and Corp. L. J. 1889, pp. 241-250. Clond, D. C. — Monopolies and the People ; Railway and Bank Monopolies, etc., 3d ed. Davenport, 1878. 340 INDUSTRIAL COMBINATIONS. Cook, Wm. W. ^- Trusts ; The Recent Combinations in Trade, New York, 1888. On Stock and Stockholders, Chicago, 1889, pp. 525-555, 3d ed. 1894, esp. Part VII. The Corporation Problem, New York, 1891. Cooke, F. H. — Economic and Uneconomic Anti-Trust Legislation, 5 Annals of the Am. Ac. of Pol. and Soc. Sci., pp. 109-114. CoQTJEHN, Chas. — Competition, 1 Lalor's Cyclo. Pol. Sci. 1881, pp. 642-683. Crain, T. C. T. — Points for Petitioners, etc.. New York, 1888. Daly, Chas. B. — Brief of Defendant in Case of the Peo- ple V. North River Sugar Refining Co., New York, 1889. Dana, W. F. — Monopoly under the National Anti-Trust Ass., Harv. Law Rev., February, 1894, n. 338. Desty, Rob. — Note of Cases, Competition and Combina- tion ; Conditional Statutory Provisions affecting Com- binations, 1 Law. Rep. Amer. 1888, pp. 849-852. DoDD, S. C. T. — Combinations ; Their Uses and Abuses, with a History of the Standard Oil Trust, New York, 1888. Statement of Pending Legislation and its Consequences, New York, 1888. Combination and Competition ; An address delivered be- fore the Merchants' Association of Boston, New York, 1889. Railw. and Corp. L. J. 1889, pp. 97-100. Authorities on Combinations, New York, 1889. Defence of Trusts, N. Y. Tribune, Feb. 2, 1890. " Trusts " ; pamphlet from the Tribune, New York, 1892 (vide Powderly). Aggregated Capital (Syracuse University Lectures), New York, 1893. APPENDIX XVI. 341 The Present Legal Status of Trusts, 7 Harv. Law Rev. November, 1893. Donald, Rob. — Trusts in the United States, Contemp. Rev. June, 1890, p. 829. DowD, J. — Trusts, Abuses and Remedies, 5 Annals of the Am. Ac. of Pol. and Soc. Sci., pp. 114-118. DwiGHT, Theo. W. — The Legality of Trusts, 3 Pol. Sci. Quar. 1888, pp. 592-632; 28 Cent. L. J. 1889, p. 29 ff. Ely, Richard T. — Nature and Significance of Corpora- tions, Harper's Mag. May, 1887. Growth of Corporations, lb. June, 1887. Future of Corporations, lb. July, 1887. Problems of To-day ; a discussion of Protective Tariffs, Taxation, and Monopolies, New York, 1888. The Tariff and Trusts (from Shane : The National Reve- nues), Chicago, 1888. The Telegraph Monopoly, 149 No. Amer. Rev. 1889, pp. 44-53. Farrer, T. H. — Industrial Monopolies, Quar. Rev. Oc- tober, 1870. Flagler, John H. — Address before the Commercial Club of Providence, Rev. Jour. Dec. 15th, 1888. GiDDiNGS, F. H. — Persistence of Competition, 2 Pol. Sc. Quar. 1887, pp. 63-7,8. GoDKiN, E. L. — Corporations and Monopolies, 18 Nation, 1874, pp. 359-360. Godson, Richard. — Monopolies and Combination Law of Patents, 1st ed., p. 42. Greenhood, Elisha. — Doctrine of Public Policy, 1886, pp. 624-683. GuNTON, Geo. — Economic and Social Aspect of Trusts, 3 Pol. Sc. Quar. 1888, pp. 385-408. Principles of Social Economics, II. and III., New York, 1891. 342 INDUSTKIAL COMBINATIONS. The Economic Errors of Trusts, 4 Soc. Economist, Feb- ruary, 1893. Gunton's Apology of Trusts, Nation, February 7, 1889. Hadley, a. T. — Monopolies and Combination, 1 Quar. Jour, of Econ., p. 28. Public Business Management, 3 Pol. Sc. Quar. 1888, pp. 582-591. Regulation of Monopolies, Railway Gar. 1890 ; 7 Railw. and Corp. L. J. 1890, pp. 59-60. Railway Transportation, New York, 1892. Halle, Ernst von. — Unternehmer- uud Unternehmungs- verbande in den vereinigten Staaten von Nordamerica, Sohriften des Vereins fiir Socialpolitik, Vol. LIX 2. pp. 93-327, Leipzig, 1894. Ha WES, C. P. — Argument in the Matter of Proposed Leg- islation relative to Trusts; pamphlet. New York, 1888, p. 32. Heinsheimer, N. — The Legal Status of Trusts, 2 Colum- bia L. Times, 1888, S. 51-58 ; 4 Pol. Sci. Quar. 1889, pp. 190-193. Hess, J. S. — Monopolies and Combination, 30 Ref . Quar. Rev., p. 450. Hold, Byron W. — Trusts v. Wages, 5 Tariff Reform, No. 17, New York, 1872. Hudson, J. F. — Modern Feudalism, 144 No. Amer. Rev. 1887, pp. 177-290. Monopolies and Combination, 144 No. Amer. Rev., p. 277. Iles, Geo. — Competition on the Trusts, 34 Pop. Sci. Month. 