The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-12-15
HEARING IN PACIFIC
MERGER UNDER WAY
Argument on the Northern Securi-
ties Litigation Is Begun in the
Supreme Court.
NO RESTRAINT OF TRADE.
Contention of Plaintiff in Appeal Is
that the Consolidation Was a
Protective Measure.
NO RESTRAINT OF TRADE


ties Company. James ]. Hill. ]. Pierpont
Morgan. Daniel s. Lamont and others
The United States, coming to this court on
appeal from the decision of the Circuit
Court for the District OF Minnesota The
decision was to the effect that the purchase
| Of the greater share of the stock of the
two railroad companies constituted mer-
ger and was contrary to the Sherman anti
trust law. The case involves the commun-
ity-of-interest principle.
There has been much interest in the case
| and when it was called to-day the court
| room was crowded both inside and outside
the bars. Attorney General Knox was
present with quite an array Of assistants
from his office, while the opposition also
was represented by e long list of distin-
guished counsel, including C. w. Bum and
Charles b. Young, former Attorney General
Griggs and John G. Johnson, of Philadel-
phia. Justice Brown was the only member
of the court not present
The hearing began at 1920 o'clock and
John G. Johnson, representing the North
ern Securities Company, made the first ar
gument He announced that the railroads
and the Securities Company would desire
to be heard by their counsel, while 1t was
| only the attorney general would speak.
After stating the case Mr.. Johnson said
the purpose of the Securities Company in
| acquiring the stock Of the railroad COM
pany had been not to prevent competition,
| but to prevent the injury of it's own prop
| erty.
Early In the argument Justice Peckham
asked whether the Securities Company held
Of he <l,a
| companies, and Mr.. Johnson admitted that
the company held nearly all the stock He
commended that, holding the stock, it had
the authority to control 1t. He took sharp
| exception to the decision of the Circuit
Court that the possession of the power
| which the Securities Company had was
| violation OF the law, and contended that
| such holding was not in accordance with
decisions of the Supreme Court which were
uniformly to the effect that it is the abuse
| or power. and not the possession of IT. that
| constitutes the offense.
NO RESTRAINT OF TRADE
Mr. johnson said what he had to say
would be stated in six propositions, which
| he would outline briefly as follows: The
| first Is that there was no agreement. con-
tract, combination or conspiracy to restrain
| competition between these two railway
| companies or to restrain trade. But that
on the contrary, whatever contract or un-
Outstanding there was In the case. as es-
| tablished by uncontradicted testimony, was
to enlarge, to create and in every way DOS
| sible TO improve trade and commerce.
Inc second proposition is that If two
| railway companies, somewhat In competition
| with each other decide Ii necessary. in
order to sustain their competition against a
third company, which otherwise could de-
| usefulness to the public to combine in anv
way Tor the purpose Of protecting themselves
| against destruction and in order, by means
| Olttiniat protection. to make greater COM
| petiuon with greater rival on a greater
scale for their advantage and for the pub
| hcs' the court must look to the matter as
one or fact to determine whether the real
| purpose was to destroy or TO lead to de-
| struction In order to promote trade by the
establishment Of the greater competition.
al Inc tnlrd proposition Is that if the hold
the majority of the shares Of the two COM
| panles was violation Of the Sherman act
OF course an agreement among any number
act. mat
The fourth proposition is that the first sec
ton OF the sherman act does not in any
| way condemn as Illegal the acquisition or
ownership OF the shares of two competing
| companies.
The The fifth proposition is that the second
! section or the Sherman act does not in any
| way condemn the acquisition and holding OF
| such ownership of shares. -
The sixth proposition is that If the Sher-
man act does condemn as illegal the owner
| ship OF a controlling interest in the shares
| of the competing railway Companies thar
| 1t is unconstitutional.
| Taking up the propositions Mr. johnson
contended that there had been no thought of
restraining competition in uniting the own
| ershlp or the two railroad companies. but
repeated that on the contrary the purpose
had been to enlarge and promote trade
| Mr.. johnson closed his argument with a
s 70 ene court tS to demand Of the t
authority to strike down the Northern
Securities Company.
BUNN'S ARGUMENT
Mr.. Johnson was followed by c. ". Bum.
| who spoke especially for the Northern Pa
cific. Mr.. Bum declared that the impor-
lance of the question could not be over
estimated, and continued:
1.-THE parallel telegraph lines of the coun-
try stand on the same footing as parallel
| railway lines as it is common KNOWLEDGE
that nearly all the telegraph lines of the
country have gradually come into the con-
| troll OF two companies.
| In the same way you have got To hold
| that the acquisition OF parallel steamboat
lines is restraint on Interstate commerce
And SO, II few individuals owning stock
| in carrying corporations should unite into n
| partnership. turning the stock in as mart
nership assets, you would have the same
unity of ownership and the same conspiracy
| and agreement, and likewise the same con-
| troll, that you have in this case and my
| question is whether ii is really a subject
| of federal control or subject of State CON
troll"
He contended that there had been no con-
| solidation, and said If there had been II
| would not be in restraint of trade
Mr.. Bum was followed by Attorney Cen
| eral Knox for the United States The conrt
| was within three-quarters of an hour of adj
| journment. when Mr.. Knox began his adj
| dress, and he was able to deliver only :,
portion of his argument. In beginning Mr.
| Knox reviewed the principal facts connected
| with the organization and subsequent his
| tory Of the Northern Pacific COMPANY its
| relations to the Great Northern Raiiroad
| and other facts out of which the Questions
| i'm this case arise. but without extended
| comment. His statement of facts I'm this
| connection was as follows:
| First-That the Northern Pacific Railroad
| was built under the authority of the United
| States and in the main with capital fur
nished by the United States, and that the
| United States intended, and attached the
| condition to its contribution, that the rail
| road should be a great independent national
| highway. and specified that the objects of
its construction was Ito promote the pub
! lie interest
| Second-That by different devices eu-
ployed during the past ten years the de-
| PENDANTS, or some of them. have endeavored
10 destroy the independence OF the North
| ern Pacific Company and bring IL under the
| domination of the Great Northern Conn
| pany.
SCHEME OF CONTROL.
Third-That the Northern Securities Com
| t. i,cf toIft.