Chapter XCV: Section 29 (15)

"In the case of the American Tin Plate Company there was also
added ten millions of common stock, which was issued to the
promoter for his services and for the cost of organization. It
is presumed, of course, that not a little of this ten millions
had to be paid out in commissions etc. to those who aided in
securing the required amount of capital, including cash
furnished for working capital. The amount of extra common
stock issued for purposes of promotion in the American Steel
Hoop Company and in the National Steel Company was $5,000,000
in each case."

_United States Industrial Commission,
Preliminary Report (56th Congress, 1st Session,
House Document Number 476, part 1). pages 10-15._

TRUSTS: Standard Oil Company.

As the rise of the Standard Oil Company seems to have marked
the beginning of the movement towards combination in
productive industries, on the great scale of recent times, the
following passages from testimony concerning the history of
the Company and of the oil business is especially interesting.
The first is from the examination of Mr. John D. Rockefeller:

"Q. 'What was the first combination in which you were
interested of different establishments in the oil industry?

A. The first combination of different establishments in the
oil industry in which I was interested was the union of
William Rockefeller & Co., Rockefeller & Andrews, Rockefeller
& Co., S. V. Harkness, and H. M. Flagler, about the year 1867.

"Q. What were the causes leading to its formation?

A. The cause leading to its formation was the desire to unite
our skill and capital in order to carry on a business of some
magnitude and importance in place of the small business that
each separately had theretofore carried on. As time elapsed
and the possibilities of the business became apparent, we
found further capital to be necessary, obtained the required
persons and capital, and organized the Standard Oil Company
with a capital of $1,000,000. Later we found more capital
could be utilized and found persons with capital to interest
themselves with us, and increased our capital to $3,500,000.
As the business grew, and markets were obtained at home and
abroad, more persons and capital were added to the business,
and new corporate agencies were obtained or organized, the
object being always the same, to extend our business by
furnishing the best and cheapest products.

"Q. Did the Standard Oil Company or other affiliated interests
at any time before 1887 receive from the railroads rebates on
freight shipped, or other special advantages?

A. The Standard Oil Company of Ohio; of which I was president,
did receive rebates from the railroads prior to 1880, but
received no special advantages for which it did not give full
compensation. The reason for rebates was that such was the
railroads' method of business. A public rate was made and
collected by the railway companies, but, so far as my
knowledge extends, was never really retained in full, a
portion of it was repaid to the shippers as a rebate. … The
Standard Oil Company of Ohio, being situated at Cleveland, had
the advantage of different carrying lines, as well as of water
transportation in the summer, and taking advantage of those
facilities made the best bargains possible for its freights.
All other companies did the same, their success depending
largely upon whether they had the choice of more than one
route. The Standard sought also to offer advantages to the
railways for the purpose of lessening rates of freight. It
offered freights in large quantity, car-loads and train loads.
It furnished loading facilities and discharging facilities. It
exempted railways from liability for fire. For these services
it obtained contracts for special allowances on freights.
These never exceeded, to the best of my present recollections,
10 per cent. But in almost every instance it was discovered
subsequently that our competitors had been obtaining as good,
and, in some instances, better rates of freight than
ourselves. …

"Q. About what percentage of the profits of the Standard Oil
Company came from special advantages given by the railroads
when these were greatest?

A. No percentage of the profits of the Standard Oil Company
came from advantages given by railroads at any time. Whatever
advantage it received in its constant efforts to reduce rates
of freight was deducted from the price of oil. The advantages
to the Standard from low freight rates consisted solely in the
increased volume of its business arising from the low price of
its products. …

"Q. To what advantages, or favors, or methods of management do
you ascribe chiefly the success of the Standard Oil Company?

A. I ascribe the success of the Standard to its consistent
policy to make the volume of its business large through the
merits and cheapness of its products. It has spared no expense
in finding, securing, and utilizing the best and cheapest
methods of manufacture. It has sought for the best
superintendents and workmen and paid the best wages. It has
not hesitated to sacrifice old machinery and old plants for
new and better ones.
{532}
It has placed its manufactories at the points where they could
supply markets at the least expense. It has not only sought
markets for its principal products, but for all possible
by-products, sparing no expense in introducing them to the
public. It has not hesitated to invest millions of dollars in
methods for cheapening the gathering and distribution of oils
by pipe lines, special cars, tank steamers, and tank wagons.
It has erected tank stations at every important railroad
station to cheapen the storage and delivery of its products.
It has spared no expense in forcing its products into the
markets of the world among people civilized and uncivilized.
It has had faith in American oil, and has brought together
millions of money for the purpose of making it what it is, and
holding its markets against the competition of Russia and all
the many countries which are producers of oil and competitors
against American oil."

_United States Industrial Commission,
Preliminary Report (56th Congress, 1st Session,
House Document Number 476, part 2). page 794._

Against the testimony of Mr. Rockefeller that the Standard Oil
Company obtained no exclusive advantages from railway
companies, other witnesses contended that such advantages were
given to it. On this point, the Commission say in their report:
"It was charged by most of the leading opponents of the
Standard Oil Company that the chief reason for the rapid
growth of the Standard, and its apparent great success in
underselling rivals and winning markets, was the special
advantages that it had received from the railroads. It was
claimed that the company not merely received discriminating
rates on its own shipments, but that it was frequently paid
rebates on the shipments of its competitors. It was conceded
by representatives of the Standard Oil Company that before the
passage of the interstate-commerce act special freight rates
and rebates were frequently received. It was asserted,
however, that this was the usual custom on the part of all
railroads with all large shippers, and that competitors of the
Standard had received similar favors. …

"Much greater differences of opinion exist with reference to
the condition of affairs since the passage of the
interstate-commerce act. It has been charged as a matter of
general belief on the part of almost all of the opponents of
the Standard Oil Company that these discriminations in various
forms have been continually received even up to date. On the
other hand, these charges have been denied in toto and most
emphatically by every representative of the Standard Oil
Company with reference to all cases excepting one, which they
claim was a mistake, the amount of freight due being promptly
paid on discovery of the error. … Certain opponents of the
company claimed that the Standard Oil Company received
commissions for shipping freight over railroads, which
commissions amounted to rebates. This charge is emphatically
denied by the Standard Oil Company and no positive proof on
the subject has been offered."

