The Minneapolis journal., 1903-04-10

company, paying therefor at the rate Of
$lsO per share and using its own stock at
par tormake the purchase. The Securities \
company subsequently made further pur-
chases of stock of the Great Northern
company. at the same rate, and in about
three months had acquired stock of the
latter company amounting, at par, to
about 1913 0O0,000 using, for that purpose
ITS own stock to the amount Of about
S$171, 1000, ,O0O.. s 81
The Securities company was enabled to
make the subsequent purchase Of stock
from stockholders of the Great Northern
company not Immediately concerned in
the organization of the Securities COM
pany by the advice. procurement and
persuasion Of those stockholders Of the
Great Northern company who had been
instrumental In organizing the Securities
company and had exchanged their own
stock for stock in that company shortly
after it's organization.
Merger Stiles Competition.
At the present time the Securities COM
pany is the owner Of about Sc per cent
OF all the stock of the Northern Pacific
company and the owner OF abouts76 per
cent of all the stock of the Great Northern
company. u s*z5
The. scheme which ~ was thus devised
and consummated led inevitably sto the
following results: First, it placed the con-
troll of the two roads In: the hands of
single person, to-wit the Securities COM
pany, by virtue of it's ownership. of a large
majority OF the stock Of both companies;
second, 1t destroyed every motive for
competition between two roads engaged
IN interstate traffic, which were natural
competitors for business. by pooling the
earnings Of the two roads for the com
mon benefit of the stockholders 5of; both
companies; and, according to the familiar
rule that every one is presumed to In
4 yhoff Sc ~
or MS own acts when done Willfully and
deliberately we must conclude that those
who conceived and executed the plan
aforesaid Intended, among other things,
to accomplish these Objects -,
me general question Of law arising
upon this state Of facts is whether such
a combination of interests as that above
described, falls within the inhibition Of
the antitrust. act or. is beyond its reach
The act brands as illegal "every contract.
combination in the form of trust or other
wise or conspiracy In restraint of trade
or, commerce among the several states
or with foreign nations' @.@s
Learned counsel On both sides have
commented on. the general language of
the act doing so, of course, for differ
ent purpose, and the generality OF the
language employed is, In our Judgment
OF great significance. It indicates, we
think, that congress, being unable to
toresee and describe all the plans that
might be formed and all the expedients
that might be resorted to to- place re-
stra1nt on interstate trade or commerce,
deliberately employed words Of such gen
eral import as, in it's opinion. would
comprehend every scheme that might he
devised to accomplish that end. -
Trust Act Hits Carriers.
What is commonly termed: al crust, ri
was species of com bination organized
spy individuals or corporations for the pur-
pose of monopolizing. the. manufacture. of
or traffic in various articles and. com
modities which was well known and fuuily
unoerstooo "hen the antitrust act was
approved. = Z" 5 80 |
, Combinations in that form were &c
cordlngly prohibited; but congress, evil
IDENTIFY anticipating that a combination
might be otherwise formed, was careful
to declare that a combination in any.
other form,. if in restraint of interstate
trade or commerce. that :4isSs5if it directly
occasloned or effected b such restraint
should likewise be deemed illegal.
~ Moreover, in cases arising under, the
act, 1t has been held by the highest iudi-
clal authority in the nation, and its opin :
ion has been reiterated lin no uncertain
tone, that the act applies to interstate
carriers. of freight and passengers as well
as to all other persons natural or :arti- |
IL q
trade Or commerce. do not mean in un-
reasonable or partial restraint of trade
or commerce, but any direct restraint |
thereof; that an agreement between com
pet1ng railroads which requires them to
act in concert in fixing the rate for the
carriage or, passengers or freight over
their respective lines from one state to
another, and which, by that means, re-
stricts temporarily the right of any one |
of such carriers to name such rates for
the carriage of such freight or passengers
over its road, as it pleases,. is a. contract |
in direct restraint Of commerce within
the meaning Of the act in that it tends to
prevent competition; that it matters not |
whether. while acting under such a con-
tract, the rate fixed is. reasonable or an
reasonable, the vice of. such a contract
or combination being that it confers the
power to establish unrea sonable rates and
directly restrains commerce by placing
obstacles lin the way sof free and unre-
stricted competition between carriers |
who are natural rivals for patronage and
finally that congress has the power. un-
der the grant Of authority contained in |
federal constitution to- regulate commerce. |
to say that no contract or combination
shall be legal which shall restrain inter
state trade or commerce BY shutting offf
the operation of the general law Of COM
petition. United States vs. Trans Mis- |
souri, Freight association, <16O u.s. S. 290: |
United States VS.. Joint Traffic associa-
ton, a171SU.EfS. sos; Addystone pipe and
Steel company VS.. United States. II u. |
s.. I'll.
Convenient Artificial Person."
~ Taking the foregoing proportions for
granted, because they have been decided
by court whose authority is controlling.
1t is almost too plain for argument that |
the defendants would have violated. the 4
antitrust: act if they had done. thr1,st no
agency of natural persons, what they have
accomplished thru an artificial person Of
their own creation.
That is to say. if the same individual
who promoted the securities com pany. in |
pursuance to a previous understanding or |
agreement so to do, had transferred their
stock in the two railroad companies to a |
third party or parties, and had agreed to
induce other shareholders to do likewise. |
until majority of the stock of both com
panies had been vested in an single indi-
vlduaI or association of individuals, and |
had empowered the holder or holders to
vote the stock as their own, receive All |
the dividends thereon, and pro rata or df- |
vide them among all the shareholders Of |
the two companies who had transferred |
their stock-the result would have been a |
combination in direct restraint Of inter- /
state commerce because it would have I
placed in the hands Of a small coterie of l
men the power to suppress competition /
between two competing interstate carriers /
whose lines are practically parallel It
Will not do to say that so long as each |
railroad company has its own board of |
directors they: operate indeDendently@ q nd /