Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-12-15


--.--..-s----
think. that as a matter Of fact and law the
thing which these gentlemen did was to
create a combination In the form of trust,
the form specifically prohibited by the act
OF Congress, If It restrained interstate
commerce; and also that the Northern Sc
curitieS Company was formed for the plIr-
pose of taking over the control of the
Great Northern and Northern Pacific rail-
roads. and actually took over that control.
and with that control absolute power over
both roads, the thing which yerr honors
have said constitutes such srestEiint under
circumstance substantially the same as
those of this case.
But the law likewise prohibits combina.
tons otherwise formed. That is to say.
the law distinctly and plainly provides that
its policy shall newer be defeated by the
exercise of any ingenuity ip the devising Of
forms The object OF the law once clearly
tablished that that object is defeated
through contracts, combinations in the
form Of trust or otherwise, or by conspi-
raCieS,"
Had Exercised the Power.
He also declared that the power to sup.
press competition has been exercised. and
he declared that Messrs. Morgan and Hill
had the power to suppress competition be-
tween these two roads when they held the
control of the majority, OF the stock Of the
two. He also asserted that they. executed
that power and actually suppressed and de-
stroyed competition between them the mo-
ment they parted with the legal title to
their segregated holdings and vested them
In the Northern Securities Company with
the power in that companys as its charter
specifies, ito exercise all the rights Of
ownership, including the right to vote
thereon" This, he contended, actually de-
stroyed competition between the two roads.
and In support of this statement he laid
down the following general propositions:
ITO be competition there must be COM
petitorS In different interests,
Amy act which eliminates the competi-
tors or unifies the interests destroys compe-
tition.
There is no competition where the net
results Of operation go into a common
purse.
There may be rivalry between the DIFF
ferent departments or agencies as to which
will contribute the most to the common
fund or as to which is the most economic
ally administered or operated. but so long
as all are interested in tha operations of
each by sharing a fixed proportion of a
common fund. unaffected by the proportion
contributed by each. there is no compett-
tion." =
The Attorney General Sums Up.
Mr.. Knox then summed up his points in
support of his contentious. that as fact
this merger is combination in the form
of trust or otherwise, as follows:
THAT the end it accomplishes is to
bring under one control the Northern Pa
ciftc and Great Northern railroads in such
a way as TO destroy competition between
them and to create a monopoly of trans
portatiOn in the section served by them.
That this end was the deliberate pur-
pose OF the parties defendant who con-
ceived and carried out the eombination.
That such combination fs In restraint
n frad fv<xYyc tall
decided. and therefore violates the act Of
Congress.
The Tendency to Combine.
''To all of this,'' he added, defendants
make vigorous objection. m,@h of which is
wholly irrelevant. 1 shah rot deny the
fact Of tendency to comhtsHfion through
out the land nor discuss its efssouhlc value
II presume that fact accssints FOR the
existence of laws designed to- regulate the
tendency along the lines of its manifesto
ton. where necessary to prot6et the rights
and interests of the people.
II have not the slightest doubt about It.
however, that this particular manifestation
Of that tendency has no economic merit. 1t
IS bad enough to bring the entire railroad
facilities of an important ssction of the
country under monopolistic control, but
when to the power to fix charges for trans.
portation you add the creation of scores Of
millions Of fat stock upon which those
charges are expected to pay dividends, you
impose an unjustificable burden upon the
people and exact too high a price for sue
cessful evasion of the law.
while 1t may be true that the recapitalt-
zation Of these companies was based upon
existing market values for their stock, yet
existing market values rested at that time
upon total fOrgetfulness Of the fact that the
progress of material prosperity is not con-
tnuous, and that those values were lifted
upon the wings Of an optimism that had
into stock and stock values all
the prosperity in sight, as well as all hopes
and expectations of many future years.
This thing was done when men who have
been regarded as wise men and safe men
lost their hold upon their Judgment and
failed to Withstand the temptation to gather
fruits which, conserved would have lasted
many years and benefited many people"
He then announced that II was not his
intention to address himself to considera-
tfOns such as these, but to such objections
by defendants to the governments case as
will be considered by the court
He then took up the doctrine Of direct and
immediate effect upon interstate commerce.
On that point he said:
1T is argued that 1t is only such con-
tracts and combina tons as directly and
affect interstate commerce
that are declared Illegal by the state.
operates directly upon COM
merce. because its certain effect is to con-
troll every act. policy and operation Of two
gigantic systems of railroads by which
commerce is carried on
Transporting commodities is commerce.
and II from one state to or through another
1t is interstate commerce." (United States
agt. Freight Association 1855 U. s., 323.)
Purpose Of Securities Company.
Nowhere does it appear by suggestion
even, that the purpose of organizing the
Northern Securities Company was other
than to secure the control Of these two
roads.
1.-THE case of United States against Knight
contains nothing that the government need
distinguish OF explain in this case. There
the combination was of the Jnstrumenta1i-
ties of production, and production is not
Here the combination is Of the
Continued on Eighth Page.)