_United States Industrial Commission,
Preliminary Report (56th Congress, 1st Session,
House Document Number 476, part 1). pages 25._

Of testimony on the subject of pipe-line consolidations in the
oil business, the report says:

"Mr. Boyle [publisher of the 'Oil City Derrick'] gives a
somewhat detailed history of the development of pipe-line
transportation in the oil business. The first successful pipe
lines were established in 1864 from Pithole to the Miller
farm. Others were soon constructed in the same district. These
were usually short, scarcely over 5 miles in length, and at
first did not even connect directly with the wells themselves,
although this practice was soon established. Numerous lines
soon grew up in different parts of the oil region, but the
first more extended systems date from 1869, when the Mutual
Pipe Line was laid more or less throughout Clarion County.
Vandergrift and Forman later established a system through
Butler County which became the nucleus of what is now known as
the United Pipe Line System. The original pipe lines were only
transporters of oil, but the nature of their work soon led them
to purchase oil, although at first it was not in the name of
the company itself. …

"Mr. Emery [of Bradford] also makes a brief statement of the
early history of pipe lines. He states that the first attempt
to combine separate pipe lines into a more complex system was
made by William H. Abbott and Henry Harley, beginning about
1866. By 1869 they had a capital of nearly $2,000,000, and 500
miles of pipe centering in the Miller farm. The concern was
then known as the Pennsylvania Transportation Company.

"Several witnesses describe the process by which the Standard
Oil Company gradually secured control of the various pipe
lines throughout the oil regions. The opponents of the trust
attribute the success of the Standard Oil Company in this
movement to the railway discriminations upon oil received from
pipe lines controlled by that company. It appears that for a
considerable period a rebate of 22 cents per barrel was
allowed on oil from pipe lines maintaining the agreed rates of
pipage. … Other opponents of the combination ascribe its
success in driving out competing pipe lines largely to the
practice of paying premiums upon oil in the territory of such
competing lines.

"Mr. Boyle gives the fullest statement of the growth of the
pipe-line consolidation during the seventies and attributes it
to the natural advantages arising from large capital and from
skill in organizing. He testifies that during the early part
of that decade very numerous pipe lines had been established.
These were at first constructed on a small scale by separate
oil producers, but, having entered the business, many
producers were inclined to extend their lines and form a
system. There thus arose an excessive number of competing
lines, and the solvency and integrity of some of them became a
matter of doubt. This excessive competition was the cause of
driving the pipe lines into a more complete organization. As
early as 1873 or 1874 a pooling arrangement was made by some
of the pipe lines, and rebates were paid by railways on oil
received from such lines. The United Pipe Line Company was
established in 1877, with a capital at first of $3,000,000,
and acquired by purchase a large number of lines. The new
company included many producers and stockholders of the
smaller companies, but it is estimated that the persons
controlling the Standard Oil Company had somewhat more than a
one-half interest in the United Pipe Lines. The National
Transit Company is the present owner of the United Pipe Lines
System, and the Standard Oil Company controls the National
Transit Company. …

{533}

"It was pointed out by several witnesses that the almost
complete control of the pipe-line system by the Standard Oil
Company gives it great power in fixing the prices of crude
oil, since producers can dispose of their product only through
the pipe lines, especially in view of the further fact, which
is alleged, that railway rates on crude oil are by agreement
kept at least as high as, if not higher than, the pipe-line
charges. The pipe-line system also gives the combination great
advantage over other refiners, who must pay the rates of
pipage fixed by the Standard, which are claimed to be
excessively high, or the high rates of freight."

_United States Industrial Commission,
Preliminary Report (56th Congress, 1st Session,
House Document Number 476, part 1), pages 100._

TRUSTS:
Sugar Trust.

The following is from the testimony of Mr. Henry O. Havemeyer:

"Q. The history and organization of the Sugar Refining Company
has been gone over so many times in testimony before that it
is not worth while to dwell on it at length, but in order that
we may have the record somewhat complete, will you give a
brief sketch of its development, going back to the conditions
of the old sugar trust? [1887]

A. There were about twenty-five different firms or
corporations in the sugar business. I think the evidence
before some one of the Congressional committees was that for a
period of 5 or 6 years before the formation of the trust, 18
of those failed or went out of business.

"Q. Eighteen out of 25?

A. Not out of 25; 18 out of about 40. It occurred to some one
to consolidate the others, and 18 out of 21, I believe, went
into the trust, leaving 3 or 4 outside, who represented, I
think, 30 per cent. Then Spreckles built a refinery in
Philadelphia, and, 2 or 3 years after the formation of the
trust, the trust or its successor bought the Philadelphia
refineries.

"Q. Will you explain in a word or two the difference between
the trust and its successor and the reason for its going into
this other form?

