The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-03-18

the government to show that they were, ss tne
mere formal device intended to defeat the pro
visions OF the Sherman act.
Third---Any restraint OF trade or commerce
Efendants is Indirect and incidental only, ana not
covered By the act Of July 2, 1890; -,
Fourth--It the Sherman act can pc 80 construed
as to forbid the sale OF stock In two competing
Erailroad corporations to one purchaeer then tnat
act Is an attempted interference on@sthe part OF
congress with transactions which are wholly
and in that respect the act Is unconstitutional.
Fifth--Rut. assuming that congress may, un;
as q regulation of commerce. restrain the states
! in the exercise of their prerogatives from per-
hitting two more corporations, to- which the
states have given life from merging, yet sucn
a purpose on the part of the government ought
to be clearly and distinctly expressed, and not
be found In the judicial interpretation OF doubt
| full language contained In penal statute.
Stxth--Acaufescence by the government Tor
| more than eleven years in the actual merger ana
consolidation Of many important parallel and
competing lines of railroads and steamships en-
gagged In Interstate and international commerce
has given practical construction to the act CT
July ., 1890, to the effect that it was mot In.
tended to forbid. and does not forbid. the natural
! processes Of unifcation which are brought aDout
I under modern methods of lease: Econsolldatlch
| merger community of interest orSownershap or
In support of this point he cited the case Of
Stuart vs. Laird a. cranch. 299).ss ~ ~ q 80
Mr. Griggs then. continued &*t4 ess - ~
T Widespread Chaos Would Result. 3 +
mo cases has ever arisen lin which
disregard Of that salutary rules Of con =
struction would result in such widespread
and irremediable injury to vested inter
ests as this. Not that any decree which
this court could make against these de-
PENDANTS would particularly or radically
affect their property interests, but be-
cause the decision once made that the
Sherman act applies to such TRANSACTIONS
as the purchase, lease, merger or con-
solidation of parallel lines of transporta-
ton, would render every such transactlon
for the last thirteen years unlawful, and
reouire the attorney general. in the due
discharge Of his duty, to bring suit Tor
dissolution and injunctions. Unnumbered
millions of dollars OF capital stock and
bonds issued upon railroad mergers anu
consultations would be tainted with IL
legality, or affected in value by the with
draWal Of the property against WHICH tney
were issued ..
In discussing the facts Mr.. Grlggs al
legged that the attorney general had filed
his complaint under the misrepresentation
that the Northern Securities company was
formed solely for the purpose OF merging
| the two corporations-an allegation that
was not supported by single proof, and
positively disproved by all the testimony
| in the case. 49,.
! At the time the Securities company was
| formed there was no certainty that a. ma
| iority of the stock of either of the rail-
road companies would be acquired by 1t.
and it would have been formed and have
continued If no other person than the
original projectors Of the company mao
come in and exchanged their stock. Such
is the testimony of all the persons par
| ticipating in the organization.
The original conception, the prlmofdlal
germ. out of which the Northern securt-
I ties grew, is to be found much further
back than the, transactions. of 1901. .
| Briefly stated, the circumstances are
these:
~..., Cause Of the Action. -, ~.
The defendants, Messrs. Hill, Kennedy,
James and Mr.. Samuel Thorne and others
not exceeding ten in number. formed a
group of active and influential persons
who have developed and maintained the
Great Northern enterprise from its origin
and who. not holding q majority OF us
stock, yet had the concurrence, support
and goodwill Of the other stockholoers
and were, because Of their successful man
agement and their influence, continued
', from year to year In control. .-.. .
AS early as 1898 these gentlemen took
q up for *consideration#the subject Of con
tinuing their policy in the, management o.
/, the company by some arrangement which
would prevent their stock from beins
:.
, original conception out OF which thu
Northern Securities company developed
II At the time Of the reorganization OF thu
, Northern Pacific in 1896 these same gen
tlemen. Independently of each other, &C
uuired about twenty millions Of dollars o
: stock in the new Northern Pacific com
; pany, which substantially they held dow
= to the formation Of the Northern Securi
. ties company. ...
! Here we find that as early as 1896
quality of interest had arisen WHEREBY
l gentlemen became concerned in the vel
. fare of both companies a. =, ,.--
J, In April, 19O1 the Northern Pacific ant
the Great Northern made the joint pur
:. chase OF the stock of the Burlington. ant
} in payment for it issued their joint bonds
f. This indicated a. very close relationship
) and q perfect confidence by each compan:
: in the CO. operation fof the other. iii tn
broad policy which the purchase of tn
S Burlington was intended to make possibl
e and to carry OUT That spolfcy2was to fl
y the Great Northern and the Northern Pa
f | cific to enterTinto- rnpetitfon for trans
Il continental traffic as rivals OF the, othe
i |transcontinental, Ines.zIt was an arrange
: ment in favor and mot in suppression q
icompetition. How splendid have been tn
: results Of this policy. not only to tn
: companies themselves, but to the vast ex
= tent of country. penetrated by the tw
: parallel lines; appears from the evidenc
:. of Mr.. Hill and others. A new commercial
: empire has been thereby created in tn
. northwest. and 1t has become possibl
+, for the products of that region to
s profitably transported and marketed in tn
d east and middle west to an extent tina
: could not have been accomplished in man
E years without the joint purchase Of tn
:, Burlington. ne. a~...-T X. ss -.
= This nutuality. Of interest possessed b
= Mr.. Hill and his associates in =. the tw
h companies and this mutually OF interes
v of the two companies in the Burlingto
s system and their joint obligation upo
v the bonds; required that the relations be
: tween the two companies should not onl
be friendly but intimate in all matters (
policy that did not relate merely to loc;
traffic arising and ended upon their ow
original and proper lines.
The so-called raid upon the stock
the Northern Pacific in May, 1901, threat
It ened. the stability Of the structure 50 care
/ fully and benefcently erected. at wa
j. this that fastened to final consumma ito
% the old conception Of a plan of: placing til
n stock owned by Hill and i his associate
e in such a position that itycould not b
e dislodged by any ordinary, assault, thereb
t. securing pernanency and stability Of man
agement. and the continuance OF the po
/: icy which looked to the development
& both the roads and the country which the
!; traversed. An #S
!, Thus avery sfer, ~ Tbs rrncAedine, x1yhlo