The sun., 1902-02-25
rhe Northern Securities Company

Ihe tedera supreme OOurt mas uo-
cded that the effort of the State Of
Minnesota TO prevent the Northern
Securities Company, a citizen Of New
Jersey, from buying the controlling
interest Of two Minnesota railroads, the
Great Northern and the Northern Pa
cilo, is not for the Court to notice. II
the New Jersey oitisen had damaged
Minnesota, the Court would have de-
termined the remedy; but 1t is quite
another thing to be asked TO lay the
Federal hand upon a Jerseyman merely
for disregarding in Now Jersey a Min
nesota statute.
This case having been thus disposed
Of, 80 far as the Supreme Court Is con-
cerned, the announced intention OF the
Attorney Generals TO disrupt the North
ern Securities Company. through the
Sherman Antitrust law, and to defeat
the company's purpose to acquire and
administer the Northern Pacific and the
Great Northern, next demands attention.
The decisions of the Supreme Court
In the Trans-Missour case and In the
Joint Traffic Association case have been
cited in support Of the Attorney-Gen
erals prospective endeavor. In order
that the situation may be understood,
we will quote the most decisive passage
of the law in question and then briefly
outline the theory on which the Northern
Securities Company may be expected to
defend itself.
The language Of the act OF Congress
prohibiting restraint OF Interstate COM
merce is that every contract or COM
bination In the form Of trust or other
wise, or conspiracy in restraint Of trade
or commerce among the several States,
is hereby declared TO be illegal"
The Trans-Missouri and Joint Traffic
Association cases involved contracts
between independent carriers for the
purposes Of restricting competition in
rates. So, too, the Addyston Pipe
Company case involved a contract be-
tween independent producers limiting
competition in an interstate business.
in each instance the restraint Of inter- |
state business was the direct and prac- |
tically the only object. The rule gov
erning those cases was stated by Mr..
Justice PECKHAM. in the Addyston Pipe
Company litigation. 1t was that the
Sherman act covers merely transactions
which directly and substantially, and |
not merely indirectly, remotely, incl |
dentally and collaterally, or as a mere |
incident TO other and innocent purposes, |
regulate to a greater or less degree COM |
merce among the States.
The direct and substantial object of |
the present transaction was the acqui- |
sition by the Securities Company OF the |
shares OF the two railroad companies |
concerned. The results which may fol- !
low therefrom will be, according to the
theory to be opposed to the Attorney !
General indirect, remote, incidental |
and collateral, and not, therefore, bring |
ing the enterprise within the prohibition ,
OF the statute.
In the Joint Traffic Association case,
in response to a suggestion Of coun-
sci, the Supreme Court said that the
act did not apply TO combinations
Of interest and property by those en-
gagged in the same line Of business,
whether effected by formation Of cor
porations or copartnerships, by en-
ployment Of the same selling agencies
or by sale Of property to one Of the
parties. Any restraint Of interstate
commerce following such action the .
Court said would be merely collateral .
and incidental and, therefore not sub b
ject 70 the statute
This view necessarily follows from
the Constitutional provision that no
person shall be deprived of liberty or
property without due process of law.
This guaranty includes the right freely
to sell and purchase property.
If the statute should bo construed to
prohibit the sale Of property, it would
TO that extent destroy its value, and thus
deprive the owners thereof without
due process of law. The Supreme
Court has, therefore, held that Congress
can prohibit contracts directly restrain
ing interstate commerce, but that il
cannot prohibit the transfer Of property
merely because the ultimate result may
be TO effect such restraint.
Such must be the general argument
in support of n scheme like that of the
Northern Securities Company. When
tho Supreme Court comes 10 consider
II, il will consider perhaps the most i'm
portant case, commercially, ever brought
before II. II il unnecessary 70 say that
IN earthquake under most if not all of
the great railroad systems Of the coun-
t5v would 10 less harmful to them and
III their all ed interests than n judg-
mcnt holdr.e that the sherman act ap-
p.oS 20 the many Transactions Of which
the Northern Securities Company is
iype.