A. The trust was attacked, and the courts decided it was
illegal, and a company was organized in New Jersey which
bought outright and paid for the different companies, which
were the constituent companies of the trust. They then
represented, I think, over 90 per cent of the output; then
other refineries began to be constructed, until now I think
they would represent 50 per cent of the consumption. …

"Q. The condition before the formation of the trust was about
this: When these 18 different companies failed, business was
in such a condition, as a whole, that it was considered
unprofitable?

A. Very unprofitable—ruinous.

"Q. Now, can you tell what special advantages—if you can give
this in some detail I shall be glad—come from this
organization, and in what way you make your savings?

A. The greatest advantage is in working the refinery full and
uninterruptedly. Of course, if you have a capacity of
140,000,000 and can only melt 100,000,000 somebody has got to
cut down materially. The moment you cut down you increase the
cost; by buying up all the refineries … and concentrating the
meltings in four refineries and working them full, you work at
a minimum cost. That enables us to pay a dividend on the
common stock.

"Q. SO the chief advantage in the combination was in
concentrating the production and destroying the poor
refineries?

A. Precisely."

_United States Industrial Commission,
Preliminary Report (56th Congress, 1st Session,
House Document Number 476, part 2). pages 109._

See, also (in this volume),
UNITED STATES OF AMERICA: A. D. 1897 (MARCH-JULY).

TRUSTS:
The earlier combinations in steel production.

Mr. Reis, president of the National Steel Company, states that
that company was organized in February, 1899, under the laws
of New Jersey, with a capital of $59,000,000, $27,000,000 of 7
per cent cumulative preferred stock and $32,000,000 of common
stock. The company includes six steel plants, located at New
Castle, Youngstown, Sharon, Mingo Junction, Bellaire, and
Columbus. These plants are engaged in producing steel billets
and slabs, which are the raw materials for making tin plates
and various other products. The plants include 15 blast
furnaces. The company also owns iron mines in northern
Michigan at Iron Mountain and Ishpeming. These are expected to
produce from 1,250,000 to 1,400,000 tons of ore annually, the
total amount required for the use of the steel plants in the
combination being about 3,000,000 tons. The National Steel
Company also owns nine lake boats for transporting ore,
capable of carrying about 1,000,000 tons annually. … Mr. Reis
testifies that the National Steel Company is not a 'trust' in
the ordinary sense, since it makes no attempt to secure
control of a large proportion of the output of steel. Its
economies are sought in the combination of steel plants with
sources of raw materials. The National Steel Company produces
only about 18 per cent of the Bessemer steel made in this
country. The other chief concerns engaged in steel production
are the Carnegie Steel Company; Federal Steel Company; the
Maryland; Jones & Laughlin Steel Company; Wheeling Steel and
Iron Company, and the Lorain Steel Company. …

"Mr. Reis states that the tariff, so far as it is placed upon
steel billets, bars, and sheets, is no longer necessary for
the protection of the industry. No steel is imported, and
during the past 8 or 10 years the tariff has cut no figure.
But if the tariff should be removed from tin plate or from
certain other branches of the iron and steel industry there
would be an indirect effect upon the making of steel. …

"Mr. Gary states that the Federal Steel Company owns all the
capital of the Minnesota Iron Company, the Illinois Steel
Company, the Lorain Steel Company, and the Elgin, Joliet and
Eastern Railroad Company. The Minnesota Iron Company is the
owner of 150,000 acres of iron ore property on the Vermilion
and Mesaba ranges. It owns the Duluth and Iron Range Railroad
Company, connecting its mines with Lake Superior at Two
Harbors and Duluth. It owns large ore docks and also 22 steel
lake vessels capable of carrying 2,000,000 tons per annum. The
product of the Minnesota Iron Company will probably be
3,500,000 tons in 1900. The Lorain Steel Company manufactures
chiefly steel rails for street railways, and to some extent
steel billets. It produces about 500,000 tons of pig iron per
year. The Illinois Steel Company has plants at North Chicago,
West Chicago, South Chicago, Milwaukee, and Joliet. It
produces about 1,500,000 tons of pig iron per year, and also
manufactures steel rails, billets, plates, etc. It owns the
Chicago, Lake Shore and Eastern Railway, which connects its
plants in the neighborhood of Chicago. It also owns large
tracts of coal property in Pennsylvania and West Virginia, and
makes there about 1,500,000 tons of coke per year. This
company also owns iron mines in Wisconsin and Michigan. …

{534}

"Mr. Stetson, a lawyer, who drafted the charter and conducted
the legal arrangements in the organization of the Federal
Steel Company, testified that it was organized in September,
1898, with an authorized capital of $100,000,000 6 per cent
noncumulative preferred stock and $100,000,000 common stock.
Of this, $98,000,000 in all was originally issued. … Mr. Gary
states that the Federal Steel Company is not a trust in any
sense. It has not sought to restrict competition and has not
brought together companies which were competing with one
another, as is the case with most so-called trusts. The
company has bought the stocks of companies doing different
lines of business, just as an individual might do. …

"The American Steel and Wire Company operates iron mines in
the Lake Superior region. It controls, perhaps, one-sixth or
one-seventh of the output of that region. It owns and operates
coal mines and burns coke. It operates 8 or 9 blast furnaces, 17
open-hearth furnaces, from 22 to 25 rod rolling mills, and
from 20 to 30 wire mills. Its finished product is plain wire,
barbed wire, wire fencing, rope, etc., wire nails, and all
kindred articles. … Mr. Gates, chairman of the American Steel
and Wire Company of New Jersey, testified concerning the
formation of that company. It was organized on January 12,
1899. A gradual process of consolidating wire plants had been
going on previously. As early as 1890 companies in which Mr.
Gates was interested practically controlled the manufacture of
barbed wire in this country. In December, 1897, and January,
1898, J. P. Morgan & Co. investigated the value of the various
wire plants throughout the country with a view to further
consolidation. The American Steel and Wire Company of
Illinois, formed in March, 1898, seems to have resulted from
this effort. … The combination into the American Steel and
Wire Company was not rendered necessary by excessive
competition and consequent losses among the wire companies.
The Consolidated Steel and Wire Company, for example, made
between 27 and 28 per cent during the last three years of its
existence. It was believed, however, that more profit would be
made through better management under consolidation.

