New-York tribune., 1903-03-19
THE N. P. MERGER SUIT.
GOVERNMENT OPENS CASE
-Four Judges Hear arguments
Under SpeciaL act of Congress.


Under Special Act of Congress.
St. Louis March 1a-For the hTst time in the his
tory of the United States courts and by authority
of a special act of Congress passed IN February
four United States crcGit judges are sitting To-
zether TO hear arguments the case being that Of
the government against the Northern SECURITIES
Company Under this special act the United states
Circuit Court for the District Of Minnesota Is hold
ing its session here. and after this hearing the
case can go Immediately to the Supreme Court OF
the United States, whereas ordinarily II WouId
have first to go through the Circuit Court Oh Ap-
peaIs probably entailing delay of from two to
three years. The hearing is given here merely loE
the personal convenience of those concerned
The Judges before whom the is being argued
are United States Circuit Judges Caldwell san
born. Thayer and Van Deventer. Judge Sa4u"eH
presiding. The attorneys for the government are
Assistant Attorneys General James NJ Beck anu
William H. Day. and Special Counsel D. T. watson
of Pittsburg. United States Attorney D. F. Dyer
assisting The Northern Securities Company Is
represented by ex-Attorney General Jonn w
Griggs, ex-Judge George B. Young OF 81 raul IN
D. Grover general attorney for the Great northern
Railroad Company. and c. W. Bum. general at
torney the Northern Pacific Company
Most Of to-day's session was taken up with tne
presentation OF the argument for the goEelhiiierI
by Assistant Attorney General Beck. When ne
ended late in the afternoon argument for the
Northern Securities Company was pegun os "a
Judge Young.
Mr.. Beck analysed the charter Of the Northern
Securities Company, and said:
Such extraordinary powers Ters 0Ss nsse6 IF s he
granted M corporation Unless fn vor2 81 Re its powers
may be classified as follows:
First-Infnite in scope,
Second-Perpetual in character
Thirdves:ed in the hands Of ys ff" o stockholders
1t will be interesting foli2w out the Ss Of
M ties 56nF 1 as Explained by
tnanciers is to enable the minority u U
the Northern Securities GoHRaPS; HorPG
ern Pscic and Great Northern systems and all
subsidiary companies whose aggregate @ 6d a
tion including funded DEBT exfesas nose hoidinGs Of
b NAY Sn6T OF 5ar APPOINT
commtet with power to and to use The sea-
NAV onIv b. fhree in number. and majority IS
Thus in the last aF the holding
company which controls the vast po%ePs+ 6I
ern compunies and ali subsidiary companies When
in the history Of corporate . and immeas
urable powe' In the hands of so few"
| Mr. Beck contended that the boards Of directors
| Of the Union Pacific the Northern Pachic' 'he
| Great Northern and Burlington systems had neeh
| so zrouped that all interests were represented on
| each and all motive and necessity for CoHlpeti-
| ton eliminated; that in this manner a WORKING
| combination had been effected which controiIeu
the three transcontnental systems, otherwise com
| reti+ive whose total trackage over q. .HD miles
| He anaivzed the Sherman Antitrust law. ana
contended that IT clearly prohibited such com
| bination He reviewed all Of the decisions OF the
| federal Appellate Court which had construed tn's
art and summarized the doctrine Of these cases
| in the following propositions:
| Public policy requires free competition between
competing transportation lines. and forhids al at
| tempts to restrict such competition or create
The police power extends to corporatio5s; ShdTn
are ebact n to egSfive Control
becomes necessary for the protection OF me Pu,s t
| Of State. with respect to domestic trade. and
Congress with respect to infsFSade taFT from com
bDns. either directly indirectly. as to elini-
The purchase Of stock by railroad corporation
IND IN ,oid and this even though accomplished by
! individual stockholders acting IN nena!i ANU ioi
where the direct and Tft 6 05 absfeeR seSR
restrain trade the intent to accomplish that result
| viii be presumed and need be formally proved
1t is not inR3rsnt c5mpdi 5na5 the moI%Py of given
/ subject of commerce; q partial monopoly Is equally
The fact that the power of the combtna tion has
not imp96tantb ~ 9pDn b,,t Nth RT 7 He power to DO
Wff fha Is 6erty 6GT BY the NTH aendmen.
purcta and sell property ts 0ea5y ad doe 9ot
sanction the purchases and sales of capital stock
with view to a practical consolidation Of parallel
Courts practca to ignore the k1Gwn ard aTh
This question theg regard s S1e as oT e
o on DESTROY sa competition Itself 1t is obvious that
tba oTfceTs Of the Great Northern. chosen by the
[T t dcer can Of ne 3ortReTn 20 PaSic
the operation Of their respeGtlyH Sy$teS rGr
Of the Northern Pacific. and vice versa nrE "a a. Is
| Of no practical consequence whether the people
use one or the other carrier as the entlre PRO,
ceeds their Joint traftC neGessary GO I9 Sorn @
| many To suggest that competition Is possible
| where competition is useless is an absurdity-
To +be claim that each stockholder has the right
| 70 disnose Of his property pleasure, Mr. Beck
| answered that no individual can. IN combination
| with others, so dispose of his property as 70 'lo
late the Antitrust law Irrespective of the abstrac'
or.er IN sell the legality Of the transaction must
| +urn upon the power Of the Northern SECURITIES
C-on,nany to buy the stock of two constituent sys
TENS and this he contended, did not exist In view
NJ the p-ovison OF law which forbids any attempt
to monopoze competitive traffic
He continued
| Defendants contend. however, that the mere own
ersi1 Of shares by the New-Jersey corporation ha:
no direct or immediate relation to Interstate com
merce and is. therefore. NOT within me Sc scope go o.
only holding corporation. / could not conceo'
| TRANSPORTATION is commerce and its vehicles are
| instr,ImentaIities of commerce and as such Wher
engaged in interstate trade fully within the
| Tegin1ate the form Of brakes used in railway trans
portation and the states may not for6a ts ra e
| Sysrers therefore, federal instrumentalltles
and their business is essentially interstate com
| merce The corporations created for thelr ma mage
| nent and operation but the method OF evi
| dencing ownership and power Of control. ~
| interstafe commerce, for it necessarily regulate:
| such commerce. At annual meetings OF me con
| sttHent systems the Northern Securities company
| through it's proxies, can ny resolution Greet IL
| servants whom it selects; to increase rates or I,
TTeferences or to decline them. TO borrow money o
TO spend it. build extensions or aoanoon eais.t
~ Commerce which is not merely directly related tt