The Minneapolis journal., 1903-03-18

control, so far ak becomes necessary for the
protection Of the public interests and it is COM
TOT the legislature OF state with respect
70 domestic trade, and congress, with respect
70 interstate trade, to prohibit either corpora
tions or individuals from combining either di-
rectly or indirectly, SO as to eliminate competi-
Third-The purchase of stock By railroad .
corporation in a competing line is contrary to
public poiicy y and void, and this even though
comPllshed by individual stockholders acting in
behalf and for the interests Of the purchasing
Fourth-Where the direct and necessary result
OF given combination is to eliminate com-
petition and thereby restrain trade, the intent
to accomplish that result will be presumed and
need not be formally proved
Fifth-It Is not important that the proposed
combination does not secure complete
nopoly of a given subject of commerce; par
tiai monopoly is equally offensive to public
policy.
Sixth-The fact that the power of the cembi-
nation has not been exercised to increase prices
or rates Is not important. The law Is concerned
not with what Is done, but with the power
to do. E5z-s. 49,
Seventh-The law will look to the substance
and not to the form. and will not permit a mo-
nopolistic combination, no matter by what cor
porate or legal devices it may be attempted.
3 neutrality-suspicious. personalities only e1-.
list in fiction of the law, and for practical
and beneficial purposes which subserve public in
terests. Where such fiction is involved to yo-
late criminal statutes or to defeat sound public
policy. such fiction will be disregarded and the
law; will look to the acts of the individuals who
control the corporation as the acts OF the corpo-
ration itself. s.s-5+s.
. Ninth-Therefore the mere fact that such a
consolidation takes the form of purchase by
the stockholders of one company, individually.
Of portion of the capital stock of a competing
line will not 1egalise the transaction, and this,
the fact that the capital stock
so purchased is less than majority. provided it
be purchased with view to the control OF the .
competing line. f5ss5E 8
Tenth-The liberty guaranteed by the fifth
amendment to purchase and sell property is
clearly subject to the police power of the state,
of capital stock with view to practical con-
solidation Of parallel and competing lines.
The Question OF Motive.
Courts are ,tao practical to ignore the
known and natural results of human ac-
ton In. dealing with this question they
regard as a maxim the proposition that to
remove the motive for competition is to
destroy fcompetitfon itseh. It is obvieus
that the OFFICERS Of the Great Northern,
chosen by the Northern Securities, can
have no motive to compete with the Of
ficers Of the Northern Pacific in the opera
tion Of their respective systems, for the
prosperity Of the Great Northern is the
prosperity Of the Northern Pacific. and
vice versa. They have a, common owner
and common master, and it Is OF no
practical consequence whether the people
use one or the other as a carrier, as
the entire proceeds of their joint traffic
necessarily go into the common treasury
Of the Northern Securities company. To
suggest that competition Is possible
where competition is useless Is an alb.
surdity.',,
To the claim that each stockholder has
the right to dispose of his property at
pleasure, Mr.. Beck answered that no in-
dividual can, in combination with others.
so dispose of his property as to violate
the antitrust law. Irrespective Of the
abstract power to sell, the legality Of the
transaction must turn upon the power Of
the Northern Securities company to buy
the stock of two constituent systems, and
this. he contended, did not exist In view
Of the provision of law which forbids any
attempt to monopolize competitive traffic.
Charter Privileges VS.. Law.
Stockholders cannot. however, veil un-
lawful acts in a corporate charter. V1o-
lations of the law cannot be excused un-
der the plea of charter privileges. This
was clearly ruled in the case of State
vs.. Standard Oil company (49 Ohio
State, 1919
"But whatever the powers of the state
Of New Jersey may be as against the
laws of Minnesota, Montana, Idaho. North
Dakota, and Washington, and Fortunate
ly this difficulty of conflicting state pow
ers need not be decided in this case. it is
obvious that they are powerless when in
voked against the constitution of the
United States.
Defendants contend. however, that the
mere ownership Of shares by the New
Jersey corporation has no direct or -imnle
date relation to interstate commerce. and
is, therefore, not within the scope of the
federal power. Even If this corporation
were only. a holding corporation, could
not concede. the contention.
tofS S@ye fs ~ -
vehicles are instrumentalities of COM
| Inerce, and as such when engaged in in
terState trade are so fully within the scope
of the federal power that congress may
even regulate the form of brakes used in
railway transportation and the states may
not forbid their entrance into their bor-
ders. These interstate railway systems,
| therefore, are federal instrumentalities,
and their business is essentially interstate
commerce. The corporations created for
] their management and operation are but
| the method of evidencing ownership and
power of control. Prior to the merger, all
| Of the stockholders of the Northern Pacific
owned the Northern Pacific. The capital
stock of a corporation is but the method OF
measuring the value Of these assets, and
each certificate is but the evidence OF the
stockholders proportionate participation
In the assets of the business and Its prof
it's. It IS true that In the interim be-
tween stockholders meeting the stock
holders designate directors as their
agents, who operate the property in the
stockholders behalf but the directors are
none the less the servants of the stock.
| holders, and have, and can have, no pow
lersr except such as are given to them by
the stockholders in accordance with the
law Of their being.
I'm the last analyses the stockholders
i clearly operate the road. Theirs is the
/ ultimate control Qui facit per alum
facit per Sc Is an old maxim of the law
i and approved common sense.
The right to vote the stock operates
4 directly upon interstate commerce. for It
necessarilysregulates such commerce. At
annual meetings of the constituent sys-
i TENS the Northern Securities company.
through its proxies. can by resolution di-
1 rect It's servants, whom it selects, to in
crease rates or, to lower them, to refuse
traffic or to accept it, to give preferences
I or to decline them, to borrow money or to
B spend it, to build extensions or abandon
Iexisting lines. This power to do consti-
ltutes that monopoly Of commerce which i