<p><a href="https://en.wikipedia.org/wiki/Trust_(business)" rel="nofollow">Wikipedia has an article</a> worth reading.</p>

<p>An American trust was typically a combination of companies operating effectively as an entity with dominant market power, so perhaps somewhere between a cartel and a monopoly.  </p>

<p>Trusts originally took their names from the use of <a href="https://en.wikipedia.org/wiki/Trust_law" rel="nofollow">trust law</a> to establish them, but later the term was used for all large companies and groups of companies which used their market position to take advantage of their suppliers and customers and to drive competitors out of business.  The most famous was <a href="https://en.wikipedia.org/wiki/Standard_Oil" rel="nofollow">Standard Oil</a>.</p>

<p>This meant that when the US legislated to regulate or dismantle trusts, it call this <a href="https://en.wikipedia.org/wiki/United_States_antitrust_law" rel="nofollow"><em>antitrust</em> law</a>, where in Europe it would be called <em>competition</em> law.      </p>

CC BY-SA 3.0
2016-09-07T21:20:23.890Z
This sounds a lot like horizontal integration, which Rockefeller also employed to expand his business -- how does a trust differ from horizontal integration, then?
Aleksandr Hovhannisyan
CC BY-SA 3.0
2016-09-07T21:24:44.907Z
@AleksandrH: horizontal integration was part of trust formation, but so too was vertical integration: if you control one part of the supply chain, then it is easier to dominate its inputs and outputs too if you want to.
Henry
CC BY-SA 3.0
2016-09-07T21:16:07.323Z
2016-09-07T21:16:07.323Z
Henry
<p>In my history class, we're studying the Industrial Revolution and how Rockefeller came to dominate the oil industry with his Standard Oil company. According to our textbook, a man named Samuel Dodd (who was Standard Oil's attorney) came up with the trust in 1881. But our textbook does a very poor job of explaining what exactly a trust is or why it helped Rockefeller to monopolize his business and basically dominate the oil industry. I've done a bit of research myself, and I'm not really good with economics. Could someone please explain, in very simple layman terms, what a trust is and what it does?</p>

<monopoly><competition>
What exactly is a trust?
Aleksandr Hovhannisyan
# What exactly is a trust?

(Asked by: username_0 on 2016-09-07)

In my history class, we're studying the Industrial Revolution and how Rockefeller came to dominate the oil industry with his Standard Oil company. According to our textbook, a man named Samuel Dodd (who was Standard Oil's attorney) came up with the trust in 1881. But our textbook does a very poor job of explaining what exactly a trust is or why it helped Rockefeller to monopolize his business and basically dominate the oil industry. I've done a bit of research myself, and I'm not really good with economics. Could someone please explain, in very simple layman terms, what a trust is and what it does?

**Tags:** monopoly, competition


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## 1 answers

### Answer by username_1 on 2016-09-07. Score: 3 | Accepted answer

[Wikipedia has an article](https://en.wikipedia.org/wiki/Trust_(business)) worth reading.

An American trust was typically a combination of companies operating effectively as an entity with dominant market power, so perhaps somewhere between a cartel and a monopoly.

Trusts originally took their names from the use of [trust law](https://en.wikipedia.org/wiki/Trust_law) to establish them, but later the term was used for all large companies and groups of companies which used their market position to take advantage of their suppliers and customers and to drive competitors out of business. The most famous was [Standard Oil](https://en.wikipedia.org/wiki/Standard_Oil).

This meant that when the US legislated to regulate or dismantle trusts, it call this [*antitrust* law](https://en.wikipedia.org/wiki/United_States_antitrust_law), where in Europe it would be called *competition* law.

> **Comments:**
> **username_0**: This sounds a lot like horizontal integration, which Rockefeller also employed to expand his business -- how does a trust differ from horizontal integration, then?  
> **username_1**: @AleksandrH: horizontal integration was part of trust formation, but so too was vertical integration: if you control one part of the supply chain, then it is easier to dominate its inputs and outputs too if you want to.  

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