The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1903-04-14

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ferred their stock. the result would
been a combination in direct re-
Straint of interstate commerce., because
lit would nave placed in the hands of a
small coterie of men he power TO
I~surnress competition between two COM
Ipeting carriers whose lines are prac-
ideally parallel. 1t will not do to say
THAT. so long as each railroad company
has its own board of directors, they OPP
lerate INDEPENDENTLY and are not con-
ltrolled by the owner of the majority Of
their stock 1t is the common exper-
Hence of mankind that the acts of cor
lporations are dictated and that their
policy is controlled by those who own
1.-The majority of his stock.
What has beer done through the or
IganiZation of the Securities Company
laccomplishes the object which congress
has r%enounced as illegel, more effec-
lively perhaps than such a combination
las is last supposed
That is TO say. by what has been
done, the power has been acquired( and
provision made for maintaining it, to
suppress competition between two in
lter-state carriers. who own and operate
competing and parallel lines of railroad.
we think. would not be
more effectively restrained than it now
lis, and by force of the existing arrange
ImentS, if h two railroad companies
49, 1NA SAO NiAAA
tier.
It is manifest, therefore, that the
New Jersey charter is about the only
shield which the defendant can inter-
lpOse between themselves and the law.
The reasoning which led to the acquisi-
Ition of that charter would seem to have
been that, while as individuals the pro-
imoters could lot by agreement be-
tween themselves, place the majority
lof the stock of the two competing and
parallel railroads in the hands of a
Single person or a few persons giving
him or them the power to operate the
roads in harmony and Stif1e competi-
Ition, yet that the same persons might
~lcreate a purely fictitious person, term
ed a corporation, which could neither
think nor act except as they directed,
land by placing the same stock in the
name of such artificial being, accom-
lplish the same purpose. The manifest
unreaSonableness OF such a proposition
and the grave consequences sure to fol-
low from its approval, compel us to as
lsume that it must be unsound, especial
lily when we reflect that the law as adj
ministered by courts of equity, looks
ALWAYS at the substance of things, at
the object accomplished, whether it be
lawful or unlawful, rather than upon
the particular devices or means by
which it has been accomplished.
The court discusses the question
whether a charter granted by a state
can be used to defeat the will of the
national legislature and says it is clear
THAT the state of New Jersey did not
intend to grant a charter under cover
Iof which an object denounced by con-
lgress as unlawful, might be formed and
maintained, because the enabling act,
under which the securities company
WAS organized, expressly declares that
three or more persons may avail them
selves of the provisions of the act and
I"because a corporation for any lawful
purpose" The words in question oper-
late, says the court. as a limitation upon
all the powers enumerated in the ar
lticleS OF association, which were filed
Iby the promoters of the securities COM
pany, so that however, extensive n
comprehensive these powers may seem
to be the state of New Jersey it is said
"you shall not exercise them SO as to
ISet at defiance any statute lawfully en-
acted by the congress of the United
Estates or any statute lawfully enacted
by any state wherein you see fit to ex-
IerciSe your powers
1t is urged. however, that such a conI-
lbinatiOn of adverse interests as was
formed, was lawful and not prohibited
by the antitrust act, because such re-
I%straint upon Interstate trade or CON-
merce, if any as it imposes 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. 1t is
pertinent, therefore, to inquire in what
way the existing combination that has
been formed, affects Interstate com
merce. 1t affects it, we think, by Civ
ing to a single corporate entity or more
accurately, to a few men acting in con-
lcert and in it's name n under cover of
its charter, the power to control all the
80 ILL.,
ed by two competing and parallel rail-
Iroads engaged in Interstate mmerc
The power was not only acquired by the
combination. but it is effectively eXer-
Icised and it operates directly on inter-
state commerce..
Again, it is urged, tentatively, hat
if the existing combination which the
government seeks to have dissolved, is
held to be one in violation of the anti
trust act and lawful, thenthe act unduly
restricts the tights of the individual to
make contracts, buy n sell property,
and is invalid for that reason"
This contention the court says is met
and answered by the decision in Addy-
Iston Pipe and Steel Company VS.. the
UNITED States, where the court says:
1.-The provision of the constitution does
not, as we believe, exclude congress
from legislating with regard to con-
tracts while in the exercise of it's on
ISl1IuIlOnal rlSnI 10 TeSulale commerce
IamOng the states. On the contrary, we
think the provision regarding the lib
Ierty of the citizen is to some extent
Limited by the commerce clause of the
constitution and that the power of on
IgreSS to regulate interstate commerce
comprises the right to enact a law pro-
Ihibiting the citizen from entering into
these private contracts which directly
and substantially and not merely in
directly. remotely. incidentally and col
Materially, regulate to a greater or less
degree, m among the states.
Learned counsel of defendants further
lcOntend as follows:
That the antitrust law was not in
tended to include or prohibit combina-
lions looking to the virtual consolida-
ton of parallel and competing lines of
railroad. although such a combination
Operates to stif1e competitions; hat no
relief can be granted to the government
in this instance, because the combina-
ton or conspiracy Of which it COM
Iplains. has accomplished it's purpose, to
luif thu nroonization Of tho cao,,ritioS