_United States Industrial Commission,
Preliminary Report (56th Congress, 1st Session,
House Document Number 476, part 1), pages 190._

TRUSTS:
Tin Plate Industry.

"The American Tin Plate Company was incorporated under the
laws of New Jersey on January 6, 1899. Its authorized capital
is $20,000,000 of 7 per cent cumulative preferred stock and
$30,000,000 of common stock. Of this, $18,000,000 of preferred
and $28,000,000 of common stock has been issued. … It is made
clear by the evidence of all the witnesses that the tin-plate
industry in the United States has been built up practically
since the McKinley tariff of 1890, which raised the duty on
tin plates from 1 to 2.2 cents per pound. Without the
protection, all the witnesses agree, the industry could not
have been profitably established. Having once been
established, it was able to submit to the reduction of the
duty to 1.2 cents by the Wilson tariff of 1894, and is now
sufficiently protected by the duty of 1.5 cents under the
Dingley tariff of 1897."

_United States Industrial Commission,
Preliminary Report (56th Congress, 1st Session,
House Document Number 476, part 1), pages 174 and 187._

TRUSTS:
The climax of consolidation in steel industries.
Formation of the United States Steel Corporation.

In February, 1901, the climax was reached in movements of
industrial combination, so far as concerns the production and
greater uses of iron and steel, by the formation of one
gigantic corporation, to embrace not only the companies named
above, but to purchase the enormous interests of the Carnegie
Company outright, and to take in several organizations of more
than considerable magnitude besides. The combination was
effected by the firm of J. P. Morgan & Co., New York, as
"syndicate managers," and an official statement of its
essential terms was published in a circular from that firm, on
the 2d of March, addressed to the stockholders of the Federal
Steel Company, National Steel Company, National Tube Company,
American Steel and Wire Company of New Jersey, American Tin
Plate Company, American Steel Hoop Company, American Sheet
Steel Company, to whom the following announcement was made:

"The United States Steel Corporation has been organized under
the laws of the State of New Jersey, with power, among other
things, to acquire the outstanding preferred stocks and common
stocks of the companies above named, and the outstanding bonds
and stock of the Carnegie Company. A syndicate, comprising
leading financial interests throughout the United States and
Europe, of which the undersigned are managers, has been formed
by subscribers to the amount of $200,000,000, (including among
such subscribers the undersigned and many large stockholders
of the several companies,) to carry out the arrangement
hereinafter stated, and to provide the sum in cash and the
financial support required for that purpose. Such syndicate,
through the undersigned, has made a contract with the United
States Steel Corporation, under which the latter is to issue
and deliver its preferred stock and its common stock and its
five per cent. gold bonds, in consideration for stocks of the
above named companies and bonds and stock of the Carnegie
Company and the sum of $25,000,000 in cash.

"The syndicate has already arranged for the acquisition of
substantially all the bonds and stock of the Carnegie Company,
including Mr. Carnegie's holdings. The bonds of the United
States Steel Corporation are to be used only to acquire bonds
and 60 per cent. of the stock of the Carnegie Company. The
undersigned, in behalf of the syndicate, and on the terms and
conditions hereinafter stated, offer, in exchange for the
preferred stocks and common stocks of the companies above
named, respectively, certificates for preferred stock and
common stock of the United States Steel Corporation, upon the
basis stated."

Details relating to the terms and the procedure of exchange
are then given, and several statements of public interest are
made, among them these: "The authorized issue of capital stock
of the United States Steel Corporation presently provided for
in said contract is $850,000,000, of which one-half is to be
seven per cent. cumulative preferred stock and one-half is to
be common stock. The company will also issue its five per
cent. gold bonds to an aggregate amount not exceeding
$304,000,000. In case less than all of the bonds and stock of
the Carnegie Company or less than all of the stocks of the
other companies above referred to shall be acquired, the
amounts of bonds and stocks to be issued will be reduced as
provided in said contract. The forms of the new bonds and of
the indenture securing the same, and of the certificates for
the new preferred and common shares, and the entire plan of
organization and management of the United States Steel
Corporation, shall be determined by J. P. Morgan & Co.
{535}
Every depositor shall accept in full payment and exchange for
his deposited stock the shares of the capital stock of the
United States Steel Corporation, to be delivered at the rates
above specified, in respect of the stock by him so deposited;
and no depositor or holder of any receipt issued hereunder
shall have any interest in the disposition of any other of the
shares of stock, or of the bonds of the United States Steel
Corporation, by it to be issued and delivered to or for
account of the syndicate or of any proceeds thereof. All
shares of the United States Steel Corporation deliverable to
or for account of the syndicate, which shall not be required
for the acquisition of the stock of the Carnegie Company or
for delivery to depositors under the terms of this circular,
are to be retained by and belong to the syndicate. … It is
proper to state that J. P. Morgan & Co. are to receive no
compensation for their services as syndicate managers beyond a
share in any sum which ultimately may be realized by the
syndicate."

