The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-06-05
Douglas Reviews Merger Deal.


reviewed the history of the Northern Sc
curities deal, the voting trust and the pol
icy of the company as detailed by the
evidence Of it's stockholders. The Morgan
Hill influence lost and regained control of
the Northern Pacific in May, 1901, and
then conceived the idea of a gigantic
holding company to consolidate the con-
troll of the two. roads perpetually. This
was done in violation of the laws Of Min
nesota and Of the United States Since
that time there has been unity Of action
and unity of corporate thought, as shown
by the Identical pleadings of the three
companies. 1t was the purpose of Messrs.
Morgan and Hill to lock up the stock Of
these railroads in perpetual bonds; so that
they would not at any time compete. Tho
they state that they did not intend to de-
stroy competition, there is no doubt as
to their purpose to bring about a COM
munity Of interest.
Competition Killed.
The evidence of various witnesses, said
the attorney general, had gone to show
that competition had ceased between
these two systems on Nov. Is, 1901. Since
that time there had not been an effort to
get business at competing points,, or to
furnish extra inducements to passengers
and shippers. Applying the rule Of hui
man selfshness as heretofore, this evil
dence showed the inevitable consequences
of common ownership, and its injurious
effects on the public. The state con-
tended that it had the police power over
such a state Of affairs. The two identical
circulars Of January, 1902, were com
mented on. They compelled shippers tt
ship by. the shorter route, and to abandon
the longer competing line. This was sig.
nificant, coming at the same time as the
merger. It was also significant that these
circulars were withdrawn just after the
filing Of suits to dissolve the consolida.
tion.. The evidence Of Lereh Bros, as tt
| taking up the side track from their farm
since the merger was consummated, wa.
cited. This evidence had been added tt
the record to bring home to all the ac
| tual injury which the public received
from the destruction of competition. Thu
evidence Of land men showed plainly tn.
interests Of the state. as the owner o
| 100000 acres Of land in proximity tt
these lines, which is affected in value b.
railroad competition.
| Mr.. Douglas cited decision Of the SUI
preme court of the United States in
/ kentucky case and the Wheeling Bridg,
case, to show that the proprietary inter
ests Of the state had been recognized. Thi
| being established, the question wa
whether an injury had been done by tn
/ act of these gentlemen in New York city
/ AS to this, the same question was pre-
sented in the Pearsall case, in which
| the same powers were in control of tn
Great Northern, and were attempting t
gain control Of the Northern Pacific.
1 In this case the supreme court decided
| that an attempt was being made to con
solidate the roads and it was perpetual.
enjoined regardless of the stage Of prog
ress to which the consolidation had gone
The dictum of the supreme court as t,
| ownership by individuals did not apply t,
| this case, where the consolidation is in
tended to be perpetual and thru an artif
cial person. On this point he read the ties
timony Of j. Pierpont Morgan.
Mr.. Douglas said his colleagues woult
go more fully into the legal aspects o
the case. He desired, however, to stat
briefly the states proposition as to 1T
rights. The state antitrust act of 1879
was Identical in it's first section with tn
/ Sherman act, forbidding combinations il
RESTRAINT Of trade. The Sherman act hat
been construed by the federal court a.
Applying to railroads and therefore thu
state law had the same application.
the acts Of the defendants violated tn
1 federal act, they were also a violation o
| the state law, and an infringement on tn
rights Of the people Of the state, guar
anteed by the constitution Of the Unite
States The contention that the stat
has no power Q interfere with privat
i contract has been repeatedly disposed Q
by the courts.