The free lance. (Fredericksburg, Va.) 1885-1926, 1903-12-19
SAYS MERGER ISILLECAL
Attorney General Argues Against
Northern Securities Company.
HE CITES SIMILAR CASES

Declares Promoters Exercised Power
to Suppress Competition When Com
panies Were Consolidated - Affects
Interstate Commerce.
Washington, Dec lG.-The argument
In the Northern Securities case was re-
sumed In the United States supreme
court. and again the court room was
crowded by attorneys and others inter-
ested In the case. Attorney General
Knox was recognized almost imme-
diately after the court came In ana re-
sumcd his argument at the point at
which he left of. lie declared that by
the union OF the Northern Pacific and
the Great Northern in the Northern
Securities company two competing in
| terstate railroads have been brought
into such relations that their independ-
ence as competitive factors in inter-
state commerce is destroyed
The attorney general said that II
was not his intention to reargue any
Of the propositions settled by the trans
Missouri and Joint Traffic cases, but to
do what he could to show their appli-
cation TO the facts OF this case. lie,
however. made the following statement
OF the great questions settled by the
court in those cases:
"First-That 10 shut ont the oper-
alton Of the general law Of COMPETE
ton between competing interstate rail-
roads is to restrain interstate COM
merce.
"Second-That to bring the opera
lions Of two or more competing inter
state railroads under the control of a
single body shuts out the operation OF
the general law of competition and con-
stitutes a restraint upon interstate
commerce.
Third That congress Is competent
10 forbid any agreement or combina-
ton among companies competing for
interstate commerce which restraints
commerce among the states by shutting
out the operation of the general law OF
competition.
"FOurth-That in order TO maintain
a suit the government is not Obliged
10 show an intent TO restrain conf
MERGE. If such restraint is the natuiNl
and necessary effect Of the arrange
ment"
Attorney General KIoX held that the
combination was in the form Of
trust. and was specifically inyalidated
by the statute.
He also declared that the power 10
suppress competition has been eXc.-
cised, and he declared that Messrs
Morgan and Hill had the power to sup
press competition between these two
roads when they held the control Of
the majority q the stock Of the two
lie also asserted that they executed
that power, and actually suppressed
and destroyed competition between
them the moment they parted with the
legal title to their segregated holdings
and vested them in the Northern Sc
curities company, with the power in
that company, as its charter specifies,
TO exercise all the rights or owner
ship. including the right to vote there
on"
lie then took mp the doctrine OF di-
rect and immediate effect upon inter-
state commerce. On that point he said:
THE Northern Securities arrangement
operates directly upon commerce, be-
cause its certain effect Is 10 control
every act, policy. and operation OF two
gigantic systems OF railroads by which
commerce is carried on Nowhere does
it appear by suggestion even, that the
purpose OF organizing the Northern Sc
curlties company was other than TO Sc
cure the consol OF these two roads.
Congress- he declared, can regu-
late anything and everything in the
sense that IL can prohibit and prevent
its use in a way that will defeat law
that congress may constitutionally en-
act For this purpose. the supreme
power operates upon everything, upon
every one"
In concluding. he called attention 20
the great possibilities Of a securities
holding company as a financial ma
chine for manipulating railroads and
other properties and concentrating
their control in the hands OF a power
full clique, and said:
Il cannot think that a combination
held together by a rope of sand comes
within the prohibition OF the law, and
that one which is bound by links OF
steel may defy its wisdom and It's
power.
"To prevent such a dangerous con-
centration of power, dangerous to COM
MERGE and a menace to our freedom.
the people have done ali that it is pos
slble for them to do under our system
of government. They have legislated |
against it. II this law can be construed
so as not to cover the situation, or If |
the court says yea to the proposition
affirmed in the last paragraph OF Mr..
Morgans answer-namely,. congress
has no power to prevent such combina-
tions, then. indeed. the governments |
grave concern as to this litigation may |
he easily understood"