The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-12-16
Northern Securities Case arguments
Are Brought to a Conclusion
CONCLUDED FROM FIRST PAGE1

act OF combining the STOCK nOtnlnB was
done which really operates to restrain COM
merce, Is a strong one which may have
great weight with the court. In the face
of this sentiment: however. Attorney Cen
eral Knox Is confident or a decision for the
government.
In his argument to-day Mr.. Knox said
and Great Northern Securities Company
two competing interstate railroads have
been brought into such relations that their
independence as competing factors in In
terstate is destroyed.
The attorney general said that it was
not his intention to reargue any of the
propositions settled by the trans-Missouri
and joint traffic cases. but to do what he
could to show their application to the facts
In this case. However, he made the fol-
lowing statement of the great questions
settled by the court in those cases:
"First-That to shut out the operation OF
the general law of competition between
competing interstate railroads is to restrain
interstate commerce.
"Second-That TO bring the operations of
two or more competing interstate railroads
under the control of a single body shuts out
the operation of the general law of com-
petition and constitutes a restraint upon
interstate commerce.
"Third-That Congress is competent to
forbid any agreement or combination
among companies competing for Interstate
commerce which restraints
among the States by shutting out. the OPP
Grafton of the general law of competition.
"Fourth-That in order to maintain a suit
the government is not obliged to show an
u lCCtIdll COllllllclC &C IL al Y
straint is the natural and necessary effect
of the arrangement"
LANGUAGE OF THE LAW.
He then said: THE language of the law
is, combination in the form of trust or
otherwise that is. combinations in any
other form. Combinat ions in the form of
trusts were well understood at the time Of
the enactment of this law They were in
variably formed by transferring the stocks
/ or IrOnprfV Of the constituent lInitC IN a
holding trustee, whose will was thus DOM
inantly e~nthroned over the. whole; and
against the stocks or property so trans
ferred the holding trustee issued certifi-
Gates TO the transformers, representing their
respective proportions of the whole. This
form OF combination was evolved from the
experience that a 'ge~ntlemen's agreement
to control competition works better when
the collateral Is VI.
lures Is a combination in the form of a
trust, and is specifically invalidated by the
statute. The testimony shows conclusively.
L think, that as a matter of fact and law
the thing which these gentlemen did was
to create a combination in the form of a
trust, the form specifically prohibited by the
act of Congress if ii restrained interstate
commerce.; and also that the Northern Sc
curities Company was formed for the pur-
pose of taking over the control of the Great
Northern and Northern Pacific railroads,
and actually took over that control, and
with that control absolute power over both
roads,, the thing which your Honors have
said constitutes such restraint under cir
c~umstances substantially the same as those
of this case.
but the law likewise prohibits combina-
tons otherwise formed. That is 10 say, the
law distinctly and plainly provides that it's
policy shall never be defeated by the exer-
forms. The object of the law once clearly
determined, all difficulty ceases If it is es-
tablished that the object is defeated through
contracts, combinations in the form of trust
or otherwise, or by cOnspiracies."
THE END ACCOMPLISHED.
Mr.. Knox then discussed the end accom-
plished by the merger of the railroad in
%terests, saying: THE device resorted to in
this case. If sustained, defeats the policy of
the law, as it accomplishes all and more in
the way of effectual destruction of compe-
tition than was accomplished in the trans
Missouri and joint traffic cases.
The one secures permanent, absolute
control and power to administer every
feature of management and operation of the
porary arrangements which related to the
single feature of rates, and depended for
their duration upon the will of the parties.
The fixing of rates is an accident of con-
troll, and 1t is wholly immaterial i'm it's effect
upon m whether the power to fix
rates depends upon the control Of the roads
by a combination effected through the hold
ing of their stock or depends on the delega-
ton of power for that purpose by the rail-
whatever it may be, vesting control, how
ever the control may be exercised, which is
illegal. If that arrangement restraints inter
a combination, a pool, a conspiracy, a con.
solidation. a contract, a securities company
or what you like. The thing it accom-
plishes is not varied by a variation in name
or manner of bringing il about.
Congress meant that the government
should have the right to prevent the exer.
else of power to restrain interstate com.
merce by preventing its acquisition through
contracts, combinations, conspiracies OF
monopolies, and 1T is the contracts, com.
4 i-nfion on1 miro nioo 1y xvhi,l, ~ -
strain is brought about that the act de.
clares illegal. The great object of Congress
was to declare a policy against which nc
arrangement could stand by which the par.
ties fully equip themselves with the power
to defeat its purpose"
COMPETITION DESTROYED.
He also declared that the power to sup
press competition has been exercised and
he declared that Messrs. Morgan and Hill
had the power to suppress competition be-
tween these two roads when they held the
fontr9HE e OF a fne m nsse2fn2 tha the fb stock of the
that power and actually suppressed and de.
stroyed competition between them the mo.
ment they part with the legal title to
in the Northern Securities Company with
the power in the company. as its charter
ership, including the right to vote there.
on" This, he commended, actually destroyed
; competition between the two roads,, and in
support or THIS Stutement ne laid down the
following general propositions:
ITO be competition there must be com.
p~etitors In different interests.
"Any act which eliminates the competi
tors or unifes the interests destroys com
petition.
There is no competition where the ne
results of operation go into a common pur
pose.
There may be rivalry between the differ
3 ent departments or agencies as to which
will contribute the most to the common
, fund or as to which is the most econom
, ically administered or operated, but so lon,
l as all are interested in the operations o
each by sharing a fixed proportion of
common fund, unaffected by the proportion
contributed by each, there is no competi
Z ton"
r Mr. Knox then summed up his points ii
) support of his contentious, that as a fac
this merger is a combination in the form O
4 a trust. or otherwise because the end ii &C
composites is to bring under one contro
: the Northern Pacific and Great Northern
railroads in such a way as TO destroy com
petition between them and to create
0 monopoly of transportation in the section
served by them.
Mr.. Knox declared that the merger wa,
arranged when men who have heap ra