is allowed to do certain things; but what it does with the $5,000,000 of
the savings-bank and the $5,000,000 of the insurance company the law
specifically says neither one of the institutions can do itself. The
"trust" then purchases for $5,000,000 the stock of an industrial
corporation. It borrows the $5,000,000 and an additional $5,000,000,
which represents its own first profit, from the trust company through
irresponsible dummies, depositing the industrial stock as collateral.
The "trust" next causes the trust company to issue bonds for
$15,000,000. These bonds are based upon and secured by nothing of worth
but the stock. The trust company offers these bonds for sale. The
insurance company buys $7,500,000 of the bonds, and the trust company,
through dummies, the other $7,500,000. By the operation so far the
"trust" shows a profit of $10,000,000. After making this profit and the
true worth of the bonds becoming known, these decline back to the
original worth of the stock upon which they are based, $5,000,000, and
there is the tremendous loss of $10,000,000 made. The trust company
"busts," and there is a loss to its depositors of $10,000,000. This loss
is divided as follows: $3,333,000 to the savings-bank, $3,333,000 to the
insurance company, and $3,333,000 directly to the people, less the
small amount which will be recovered from the stockholders. (These
losses will be affected in an unimportant way by the $1,000,000 original
capital.)

In this case the "trust" has done nothing for which those responsible
for it can be held civilly or criminally liable. Neither has the
insurance company, the savings-bank, nor the trust company, and yet, if
there had been no "Trust" and any one of the three institutions had made
the loss directly through its own actions, the officers of that
institution would have been civilly and perhaps criminally held
responsible.

The utility and convenience of the "trust" having been demonstrated, it
became a popular instrument for financiers desiring to accomplish all
manner of illegal purposes. Especially was it an apt tool for the
"System," which in the meantime was perfecting its control of the
people's institutions. The owners of railroads running through the same
territory, finding cumbersome and hampering the restrictions with which
the community they served had safeguarded its interests, formed
"trusts." Straightway there were valuable results--the combination was
emancipated from the re