The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1903-12-14
AS KNOX SEES IT
Attorney General Files His
Brief in Supreme Court
On Behalf Of the Government in
Securities Case.
SAME SET OF MEN
Own Both Roads That Owned
Them Before.
Therefore He Holds There Can
Be No Competition.

uCI OAVEO Ao nOIuS HSE0 IAN
Be No Competition.
Washington, Dec. 14.-The brief of the
government in the case of the Northern
Securities company and others versus
the United Sts-tes on appeal from the
decision OF Che circuit court of the
United StAtes for the district OF Min
nesota, vas filed in the United States
supreme court today. The document
was prepared by Attorney General
Knox and Assistant Attorney General
Day and covers 1870 printed pages.
After stating that the bill in the case
was originally brought by the govern
| ment to restrain the violation of the
antitrust law, by the Securities COM
pany in the consolidation of the North
ern Pacific and the Great Northern rail-
/ roads and that the decision of the court
| below was favorable to the contention
! of the United States, the brief enters
i into the following specifications as to
the reasons for the action:
1.-The lines of railway operated by
the defendants, the Great Northern
Railroad company and the Northern
Pacific Railroad company are parallel
and competing
1.-The combination is in restraint of
Interstate commerce and a monopoly
The concluding paragraph of Judge
| quoted, as summing up the argument
bearing upon the facts of the case, as
follows:
AT the present time the Securities
company is the owner of about SO per
4 cent of all the stock of the Northern
| Pacific company and the owner OF
about 76 per cent of all the stock of the
Great Northern company. The scheme
which was thus devised and consum-
mated led inevitably to the following
| results:
two roads in the hands Of a single per-
son, tOwit, the Securities company, by
virtue of its ownership of a large ma
jority of the stock OF both companies.
"Second-It destroyed every motive
/ for competition between two roads en-
gagged in interstate traffic, which were
| natural competitors for business by
pooling the earnings of the two roads
4 for the common benefit of the stock
| holders CT both companies; and accord
| ing to the familiar rule that every one
/ is presumed to intend what is the nee
Il essary consequence of his own acts,
when done willfully and deliberately,
we must conclude that those who con-
ceived and executed the plan aforesaid
! intended, among other things, to ac-
/ complish those Objects
! The attorney generals own summary
of the results is as follows:
! ITO sum up, the result of the afore-
| mentioned exchanges of Great North
ern and, Northern Pacific stock for the
stock of the Securities the latter COM
| pany on December II, 1901, had acquired
4 and paid for $4,000 shares, in round
figures, of the Great Northern stock,
the total capital stock of that COM
| pany consisting of 1,250. 600 shares, of
which 1,220, 900 had been issued and by
January l, 1902, the Securities company
had acquired virtually all of the com
mon stock of the Northern Pacific, and
the preferred stock was retired on that
date, the resolution to retire it having
1sv,e
Der, its answer to the bill admitting
that it held 1850, 600 Northern Pacific
shares, out of total of 1,550000
THE final result of the transactions
was that one and the same set of men,
Mr. Hill and Mr.. Morgan and their
associates being the ruling spirits
among them. acting together under
charter agreement and through the
agency OF q corporate organization,
became invested with absolute power
of control over two parallel and COM
peting systems of interstate railroad.
In place of two distinct sets of stock
holders with rival and competing in
terests. namely, the stockholders of the
Great Northern and Northern Pacific.
there has been substituted by means
of interchange of stocks described. by
the one set of stockholders with one
common and noncomDetitfve interests,
namely the stockholders of the Secu-
rites company. Thus identically the
same persons who controlled the Great
the Securities company came into pos
session of a majority of their shares,
control now, only now these persons
have common Interest," community
of interest-in the earnings of both
roads, while formerly the interests of
the two sets of persons-the two sets
of acknowledgements, in most respects,
divergent and competitive. 1t borders
Oh absurdity to say that two railway
corporations, which under normal con-
ditioDs are naturally competitors for
traffic, will continue to compete in any
real sense after both become subject to
the same source of control.
1T is not in the interest of stockholders
of the Securities that one of these rail.
roads should prosper at the expense II
in both; they receive their dividends from
a fund created by pooling the earnings OF
both. A more effective method for COM
bining competitive interests-for suppress
ing competition between rival and nat
urally competing business corporations
it would hardly be possible to conceive.
The questions of law growing out OF
the statement of facts are presented as
follows:
''First-Has combination been accom-
plished by means of the Securities COM
pany in violation of section l OF an act or
congress, approved July 2, 1890 entitled
An act to protect trade and commerce
against unlawful restraints and uonopo-
lies. hereafter called the antitrust act?
''Second-Have the defendants monopo-
4 of the interstate or foreign commerce or
1 the United States in violation OF section
2 of the antitrust act2
| 'Third-KVas the relief granted by the
/ circuit court authorized by law"
The government maintains that each Of
Oh rad IN