Omaha daily bee., 1903-04-19
REFLEX OF THE MERGER DECISION.


VIII the great corporations control the
people or will the people control the
great corporations? That question was
tersely ~propounded for the first time In
the historic campaign that culmi-
mated in the adoption Of the present
constitution Of California and the cleo
ton of Newton Booth in March, 1875, to
the United States senate. Nine years
later congress made the first serious at
tempt to regulate railroad traffic by the
enactment Of the interstate commerce
law.
Up to that time railroad managers and
railroad attorneys persistently resisted
every effort at national railroad regula.
ton. When the editor Of The Bee ap-
peared before the committee on COM
merce Of the lower house Of congress In
1886 in support of the Regan bill, that
furnished the basis Of the interstate
commerce act, representatives Of the
railroads insisted before the committee
that railroads were private property and
that congress might as well undertake
to regulate the price of bread or the
price of groceries and hardware, as to
regulate freight rates or prescribe re-
strictions to Interstate traffic.
Now the United States court Of ap-
peals declares in its recent Northern Sc
curities merger decision that congress
has not merely the right to prohibit un-
just and unreasonable rates, but the
right to prohibit such an ownership of
competing railroads as by destroying
competition tends to produce unjust and
unreasonable rates.
That the enunciation of this principle
will have far-reaching consequences is
a foregone conclusion. While the rail
road systems embraced In the Northern
Securities merger will doubtless con
tinue to be operated on the community
! OF interest plan under reciprocity traffic
arrangements, the dissolution of the Sc.
curlties company and the rescension
Of the stock iobbing and bond jobbing
deals by which the Burlington ceased tc
be an independent, self-governing sys
tenn, will have a most salutary effect
Whether the courts so declare or not
the issue of bonds in exchange for stocks
either at a ratio of two to one or dollar
for dollar is fraught with danger to the
American people. The conversion OF
stocks into bonds is a far greater
menace to the American people thar
the consolidation of competing lines o.
railroad.
The merger decision by which the Bur
llngton road is to he cut loose from tn
Great Northern and Northern Pacif,
recalls the fact of a preceding lawles
merger nearer home. Section 3 OF arti
Gle XII of the Constitution OF Nebraska
reads as follows:
No railroad corporation or t~elegrap.
company shall consolidate its stock, prop
erty, franchises OF earnings in whole OF 3
part with any other corporation or tele
graph company owning a parallel or com
peting line.
In the face of this specific constitJ
tlonal prohibition the Burlington & Mii
souri, River Railroad company absorbe
the stocks, property and franchises o
the Atchison & Nebraska railroad, whic
was parallel to the Burlington road, an
! as a natural consequence Of this merge
the people ON the line of the Atchiso
! X Nebraska have been deprived Of n
the benefits Of competition. And ye
p when this fragrant violation OF the col
stitution was brought directly befo;
= the supreme court Of Nebraska, that TT
| bunal sanctioned and upheld the uneoI
= stitutional merger in a decision tbs
viii stand unique among Its variegate