The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-09-05
Northern Securities.

Northern Securities.
The important significance Of the
opinion expressed month ago in the
Northern Securities case, by Federal
part upon it's revelation for the first time
of facts developed by the examination
and cross-examination of competent
witnesses and judicially established, re-
garding the promotion and formation
of that company, the individuals con-
cerncd therein, their motives and pur-
poses, and in part on the argument OF the
case in the State which began the suit,
and in which, just two years ago. Mr..
ROOSEVELT began his raid on capital,
The company was Incorporated in New
Jersey in November. 1901. That date in
material because publicity of ownership
by the company of 90 per cent. Of the
Northern Pacific and 10 per cent. of the
Great Northern shares 30 moved the
wrath of the President and his Attorney
General as to make the transaction
pivot in campaign for the Republican
nomination in 1904. Thus and then the
prosecution of the company in the Fed
eral courts assumed a political phase
| quite apart from the rights of private
| property that were involved.
The Federal Executive averred that
the purpose of the promoters and or
ganizers of the company was to promote
monopoly and restrain interstate trade.
1t pressed into the campaign the services
of Federal prosecuting officers and Fed
eral courts.
A large part Of the long opinion by
Judge LOCHREN consists of an EXPOSE
ton of facts judicially proven. After
devoting the space of two newspaper
columns to such an exposition, the Court
demonstrated that self-defence was the
motive Of the promoters. 1t said:
IT Is obvious from the foregoing facts that the
| Northern Securities Company was Incorporated
with the purpose and intent on the part Of Its pro
moters that should acquire by purchase. by eA-
! change Of stock and should own and control. con
side rable majority OF all the sock OF the Northern
! Pacific company. and thus secure that company
against the usng-r Of any future raid upon It's stock
which might place ,ss management ana the result
ing control of tho Burlington system III the power
I of any rival railroad corporation whose interests
might he hostile 10 the development and property
! of the Northern Pacific and Great Northern COM
panies and their ,esooard terminals and Of the
region OF country traverssd by their railroad sys
TENS.
This was the avowed purpose OF Mr.. MORGAN
! and his associates who acted with him. including
| Mr.. HILL and the other large stockholders OF the
| Great Northern company. who also held large
amounts OF stock in the Northern Pac.l'c company.
| and were apprenensve that any hostile control OF
| the Northern Pacific company which might sacri-
nee It's interests TO q rival would be disastrous 10
the development and prosperity of the Great North
| ern company"
The Court then explained how and
why, without any thought of creating a
railway monopoly in the Northwest, Mr..
HARTMAN united in the Incorporation Of
the Northern Securities.
The political theory on which the Presi-
dent made his personal and partisan
appeal against the capitalists and share
owners who united to form the new COM
pany was that they were in position,
under New Jersey statute where they
could do evil if they would. To that
theory Judge LoCHREN gave this coup
de grace:
| Il am compelled to reject the doctrine that any
person can be held to have committed or to be pur
posing and about to commit highly penal offence
| l., hprn ran he his peCulaTy
interests viii be thereby advanced and that he
has the power either directly by himself or directly
through persuasion or coercion of his agents, TO
compass the commission Of the offence"
The White House and the Department
of Justice affirmed that the motive and
effect of the promoters of the Northern
Securities Company were the restraint
of trade and the formation of q now rail-
way monopoly in the Northwest but the
trial Judge declared that, upon all the
facts in evidence before him, the purpose
was n safeguarding of the share owners
of the two corporations from an injurious
raid by rival corporation. IL was only
a movement of justifiable self-defenoe,
The facility of credit, offered by banks
and trust companies, during the pros
perity of the country under MCKINLEY
sufficient TO wrest great corporations
from the hands of the managers into
which they had been given by the share
owners, justified counter efforts to retain
the control. How much and precisely
what may be permissible to that end il
not yet thoroughly explored, but Judge
LoCHREN has shown that in the North
ern Securities episode the efforts put
forth had no relation To forbidden mon
opolies, or TO the trust DOGGY which, for
dozen years and more, has occupied
the attention of politicians
The Lone shepherd OF WOiferts