Subsequently the American Bridge Company and the Lake Superior
Consolidated Iron Mines were taken into the consolidation,
and, on the 1st of April, 1901, the United States Steel
Corporation filed with the Secretary of State at Trenton, New
Jersey, amended articles of incorporation increasing its
authorized capital stock to $1,100,000,000. The stock is
equally divided into 7 per cent. cumulative preferred stock
and common stock. The total is greater by $250,000,000 than
the amount stated in the circular issued by J. P. Morgan &
Co., on March 2, as "presently provided for," and with the 5
per cent. gold bonds, not exceeding $304,000,000, brings the
security issues of the great steel combination up to
$1,404,000,000.

TRUSTS:
Industrial combinations in European countries.

"Trusts of the magnitude and influence of those now so
numerous in the United States are as yet rare in the Old
World. … It is in Germany, … of all European countries, that
trusts have spread most extensively and have been most
successful. … The German technical journals for 1897 enumerate
about 180 trusts, of which, it is true, only a few would
correspond to American ideas, but all of which demonstrate a
capacity for wider combination and fuller development. … As
regards great industrial combinations, the most striking
advance has been made in the German coal industry; the most
prominent organization in this department being the
Rheinisch-Westfälische Kohlensyndikat, which is distinguished
by the characteristics of a genuine trust, exercising within
its sphere of activity almost unlimited power. Like the
American Standard Oil Company, it directly controls the sales,
leaving the matter of production entirely to the separate
companies. Under the innocent title of 'eines Vereins zum
Ankauf und Verkauf von Kohlen' (a society for the buying and
selling of coal), this trust has, for the past five years,
completely controlled the West German coal industry, and
dictated prices. …

"In Austria and Hungary trusts have not yet extended so
rapidly. Nevertheless, on various occasions several of them
have given rise to such unfavorable comment that the sentiment
in favor of a legislative restriction of the movement is
to-day much more pronounced in the Austrian than in the German
Parliament. …

"As far as England is concerned, it must be admitted that,
notwithstanding her great industrial activity and a
competitive warfare not less pronounced than that of other
states, the Trust system has as yet found but tardy acceptance
in that country. This is doubtless due in some degree to the
thorough application of the principle of Free Trade; for it is
well known that the largest trusts are powerless unless their
interests are secured by a protective tariff excluding from
the home market the products of foreign countries.
Furthermore, we should remember that in England the principle
of individual freedom is regarded as inviolable. There, it
still obtains more widely than in most other countries; and
the majority of British merchants consider the principle
involved in the formation of trusts as a serious menace to the
freedom of the individual. …

"France is a country in which the Trust system has long
flourished and assumed extensive proportions. In the iron
trade, great trust companies—local in their character, it is
true—have existed for the last twenty years; and the most
powerful of these, like those of Germany, limit their activity
to the establishment of sales-depots. The chemical industry of
France, like that of Germany, is now controlled almost
exclusively by combinations. … Several international trusts,
such as the Zinc Trust, also have their headquarters at Paris.
Belgium, like France, is interested in most of the
international trusts; and there, as in France, the Trust
system has been successful largely in those enterprises which,
in other industrial countries, have hitherto maintained a
stubborn resistance to the inroads of the Trust. …

"In respect to the economic value of trusts in Europe, it may
be said that the influence exerted by them, both for good and
for evil, is, in its essential features, similar to that
exerted by the trusts of America."

_W. Berdrow,
Trusts in Europe
(Forum, May. 1899)._

TRUSTS:
Industrial combinations in England.

"England no longer enjoys that immunity from monopoly which
was the boast of its own economists and the object-lesson of
American free-traders. While the position of trusts has not
greatly changed in the United States during the past ten
years, except to develop on the same lines, a commercial
revolution is taking place in England. The country is becoming
honey-combed with combinations and trusts; and, what is more
and perhaps worse, there is no agitation against the system.
No effort is made to check trusts or control them. … There are
a large number of informal combines in England which give some
advantages of monopoly without unity of control or financial
association. Thus, the railroad corporations have long ceased
to compete as regards rates. It is perfectly well understood,
and has been admitted over and over again by railroad men
before Parliamentary committees, that the railroad companies
combine. They agree in their rates, but compete in facilities,
speed, etc. If it were not that the railroad companies are
strictly regulated by the Board of Trade, this system of
concerted action would be a very serious factor. As it is, the
railroads represent the most powerful interest in Parliament. …
Similarly, the leading shipping companies have fixed rates for
freight, to stop under-cutting, competing only in speed and
facilities. … There are various understandings and agreements
in the coal-trade. …

{536}

"Until a few years ago, England was not ripe for trusts. The
early efforts failed either through the overcapitalization of
the concerns, opposition from outsiders, or defective
management. … The monopoly that has been most prejudicial to
public interests—the National Telephone Company—is now being
undermined. … The agitation against this monopoly on the part
of municipalities became so strong that in 1898 the House of
Commons appointed a committee to investigate the question. The
result was that last year an act was passed giving
municipalities the right to establish telephones, and
authorizing the post-office to spend $10,000,000 in creating a
competitive system in London. …

"During the last three years, there has been a prolific crop
of amalgamations—half-way houses to trusts. … There is one
kind of amalgamation taking place that deserves special note.
Great mining, iron, engineering, and shipbuilding firms have
come together. Instead of having between the raw material and
the completed ship or engineering work the intermediary
profits of the iron-ore miner, the coal-miner, the
iron-master, the steel-maker, the iron-founder, the forger,
the marine-engine builder, and so forth,—all these middlemen
are got rid of, and the whole business placed, as it were,
under one roof. …

"Consumers in England have not so much to fear from combines
regulated by the Companies' Act, and held in check by free
trade, as consumers in the United States."

