Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-12-16

SoHSEeSS.
TO all of this he added. defendants
make vigorous objection, much of which
is wholly irrevelant. l shall not deny
the fact of a tendency to combination
throughout the land nor discuss its do
mcstic value. 1t is bad enough TO bring
the entire railroad facilities of an inn
portant section of the country under mo-
nopoiistic control, but when to the power
to fix charges for transportation you add
the creation of scores of millions of fiat
stock upon which those charges are eX-
pected to pay dividends, you impose ar
unjustifable burden upon the people and
exact too high price for successful
evasion Of the law
This thing was done when men who
have been regarded as wise men and safe
men lost their head upon their Judgment
failed tc withstand the temptation to
gather fer their instant personal advan-
tase the fruits which, conserved, would
have lasted for many years and benefit
ted many people"
1T is argued that it is only such con-
tracts and combinations as directly and
Immediately affect Interstate commerce
that are declared illegal by The statutes.
This is true, but the Northern Securi-
ties arrangement operates directly upon
commerce.
Put the proposition as it is put by APP
peliants: Can Congress regulate the own
eTShp OF Interstate railroads under its
COVER to regulate commerce among the
states, and has it done so by this act OF
1890?
Most certainly, yes. Congress can reg
uate anything and everything in the
sense that it can prohibit and prevent its
use in any way that will defeat Il law
chat Congress may constitutionally enact.
For this purpose the supreme power OPP
rates upon everything, upon enc
In concluding, the attorney general
says: AS Said in opening this argu-
ment. specifically this suit was instituted
o determine whether this device, which
defendants employed to restrain inter
,tatc commerce by monopolizing the bus
mess of transportation, viii prevail
4gainst a law making all devices to that
| nd Illegal
The possibilities Of securities hold
| ng company of this kind, as u financial
| machine for manipulating railroad ANA
| other properties and concentrating their
| ontrol in the hands OF powerful clique,
| ire simply erroneous. It has again and
| gain been pointed out. since the organi-
| !ation of the Northern Securities Go,
| hat in its simplest form it is possible for
| | group of men, by incorpora ting them
| selves as a securities holding company to
| 'ontrol two railroad companies upon tbs
| holding of half the amount OF stock that
| would he required in the hands Of indi-
| 'iduals.
individuals will be required to hold il
| ner cent of the stock of both railroads
| n order to control them. but ii a partic-
| llar group OF men had the contrn! OF a
securities holding company that held u
| GER cent. of the stock Of both roads they
! you'd control both roads upon a holding
| Of 81 per cent. of the shares of the holding
| company, or practically onc-fourth of the
! combined capital of the two roads. This
| docs not violate to u simple rule of vulgar
| fractions, because it works out that half
| # half is equal to q half of Il whole.
| Of course it is a simple proposition to
| pring any number of railroads under the
| same control without increasing the stock
| If the securities holding company or with
| ,ut increasing the stock of the holders of
| The control of the securities comDauy by
| employing the device reSortcd to by the
| defendants in the purchase of the Burl-
| lngton road, namely. by having one of the
| railroads controlled by the securities
company acquire the stock and pay for
t with its own obligations secured by a
| pledge of the stock acquired.
| Il cannot think that Il combination held
| together by rope OF sand comes within
thc prohibition of tue law and that one
l wi. ~, j. Iit,I
its wisdom and its power.
| III the 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 combinations, then indeed the gov
@rnmcnts grave concern as to this ltiga-
| ton may be easily understood.
| Mr.. Knox closed at 40 T. NJ, and was
| Immediately followed by George H. Young
| on behalf of the Securities Co. He bec;, II
| his argument by saying that his clients
| dill not seek to in any way limit thc au-
] thority of Congress over interstate COM
| mcrce. nor was the Securities Co seeking
| to i'll any way cVado the law. But it was
| not. he said. necessary to stretch the law
| covering Interstate commerce to make it
cover something that is not Interstate
commerce.
I'VE are not dealing hore with commerce
| or the operations of railroads at all" he
said, but we arc dealing with the oues-
ton of property"
lie referred to previous cases in the SUI
prcmc court, under the antitrust law,
and said that Congress had not defined
the restraint of trade and that it had been
necessary for the court to make It's own
definitions IN the joint traffic case the
roads dealt with We're competing in char
acter But suppose they had not been
competitors and they had agreed to re-
duce rates. That would have been con
tract in restraint of trade
Mr.. Young also discussed the sugar trust
case. which he said was often misundcr-
stood. In that case u number of sugar
concerns had been consolidated. The com
panics were as much engaged in COM
mcrce as were the purchasers of these
railroad shares. Indcd. he commended that