But as the powers of corporations, created by legislative act, are limited to such as the act expressly confers, and the enumeration of these implies the exclusion of all others, it follows that, unless express permission be given to do so, it is not within the general powers of a corporation to purchase the stock of other corporations for the purpose of controlling their management.

Not only is this true as a general rule, but by the law of the State of New York, under which this corporation was organized, i. e. "An act to authorize the formation of corporations for manufacturing, mining, mechanical and chemical purposes," passed February 17, 1848, it was declared in section eight that "it shall not be lawful for such company to use any of their funds for the purchase of any stock in any other corporation." This language is clear and explicit, and evidently covers purchases of stock in other corporations, whether engaged in the same or different business.

In this connection, however, our attention is called to an act passed by the legislature of New York, June 7, 1853, (chapter 333,) amendatory of the act of 1848, the second section of which enacts that "the trustees of such company may purchase mines, manufactories and other property necessary for their business, and issue stock to the amount of the value thereof in payment therefore." 1 The position of the plaintiffs in this connection is that, under the authority to purchase "other property necessary for their business," it was competent for manufacturing corporations to purchase the stock of other similar corporations. But we do not so read the act. Its evident object was to permit manufacturing corporations to purchase mines from which they could extract their own ore, or manufactories of raw material, such as pig iron or lumber, which could furnish to them material to be worked up into their own products; and in case such purchases involved a larger outlay than their present resources would justify, to issue new stock "to the amount of the value thereof in payment therefor." But there is nothing to indicate that the legislature intended to authorize them to purchase the stock of competing corporations, or corporations engaged in other business. It is only property necessary for their own current business they were authorized to purchase.

Another act amending the general corporation act of 1848, passed April 28, 1866, (chapter 838,) was intended for a similar purpose.

1 Thus in original.-Ed.

By section three it was enacted that "It shall be lawful for any manufacturing company heretofore or hereafter organized under the provisions of this act or the act hereby amended, to hold stock in the capital of any corporation engaged in the business of mining, manufacturing or transporting such materials as are required in the prosecution of the business of such company, so long as they shall furnish or transport such materials for the use of such company, and for two years thereafter and no longer; and the trustees of such company shall have the same power with respect to the purchase of such stock and issuing stock therefor as are now given by law with respect to the purchase of mines, manufactories and other property necessary to the business of manufacturing companies. But the capital stock of such company shall not be increased without the consent of the owners of two thirds of the stock, to be obtained as provided by sections twenty-one and twenty-two of the act hereby amended." The object of this act was evidently much the same as that of the prior act of 1853, that is, to enable manufacturing corporations to produce their own ore and manufacture their own raw materials. To meet the exigencies of this statute it is necessary that the company, whose stock is purchased, should at the time of the purchase be engaged in the business of mining, manufacturing or transporting such materials as are required in the prosecution of the business of the purchasing company; and the right is limited to such time as they shall furnish or transport such materials for the use of such company, and for two years thereafter. It clearly has no application to a case where a manufacturing company purchases the stock of an insolvent rival concern which has ceased to do business, and whose stock is bought for the evident purpose of preventing a reorganization, and of obtaining its patronage.

In the Revised Statutes of New York of 1889, c. 18, vol. 3, p. 1959, there is also an act, to which our attention is called by a supplemental brief, permitting manufacturing companies to increase or diminish their capital stock to any amount which may be sufficient and proper for the purposes of the corporation, and also to extend their business to any other manufacturing business subject to the provi

sions of the act.

That neither of these acts were intended to give authority to corporations to purchase stock of other corporations engaged in the same business is evident from a subsequent act approved June 7, 1890, to take effect May 1, 1891, the fortieth section of which provides that "... no corporation shall use any of its funds in the

purchase of any stock of its own or any other corporation, unless the same shall have been bona fide pledged, hypothecated or transferred to it, by way of security for, or in satisfaction or part satisfaction of, a debt previously contracted in the course of its business, or shall be purchased by it at sales upon judgments, orders or decrees which shall be obtained for such debts or in the prosecution thereof. Any domestic corporation transacting business in this State, and also in other States or foreign countries, may invest its funds in the stocks, bonds or securities of other corporations owning lands in this State or other States, if dividends have been paid on such stocks continuously for three years immediately before such loans are made, or if the interest on such bonds or securities is not in default, and such stock, bonds and securities shall be continuously of a market value twenty per cent greater than the amount loaned or continued thereon."