_R. Donald,
Trusts in England
(Review of Reviews, November, 1900)._

TRUSTS:
The question in American politics.

See (in this volume)
UNITED STATES OF AMERICA: A. D. 1896 (JUNE-NOVEMBER);
and 1900 (MAY-NOVEMBER).

----------TRUSTS: End--------

TSUNG-LI-AMEN, The Chinese.

See (in this volume)
CHINA: A. D. 1899 (MARCH).

TUBUAI ISLANDS.

See (in this volume)
AUSTRAL ISLANDS.

TUGELA RIVER, Military operations on the.

See (in this volume)
SOUTH AFRICA (THE FIELD OF WAR):
A. D. 1899 (OCTOBER-DECEMBER); and 1900 (JANUARY-FEBRUARY).

TUNIS: A. D. 1881-1898.
During the French Protectorate.

In 1881, under pretexts which were much condemned at the time,
the government of France compelled the Bey of Tunis to sign a
treaty by which he submitted himself and country to the
Protectorate of France.

See, in volume 2,
FRANCE: A. D. 1875-1889.

This action gave bitter offense to the Italians, who had been
intending to lay their own hands on Tunis, and it is to be
counted among the causes of the entrance of Italy into the
Dreibund or Triple Alliance with Germany and Austria-Hungary
in 1882. But time had so far worn away the grievance that the
Tunisian protectorate was practically recognized by the
Italian government in a treaty with France, signed in
September, 1896. In 1898, the general results produced in
Tunis by seventeen years of French control were described in
an elaborate report to the British government by its
representative in the Protectorate, or Regency, Sir H.
Johnston. The following is quoted from that report:

"The protectorate of Tunis is nominally an Arab Kingdom, ruled
by a prince of Turkish descent under the guidance and control
of a French Minister Resident-General and a staff of French
officials. The present Bey of Tunis, Sidi Ali Pasha-Bey, is, I
believe, the most aged ruler living, having been born in the
year 1817. He was Heir Apparent at the time of the French
treaty of protection, concluded with his elder brother, Sidi
Sadok Bey. Sidi Ali at his accession to the throne in 1882
accepted the inevitable with a good grace, and has from the
very first lent himself unreservedly to the French efforts for
the regeneration of his country. Two of his ministers are
Arabs (the Prime Minister and the Minister of the Pen), the
remainder of the Council are French officials. M. René Millet,
the Resident-General of France, is at the same time Minister
for the Foreign Affairs of the Tunisian Government and
President of the Council. … The personal staff of the
Resident-General consists of about nine members. In addition,
the French Government is more or less directly represented
throughout the Regency by officials corresponding almost
exactly to our vice-consuls, collectors and
assistant-collectors in our African Protectorates, with this
difference, that the collectors are called 'contrôleurs.' …

"The whole of Tunisia is now under civil administration,
except the Saham district to the south of Gabes, which still
remains under military control. … In the districts which I
visited, the natives, talking to me freely, said that they
would sooner be under the rule of any Frenchman than under
that of their own kaids. The French are face to face here with
the same problem that we find so difficult in other oriental
countries—that of creating amongst the natives a body of
public officials who will keep their hands from picking and
stealing, and their tongues from evil speaking, lying and
slandering. No tyrant is so cruel to an Arab as an Arab; no
one is harder on Muhammadans than their co-religionists.
Justice is administered to Europeans, and to the protected
subjects of European powers, by French tribunals, which
equally deal with cases arising between Europeans and
Tunisians. … Justice is administered to natives, in cases
where natives alone are concerned, by Arab courts depending
directly on the Tunisian Government, but with a Frenchman at
the head of each principal department. At all the centres of
population there are Arab courts of justice. The Court of
Appeal for the French courts in Tunis is the Supreme Court of
Algiers; the appeal from the Arab courts is to the Bey. …
Public works are entirely under French control, though
Tunisians are employed in minor posts. …

"Public education is under French and Arab direction. The
schools and colleges more or less directly supported by the
Government in the city of Tunis are the following:—
The Lycée Carnot,
the College Sadiki,
the secondary school for girls,
the Alawi College,
two lay schools for boys,
a school for Jewish children of the Israelite Alliance,
a Jewish agricultural school,
two schools for Jewish girls,
three schools for boys under the direction of friars, and a
primary school for little girls.
{537}
There is a Muhammadan university at the Great Mosque in Tunis,
and there are 113 primary Muhammadan schools in the same town.
In the interior there are about 98 primary schools for boys
and girls, supported by the Government, and mainly under
French direction. There are also about 500 Muhammadan schools
in the interior, either private or assisted by Government
funds. In addition to Government-supported schools, a large
number of private establishments have sprung up at Tunis and
at Sfax, wherein surprisingly good teaching is given, even in
such subjects as music. … The progress of education is having
very marked results on the indigenous population of the coming
generation—good results in the dissipation of Muhammadan
fanaticism and prejudice, results less pleasing, however, when
the recipient of this education is turned out a creature with
no particular religion, with no principles, and a contempt for
manly labour. …

"In 1880 life and property were thoroughly insecure. The
property of Europeans, perhaps, was safe, provided they were
the subjects of a Power able to coerce the Government of
Tunis, and their lives were not in any great danger in the
principal towns; but it would have been impossible for any
European to have travelled about many parts of the Regency
without a considerable escort; impossible, indeed, to
penetrate some parts of the Regency at all unless at the head
of an army. … It was as difficult, and dangerous, and
expensive to travel about the Regency 18 years ago as it is
now to visit the far interior of Morocco. I spent eight months
in Tunisia at that time, but never succeeded in visiting
Kairwan, the Holy City. … Now, I can go from Tunis to Kairwan
in a few hours by railway, see all the sights unhindered,
enter the mosques without offence, dine and sleep at an
excellent hotel, and be back again at my work in Tunis the
next day. I may further add that I have just traversed much of
the Tunisian Sahara and a good deal of the Jerid country with
no other escort than my servant, and a native cavalryman to
act as guide. I should have been equally safe had I been
alone. The whole Regency of Tunis is now as safe for tourists
as France."

