The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1903-03-20
MERGER CASE
BEING ARGUED
Government Attacks v it'll
Vigor Great Railway Trust.
TRANSACTION WAS OPEN
Defense Says This Thing Not
Done in a Corner"

St Louis, No, March 19-Argument
for the Northern Securities company in
the merger case. was resumed by Judge
George b Young. in the United States
circuit court for the district of Minnesota.
sitting here. at 10 o'clock this morning
Attorney Young took up the reasons why
the Burlington system was purchased by
the Northern Pacific and Great Northern
systems. He stated he would occupy the
entire forenoon session.
Judge Young pointed out that It was
essential 10 the frans-C Continental roads
that they should have some opening to
the manufacturing districts and the coal
fields of the middle west; how this pur-
chase would lead TO greater trade and
the settling of the vast unoccupied lands
of the Dakotas and Montana. He then
showed how this purchase was completed
long before the idea OF a common hold
ing Of the stock Of the Northern Pacific
and Great Northern by a single company;
that at the time. as was shown by the
testimony Of Messrs Morgan, Hill. and
IntlL dSSDE48ltSs the purchase Ol the
shares OF the Northern Pacific was such
a colossal undertaking that it did not
appear possible. However the raid of the
Union Pacific interests TO gain posses
sion OF the Northern Pacific stock on
May 9, 1900, showed that some action was
necessary TO prevent its reoccurrence-
Immediately subsequent TO this, there
was meeting of the representatives Of
the moneyed interests. which included
the representatives of the Northern Paci-
cific and the Union Pacific and others,
whereby it was agreed that a holding
company should be formed 10 hold the
stock of the Northern Pacific company.
Judge Young pointed out that the pur-
chase of stock OF the Great Northern was
neither suggested nor contemplated and
that this conclusively refutes the state
ment Of Assistant Attorney General Beck
that at that time there was an agree
mcnt made to create a common owner
ship Of the Great Northern and Northern
Pacific and thus violate the Sherman
antitrust act He then went on to show
that the formation of the SECURITIES com
pany had not restrained or monopolized
commerce. after each railroad is managed
as required bv law, by a wholly different
hoard of directors from that of the other.
He showed that only 2.7S of the traffic of
the Great Northern and only 2.S9 of the
traffic on the Northern Pacific could in
any degree be called competitive; that
by the Burlington purchase the total traf-
fc on the road would he immensely in
creased and that the continuance of this
increase could only be insured by a har-
in, n RI
the ownership Of the Burlington and this
could be best secured by the common
ownership Of the stock.
To show the absurdity of the govern
ment's claims that thi shielding OF the
stock by the Northern Securities com
pany was to raise the rates. it should be
noted that even if the profits should be
increased ten per cent on traffic between
competitive points that the net gain TO
Mr. Hill. Mr.. Morgan and their associates
collectively would be net gain of not
more than S17ooo per anum to gain which
tho Northern Securities company was
formed.
Court then took a recess at 1925 till
O'Clock this afternoon.
At O'Clock Judge Young for the de-
PENDANTS. resumed his arguments. He
devoted himself to a discussion of the
power Of congress over interstate COM
nlerce. He pointed out that the United
States supreme court decisions have held
without variation that congress could
Only regulate that which directly affected
Interstate commerce while the declaration
as 70 who would hold stock of corpora
lions engaged in interstate commerce bus
iness was clearly an indirect regulation
and not within the jurisdiction of con-
gress and hence the sherman antitrust
act would not apply. He argues in sup
port of this contention that the jurisdic-
tion of congress was exclusive in those
matters admitting Of a uniform rule: that
BY the passing Of the antitrust act, it
was hown that this was matter OF ad-
hitting of a uniform rule. But if this is
true the states have no right 10 author
ixe nor prohibit the consolidation Of rail
raad lines. but the right of states TO
allow consolidation has been always per
mitted without question and consolidation
may be prohibited by the states 10 which
effect are the cases GA which the counsel
for the government most rely
To further show that the antitrust act
was not intended 10 apply 10 the purchase
OF railroad stock by a competitor, Judge
Young gave the history Of all the larger
eastern railroad systems showing that
they were all composed Of competitive
lines. yet their capital stock was owned
BY one Of their constituent companys
which originally competed with the others
At 80 O'Clock Judge Young had con-
Guided and N. D. Gorver. OF ST. Paul,
counsel for the Great Northern Railway
company. began his argument n further
Aefense OF the defendants.