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Trusts

The original sense of the word trust describes an arrangement for administering the affairs of a child or incompetent adult (beneficiary) by a person known as a trustee. A trustee is a person or party who acts on behalf of another or others, usually under the terms of a court order. In a business application, the trust was an arrangement under which stockholders in a company would assign their shares to trustees, who have the voting power to guide the decision-making of that company. This technical use of the term is of less historical interest than its other use, to describe an arrangement under which major producers in an economic arena would agree to control production and prices to their mutual benefit. Instances included John D. Rockefeller`s oil trust, the barbed wire trust, the cash register, trust and the sugar trust, among others. In the United States, trusts came under increasing public criticism in the late 19th century and would become the subject of antitrust legislation. The state of New Jersey in 1889 enacted new corporation legislation, authorizing the use of the Holding Company to circumvent the discredited trust.