The Providence news. (Providence [R.I.]) 1891-1906, 1903-04-10
COURT DECIDES
AGAINST MERGER.
Northern Securities Company En-
joined From Voting the Stock of
Its Subsidiary Roads.

ION has been reiterated in no uncertain
tone that the act applies 10 Interstate
carriers OF freight and passengers as well
as 10 all other persons, natural or artih-
cial: that the words "in restraint of trade
or commerce do not mean in unreason-
able or partial restraint OF trade or COM
merce, but any direct restraint thereof;
that an agreement between competing
railroads which requires them to act In
concert I'm fixing the rate for the carriage
OF passengers or freight over their re-
spective lines from one state to another
and which. by that means. restricts tenn
porarily the right OF any other OF such
carriers 10 name such rates for the car
riage OF such freight OF passengers over
It's road as IL pleases IL a contract I'm d.
rect restraint of commerce within the
meaning OF the act, In that II tends to
prevent competition.
ILLEGAL CONTRACTS.
ALSO that II matters not whether while
acting under such a contract, the rate
fixed IL reasonable or unreasonable. the
vice OF such a contract or combination
being that II confes power TO establish
unreasonable rates and directly restra,ns
commerce by placing obstacles I'm the way
OF free and unrestricted competition be-
tween carriers who are natural rivals OF
patronage: and, finally. that congress has
the power under the grant OF authority
contained in the Federal constitution 10
regulate commerce TO say that no con-
tract or combination shall be legal which
shall restrain Interstate trade or COM
merce by shutting off the operation OF the
general law OF competition"
Under these propositions IL IL also held
that II the stock had been entrusted TO
one person. with instructions how to vote
II, the result would have been a COM
bination in direct restraint OF interstate
20
press competition. The organization OF
the securities company. II Is held "ac-
complishes the object. which congress has
denounced as Illegal. moro effectually
than by other methods.
Tho court continues: 80 far as the
New Jersey charter is concerned. the
question. broadly stated, which the court
has 10 determine Is whether a charter
granted by a state can be used 10 defeat
the will of the national Legislature as ex-
pressed in law relating to Interstate
trade and commerce over which congress
has absolute control.
CHARTER NOT so BROAD.
Presumably, at least. no charter granted
by-a state Is intended by the state to have
that effect or TO be used for such pur-
pose; and in the present instance 1t is
clear that the state OF New Jersey did not
intend 10 grant a charter under cover OF
which an object denounced by congress as
unlawful. namely, a combination con-
ferring the power to restrain Interstate
commerce. might be formed and main
tanned because the enabling act under
which the securities company was or
ganized expressly declares that three or
more persons may avail themselves of
the provisions of the act and become a
corporation for any lawful purpose DAVIS
OF New Jersey, 1899. p. +7O.
This language Is not merely perfume
tory: IT means. obviously, that whatever
sumo they must hold and exercise for the
accomplishment of lawful objects. The
words in question operate. therefore, as a
limitation upon all the powers enumerated
In the articles OF association which were
filed by the promoters OF the securities
company, so that, however extensive and
comprehen ensive these powers may seem TO
be. tho state OF New Jersey has said you
shall not exercise them so as to set at de-
fance any statute lawfully enacted by the
congress OF the United States or any
statute lawfully enacted by any state
wherein you see 1T to exercise your
powers"
The contention that whatever restraint
! upon Interstate commerce there may
be in direct and remote and therefore not
/ 20 be forbidden by congress, the court
! finds, Is not we'll sustained.
! The contention that II the existing COM
bination is in violation OF the Antitrust
act then that act unduly restricts the
rights OF the individual to make contracts
and Is invalid. is declared TO be entitled
! to little consideration. On this point
the court says:
The provision OF the constitution does
not. as we believe. exclude congress from
legislatng with regard TO contracts OF
the above nature while In the exercise
OF its constitutional right TO regulate
commerce among the states.
LIBERTY LIMITED.
"on the contrary we think the provision
regarding the liberty OF the citizen r. "a
some extent limited by the commerce.