Sometimes two or more formerly independent corporations are not joined under one control by an exchange of securities, but are actually "consolidated" or "merged." The two words just quoted are sometimes used in a popular sense as almost equivalent to "combined," but are here used in their legal sense. A "consolidation" or "merger," technically speaking, consists of the complete union of one corporation with another corporation, so that the charters, corporate powers, and security issues are all combined, making only one corporation in place of the two which previously existed. This is entirely different, it will be seen, from the customary process of keeping alive all the corporations that enter into the combination and simply acquiring voting control over those corporations. A "consolidation" or "merger," in the technical sense, is somewhat unusual; in fact, this form is very seldom used except when a railroad or other company desires to take over in toto one of its subsidiary companies which has previously been the legal owner of a separate piece of property. The largest and most important consolidation that has ever taken place in the United States was that of the New York Central and Lake Shore and Michigan Central Railroad Company in 1914. The prime purpose in this case, it was stated, was to make possible a more extensive mortgage and larger bond issues than could be brought out by either of the corporations separately.

This discussion of forms of combination is perhaps leading us away slightly from the main topic of methods of promoting combinations, for such forms as are treated in these sections are customary only when the corporations concerned have previously been under common control. The combination in such cases could hardly be regarded as requiring promotion. Nevertheless, a promoter sometimes brings about a combination of a small independent company with a large and powerful company by effecting a lease or a "consolidation" of the two.