The Indianapolis journal., 1903-04-10

come from its approval compel us to as
sumo that il must be unsound. especially
when We reflect that the law as admins
tered by courts of equity looks always at
the substance of things-at the object ac-
complished, whether 1t be lawful or unlaw-
ful-rather than upon the particular de-
vices means by which it has been ac-
complished.
so far as the New Jersey charter is con-
cerned the question, broadly stated. which
the court has to determine is whether
charter granted by State can be used TO
defeat the will of the national legislature
as expressed In law relating TO interstate
trade and commerce over which Congress
has absolute control. PreSumptively, at
least no charter granted by State is in
tended by the State to have that effect or
to be used for such purpose, and in the
present instance it is clear that the State
of New Jersey did not intend TO grant a
charter under cover of which an object de-
nounced by Congress as unlawful, namely,
a combination comforting the power TO re-
strain interstate commerce, might be
formed and maintained because the en-
abling act under which the Securities Com
pany was organized expressly declares
that three or more persons may avail
themselves of the provisions of the act, and
become a corporation for any lawful pur-
pose. laws of New Jersey 1899, p. 413.1
This language is not merely perfunctory;
ii means obviously that whatever powers
the incOrp0rators saw fit 10 assume. they
must hold and exercise for the accomplish
ment of lawful objects. The words in
question operate, therefore. as a limita-
tion upon all the powers enumerated in the
articles of association which were filed by
the promoters of the Securities Company,
so that however extensive and compre-
hensive these powers may seem to be. the
State of New Jersey has said you shall not
exercise them so dS 10 set at defiance any
statute lawfully enacted by the Congress
of the United States any statute law
fully enacted by any State wherein you see
fit to exercise your powers.
VOID UNDER FEDERAL LAW.
if the State Of New Jersey had undertaken
to invest the incorporators of the Securi-
ties Company with the power to do acts
in the corporate name which would oper-
ate to restrain interstate commerce and
for that reason could not be done by them
as an association of individuals, then we
have no doubt that such a grant would
have been void under the provisions of the
antitrust act, or at least, in particular
would not be allowed to stand in the way
of the enforcement of that act. The power
of Congress over interstate commerce is
supreme. far-reaching and acknowledges no
limitations other than such as are pre-
scribed in the Constitution itself. [Gib-
hons VS.. Ogden, Q Wheat. 1897; County of
Champion VS.. Ames, L. s., decided Feb. %,
19O3.1 No legislation on the part of State
can curtail or interfere with its exercise;
and in view of repeated decisions one
can deny that it is legitimate exercise of
the power in question for Congress to say
that neither natural nor artificial persons
ever to place restraints on interstate trade
or commerce. UNITED States VS.. Trans
missouri Freight Association, 1G6 u: s.,
Eo; United States VS.. Joint Traffic Asso,
citation, III U. s., sos; Addyston Pipe and
Steel Company VS.. United States, 175 u
s., 211.l
1T is urged, however, that such a COM
bination of adverse interests as was formed
and has been heretofore described was law
full and not prohibited by the antitrust
act, because such restraint upon inter-
state trade or commerce, IL any, as 1t I'M
poses, is indirect collateral and remote and
hence that the combination is not one of
that character which the Congress of the
United States can lawfully forbid. The
the contention: United States VS.. E. c.
knight Company, 156 u. s., l.; Hopkins VS..
United States III u. s.. SIS; Anderson VS..
United States. III u. s., Co..
1t Is pertinent, therefore, to inquire In
what way the existing combination that
has formed does affect interstate commerce.
1t affects IL, We think, by giving to sin
gle corporate entity, or, more accurately,
to few men acting in concert and in its
name and under cover of its charter, the
power TO control all the means or trans
portation that are owned by two competing
and parallel railroads engaged in inter-
state commerce.; in other words, the power
to dictate every important act which the
two companies may do; to compel them to
act in harmony in establishing interstate
rates for the carriage of freight and pas
sengers and generally to prescribe the
policy which they shall pursue. 1t mat
ters not, We think, through how many
hands the orders come by which these aims
are accomplished through what chan
nels; the power was not only acquired by
the combination, but it is effectually exer-
cised and it operates directly on interstate
commerce Notwithstanding the manner OF
it's exercise, by controlling the means of
transportation, to-wit. the cars, engines and
railroads by which persons and common
ties are carried, as well as by liking tne
price to be charged for such carriage.
CITATIONS NOT RELEVANT.
The cases cited above, and on which reli-
ance is placed to sustain the view that
the restraint imposed is merely indirect re-
mote. incidental or collateral. are not rel
evant. for. as was fully explained in Ad-
dyston Pipe and Steel Company Vs. United
States. 175 United States, 21l. 23S. 24O. 24S.
One of these cases Omitted States vs. E. c.
knight Company dealt only with COM
bination within a State to obtain practical
monopoly of the manufacture of sugar.
and it was held that the combination only
related to manufacture and not TO COM
merce among the States or with foreign
nations: that the fact that an article was
manufactured for export to another state,
did not make 1t an article of interstate COM
merce before transportation had been be-
gun necessarily subject 1t to federal
control; and that the effect of the cOmbina-
ton then under consideration on interstate
commerce was at most incidental and col
lateral. But while commenting on Its
previous decision in United States VS.. K. G.
knight Company the court took occasion
to say, in AddyStOn Pipe and Steel Com
pany VS.. United States, 1l5 United States,
246, that when a contract is made for the
sale and delivery of an article in another
State the transaction is one of interstate
commerce, although the vender has also
agreed to manufacture the article so sold,
and that combinations or control and mo-
nopolize such transactions would be in re-
straint of interstate commerce.
In the other cases (Hopkins VS.. United
States and Anderson VS.. United States) ii
was held that the business of the members
of the Kansas City Live Stock Exchange,
court, was not interstate commerce and
that the act did not affect them and that
even il they were affected the particu-
lar agreement which was involved did not
operate a restraint of interstate COM
merce. We fail to find, in either of these
cases, any suggestion that a combinati ton
such as the one in hand, the object and
single person or to a coterie of persons full
control of all the means of transportation
owned by two competing and parallel lines
of road engaged in interstate commerce, as
well as the power TO fix the rate for the
transportation of persons and property,
does not directly and Immediately affect in
terstate commerce. No combination as IL
would seem could more Immediately at
feet ii.
RIGHT TO MAKE CONTRACTS.
"Again it is urged, tentatively, that if the
existing combination which the government
seeks TO have dissolved is held to be one in