Omaha daily bee., 1903-03-20
MERGER IS DEFENDED
Lawyers Claim Consolidation Was Intended
to Aid, Not Restrain Trade.
DENY THAT MONOPOLY WAS CREATED
Railroads Managed Separately, Even After
Amalgamation.
Hanls
CONGRESS HAS NO JURISDICTION IN CAS-
CONGRESS HAS NO JURISDICTION IN cA
Srec'a al Court Also Declared Powerless t.
Quash Deal
NORTHERN SECURITIES ARGUMENTS GO ON
Attorneys Bring Up Many Points ir
Evidence TO show Beneficial RE-
suIt of Holding Concern
Created by Hill Faction

ST. LOUIS. March 19.-George b. Young's
defense OF the merger occupied almost the
entire days session OF the special court at
st. Louis.
Judge Young pointed out that It was es-
sential to the transcontinental roads that
they should have some opening to the man
ufacturing districts and the coal fields OF
the middle west and claimed the merger
would lead to greater trade and the set
tling Of the vast unoccupied lands OF the
Dakotas and Montana.
Declaring the alleged consolidation was
completed long before the idea of a COM
mon holding Of the stock OF the Northerl
Pacific and Great Northern had come up,
he said at the time as was shown by
the testimony Of Messrs Morgan, Hill and
their associates, the purchase of the shares
of the Northern Pacific was such a colos-
cal undertaking that 1t did not appear pos
slbe
U. p. Road Decides MaEnates.
However. the raid OF the Union Pacific
interests to gain possession Of the Northern
Pacific on May 8, 1900. showed that some
action was necessary to prevent it's recur-
renee. Immediately subsequent to this
here was meeting OF the representatives
u the moneyed interests, which included
the representatives Of the Northern Pacific
+nd the Union Pacific and others, whereby
1t was agreed that a holding company
should be formed to hold the stock of the
Northern Pacific company.
Judge Young pointed out that the hold
ing Of the Great Northern was neither sug-
Eested nor contemplated and that this con-
clusively refuted the statement of Assist
ant Attorney General Beck that at that
time there was an agreement made to
create common ownership OF the Great
Northern and Northern Pacific, and thus
violate the Sherman antitrust act.
He then went on to show that the for
ination Of the securities company had not
restrained or monopolized commerce, as
each railway is managed, as required by
law. by a wholly different board OF directors
from the other. He showed that only 2.7s
per cent Of the trafic OF the Great Northern
and only 2,s0 per cent OF the traflc on
he Northern Pacific could in any degree
1e called competitive; that by the Bur
lington purchase the trafic on the roa1
would be immensely increased and that the
continuation of this increase could only
be insured by harmonious action of both
roads In regard to the ownership of the
Burlington, and this could be best secured
by the common ownership of the stock.
To show the absurdity OF the govern
ment's claim that this holding OF the stock
by the Northern Securities company waS
to raise the rates, II should be noted that
oven il the profits should be increased II
per cent on trafhc between competitive
points, that the net gain to Mr.. Hill, Mr.
Morgan and their associates collectively
would be a net gain OF not more than 81, ,OOI
per annum, to gain which the Northern Sc.
eurities company was formed.
Court, then, at 1925, took a recess until
o'clock this afternoon.
sherman Act InapPIIcabIe,
He pointed out that the United States su
preme court had held, without variation
that congress could only regulate tha
which directly affected interstate com
Inerce while the declaration as TO VIII
should hold stock Of corporations en-
gagged in interstate business was clearl,
an indirect regulation and not within tn
Jurisdiction of congress, and hence tn
sherman antitrust act would not apply.
He argued that the Jurisdiction OF con
gress was exclusive in those matters ad
hitting OF a uniform rule; that by tn
passing OF the antitrust act. II was show
that this was a matter admitting Of uni
form rule.
But IL this is true, the states have n
right TO authorize or prohibit the consoli
dation OF railroad lines: but the right G
ways permitted without question
To further show that the antitrust ac
was not intended to apply to the purchas
OF railroad stock by a competitor, Judg
Young gave the history OF all the large
eastern railway systems, showing that the
were all composed Of competitive parable
lines, yet their capital stock was owned b
one OF their constituent companies whic
originally competed with the others
In his closing arguments Judge Youn
contended that the government is not en-
titled to maintain the action under III
Sherman antitrust act, neither had m
court jurisdiction, for the conspiracy G
combination relied on, II 1t ever existe,
had done all It was formed to do. and ha
come TO an end before the proceedings wer
instituted He contended that the onl
combination OF which there was any ey
dence was the combination formed 10 al
commerce and not to restrain IL, and tn,
the evidence shows no conspiracy to monoI
oliEe,
He declared that the very general lar
guage of the antitrust act was not IL
tended TO include combinations to purcha,
railways OF railway shares, competing {
non-competing, nor consolidation actual ,
virtual" OF railways.
-he various transactions spoken
we're made openly, one after another, du
ing the years thar have followed the enac
ment Of the antitrust law They were r,
ported In all the principal newspapers al
were known 10 every department OF Il
government and their lswfulness was un
vensally acquiesced in.
The duty Of restraining all violations
the antitrust act is laid by the act in e.
press terms upon the attorney genera
But not one suit had been inStitlted
any of these cases. He asserted that the
can have been but one reason for thi
and that is that the present incumbent
that ONCE and his predecessors abstain,
because in their judgment such combin
tions we're not in direct restraint OF Il
terstate commerce and the act had no a.
plication.
IN concluding he said II was not 20
imagined that even now the attorney Kel