1889, pp. 619-630. Jeans, I. St. — Trusts, Pools, and Combinations, Social Sci- ence Series, London, 1894. Jbnks, J. W. — Development of the Whiskey Trust, 4 Pol. Sc. Quar. 1889, pp. 296-319. Trusts in the United States, Economic Journal, London, 1892. APPENDIX XVI. 343 The same in German. — Die Trusts in den Ver. Staaten von Nordamerika. In Conrads JahrbUchern. N. F. Bd. I, Jena, 1891. Capitalistic Monopolies, 9 Pol. Sci. Quar. September, 1894, p. 486 ff. Kahn, Laz. — The Stove Industry and the Ethics of Con- solidation, Cleveland, 189-3. Lloyd, H. D. — Lords of Industry, 138 No. Amer. Rev. 1884, pp. 535-553. Story of a Great Monopoly ; The Standard Oil Co., 47 Atlantic Mo. 1881, pp. 317-834. Wealth against Commonwealth, Chicago, 1874. Summary of Facts before the Antiinonopoly Conven- tion, Chicago, 1893. Lewis, John. — The American Railroad and Corporation Reports, Vol. I fi., Chicago, 1890. McCooK, John J. — Proposed' Railway Trust, 5 Railw. and Corp. L. J. 1891, pp. 165 ff. McPherson, L. S. — The Meaning of Corporations and Trusts, Pop. Sci. Month., July, 1894. Mickey, D. M. — "Trusts," 22 Amer. Law Rev. 1888, pp. 538-549 ; 20 Week. Law Bull. 1888, pp. 159-165. MiNTURN, Jas. F. — History of Trusts, 3 Belford's Mag. 1889, pp. 61-66. Morgan, A. — Combination ; is it a Crime ? 33 Pop. Sei. Month. 1888, pp. 42-66. Parsons, John E. — Argument in Case of People v. North River Sugar Ref. Co., New York, 1889, p. 18. Passos, Dos. — The Interstate Commerce ■ Act, New York, 1887. Peck, Jas. F. — Conspiracy Prosecutions and Conspiracy Laws of New Netherland, New York, etc., 9 N. Y. Assembly Doc. 1888, No. 68, pp. 563-700. PowDERLY, Terence W. — "Trusts"; pamphlet from the Tribune, New York, 1892 (mde S. C. T. Dodd). 344 INDUSTRIAL COMBINATIOIfS. Pkyor, Roger A. — Substance and Argument before the Legislative Committee of the State of New York, New York, 1888. Brief ; Case of the People v. North River Sugar Refining Co., Supreme Court, Circuit ; pamphlet, New York, 1888. Trust Combinations ; Illegality of Trust Monopolies. Reply ; pamphlet. New York, 1888, p. 9. Additional Brief for Plaintiff, New York, 1889. Illegality of Trust Combinations ; A Cause of Corporate Forfeiture ; Argument in Case ; People v. North River Sugar Refining Co., New York, 1889. Rapsheb, W. M. — Dangerous Trusts, 146 No. Amer. Rev. 1888, pp. 509-514. Rich, G. E. — Trusts ; their own Correctives, Pop. Sci. Month. April, 1894, pp. 740 S. Root, Frank D. — Trusts and the Tariff, 1 Tarifi Reform, No. 30, New York, 1888. Ross, Geo. W.— Trusts, 10 Chic. Law Jour. 1889, pp. 112- 144. Seeger, Ferd. — Jobs in Cities, New York, 1886. Semmes, Thomas J. — Argument on Behalf of the Cotton Oil Trust, New Orleans, 1888. Spelling. — Treatise on Trusts and Monopolies, Boston, 1893. Sterne, Sim. — Monopolies and Combination, 2 Public Cyclo. of Pol. Sci., p. 390. Sticknet, a. B. — The Railway Problem, St. Paul, 1891. Stimson, Geo. "W. — Trusts, 7 Harv. Law Rev. 1887, pp. 132-143. Sullivan, A. S. — Address at the Laying of the Corner Stone of the New Building of the Consolidated Stock Exchange in New York City, Sept. 8, 1887; Stock Exch. Annual Rep. 1888, pp. 120-123. APPENDIX XVI. 345 Summer, Wm. G. — Good Sense on the Trust Question, N. Y. Independent, 1888. SwANN, John. — Combinations and Pools ; Hints to In- vestors, 1886. Swiif T, M. J. — "What shall be done with Trusts ? Andover Kev. 1888, pp. 109-127. Thompson, Robt. Alhs. — Concerning Trusts ; Paper read before the Philadelphia Science