IMPORTANT THE editor desires to call attention to the following points: 1. The editor is alone responsible for the typographical work in the volume. So far as possible it was attempted to reproduce the documents exactly as they were in the original. The editor believes that all the errors in spelling and construction have been duly noted. To have done the same with the very numerous errors in punctuation, use of parentheses, etc. etc., would have unnecessarily cumbered the pages. Such errors as are discovered therefore in this respect will probably be found to be errors in the originals. 2. Some of the court decisions were necessarily taken from advance copies as at the time the volume was made up they had not been published in the reports. 3. The paging in the Stanley and Interstate Commerce Committee Investigations differs somewhat in the first copies issued and the last. 4. The title of the Interstate Commerce Investigation reads in original, sometimes "Hearing" and at others "Hearings." 5. Lines and fictitious initials have been used instead of names in many places in Chapter XII. 6. Examination of the document beginning on page 118 will show that it resembles both a pooling agreement and a factor's agreement. As a single contract the party of the first part is constituted a factor of the Table and Stair Oil Cloth Association. Several of such contracts, however, were the basis of the pool. The document should be read both as a pooling and as a factor's agreement. INDUSTRIAL COMBINATIONS AND TRUSTS ན CHAPTER I SPECIMENS OF EARLY POOLING NOTE THE industrial combination and trust movement as a feature of our national life may be said to date from the pools in the cordage industry about 1860. These combinations were shortly succeeded in the middle of the sixties by the organization of the Michigan Salt Association, and the first anthracite coal combination appears to have been formed in 1871. The pools of the anthracite coal roads continued a more or less intermittent and spasmodic existence down to the passage of the Interstate Commerce Act of 1887. Both the seventies and eighties were characterized by numerous combinations of the same type. Among these may be mentioned the Western Export Association, the United Refining Company, Gunpowder Manufacturers' Association, Kentucky Distilleries' Association, Wall Paper Association, Sand Paper Association, Upholsterers' Felt Association, Standard Envelope Company and others. Space permits the reproduction of only three documents showing the form of organization and methods of these early combinations. So brief an examination may be justified first, by the fact that these pools are now chiefly of historic interest, and second that their organization and methods of operation have in nearly every case been substantially reproduced in more recent combinations whose agreements will be shown in other chapters. The first exhibit in the following pages is the pooling agreement of the Gunpowder Manufacturers, which was adopted April 23, 1872. In essence it is a simple agreement for the maintenance of prices. In the second agreement, that of the Kentucky Distillers, we have an example of a pool formed primarily to divide output I and limit production. In the third member of this group, the Standard Envelope Company, we have probably the most interesting combination of the three. The Standard Envelope Company was a Massachusetts corporation with a capital of $5,100, incorporated by certain envelope manufacturers. It was a convenient method of harmonizing the interests of the different members, and was used as a medium for the pooling of profits and expenses. Another and supplementary agreement provided an arrangement for equalizing and keeping prices at a fixed rate, and also for equalizing losses and expenses.-Ed. EXHIBIT I ARTICLES OF ASSOCIATION OF THE MANUFACTURERS OF GUN 1 POWDER We, the undersigned, Manufacturers of Gunpowder, for the purpose of ensuring an equitable adjustment of prices and terms for sales of powder throughout the United States, hereby agree to the subjoined Articles of Association, to which we severally pledge for ourselves, and all under our control, rigid and honorable adherence. Ist. This Association shall be called "THE GUNPOWDER TRADE ASSOCIATION OF THE UNITED STATES," and comprises all manufacturers of Gunpowder in the United States, who now or hereafter may be admitted thereto; the present organization being composed of the following manufacturers, entitled to representation and vote at all meetings of the Association, as follows: E. I. Dupont de Nemours & Co.....Ten Votes. Hazard Powder Company Laflin & Rand Powder Company. Oriental Powder Mills... Austin Powder Company.. American Powder Company. Miami Powder Company Ten Votes. .Ten Votes. Six Votes. ..Four Votes. 