The Minneapolis journal., 1902-08-19
Question Mr.. Whitney Raises Re-
garding Northern Securities.
AUTHORITY OF N J. CORPORATION
New Jersey Individual Can Buy
Controlling Stock, but Can
Such Corporationf
Special to The Journal.


Washington, Aug. 19.-An interesting
contribution to the debate over the North
ern Securities merger, which Is forming
so large a part Of the antitrust discussion
of the present summer, has been made by
Edward B. Whitney, in recent number
of the Yale Law Journal He was. 1t
will be recalled, assistant attorney gen.
eral in the second Cleveland administra-
tion. and is well-kEown member Of the
New York bar. His position, briefly and
roughly stated. is that the laws OF New
Jersey authorize the formation of corpor-
ations for lawful purposes only, and that
when a corporation is organized to oper-
ate in states other than the one giving
the charter, and to operate there. con-
trary to the law of those states, the cor
poration cannot be said to be organized
for lawful purpose, and on this, theory
the Northern Securities company is con-
demned. This raises a very interesting
point about which lawyers will disagree,
Judging from the current comment on it In
administration circles here.
Perpetuation of Competition.
Mr.. Whitney writes that 1t is not his
purpose to discuss the legal merits of any
of the litigations now pending IN regard
to the Northern Securities company, nor
the non-legal question whether such COM
binations are in the interest of the COM
| desires to perpetuate the tradition OF
competition, especially concerning paral-
lei lines of railroad. and that our business
| is to see that this fundamental of public
policy Is not circumvented by individuals.
A direct attempt to bring about the GEM
| bnation of the Great Northern and
Northern Pacific roads had been declared
| illegal by the United States supreme
court, administering the local laws. OF
Minnesota. But it is obvious that COM
| bination could be secured if any one in
| dividual bought a majority interest In
the stock of each load, and present laws
would not touch the case, for man
cannot be prevented from combining with
himself. Hence. the owners Of the ma
jority OF the stock of the two roads. II
current belief is we'll founded. concluded
to merge themselves into an artificial
person, hoping, as Mr.. Whitney says, that
the law might then fail to distinguish be-
tween them and single natural person
They accordingly filed a paper and paid
a fee in a far-off state and went through
certain formalities. The corporation is
to perform but. two acts year-2yote its
stock at the annual meeting OF the Great
Northern company and again at the an
nual meeting Of the Northern Pacific.
Public Policy Frustrated.
If such a corporation as an artificial
person is indistinguishable from a. nat
ural person. the simple device Of the mer
ger is completely effective, and the public
policy of the United States and of thu
states through which the railroads rul
has been frustrated. And yet this resul
will have been achieved by the automatic
operation of the laws of state Whicl
has no jurisdiction ever either railroad
and where few of the individuals inter
ested reside. Mr.. Whitney's object is t.
consider whether state like New Jerse
has the power to confer by the iproces
Of incorporation, such privileges and i'm
muntties 1t does not necessarily fol
low, he shows, that a state must spermf
an association to be formed for the pur
pose of ending competitio&sby joint own
ership simply because it does not preven
an individual from doing this. Combina
tions are SO much more powerful tina
single individuals that they have been tn
, subject Of special legislation The doc
trine of penal law that conspiracies ma
be criminal, although their acts and oh
jects would not be criminal in an indi
! vidual, and the similar doctrine Of tn
civil courts, are an illustration.
| Mr.. Whitney then discusses the person
5 ality of corporation, and especially th
course of this legal fiction as shown /
| the various cases before our sl1prem
court, most of which is familiar to law
5 yers. He follows this with what is per
3 haps the substance, Of his argument, say
: ing: %~''5sE @t az 5:~