Association, Feb. 21st, 1889. Thitrber, P. B. — Combination and Competition, New York, 1888, 5 Railw. and Corp. L. J. 1889, pp. 20-24. Uhle, J. B. — Amer. L. Keg., N. S. Legal Misc. Sept. No. 1888, pp. v., vi. Walker. — Competition not the Life of Trade (Address). Warner, John de Witt. — Labor, Wages, and Tiiriffs, 2 Tariff Reform No. 31, New York, Jan. 15, 1892. Tariff Trusts plead Guilty, 5 Tariff Reform 13, New York, Sept. 15, 1892. Tariffs, Tramps, and Trusts, 5 Tariff Reform 53, New York, 1891. Tariff, Trusts, 100 Samples, 5 Tariff Reform 8, New York, 1892. Sugar, Sugar Tariff, Sugar Trust, 7 Tariff Reform 2, New York, 1895. The Sugar Trust, 7 Tariff Reform 4, New York, 1894. Welch, J. C. — Trusts, 136, No. Amer. Rev. 1883, pp. 191- 200. Wells. — Recent Economic Changes, New York, 1889. Trusts and Monopolies ; How the Republican Party greets and maintains them ; Speech, October, 1889. WiLETT, E. — Trusts, The New Juggernaut, 7 Drake's Mag. 1889. WiMAN, Erastus. — How Fortunes are made ; Combinar tions as a Fortune Getter, N. Y. Tribune, Dec. 5, 1889. 346 INDUSTRIAL COMBINATIONS. The Waste of Competition ; pamphlet, New York, 1889, p. 8. Winters. — Bibliography of Trusts, Railway and Corp. L. J., 1891. Wood, Henry. — Bugbear of Trusts, 5 Forum, 1888, pp. 584-590. Weights, R. S. — -Law of Criminal Conspiracies, Amer. Ed. Philadelphia, 1887. Trusts and the TarifE, Supplement of the N. Y. World, July, 1892. Lead Trust Secrets, New York Herald, Feb. 6, 1890. Power of Trusts, Public Opinion, March 1, 1890. The So-Called " Trust," 21 Amer. Law Rev. 1887, pp. 976- 979. Modern Competition, 62 Fraser Mag. p. 767. Crinftnal Conspiracies and Combinations, 10 Washington Law Rep. 1882, pp. 353, 369, 401, 433, 449, 481, 497 ; 16 Cent. L. J. 1883, p. 39. Monopoly in Business, 40 Mo. Rel. Mag. 202. Municipal Ordinances creating a Monopoly, 34 Amer. Dec. 1882, pp. 637, 638. Remedies for the Evils of Monopolies, 8 West. Journal, 1874, pp. 511-519. A Tyrant Trust, New York Evening World, June 28, 1889. After the Trust; Views of S. C. T. Dodd, John R. Dos Passes, John E. Parsons, etc., New York Mail and Express, Feb. 1, 1890. American Cotton Oil Trust ; How a MOlion was Lost, New York Evening Post, Sept. 2, 1889. American Cotton Oil Trust Secrets, New York Times, Feb. 15, 1890. A Book Trust, New York Mail and Express, Feb. 7, 1890 ; New York World, March 7, 1890. Chicago Gas Trust, New York Daily Times, Jan. 4, 1888 ; 5 Railw. and Corp. L. J. 1889, p. 536. APPENDIX XVI. 347 Coffin-Makers' and Undertakers' Trust, Industrial Journal, February, 1889. Frenzy for Trusts, New York Evening San, June 27, 1889. Effect of Trust Combinations, New York Com. Bulletin, April 1, 1889. Farmers' Trust of the Northwest, New York Com. Adver- tiser, March 26, 1888. Ferry Syndicate of New York City, New York Star, Feb. 20, 1890. Difference in Trusts, 5 Railw. and Corp. L. J. 1889, pp. 455- 456 ; Amer. Grocer, March 27, 1889. Economic Effects of Combination, Age of Steel, 5 January, 1889. Industrial Trusts, 18 Amer. Phil. 1889, p. 246. Morality of Trusts, 66 Saturday Review, London, 1888, S. 609. Railway Trusts, 5 Railw. and Corp. L. J. 1889, p. 165 ; 6 Bd. 1889, pp. 61, 191, 201. History of the " Gentlemen's Agreement," New York Star, Jan. 12, 1890. Brief History of the Standard Oil Co. ; Its Methods and Influence ; pamphlet, New York, 1887, pp. 23 ff. Trusts, and how to deal with them, Chautauquan, February, 1890. Trusts in America, 61 London Speot. 1888, p. 1253. The Sugar Trust, N. Y. World, April 19, 1894 ; A History of the Sugar Trust, Harper's Weekly, Aug. 18, 1894. The Spirit of Monopoly, 3 Amer. L. J., N. S. 1850, pp. 283-286. Points for Petitioners in re Grant et al. on a hearing before Hon. Chas. F. Tabor, Attorney General N. Y. 1888. Petitions and Answers, with Opinion of the Attorney Gen- eral, Hon. Chas. F. Tabor, in the Matter of Grant et al. U. S-. House of Rep., Doc. No. 3112, 1888, pp. 200-209. 