1 United States of America v. E. I. du Pont, de Nemours and Company. In the Circuit Court of the United States for the District of Delaware, Gov't. Ex. No. 96-b. Pet. Record, Exhibits, Vol. 1, pp. 476-479. The minutes of the same meeting that adopted this agreement show that a committee reported a scale of prices which was also adopted and made binding upon the Association. For a complete history of the powder combinations, see Stevens, Wm. S., Quarterly Journal of Economics, May, 1912, Vol. XXVI, pp. 444-481.-Ed. 2d. The officers of this Association shall be a President, Vice-President, Secretary, and Treasurer, to be elected by ballot on the first meeting of this Association, and annually thereafter, and who shall hold office until others are elected in their stead. 3d. It shall be the duty of the President to preside at all meetings of the Association, and on the written request of two members thereof, to call special meetings of the same. In case of his absence, the same duties will devolve upon the Vice-President. The Secretary shall attend all meetings of the Association, keep full record of their transactions, and issue such notices to the associates as the properly authorized officers may direct. The Treasurer shall have the custody of all funds belonging to the Association. 4th. This Association shall meet quarterly: say in the first week in February, May, August, and November, of each year, at such time and place as may be agreed upon at the previous quarterly meeting, for the purpose of establishing prices if need be, of hearing and deciding appeals, and determining all questions relative to the trade that may be submitted to it. 5th.-A Council of five persons, associates, of whom three (3) shall constitute a quorum, shall be elected by this Association at their first meeting for organization, and annually thereafter, holding office till the election of their successors, in default of such annual election. Such Council shall meet weekly (or at the call of the chairman) in the City of New York, or elsewhere, as a majority of Council shall decide. To said Council shall be referred all questions of discrepancy and deviations from prices in the different home markets, all complaints in writing of infraction of agreement by any agent of any associated company or firm; they shall adjudicate upon the same, and the decision by a majority of the Council shall be final; provided, that any associate aggrieved by such decision may appeal to the next quarterly meeting of the Association, pending which he must submit to the decision of the Council. 6th. Any manufacturer of Gunpowder desiring to be admitted a member of this Association, may at any time signify his wish in writing to the President thereof; when upon admission and on his signing the Articles of Association, the said manufacturer is at once entitled to participate in its benefits, as he is likewise bound by its obligations. No member of the Association shall withdraw from the same without having signified his intention so to do, at least thirty days before such withdrawal, to the President, who shall at once call a special meeting of the Association. 7th. The minimum prices for powder of the various sorts required for the trade shall be established and regulated by this Association. 8th. Any funds necessary for the carrying out the provisions of these Articles shall be assessed by the Council upon the associates in proportion to the votes to which they are respectively entitled. 9th.-These Articles shall not be altered or amended, except by a vote of two-thirds of the members of the Association at a regular quarterly meeting and after at least thirty days' notice of the proposed alteration or amendment. EXHIBIT 2 PROCEEDINGS OF THE KENTUCKY DISTILLERS AT THEIR MEETING IN LOUISVILLE, KENTUCKY, MAY, 18881 Ist. Determine the quantity of whisky to be made in 1889. On this point 11,000,000 gallons is recommended as the maximum. 2d. Of this quantity let there be distributed under the following rules 9,000,000 gallons, leaving 2,000,000 gallons as a reserve, to be placed in the hands of a committee of ten, consisting of two from each collection district, to be allotted in such quantities and to such signers as in the judgment of the committee may be required to even up the shares of each, when any injustice, all facts duly and impartially considered, has been done under the rule. 3d. Take the surveyed capacity of the distillers of the State, and, after excluding from consideration all houses with a daily capacity of less than 40 bushels, ascertain the percentage of capacity actually used for an assumed period of 156 days in producing the crop of 1886, if the distillery was not operated in 1887, or the crop of 1887, or an average of the two years, when no production was made in 1886 and 1887, the committee shall make a basis fairly and justly. 4th. Having ascertained as above the actual percentage of capacity used by each, multiply the surveyed capacity by this percentage and thus ascertain the number of bushels required to 1 House Report No. 4165, 50th Cong., 2nd Session, 1888, pp. 33-36. This agreement followed one of similar character adopted in June, 1887.-Ed. |