Various experiments have been tried at different times in the way of carrying on business through trustees. It was long ago decided in England that the actual owners of the property could not be held liable as partners if the property was in trust and the business carried on by trustees.

The Standard Oil Company, the Sugar Trust, and the Bay State Gas Company in this country were all organized as trusts. A board of trustees took over the stock of the constituent companies and issued trust certificates to the owners. Thereafter, until the courts declared such organizations illegal, these boards of trustees dominated their respective industries. The courts decided that trusts of this nature were illegal, not because of any objection to their form of organization, but because their chief object was to restrict competition.

When the trust form was forbidden to these monopolies, they resorted to the holding corporation, but the name "trust" persisted and is still used to designate the great monopolistic corporations. It is misleading and has caused considerable unjust prejudice on the part of the public against this method of doing business.

The trust form of business association is used to a limited extent in Massachusetts. Up to 1912 the law in that state made no provision for corporations to deal in real estate, and consequently a large number of real estate trusts under the name of "voluntary associations" came into existence. They have increased until they now own not less than $250,000,000 in real property. Of late years this form of organization has extended to a limited degree into other lines of business activity and may become a popular form.

The characteristic features of these voluntary associations are as follows:

1. A deed or declaration of trust, drawn up to define the rights and powers of the trustees and the shareholders.

2. Two or more trustees who are authorized to take over and manage the capital, business, or property supplied by the shareholders.

3. Shareholders who receive transferable certificates representing their respective interests in the profits and in the property on dissolution.

4. Provisions for division of profits, appointment of trustees to fill vacancies, and for dissolution at termination of the trust.

It is usual to provide in the deed of trust that no liability is to attach to the shareholders or trustees.

The Commissioner of Corporations of Massachusetts in closing his report summarizes the advantages afforded by these voluntary associations as follows:*

1. The experience of twenty-five years shows that they furnish a convenient, safe, and unobjectionable form of co-operation, ownership, and management.

2. Their form of management is more flexible, more economical, and more convenient than that of a corporation. Trustees can do business with more ease and rapidity than a board of directors.

3. In particular they afford a convenient form for combining capital for the development and improvement of real estate, as the form of organization insures a continuity of management and control that specially appeals to investors in real estate, and which cannot be secured by a corporation on account of the change of officers each year. Trustees are not changed as frequently as are directors of a corporation.