348 INDUSTRIAL COMBINATIONS. Judge Barrett and the Newspapers, 5 Railw. and Corp. L. J. 1889, pp. 53-54 (case of the People v. North River Sugar Refining), Supreme Court, General Term Appellants. Case in Appeal from Judgment, New York, 1889, pp. Ill ff. Opinion of Hon. Chas. Daniels, 7 New York Supp. 1889, p. 406; 27 New York State Rep., p. 282; 5 Lawy. Rep. Ann. 386 ; 2 New York. Report of Speeches at the Banquet of the Merchants' Asso- ciation, Boston, Jan. 8, 1889 ; Boston Journal, Jan. 9, 1889 ; Boston, 1889. Report of the Addresses to the Plymouth League ; subject, " Trusts," Brooklyn Eagle, Feb. 7, 1889. Report No. 3112, U. S. House of Representatives, 50th Congress, 1st Session, July 30, 1888. From the Com- mittee on Manufactures in Relation to Trusts ; pam- phlet, Washington, D. C, 1888 ; Part I., Sugar Trust, p. 211 ; Part H., Standard Oil Trust, p. 956. Report No. 4165, Part I., U. S. House of Representatives, 50th Congress, 2d Session, March 2, 1889. From the Committee on Manufactures in Relation to the ^Tiis- key Trust and the Cotton-bagging Combination ; pamphlet, Washington, D. C, 1889, p. 188. Report No. 4165, Part II., U. S. House of Representatives, 50th Congress, 2d Session, March 2, 1889 ; Views of the Minority of the Committee on Manufactures on the Investigation of the Sugar and Standard OU Trusts; pamphlet, Washington, D. C, 1889, p. 37. Report of Committee on General Laws on the Investigation relative to Trusts, March 6, 1888 ; New York Senate Doc. No. 50; pamphlet, Albany, 1888, p. 692. Report of Committee on General Laws relative to Combi- nations coniraouly known as Trusts, May 9, 1889 ; Majority and Minority Reports, etc., New York Sen- ate, Doc. No. 64 ; pamphlet, Albany, 1889', p. 307 ; 5 Railw. and Corp. L. J. 1889, pp. 478-479. APPENDIX XVI. 349 Report of the Select Committee to the Canadian House of Commons upon Alleged Combinations in Manufac- tures, Trade, and Insurance in Canada, May 16, 1888, Sixth Parliament, 2d Session ; pamphlet, Ottawa, 1888, p. 750. Report of Proceedings of the Special Committee on Rail- roads of the New York Assembly to investigate Al- leged Railway Abuses, A. B. Hepburn, Chairman, 5 vols. 8vo, New York, 1879. Report of the Special Committee ; Investigation of Alleged Railway Abuses, Vol. 3, New York Assem.bly Doc. 1880, No. 88, p. 78. Report and Testimony ; Special Senate Committee of the State of New York appointed to investigate the Cor- nering of Grain, Combinations, Pools, etc.. Vol. 5, New York Senate Doc. 1883, No. 45, p. 934. • Report of the Interstate Commerce Commission, 1888-1893. Report No. 2600, House of Representatives, Whiskey Trust Investigation, March 1, 1893. Report No. 2278, House of Representatives, Alleged Coal Combination, January, 1893, and Testimony taken by the Sub-Committee of the Committee of Interstate and Foreign Commerce, etc., Washington, 1892, in regard to the Alleged Combinations of the Philadelphia and Reading Railroad Co. and other Railroad and Coal Commissions and Producers of Coal, Washington, D. C, 1892. Report No. 829, May 1, 1890, and Testimony taken by the Select Committee of the U. S. Senate on the Trans- portation and Sale of Milk Products, Washington, 1889 and 1890. Report of the Special Committee of the Ohio Assembly on Trusts, Pools, etc., 1889. Report on the ponstitutionality and Legal Status of Trusts in the U. S. Foreign Office, 1890, Misc. Series No. 350 INDUSTEIAL COMBINATIONS. 