Trust

Trust (трест; trest). The most integrated form of economic association among a number of companies. Members of a trust surrender their autonomy in production and marketing and accept a single administration. Trusts arose in Western Europe and North America in the 19th century. Eventually they came under government regulations on competition and monopoly. In comparison with other forms of monopoly that emerged in Ukraine in the last quarter of the 19th century, such as cartels and syndicates, trusts were relatively unimportant and underdeveloped.

Trusts were also a common form of economic organization in the Union of Soviet Socialist Republics. Many were formed during the New Economic Policy period in an attempt to rationalize production, reduce costs, and eliminate duplication. They were usually a combination of enterprises in a single territory. The process of defining the legal status of the trusts was not systematic, and culminated in a law on trusts passed by the USSR Central Executive Committee and the Council of People's Commissars on 10 April 1923. In Ukraine trusts developed more rapidly than in other republics. The Pivdenstal trust was established in October 1921. It consisted of 3 large steel plants, in Makiivka, Yuzivka, and Petrivsk, 19 smaller plants, several coal mines, and some coking plants. The other large trusts in Soviet Ukraine were Donbasvuhillia, in the coal industry; Pivdennorudnyi, in iron-ore mining; the Southern Machine-Building Trust; and Pivdennyi Silmashtrest, based in Zaporizhia, and Ukrtrestsilmash, based in Kharkiv, both in agricultural-machine building. Specialized trusts were also formed in the chemical industry, the paper industry, the leather industry, the ceramics industry, the dairy industry, the tobacco industry, the sugar industry, the electric power industry, the textile industry, the alcohol industry, the glass industry, and the flour milling industry. Under the NEP there were, altogether, 36 regional and 24 republican trusts in Ukraine. Nominally the trusts were regulated by the Supreme Council of the National Economy (VRNH), but from 1925 some of its responsibilities were transferred to the State Planning Committee. The struggle for control of the trusts among the VRNH, the republic's State Planning Committee of the Ukrainian SSR, and the USSR people's commissariats resulted in the gradual dismantling of most trusts in 1929–30. Some were abolished outright in 1932, along with the VRNH, and enterprises were placed under the direct control of the commissariats.

Under Nikita Khrushchev's reforms in the early 1960s, which introduced regional economic councils throughout the Ukrainian SSR and the USSR, trusts were revived. But they were no more than associations that served as a link between the ministries and the individual enterprises and helped co-ordinate production plans. Trusts such as the coal-mining trusts Antratsyt and Chervonohradvuhillia, the manganese-mining trusts Nykopilmarhanets, the construction industry trusts Holovkharkivbud and Poltavaspetsbud, and the lumbering trust Lvivderevprom operated until the mid-1970s. Then they were abolished and replaced by manufacturing consortia.

[This article originally appeared in the Encyclopedia of Ukraine, vol. 5 (1993).]