New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-08-02
SUSTAINS THE MERGER
MINNESOTA LOSES SUIT.
States Complaint against Northern
Securities COMPANY Dismissed.

Securities Company Dismissed.
St Paul, Aug. Judge Lochren to-day in
;he United States Circuit Court handed down
his decision IN the case of the State OF Mime
sofa against the Northern Securities Company,
the great Northern Railway Company, the
Northern Pacific Railway Company. and James
J. Hill, as president of the Northern Securities
Company and individually in which he sus-
tanned the contentious of the defendants and
dismissed the bill of complaint of the State. He
finds that the Northern Securities Company has
not violated the State laws forbidding the con-
solidation OF parallel and competing lines OF
railway through its ownership of the stock of
the Great Northern and Northern Pacific rail-
ways. and refuses the njunctions asked by the
State Of Minnesota 10 restrain the Securities
Company from voting the stock Of the two rail-
road companies or either of them.
This decision does not affect the results Of
the federal governments victory in the Circuit
Court in any way. The federal suit involved the
same defendants and the same general state of
facts. but based a totally different con-
tention Of law. The federal suit in which the
Securities Company was beaten, was a prosecu-
ton for violation OF the Sherman Antitrust
law passed by Congress. The State suit in
which the Securities Company wins, was based
al allegation that the defendants violated
acts OF the Minnesota Legislature forbidding the
consolidation Of parallel and competing lines OF
railway. The hearing OF the State suit was be-
gun Friday, June 5, before Judge Lochren, in
the Federal Circuit Court It followed the sub
mission Of much testimony by both sides for
many months, in which Frederick G. Ingersoll,
OF this city acted as referee. The final argu-
ment lasted FIVE days. Attorney General Doug
lass. ex-Attorney General George B. Wilson and
". D. Mum spoke for the State. and George B.
Young. NJ. D. Grover and c. w. Bum for the
defendants. The case was submitted on Wednes-
day, June TO- An appeal to the United States
Supreme Court is now pending in the federal
suit.
JUDGE LOCHREN's OPINION.
Judge Lochren in his decision says in part:
The defendant the Great Northern Railway
Company, is a Minnesota corporation, which
has as stated in the bill acquired the property,
rights and franchises and the management and
control Of various specified railway corpora
TONS That the defendant Northern Pacific
Railway Company is Wisconsin corporation
which filed its articles Of incorporation in Min,
nesota and in 1886 purchased and acquired all
the railroad properties. railway lines, rights or
way rolling stock and franchises OF the earlier
Northern Pacific Railway Company, and as also
stated in the BILL acquired the property, l4shlS
and franchises and the management and control
of other specific railway corporations: mat
said Great Northern and Northern Paclnc COM
Danies now and for many years seVerally own
and operate and maintain a main line or raii-
Vav extending from the cities Of Duluth, st.
Paul and nneapols westward across the
States OF Minnesota, North Dakota, Montana,
Idaho and Washington TO Puget SOUND. win
many branches along the route or each, ana
said two systems of railroads are as 10 each
other parallel and competing lines of railroad
at least between cities and towns reached or
traYersed by the lines OF both OF Sald TWO ran
ways among which are Duluth. St Paul, MN
neapolis. Anoka, St Cloud, Moosehead, East t,sI
Grand Forks and several other towns IN the
state Of Minnesota, and that reasonable de-
gree of competition for TIE traffic between
places so situated on both SAID INES Oh railway
has existed in the past years.
STATE LAW NOT VIOLATED.
After recitinE the act passed by the legislature
OF 1874 forbidding the consolidation Of parallel
rqr~oads and the act of 1881 forbidding one
railroad company to consolidate its stock and
franchise with the stock Of any other roads
which might be connected and operated to-
gether 10 constitute a continuous main hne'
with or without branches, and pointing to the
fact that the same statute reiterated the prohi-
bition against consolidating parallel and COM
peting lines Judge Lochren calls attention to
the passage of the antitrust law by the State
legislature in 1899 forbidding combinations In
restraint Of trade or commerce between the
State OF Minnesota and other States and its
penalties and then gives a complete history OF
the merger proceedings
Under conclusions of law, the court says
after reviewing a nnmber Of Supreme Court de-
cisions on the Sherman antitrust act the
proper construction or the sherman ANTITRUST
act so far as it relates to railroad transporta-
ton as deduced from these decisions Of the Su-
prenle Court, appears TO be this
The act applies to railroads. and all contracts
made between railroad companies for the pur-
pose and having the effect of preventing COM
petition by fixing rates, or empowering persons
to fix them, and agreeing to conform 10 mem i
when fixed, are in restraint OF trade ana W1thln
the provisions OF the statute whether the rates
SO fixed are reasonable or unreasonable
That contracts between divers manufacturers
of a commodity respecting the sales or that
commodity to be delivered by them outside the
State having the direct effect Of sitting com
Detjtiou and raising the cost OF the article 10 the
purchaser are also in restraint OF trade and
within the statute.
That contracts which do not directly and nee
essarily affect transportation rates therefor
are not in restraint of trade or within the stat
ute even though they may remotely and direct
Nv appear TO have some probable effect IN that
direction.
The State antitrust act must have the same
construction in respect to traffic On railroads
within the State.
Neither the Great Northern Company nor the
Northern Pacific Company were parties TO or
in their corporate capacity had anything TO do
with the formation of the Northern Securities
Companies, nor of any OF the contracts or pro-
ceedings complained Of in the bin. The North
ern Securities Company Is merely an investor in
these two railroad companies. 1t has done no
act and made no contract in restraint Of trade
commerce
NOT IN RESTRAINT OF TRADE.
The action Of the defendant, Hill, in promot-
ing the formation Of the Northern Securities
Connpanv under the circumstances and for the
vesting in its stocks by the sale to il Of his
stock in the two railroad companies involved