Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1902-02-21
MOVE ON MERGER
Uncle Sam Joins in the Attack on
the Northern Securities
Company.
NEWS HITS THE STOCK EXCHANGE
Knocks Holes in Some Optimistic
Speculative Assumptions
Views at Chicago.

New York. Feb. 21.-The announce,
ment by the attorney general of the
United States that he believed the
Northern Securities company in
fIinGed the antitrust law and that
he would file bill in equity in the
supreme court, in accordance with in
structiOns from the president. To test
Cbe question overshadowed all other
considerations i'm the stock market.
The acute interest manifested in this
company by all spectators and, in
deed. all holders of securities was viv-
idly demonstrated by the effect in the
stock market. and was the more not
able since Great Northern preferred
is the only stock remaining listed on
the exchange which is directly includ-
eel in the securities company. Yet the
whole market fell away sharply under
heavy liquidation. with only Il few un-
important exceptions.
News Was "A Rude Shock.
For some time there has been
deep-rOoted conviction amongst the
spectators that the supreme court
would throw out of court MinnesOta's
suit against the legality of the North
ern Securities company. There has
been an assumption, also, which was
carefully fOStered in the interest of
revival of speculation. that the pub
lie opposition to financial combinations
was more apparent than real. and that
n demonstration of the public utility
of these combinations would secure
them against interference, even where
technically open to construction of IL
legality. This announcement from
Washington was therefore n rude
shock to all of the optimistic scnti-
ment that has been carefully nur-
tured in the financial district.
Chicago Is Also Interested.
Chicago. Feb. 21.-President ROosc-
velt's action in directing Attorney
General Knox to ascertain through
the federal courts whether or not the
railroad merger accomplished 10y the
Northern Securities company is i'm con-
travention Of the laws Of the United
States. and the important opinion eX-
pressed by the head OF the depart
me1t of Justice that the consolidation
violates the provisions of the Shcr-
man act. aroused much interest in
Chicago among those who have fol
lowed the progress of events SubSe-
quent To- the syndinste's organization
Looking FOR Thorough Test.
II is the general opinion among
Chicago lawyers. although many of
them refused to talk for publication.
that the administration has been wise
in beginning litigation Independent of
that instituted by the state of Mime
sofa. ana that the test viii ha so
thorough that many Of the questions
involved i'm the amalgamatiOn of qua
si-public corporations viii he finally
settled
View OF Chicago Lawyer.
II think this H. Il very wise step on
the part Of the administration" said |
John :. Miller ..whcn IL is done with
care and based on the judgment of Il
federal law officer. The litigation has
got 10 take place some time, so long
as there is serious question about the
validity of an organization of that
nature. and it would better come be
fore lot of innocent investors he
come interested. 1t is proper that the
federal government should institute
an inquiry into the plans of the organ
izntion through the attorney general.
AS TO the legal question involved
an off-hand opinion by 4 lawyer is not
worth very much. y somewhat cog
nate matter was before the supreme
court of the United States i'm the Pears
all case, where the Great Northern
railroad some years ago undertook TO
Acquire Il considerable portion of the
stock OF the Northern Pacific at the
time Of its reorganization.
"PearsalI. stakeholder of the
Great Northern. began his suit in the
federal court at st. Paul to restrain
the purchase by the Great Northern of
the stock OF the Northern Pacific on
the ground that it was in violation of
the provisions of the Minnesota con
stitution .forbiddinG the consolidation
or purchase or acquisition of cOmpet-
ing railroad lines. The supreme court
of the United States sustained the suit
and held that such a union as was
then attempted-that is. the abSOrp-
ton of the Northern Pacific by the
Great Northern-was in violation of
the Minnesota constitution
The Question at Issue.
~ suppose the question IN the pres
ent suit is whether the acquisition of
stock of both railroads by New Jer-
sey corporation. organized for that
purpose. IS an attempt to accomplish
the same result in another way. and
whether it would violate the same pub
lie policy.
..'The government suit contemplated
by the attorney general involves Il diff
ferent question from that of the pub
lie policy of Minnesota. That involves
the question of the application of what
is known as the Sherman act which
forbids tho combination or agreement
of railroad companies for the purpose
of restraint of trade or the controlling
of rates and prevention of competition.
'.The contemplated suit by the attor-
ney general. / should think. would in
volve some new questions. and some
very serious ones, as to the application
of the Sherman act. Lawyers cannot
with any certainty foretell what the
decision of the court viii be-"