Great Britain, Parliamentary Publications
(Papers by Command, 1898, C. 8649-18, pages 10-15, and 2-3).

TUNNELS, New York Rapid Transit and East River.

See (in this volume)
NEW YORK CITY: A. D. 1900 (JANUARY-SEPTEMBER).

TURBINES, Steam, The invention of.

See (in this volume)
SCIENCE, RECENT: MECHANICS.

----------TURKEY: Start--------

TURKEY: A. D. 1895.
Revolt and massacres in Armenia.
Atrocities on both sides.

A horrible condition of things in Armenia was beginning to
cause excitement throughout the world. On one hand, the
Armenians were in revolt against the foul Turkish government,
and avenging themselves savagely upon their oppressors
whenever they found the opportunity; on the other hand the
Turks were making the revolt an excuse for the atrocities that
are habitual to them in every such case. A special
correspondent sent in January by Reuter's news agency to
investigate the situation reported his conviction "that both
Turk and Armenian are in the wrong, and that, as very often
happens, it is the innocent who have suffered for the
wrong-doings of the guilty. When it is asserted on behalf of
the Turks that they are engaged in suppressing a revolutionary
movement in Armenia, the statement is fully justified by the
facts of the case. There does exist in Armenia an extremely
vigorous revolutionary movement, and it is equally beyond
question that the methods of some of the leaders of this
movement are no less shocking than the barbarity of the Turk
in suppressing it. At every step," he added, "I became more
and more convinced that the inhuman ferocity displayed in this
terrible struggle for the mastery has not been in the least
exaggerated in the reports of the massacres already published
in England. At Bitlis I heard the story of a Turkish soldier
who boasted, as one who had achieved a glorious feat, that he
had taken part in the disembowelling of thirty pregnant
women. 'Two lives in one,' was the rallying cry of the armed
men who perpetrated this butchery. Another soldier, who had
taken part in a massacre in a church, described, gloating upon
every ghastly detail, how he had slipped and slid along the
blood-washed floor while the inhuman work proceeded.
Unfortunately, something very like a counterpart of these
atrocities is presented by the methods of some of the leaders
of the Armenian revolutionary movement. I believe there is no
doubt of the fact that certain of these Armenian conspirators
arranged to murder the Reverend Dr. Edward Riggs and two other
American missionaries at Marsovan, and fasten the blame upon
the Turks, in order that, as they imagined, the United States
might inflict summary punishment upon the Turkish Government,
thereby rendering Armenian independence possible. The
missionaries only escaped through a timely warning which they
received from an Armenian friend. Dr. Riggs has devoted his
life to the education of the Armenian youth in the missionary
schools, but the conspirators, in their blind fanaticism, gave
this fact little heed."

There could be no denial however, that the treatment of
Armenia and the Armenians by their Turkish political masters
was horribly bad. In May, the governments of Great Britain,
France and Russia united in proposing certain reforms for
Armenia, over which there were evasive and dilatory
negotiations carried on by the Porte for several months.
Meantime, the Armenians became more aggressive and
threatening, and a secret society called the "Hintchak," which
had been in existence among them since 1887, assumed great
activity. Connected with the Hintchak there was said to be an
organization of spies and "executioners," the latter of whom
carried out decrees of assassination, arson, and
bomb-explosion which the society had pronounced. Finally, on
the 17th of October, an imperial irade (edict, or decree) was
issued, approving and adopting the project of reform which the
British, French and Russian ambassadors had submitted to the
Porte.
{538}
But the appearance of the sultan's ineffectual irade was
speedily followed by fresh reports of frightful massacres of
Armenians, at Trebizond, Erzeroum, Bitlis, Zeitoun, and
elsewhere, with outraging of women and destruction of
property, which increased rather than diminished as time went
on. There was no sign that anything had been done towards
carrying out the promised reforms; though the sultan wrote
personally to Lord Salisbury to remonstrate against an
expression of skepticism concerning them, which the latter had
let fall in a speech, and to say to the British Premier: "I will
execute the reforms. … This is my earnest determination, as to
which I give my word of honour." But nothing came of it all,
and the Powers which had received the Sultan's promises could
agree on no steps further, except to demand and obtain
permission to bring, each, an additional gunboat into the
Bosphorus.

_Annual Register, 1895,
pages 284-294 and 190-193._

In response to a resolution of the Senate of the United States
asking for information relative to the treatment of the
Armenian subjects of the Turkish government, the Secretary of
State, Mr. Olney, on the 19th of December, 1895, communicated
the following, among other statements of fact: Of the
massacres at Sassoun, which occurred in August, 1894, "the
Department of State has little trustworthy information. …
Since that time appalling outbreaks against the Armenians have
occurred in many other parts of Asia Minor, where these
unfortunate people form but a small minority of the
population. At first they were scarcely more than local riots,
as at Tokat, in the vilayet of Sivas, in March last, where one
Armenian was killed outright and more than 30 wounded by the
Turkish soldiery. In June last an attempted rising of
Armenians in the province of Aleppo in the mountains of
Kozar-Dagh and Zeitoun was thwarted without bloodshed by the
arrest of the alleged conspirators. … In July a band of armed
Armenians crossing into the vilayet of Erzerum from Russia was
dispersed, several being killed or captured. By August the
Moslem feeling against Armenians had become so far aroused
that rumors of intended massacres came from several
independent quarters, Harpoot, Marsovan, and Bitlis among
them, which led to urgent demands by the United States
minister for adequate measures looking to the due protection
of American citizens in those places.

