The Indianapolis journal., 1903-08-02
GOVERNOR VAN SAINT SAYS THE
MATTER WILL NOT REST.
United States Supreme Court to Be
Asked to Pass on the Question
Soon as Possible.

dS piSSiueIt OF the Northern SecuIllieS
Company and individually, in which ne
sustained the contentious of the defend
ants and dismissed the bill OF complaint OF
the State. He finds that the Northern Sc
curities Company has not violated the State
laws forbidding the consolidation of paral-
lei and competing lines of railway, through
It's ownership of the stock of the Great
Northern and Northern Pacific Railways
He refuses the Injunction asked by the
State of Minnesota to restrain the Sc
curities Company from voting the stock
Of the two railroad companies either
of them.
This decision affects the results of the
federal governments victory in the Circuit
Court in no way whatever. The federal
suit involved the same defendants and the
same general state Of facts. but based
on different contention of law. The fed
eral suit I'm which the Securities Company
was beaten was prosecution for violation
of the Sherman antitrust law passed by
the federal Congress. The State suit in
which the Securities Company wins was
based on an allegation that the defendants
violated acts of the Minnesota Legislature
forbidding the consolidation of parallel
and competing lines of railway.
JUDGE LOCHREN'S RULING.
Judge Lochren. in his decision to-day,
says in part:
1.-THE defendant, the Great Northern Rail-
way Company, is a Minnesota corporation,
which has, stated in the bill, acquired
the property, rights and franchises and the
management and control of various speci-
fled railway corporations. That the defend
ant, Northern Pacific Company, is a Wis
consin corporation which filed its articles
n In ~ md In
purchased and acquired all the railroad
properties, railway lines, right of way.
rolling stock and franchises of the earlier
Northern Pacific Railway Company; and
he also stated in the bill acquired the prop
erty rights and franchises, and the manage
ment and control OF other specified railway
corporations. That said Great Northern
and Northern Pacific Companies now and
fer many years, severally own, operate and
maintain main line of railway extending
from the cities of Duluth, St Paul and
Minneapolis, westward, across the State of
Minnesota, North Dakota, Montana, Idaho
and Washington to Puget sound; with
many branches along the route of each,
and said two systems of railroads are as TO
each other parallel and competing lines
of railroad: at least between cities and
towns reached or trayerSed by the lines or
Duluth, st. Paul, Minneapolis, Anoka,
ST. Cloud, Moorhead, East Grand Forks
and several other towns in the State of
Minnesota; and that a reasonable degree of
competition for the traffic between places
SO situated on both said lines of railway
has existed in the past years"
After reciting the act passed by the Leg
islature of 1874 forbidding the consolidating
of parallel railroads, also the act of 1881
permitting one railroad company to con-
solidate its stock and franchise with the
stock of any other roads which might be
connected and operated together TO consti-
tute continuous main line with or with
out branches; and calling attention to the
fact that the same statute reiterated the
prohibition against consolidating parallel
and competing lines. Judge Lochren calls
attention 10 the passage or the antitrust
law passed by the State Legislature in 1899,
forbidding combinations in restraint of
trade or commerce between the State of
Minnesota and other States and its penal
ties anG then gives a complete history of
the merger proceedings.
SHERMAN ACT CONSTRUED.
Under conclusions of law the court says,
after reviewing number of Supreme Court
decisions the Sherman antitrust act:
"The proper construction of the Sherman
antitrust act, far it relates to rail-
road transportation, as deduced from these
decisions of the Supreme Court, appears to
be this: The act applies to railroads and all
contracts made between railroad companies
for the purpose and having the effect of
preventing competition by fixing rates, or
empowering persons TO fix them, and agree
ing to conform to them when fixed, in
restraint of trade and within the provisions
of the statute, whether the rates so fixed
are reasonable or unreasonable. That con-
tracts between divers manufacturers of a
commodity respecting their sales of that
commodity TO be delivered by them outside
the State. having the direct effect of sitting
competition and raising the cost or the arti-
Gle TO the purchaser is also in restraint of
trade and within the statute That contracts
which do not directly and necessarily affect
transportation or rates therefor are not I'm
restraint of trade, or within the statute
even though they may remotely and indf-
rectly appear TO have some probable effect
in that direction.
The state antitrust act must have the
same construction in respect To traffic on
railroads within the State. Neither the
Great Northern Company nor Northern Pa
cific Company were either parties TO, nor in
their corporate capacities had anything to
do in. the formation of the Northern Securi-
ties Company or with any of The contracts
or proceedings complained of in the bill. The
Northern Securities Company is merely an
investor in and owner of a. majority of the
stock of each of these two railroad compa-
nies. 1t has done no act and made no con-
tract in restraint of trade or commerce The
action OF the Defendant Hill In promounS
the formation of the Northern Securities
Company under the circumstances and for
the purposes which the evidence discloses,
and investing in its stocks by the sale to IL
of his stock in the two railroad companies
involved no act or contract in restraint or
trade or commerce, or Affecting transporta-
ton or rates more than any ordinary trans
fer of railroad stock from one person 10 an
other.
LAW NOT VIOLATED.
MY judgment after most careful consid-
Grafton of the facts and the law applicable
thereto, as construed by the highest court
leads me to the conclusion that some of
the defendants have violated the Minnesota
antitrust act, conclusion apparently con-
trary to that reached by the eminent judges
who, in this court. recently, decided the
case of the United States VS.. Northen Sc
curities Company, and who will doubtless
in another court review this cause upon
appeal. But the rights of litigants and my
own sense of duty alike requires that my
own deliberate judgment, guided by my un-
derstanding OF authoritative expositions of
the law, be given in all causes tried before
me.
ITO epitomize the recent decision: II is
held that IL will be for the interest of the
Northern Securities Company 10 restrain
trade by suppressing competition between
these two railroad companies: and that by
coercing. persuading the two boards of
directors whom IL has the power to elect
IL will certainly cause them TO commit high
iy penal offenses by entering into combina-
tions. contracts and arrangements in re-
straint OF trade. in violation of the anti
trust aCf and hence the Northern SeCuri-