alleryStart learning →How was a trust formed out of separate corporations?
ATrustees bought every share on the market
BEach corporation kept its own directors
CWorkers were given shares in each company
DStockholders handed their stocks to trustees
Answer & Solution
Correct answer: D. Stockholders handed their stocks to trustees
1. 1. A trust is described as a combination of corporations rather than a single firm.
2. 2. The mechanism is the stockholders of each corporation placing their stocks in the hands of trustees.
3. 3. Those trustees then managed the business of all the corporations together.
4. 4. That is why the form gave centralized control and administration and allowed patents to be pooled.
5. 5. No purchase on the open market is described, so the second option invents a method.
6. 6. Keeping separate directors would defeat the centralized control the form existed to create.
_Source: An Outline of American History (U.S. Information Agency, 1990, public domain), section INDUSTRY GROWS BIGGER_
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