Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-12-15
SUPREME COURT
CONTINUED from page ~


ROAD companies had been not to pre-
vent competition, but to prevent tn
injury of it's own property
Early in the argument Justice Peck
| nam asked whether the Securities CO
held the major portion OF the stock o
the TWO companies, and Mr.. johnson
admitted that the company held nearl,
ali the stock. He contended that. hold
| ing the stock, it had the authority t
control it.
He took sharp exception to the de.
cision of the circuit court that the pos.
session of the power which the Securi-
ties Co. had was a violation Of the law
and contendeI that such holding was
not in accordance with decisions of the
supreme court which were uniformly
to the effect that it is the use of powei
and not the possession of it that con-
stitutes the offence.
Mr.. Johnson said that what he had
to say would be stated in six PROPOSE
lions, which he outlined briefly as fol-
lows:
The first is that there was no agree
ment,~ contract, combination or con-
spiracy TO restrain competition between
these two railway companies, nor to
restrain trade, but that. on the con-
trary. whatever contract or under
standing there was in the case as es-
tablished by uncontradicted testimony
was to enlarge, TO create and to i'll ev
cry way possible improve trade and
commerce.
The second proposition is that if two
railway companies somewhat in COM
petition with themselves, find it neces-
sary in order to sustain their compe-
tition against IL third company which
otherwise could destroy them or great
ly interfere with their usefulness to the
public, to combine IN any way, for the
purpose of protecting themselves
against destruction and in order by
means of that protection to make a
greater competition with a greater riv-
NJ on greater scale for the greater
advantage OF the public, that the court
must look to the matter as one of fact
to determine whether the real purpose
was to destroy or lead to the destruc-
ton ofsthe smaller competition in order
to prOfpote trade by the establishment
Of the greater competition.
The third proposition is that if the
holding of the Northern Securities Co
of the majority Of the shares of two
companies was violation of the Sher
man act. of course an agreement
amongst any number Of persons would
be violation of that act.
The fourth proposition is that the
first section of the sherman act does
not in any way condemn as Illegal the
acquisition of ownership Of the shares
of the tsyo competing companies.
The fifth proposition is that the sec
end section OF the Sherman act does
not in any way condemn the acGuisi-
ton and holding of such ownership of
shares.
Thes sixth proposition is that if the
Sherman act does condemn as illegal
the Ownership of n controlling interest
in sthe shares of the competing railway
companies, that it is unconstitutional.
Taking up the propositions. Mr..
Johnson contended that there had been
no ,tt5aught of re restraining competition
fl .uritfhg the ownership of the two
railroad companies. but repeated that
on tfa~contrary the purpose had been
to enlarge and promote trade. lie adj
agreement to restrain Interstate com
merce that would constitute u direct
violation of the Interstate commerce
law and also conceded that it was
imnaterial what the intent had been.
He knew wcll enough, he said, that the
decision of the court would be based
upon the acts performed and not upon
the statement Of motives. Mr.. Johnson
thea outlined at some length the or
ganization of the two railroad COM
Uanies. There WAS demand III the
East for the lumber Of the Northwest,
but the problem was to get return
freights TO avoid paying practicaily
double for Carryin" the Western ium-
her. The railroad managers began
WORK TO cultivate m Oriental dem; nd
eo, The coal and steel of The East ana
the middle West and the cotton of the
south. feeling that if this demand
could be sufficiently stimulated the
regular freight problem would De SOW
ed. Neither the Northern Pacific or the
(,reat Northern reached the ceAtcfS OF
these interests. but the burlington
road did and it was believed that Il
they could get control of that line they
could make such lOW rates on the Bur
lington ana on their own Ines as
would insure the permanenry OF the
trade which might be developed IN the
Orient. This plan WAS put into eNecu-
ton. the price paid being S26O0o0,0oo.
The burlington was not a parallel
nor a competing line but supplieH.
ana, certainly it could not be contend-
ed that this act was contrary TO law.
He then reviewed the raid on the
Union Pacific on the Northern Pacific
stock, The Union Pacific road. he said
proposed that it should be allowed 10
have an interest in the purchase. THIS
WAS naturally declined because Ii
would destroy the purpose for when
the burlington had been secured. When
the Union Pacific got control OF the
majority of Northern Pacific stock II
was he-gaid, q staggering blow because
| it carried with it the ownership OF
half interest in the Burlington.
| They determined to form corpora
ton to which they could turn over tins
Northern Pacific shares. They SOLO
their shares outright to this company
| As one of these results, he said. thert
| had been q vast increase in the tonnage
of the two roads. He also s1'd that u'i'