174 ; Reports on Subjects on General and Commer- cial Interests presented to the Houses of Parliament by Command of Her Majesty, London, July, 1890. Report of Commission appointed to investigate the Waste of Coal Mining, etc., Philadelphia, 189.3. Sugar Trust Injunction, 23 Abb. N. C. (1889, p. 314 ; 2 New York L. J. 1890, p. 2155.) American Cotton Oil Trust Co. Case, La., 1 Railw. and Corp. L. J. 1887, p. 509 ; 40 La. Ann. 1888, p. 8. Enloe's Proposed Amendment to the Constitution, H. R. Review, No. 30, 1890. Statutory Enactments against Trusts, 28 Cent. L. J. 1889, pp. 53.3-534. U. S. Senate Bills, Session of 1889-1890, No. 1 (Sherman, Ohio), 6 (George, Miss.), 62 (Reagan, Tex.). Turpie's Resolution ; Seizure of Trust Goods, Sen. Mis. No. 18, 1890. U. S. Debates, Sherman's BiU, 1889 (No. 3445), 20 Cong. Rec. (1889), pp. 1120, 1167, 1456. Sherman's Bill, 1890 (No. 1), Cong. Rec. Feb. 28, 1890, pp. 1797-1803. U. S. House of Representative Bills, Session of 1889-1890, Nos. 91 (McRae, Ark.), 179 (Stewart, Ga.), 202, (Fithian, 111.), 270 (Henderson, la.), 286 (Conger, la.), 313 (Laoey, la.), 402 (Blanchard, La.), 509 (Anderson, Miss.), 811 (Enloe, Tenn.), 826 (Rich- ardson, Tenn.), 830 (Pierce, Tenn.), 846 (Stewart, Tex.), 3294 (Breckinridge), 3353 (Lester, Va.), 3819 (Lane, HI.), 3844 (Perkins, Kan.), 3925 (Abbott, Tex.). Notes on cm-rent events within the Trusts are given in Bradstreet's, Dun's Review, and the Financial and Com- mercial Chronicle. THE SUGAK COMBINE. A = Price of refined sugar (granulated). B = Price of raw sugar (96° centrifugal.). = Diflerence between A and B — cost of refining plus profits. a. Organization of trust. 6. Change of tariff, c. Union with competing refineries. THE WHISKEY COMBINE. A = Average monthly price of corn per bushel at Peoria, 111. B = Average monthly price of spirits derived from one bushel of com (obtained by multiplying the value of one gallon of spirits, less the tax of $^90 per gallon, by the yield in gallons from one bushel of corn). The space between the lines represents the cost of production plus the profits. For much of the time before the formation of the trust, assessments for export expenses must be deducted from the profits. HONEST MONEY. By ARTHUR I. FONDA. i2mo, cloth, $1.00. A work dealing in a rational and common-sense way with the requirements of an honest money, criticising the merits and defects of various proposals for its betterment, with an outline of a new monetary system that seems to meet the requirements and correct existing faults. LABOUR POPULAR WELFARE. By W. H. MALLOCK, " Author of " Is Life Worth Living ? " " Social Equality," Etc. Second Edition, i2mo, cloth, go cents. " This new edition of Mr. W. H, Mallock's famous work, now published in a much cheaper form, will be heartily welcomed. The author's theories are his own, and his statements of fact may be relied upon as accurate. Few economic writers have compressed so much into so little space, and there is the advantage of clearness in brevity of statement. He writes earnestly. ... It is no mean compliment to Mr. Mallock that his book is attacked by radicals and socialists on the one hand, and by conservatives on the othet^"— Boston Daily Advertiser. " One cannot but recognize the earnestness of the writer, especially in the directions of making his book practical ; and we are more deeply impressed with his words, perhaps, because he is in no way an extremist. He writes from the standpoint of a radical, not as an agitator, and he states his arguments and con- victions forcibly and clearly," — Detroit Free Press. MACMILLAN & CO., 66 FIFTH AVENUE, NEW YORK. I THE American Commonwealth. By the Right Hon. JAMES BRYCE, D.C.L., Author of "The Holy Roman Empire," M.P. for Aberdeen. Third Edition, Revised Throughout. In Two Volumes. Large i2mo, $4.00, net. This new edition has been practically rewritten, and not only have all difficult and controverted points been reconsidered, but in every possible way the infor- mation given is brought up to date. All statistics have