"On the 30th of September grave disturbances began at
Constantinople itself. Several hundred Armenians, who had
gathered for the purpose of going in a body to the Sultan's
palace and demanding redress for the grievances of their
countrymen, were dispersed by the police after a severe
conflict in which a number of Turks and Armenians were killed
and wounded. Mob violence followed, the Armenians resident in
various quarters of the capital being assailed by an excited
Turkish rabble, and over 50 were slain. The rioting continued
the next day, October 1, in Constantinople and its suburbs.
Some 800 or 1,000 Armenians were captured or arrested, many of
them being armed with new revolvers of a uniform pattern. By
the third day order was restored, and the Armenians who had
sought refuge in their churches returned to their homes. The
effect of this outbreak at the national capital was most
disastrous in the provinces. The danger of a general massacre
of Christians in the vilayets of Adana and Aleppo seemed so
imminent, that renewed orders for the effective protection of
American citizens in those quarters were demanded and
obtained. Fears for their safety at Hadjin, Mersine, and
Marash were especially felt, and the cruiser Marblehead was
promptly ordered to Iskanderoun (Alexandretta), the nearest
seaport.

"On October 8 a Turkish uprising occurred at Trebizond, due,
it is reported, to an attempt to assassinate the late Vali of
Van as he was about to leave for Constantinople, the Turks
claiming that the act was done by an Armenian and that they
were in danger of a general Armenian attack. On the 9th the
disturbance was renewed, many Armenians being killed and their
homes and shops looted by the mob. The authorities attempted
to quell the riot, but having only some 400 soldiers and
policemen at command, were powerless, and murder and pillage
ran their course as long as an Armenian was in sight. The
official Turkish reports give the number of Armenians slain as
182, of Turks 11, but the general estimate places the total
number at some 500. Reinforcements of troops soon arrived, and
quiet was restored. No injury to American citizens or property
occurred.

"From this time the reports of conflicts between Turks and
Armenians, with great loss of life, become frequent and
confused. At Akhissar, some 60 miles from Smyrna, 50 Armenians
were killed October 9. Koordish raids terrorized many parts of
the Armenian provinces. At Bitlis over 500 were reported
killed, the Turkish accounts alleging that the Armenians
attacked the Moslem mosques during the hour of prayer. At
Diarbekir 5,000 are said to have lost their lives, of which
2,300 were Mussulmans—but the Turkish authorities pronounce
this estimate exaggerated. From Malatia comes the report of a
'great massacre' early in November, when every adult male
Christian is said to have perished. Another sanguinary
outbreak, with great slaughter, is reported from Sivas on
November 12; some 800 Armenians and 10 Koords are said to have
been killed. At Hadjin and Ourfa loss of life is reported, the
American missionaries at those places being protected by
Turkish guards under orders from the Porte.

"The Kaimakam of Hadjin is credibly said to have announced
that he would destroy the town and sow barley on its site.
There being an American school at that place, directed by
American teachers, the United States minister thereupon
notified the Porte that if one of those American ladies
received injury from the riotous conduct of the populace, he
would demand, in the name of the United States, 'the head of
that Kaimakam.' That officer has since been removed. Later
reports allege massacres at Marsovan and Amasia. The consular
agent at Aleppo telegraphs that a severe conflict had occurred
at Aintab, and that great fear prevailed at Aleppo. The
burning of the American buildings at Harpoot took place during
a bloody riot, and many persons are said to have perished in
the province of that name. At Kurun 400 deaths are reported.
Particulars of the recent outbreak at Marash, on November 19,
in which American missionary property was destroyed, have not
yet been received.

{539}

"These scattered notices, for the most part received by
telegraph, are given, not as official averment of the facts
stated, but as showing the alarming degree to which racial
prejudices and fanatical passions have been roused throughout
Asia Minor. As above said, the Department of State has and can
have official knowledge regarding but few of these reported
massacres, and though up to the early part of December the
United States minister estimated the number of the killed as
exceeding 30,000, it is more than likely that the figures are
greatly exaggerated. At latest advices mob violence and
slaughter appear to have been checked, or at least to have
partially subsided. The Turkish Government has been emphatic
in assurances of its purpose and ability to restore order in
the affected localities; new governors have been appointed in
many of the provinces, troops have been sent to the scene of
recent or apprehended disorders, and forces have been massed
to subdue the Armenians who had gained the ascendant in
Zeitoun."

Of the American missionary establishments in Turkey, and of
the extent to which they suffered harm during the outbreaks,
the same report gave the following account:

"The number of citizens of the United States resident in the
Turkish Empire is not accurately known. According to latest
advices there are 172 American missionaries, dependents of
various mission boards in the United States, scattered over
Asia Minor. There are also numbers of our citizens engaged in
business or practicing professions in different parts of the
Empire. Besides these, more or less persons, originally
subjects of Turkey and since naturalized in the United States,
have returned to the country of their birth and are
temporarily residing there. The whole number of persons
comprising these several classes can not be accurately
estimated, but, the families of such citizens being
considered, can hardly be less than five or six hundred, and
may possibly exceed that total.