Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-04-13

i COMBINATION In DIRECT RE-
/ STRAINT OF INTERSTATE COM :
MERGE. BECAUSE IT WOULD
HAVE PLACED IN THE HANDS OF
A SMALL COTERIE OF MEN THE
/ POWER TO SUPPRESS COMPETI-
i TION BETWEEN TWO COMPETING
INTERSTATE CARRIERS WHOSE
LINES ARE PRACTICALLY PAFtAL-
LEI.
/ 1t will not do to say that so long as
each company has its own board of
directors they operate independently
! and are not controlled by the owners
of the majority of their stock. 1t is
] the common experience of mankind that
the acts of corporations are dictated
and that their policy is controlled by
| those who own the majority of their
stock Indeed, one of the favorite meth
DDS in these days. and about the only
method of obtaining control of a corp0-
ration is to purchase the greater part
of it's stock.
ut was the method pursued by the
| Northern Pacific and Great Northern
accompanies to obtain control of the Chi
cago, Burlington 4 Quincy railroad
and so long as directors are chosen by
stockholders. the latter will necessarily
| dominate the former and in a real sense
determine an important corporate acts
1 The fact that the ownership of ma
| jority of the capital stock of corpo-
| ration gives one the mastery and con-
! troll of the corporation was distinctly
recognized and declared in Pearsall VS..
| Great Northern Railway, ISL United
| States GAG, 671. The same fact has been
1 recognized and declared by other
| courts. pennsylvania Railroad Com
pany VS.. New York & Northern Rail-
way Company, $50 New York 40, 425;
! People eX rel. VS.. Chicago Gas Trust
Company, 100 Illinois 26S, % N. e.
Rep. T9S, S02.)
I'm opposition to this view. counsel
cite Pullman Car Company VS.. Mis-
souri, Pacific Company, 115, Missouri
| 5S7, 596, but in that case the meaning
of the word CONTROLLED, as used
| in a private contract was the point
under consideration and what was said
on the subject cannot be held appli-
1 cable to cases arising under the anti
trust act, when the point involved is
whether the ownership of all the stock
of two competing and parallel roads
vests the owner thereof With the power
| to suppress competition between such
roads. We entertain no doubt that it
i does. Indeed, we regard suppression Of
4 competition, and to that extent a re-
straint of commerce, as the natural
and inevitable result of such owner
ship.
What has been done through the
organization of the Securities company
accomplishes the object, which Con-
gress has denounced as illegal. more
| effectually perhaps than such COM
| bination as is last supposed. That is
1 to say. by what has been done, the
power has been aquired (and provis-
ion for maintaining iD to suppress
competition between two interstate
carriers who own and operate Compel
ling and parallel lines of railroad.
COMPETITION WE THINK,
WOULD NOT BE MORE EFFECT
UALLY RESTRAINED THAN IT is
NOW UNDER AND BY FORCE OF
/ THE EXISTING ARRANGEMENT il
the two railroad companies were con-
solidated under single charter. 1t is
manifest, therefore. that the New Jer-
! sey charter is about the only shield
| which the defendants can interpose be-
| tween themselves and the law.
| THE reasoning which led to the
i aquisition of that charter would seem
! to have been that while as individuals
| the promoters could not, by agreement
4 between themselves, place the majority
of the stock of the two competing and
| parallel railroads in the hands of a
single person of a few persons, giving
| him or them the power to operate the
roads in harmony and stifle competi-
1 ton. yet that the same persons MIGHT
| CREATE A PURELY FICTITIOUS
PERSON. TERMED A CORPORA
TION, which could neither think nor
| act. except as they directed, and by
| placing the same stock in the name OF
such artificial being accomplish the
same purpose.
| The manifest unreasonableness of
such a proposition and the grave con-
sequence sure to follow from it's app
| prevail compel us to assume that it
must be unsound, especially when we
! reflect that the law as administered
! by courts of equity looks always at
the substance of things-at the object
accomplished, whether it be lawful or
NEUTRALITY-SUSPICIOUS. than upon the par
ticular devices or means by which it
| has been accomplished"