Evening journal., 1903-12-16
DECLARES MERCER
To Be ILLEGAL
Attorney General Knox
Argues Against Northern
Securities Company
HE CITES SIMILAR CASES

Washington, Dec, 16.-The argument
In the Northern Securities case was re-
sumed in the United States supreme
court. and again the court room was
crowded by attorneys and others inter-
ested in the case. Attorney General
Knox was recognized almost imme-
diately after the court came in and re-
sumed his argument at the point at
which he left OF. He declared that by
The union of the Northern Pacific and
the Great Northern in the Northern
Securities company two competing in
terstate railroads have been brought
into suck relations that their independ-
ence as competitive factors in inter-
state commerce is destroyed.
The attorney general said that II
was not his intention to reargue any
Of the propositions settled by the trans
Missouri and Joint Trafic cases. but 70
do what he could to show their appli-
cation to the facts OF this case. He,
however, made the following statement
Of the great questions settled BY the
court in those cases:
"First-That to shut out the oper-
alton OF the general law of competi-
ton between competing interstate rail-
roads is to restrain Interstate COM
merce.
"Second-That to bring the opera
tions OF two or more competing inter-
state railroads under the control OF
single body shuts out the operation OF
the general law Of competition and con-
stitutes a restraint upon interstate
commerce.
"Third-That congress is competent
to forbid any agreement or combina-
ton among companies competing for
interstate commerce which restrains
commerce among the states by shutting
out the operation OF the general law Of
competition.
"Fourth-That in order to maintain
q suit the government Is not Obliged
10 show an intent to restrain cont
merce. II such restraint is the natural
and necessary effect OF the arrangeN
ment."
Attorney General Knox held that the
combination was in the form Of a
trust, and was specifically invalidated
by the statute.
He also declared that the power to
suppress competition has been exer-
cised. and he declared that Messrs.
Morgan and Hill had the power to sup
press competition between 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 destroyed competition between
them the moment they parted with the
legal title TO their segregated holdingi
and vested them in the Northern Sc
i eurities company with the mower weris Il
that company. as its charter specifies
TO exercise all the rights or owner
ship, including the right to vote there
on"
He then took up the doctrine OF di.
rect and immediate effect upon inter
state commerce On that point he said
"The Northern Securities arrangement
operates directly upon co nmerce. be-
cause its certain effect is to control
every act. policy. and operation Of two
gigantic systems of railroads by which
commerce is carried on. Nowhere docs
II appear by suggestion even. that the
purpose OF organizing the Northern Sc
curities company was other than to Sc
cure the control Of these two roads.
Congress" he declared. "can regu-
late anything and everything In the
sense that It can prohibit and prevent
its use In way that will defeat a law
that congress may constitutionally en-
act For this purpose, the supreme
power operates upon everything, upon
every one"
In concluding. he called attention 70
the great possibilities OF a securities
holding company as a financial ma
chine for manipulating railroads and
other properties and concentrating
their control in the hands Of a power
ful clique. and said:
Il cannot think that a combination
held together by a rope Of sand comes
within the prohibition of the law. and
that one which is bound by links OF
steel may defy its wisdom and its
power.
ITO prevent such a dangerous con-
centration Of power, dangerous to COM
merce and a menace to our freedom,
the people have done all that it is pos
sible for them 70 do under our system
Of government They have legislated
against It. II this law can be construed
so as not to cover the situation, or IL
the court says yea to the proposition
affirmed in the last paragraph Of Mr..
Morgan's answer-namely, congress
has no power TO prevent such combina-
tions, then. indeed. the governments 8
grave concern as to this litigation may
be easily understood"