Answer:
In a trust, the firms were operated independently but gave voting control to a board of trustees. The board enforced collusive agreements for the firms to charge the same price and not to compete for each other's customers.
Step-by-step explanation:
In the context of United States history, during the late 19th and early 20th centuries, trusts were legal arrangements where a group of trustees held and managed the stock of multiple companies, effectively controlling them as a single entity.
The trustees managed the companies by enforcing collusive agreements, such as fixing prices and preventing competition for each other's customers.
This eliminated competition between the companies within the trust, as they were operated independently but were bound by the collusive agreements dictated by the board of trustees.
The establishment of trusts aimed to circumvent laws intended to prohibit monopolies.
For example, the Beef Trust ensured that member companies did not compete when purchasing livestock, which kept prices low to the advantage of packers and to the detriment of the farmers.
Such practices led to the passage of the Sherman Antitrust Act of 1890, America's first antitrust law, which aimed to break up these trusts and promote fair competition. Subsequent legislation and legal actions, including the breakup of Standard Oil in 1911 and the creation of the Federal Trade Commission, continued the government's efforts to regulate and dismantle monopolistic trust.