Had the former acts given the unlimited authority to purchase insisted upon by the plaintiffs, this act would have been entirely unnecessary, and instead of enlarging the power previously possessed, would have operated as a restriction upon it. That this act of 1890 does not assist the plaintiffs is evident not only from the fact that the act did not take effect until after the contract was made, but from the further fact that it merely authorizes corporations to invest their funds in the stocks, bonds or securities of other corporations if dividends have been paid for three years before the loans are made; or if the interest on their securities is not in default, and such securities are worth twenty per cent greater than the amount loaned thereon. This act evidently refers to loans and not to purchases, since the section expressly provides that no corporation shall use its funds in the purchase of any stock, either of its own or any other corporation, unless by way of security for antecedent debts.

The truth is, that the legislature of New York, instead of repealing the prohibitory clause in the original act of 1848, concerning the purchase of stock in other corporations, has modified it but slightly, by slow degrees, and in special cases, to enable a manufacturing corporation to control more perfectly its own legitimate business operations, and has thereby manifested the more clearly its intention to preserve the original inhibition.

Our conclusion upon this branch of the case is that, as the main, if not the sole, object of the purchase from the plaintiffs was to acquire their stock in the Consolidated Company, such purchase was ultra vires the Refrigerating Company.

GROUP 2

DIFFERENCE BETWEEN THE TRUST AND THE HOLDING COMPANY EXHIBIT I

STANDARD OIL CHANGES FROM A TRUST TO A HOLDING COMPANY.1

1. On March 2, 1892, a judgment was rendered in a suit brought in the Supreme Court of Ohio by the State of Ohio on the relation of the Attorney General, against the Standard Oil Co. (of Ohio), after hearing upon Bill and Answer. This decision rendered it inadvisable to continue the form of organization provided by the Trust Agreement for the management of the common properties. The certificate holders thereupon adopted the resolution set forth on pages 64-5 of the Government's Bill of Complaint, providing for the dissolution of the Trust. This resolution was adopted pursuant to Article 21st of the Trust Agreement.

Up to the time of the adoption of the resolution for the dissolution of the Trust in 1892, many of the companies named in the Trust Agreement, and most of those organized or acquired subsequent to the formation of the Trust, had continued as separate corporate organizations. At that time a great many of these organizations which no longer served any particular purpose were dissolved.

2. The stocks of a number of important companies that had been held by the trustees were transferred directly to the Standard Oil Company (New Jersey) and have ever since been held by that Company. Among the stocks that have been so held in continuous ownership by the Standard Oil Co. (New Jersey) are the Chesebrough Manufacturing Company, Continental Oil Company, Galena Oil Works, Limited, Signal Oil Works, Limited, Standard Oil Company (Iowa), Vacuum Oil Company and the WatersPierce Oil Company, (Pet. Ex. 253, vol. 7, p. 448).

3. The changes effected in the companies about the time of the resolution for the dissolution of the Trust left in the hands of the Trustees stock of the following companies:

1 United States of America v. Standard Oil Company (N. J.) et al. Brief for Defendants on the Facts, In the Circuit Court of the United States for the Eastern Division of the Eastern Judicial District of Missouri, Vol. I, pp. 76-85.

Of these twenty companies, only three antedate the Trust agreement of 1882, to wit, the Standard Oil Co. (of Ohio) itself, the Atlantic Refining Co., all the stock of which had been held for the benefit of the Standard Oil stockholders since 1874, and the National Transit Co., which had been organized by Standard Oil interests. Of the remaining seventeen companies, six were pipe line companies, all of which had been organized and their properties created by Standard Oil interests for the common benefit of the certificate holders. The Anglo-American Oil Co., Ltd., the Solar Refining Co., the Standard Oil Co. (Indiana), the Standard Oil Co. (Kentucky), the Standard Oil Co. (New Jersey), the Standard Oil Co. of New York and the Union Tank Line had all been organized by the Standard Oil trustees, and no one else had ever held any of their stock. Their capital had been paid for with the common moneys of the holders of the trust certificates, or with the properties of companies whose stocks were held by the trustees for their account. The South Penn Oil Co., the Ohio Oil Co. and the Forest Oil Co. were producing companies. The first had been originally organized by the Standard Oil trustees, and a large part of the properties of the others had been conveyed to them by com