been carefully corrected by the latest official records, and constitutional changes in the States since 1889 have been (so far as possible) noted. Four entirely new chapters are added, in which the author discusses The Tammany Ring in Neiv York City, The Present and Future of the Negroy The South since the War, and The Home of the Nation, In the new material Mr. Bryce enters quite fully into recent politics, takes note of the issues of the last Presidential campaign, the effects of public opinion on such questions as the Force bill, the tariff, the silver question, in deciding the elections, the relations of the political parties to each of these topics, discusses at some length the growth of new parties, and comments on the Hawaiian trou- bles, new aspects of the agitation for female suffrage, etc. The changes in the financial position of the Nation are commented upon, and the menacing attitude of Labor in recent years as shown in the Homestead Riots of 1892 and the Railroad Strikes in the present year. Attention is called to the dangers, on the one hand, of a constant influx every year of half a million of untrained Europeans, and on the other of the growing influence of wealth over the country, and such sinister results as "combines," huge corporations, etc., which are able to crush competition, and even influence legislation. On the other hand, something is said hopefully of the efforts of municipal reformers to purify politics, and of the revolt of the better portion of the com- munity in its effort to repress Rings, to minimize the action of the Machine^ and overthrow the Rule of the Boss. MACMILLAN & CO., 66 FIFTH AVENUE, NEW YORK. 2 IN PREPARATION. INDUSTRIAL COMBINATIONS AND COALITIONS IN THE UNITED STATES. By ERNST VON HALLE. i2mo, cloth. Dr. von Halle's work, on " Industrial Combinations and Coalitions in the United States," deals with an interesting and important subject. The scope of the work may be indicated by enumerating a few of the combines) in their broader sense, the author briefly touches upon, — such as the Standard Oil Trust, the Cordage Trust, Railway Pooling, Steamship Line Combines, Pork- Packing, Brewing and Distilling Combines, School Book, Wall Paper, and Playing Card Trusts, the Steel Trade Combine, the Western Union Telegraph System, General Electric Companies Trust, Express Service Combines, besides Gas and Water, and Postal Service, Copyrights, Patents, etc. The author's point of view is not controversial, but elucidatory and impartial, — seeking not to take sides for or against " Combines," still less to pass judgment upon them from a moral standpoint. He, of course, holds up to view their evils, — economical and political, — but, on the other hand, he points to their manifest industrial advantages. He shows how legislation has opposed them and sought to hold them in check, and he quotes both statutes and the decisions of jurists as re- pressive measures. Reference is also made to Trusts and their relation to the Stock market; while tbe subject is briefly considered as the outcome of a sys- tem of Protection. Here, as throughout, the author does not take sides, but con- tents himself, in the main, with a survey of facts. So neutral is the author, and averse from bias, that while he writes of monopolies as " despoilers, oppressors, and impoverishers," he at the same time commends them, as among the blessings of civilization, in giving encouragement to the invention and improvement of machinery and to the vast array of modern labor-saving processes which the age — even an age of combines and trusts — has produced. MACMILLAN & CO., 66 FIFTH AVENUE, NEW YORK. 3 THE UNITED STATES. An Outline of Political History, 1492-1871. By GOLDWIN SMITH, D.C.L. i2mo, cloth, $2.00. 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