The Saint Paul globe., 1903-03-19
Arguments Open in st. Louis
Before Four United States
Circuit Judges-Assistant
Attorney General Beck
Speaks for the Government
and Judge Young for the
Securities Company.

of the United States courts,
and by authority of a special
act of congress passed last February,
sitting together to hear arguments in
case, the trial being the fight of the
government against the Northern Sc
curities Company of New Jersey in fne
celebrated merger suit. Under this
special act the United States circuit
court for the district Of Minnesota is
holding it's session in st. Louis, in the
appellate court room, and by this ar
rangement the case can go Immediate
ly from this court to the supreme court
Of the United States. whereas, in the
general court proceedings it would nee
essarily go through the circuit court
Of appeals and a delay of from two to
three years would probably ensue. The
hearing of the case in st. Louis is
merely for the personal convenience of
those concerned.
The four judges before whom the
merger case is being argued are United
States Circuit Judges Caldwell, San
born, Thayer and aVndeventer, Judge
Caldwell presiding.
The attorneys for the government are
Assistant Attorneys General James M.
Beck and William H. Day, and Special
Counsel D. T. Watson of Pittsburg,
United States Attorney D. P. Dyer, of
st. Louis, assisting.
For the Northern Securities compa-
ny are former Attorney General John
W. Griggs, former Judge George B.
Young, of ST. Paul; M. D. Grover, gen.
eral attorney for the Great Northern
railroad, and c. w. Bum, general at
torney for the Northern Pacific.
Mr.. Beck's Contentious.
Most of today's session was taken Up
with the presentation of argument for
the government by Assistant Attorney
General Beck. After he had concluded
late in the afternoon, argument for the
Northern Securities company was be-
gun by former Judge George B. Young,
of st. Paul.
Assistant Attorney General Beck be-
gan speaking soon after court conven-
ed at 10 o'clock, and with the excep-
ton Of two hours Of recess, he spoke
continuously until 1852 p. m. The
court room was crowded. to hear his
argument. Attorney Beck referred to
the Wabash injunction case which is
being tried in the United States court
at the other end of the building, say
ing that the laws were sUf:h that en-
ployes of a railroad who did not own
one cent of stock, or one rail of the
road, could be enjoined from striking
and thereby interfering with the inter-
state commerce act by stopping traffic;
but that unless this court so ruled, the
government was powerless to prevent
the owners of railroads themselves
f,.O
and thereby interfering with the very
points the interstate commerce act
sought to protect
Mr.. Beck began by reviewing the
history Of the events that eliminated
in the organization Of the Northern Sc
curities company. Regarding the lat
ter he said:
Classifies Its Powers.
such extraordinary powers were
never yet granted to a corporation
breed. In a few words, it's powers
may be classified as follows:
'First-Infinite in scope.
'Second-Perpetual in character.
"Third-VeSted in the hands of. the
few.
'Fourth-By methods secret even to
stockholders.
the possibilities of such corporation
The original idea of the holding cor
poration, as explained by noted finan-
ciers, is to enable the minority to rule
the majority.
"a majority of the Northern Securi-
ties company, namely, $201, ,000, 900, con-
trolls the Burlington, Northern Pacific
and Great Northern systems and all
subsidiary companies whose aggregate
capitalization, including funded debt,
exceeds 81 900, 100000, but the board of
directors whose holdings of Northern
Securities may be comparatively in
significant, can, during the tenure Of
their office, appoint a committee with
power to act and to use the seal of the
corporation at pleasure. This commit
tee may only be three in number, and
majority is determinative. Thus, in
the last analysis, two men may control
the unlimited powers of the Burling-
ton, Northern Pacific and Great North
ern companies and all subsidiary com
panies."
Mr.. Beck contended that a working
combination had been effected which
controlled the three transcontinental
systems, otherwise competitive, whose
total trackage was over $4,000 miles.
He analyzed the Sherman anti trust
law, and contended that it prohibited
such combination.
HS 60 competition.
Courts are too practical to ignore
the known and natural results of hu-
man action. In dealing with this uues
ton they regard as maxim the propo-
sition that to remove the motive for
competition is to destroy competition
itself 1t is obvious that the officers of
the Great Northern, chosen by the
Northern Securities, can have no mo-
TIVE to compete with the officers of the
Northern Pacific in the operation of
their respective systems, for the pros
per1ty of the Great Northern is the
prosperity of the Northern Pacific. and
vice versa. They have a common own
er and a common master, and 1t is of
no practical consequence whether the
people use one or the other as a car
r1er, as the entire proceeds of their
joint traffic necessarily go into the
common treasury Of the Northern Sc
curities company. To suggest that
competition is possible where competi-
ton is useless is an absurdity."
TO the claim that each stockholder
has the right to dispose of his propertv
at pleasure, Mr.. Beck answered that no
individual can, in combination with
others, so dispose Of his property as to
violate the antitrust law Irrespec
tive of the abstract power to sell. the
legality of the transaction must turn
upon the power of the Northern Securi-
ties company to buy the stock of two
constituent systems, and this, he con-
tended, did not exist in view of tha
provision Of law which forbids anv
attempt to monopolize competitive
traffic.
"Beneficence Of Monopoly"
Mr. Pao1-