Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-08-01
STATE LOSES CASE
Decision in Minnesota Merger
Complaint.
NO VIOLATION OF LAW
JUDGE HOLDS SHERMAN LAW IS
VIOLATED,
But Denies the Injunction Asked for
by the State Against North
ern Securities Company.

|
| ST. PAUL, Mimi, August Judge Loeb
| rem today in the United States circuit
court handed down his decision in the case
| of the state of Minnesota against the
| Northern Securities Company. the Great
! Northern Railway Company. the Northern
! Pacific Railway Company and James J.
I Hill president of the Northern Securities
| Company and individually. In which lac sus-
| tanned the contentious of the defendants
and dismissed the bill of compliant of the
| state.
He finds that the Northern Securities
| Company has not violated the state laws
| forbidding the consolidation of parallel
and competing lines of railway, through
! its ownership of the stock of the Great
| Northern and Northern Pacific railways
| He refuses the injunctions asked by the
state of Minnesota to restrain the se-
| curiues company from voting the stock OF
the TWO railway companies or either of
| them.
Does Not Affect Federal Suit.
| 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 tie
| same general state of facts but was based
| on "A totally different contention of law
| The federal suit in 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 security COM
| pany wins. was based on an all"SA ton that
| the defendants violated acts of the Mime
sofa legfSld ttlre fOrbidtlng the conSGlida ton
of parallel and competing lues of railway.
| The hearing of the state suit was begun
| Friday. June .. before Judge Lochren in
| the federal circuit court. 1t followed the
submission of much testimony by both sides
| for many months. in which Frederick g.
1nSersoll Of this city acted referee. Ths
final argument lasted five days. In which
Attorney General Douglass. former Attor-
ney General George Il. Wilson and Attorney
NJ. d. Mum spoke for the state and George
B. Young. NJ. y. Grover and c. w. Bum
for the defendants. The case was submit
ted Wednesday, June To- An appeal to tie
United States Supreme Court is now pend
ing in the federal suit. Judge Lochren IN
his decision says. in part:
Minnesota Corporation.
The defendant. the Great Northern Rail-
way Company, is Minnesota corporation.
which has, as stated in the bill. acquired
the property. rights and franchises and the
management and control of various speci-
fled railway corporations.
That the defendant Northern Pacific Rail-
way Company is Wisconsin coropat.on
Minnesota, and in 1896 purchased and ac-
quired all the railroad properties. railway
lines, rights of way, rolling stock ami
franchises of the earlier Northern Pacihc
Railroad Company, and he also stated I'm
the bill, acquired the property, rights and
franchises and the management and control
of other specified railway corporations.
That said Great Northern and Northern
Pacific companies now and for many years,
Severally own operate and maintain a main
line of railway extending from the cities OF
Duluth St. Paul and Minneapolis west
ward across the states of Minnesota, North
Dakota Montana Idaho and Washington
to Puget sound with many branches along
the route of each. and said that said two
systems of railroads are as TO each other
parallel and competing lines OF railroad:
at least between cities and towns reached
or traversed by the lines of both of said
two railways. among which are 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 fot
the traffic between places 30 situated on
both of said lines OF railway. has existed
in the past years.
Cites Antitrust Law.
After reciting the act passed by the lesis-
lature Of 1874 .forbidding the consolidation
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 con-
stftute q continuous main line with or
without branches and calling attention TO
the fact that the same statute reiterated
the prohibition against consolidating par
allel and competing lines Judge Lochren
calls attention to the passage OF the anu
trust law passed by the state legislature
in 1899 forbfdding combination IN restraint
of trade commerce between the state
of Minnesota or other states and of ITS
penalties and then gives complete ms
tory of the merger proceedings.
Under conclusions of law the court saNs.
after reviewing a number of Supreme
Court decisions on the Sherman antitrust
act. the proper construction OF the Shef-
man antitrust act, so far as ii relates to
railroad tranSpoT tation as deduced from
these decisions of the Supreme Court APP
pears to he this:
The act applies to railroads. and all con-
tracts made between railroad companies
for the purpose and having the effect of
preventing competition by fixing rates or
empowering persons to nix them, and agree
ing to conform to them when nXeo are IN
restraint of trade and within the provisions
of the statute. whether the rates so fixed
are eaSonable or unreasonable.
That contracts between divers manufac-
turers of a commodity respecting the sales
of that commodity to be delivered by them
outside the state, having the direct effect
of sitting competition and raising the cost
of the article to the purchaser are also in
restraint of trade and within the statute.
That contracts which do not directly and
necessarily affect transportation or rates
therefor are not in restraint of trade or
within the statute. even though they may
remotely and indirectly appear to have
some probabl 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
the Northern Pacific company were parties
to or in their corporate capacity had any
thing to do with the formation of the
Northern Securities Company nor OF any of
the contracts or proceedings complained of
in the bill. The Northern Securities Com
pany is merely an investor In and owner OF
a majority of the stock of each of these
two railroad companies. 1t has done no
act and made contract In restraint of
trade or commerce.
Admiral Tavlnr on Vacation