The Saint Paul globe., 1903-04-10

milar rule that everyone is presumed to
when done wiIlfully and deliberate
! ly, we must conclude that those who con-
| ceived and executed the plan aforesaid in
tended, among other things, to accomplish
! these objects.
| Application of Sherman Act.
The general question of law arising upon
| this state of facts, is whether such
| combination of interests as that above
| described, falls within the inhibition of
| the antitrust act or is beyond its reach.
| The act brands as illegal every contract,
combination in the form OF trust or
otherwise or conspiracy in restraint of
| trade or commerce among the several
states or with foreign nations" Learned
| counsel on both sides have commented on
| SO of course for a different purpose, and
| the generality of the language employed
1t indicates. we think, that congress, be-
| ing unable to foresee and describe all the
plans that might be formed and all the
eXpedients that might be resorted to to
place restraints on interstate trade or
| commerce, deliberately employed words
| of such general import as, in its opin-
ion, would comprehend every scheme that
might be devised to accomplish that
end
What is commonly termed trust was
| a species of combination organized by in
dividuals or corporations for the purpose
! of monOpOliZing the manufacture Of or
traffic ip, various articles and commodi-
derstood when the anti thrust act was ap-
proved: Combinations in that form We're
accordingly prohibited; but congress, evil
IDENTIFY anticipating that a combination
might be otherwise formed was careful
to declare that a combination in any
other FORM if in restraint of interstate
trade or commerce. that Is if it directly
occasloned or effected such restraint
should likewise be deemed illegal More
over; in cases arising under the act, it
mas peen heId by the highest judicial au-
thorlty in the nation and it's opinion has
been reiterated in no uncertain tone that
the act applies to interstate carriers of
other persons, natural or artificial; that
the words in restraint Of trade or COM
merce 90 not mean in unreasonable or
partial restraint of trade or commerce
put any direct restraint thereof; that an
agreement between competing railroads
%nicn Gl1i requires them to act in concert in
nXlng the rate for the carriage of pas
SengerS or freight over their respective
mes from one state to another and
WniicGh, by that means, restricts tempo
Iarlly the right of any one of such car
rIe-S TO name such rates for the carriage
oI Sucn freight or passengers over its
, road, as 1t pleases, is a contract In direct
restraint or commerce within the meaning
| OF the act. in that it tends to prevent
| competition; that it matters notn whether
,W4lle acting under such a contract, the
rate tXed is reasonable or unrea asona BILE
me wee or such a contract or combina
tlon being that it confers the power to
eslapIish unreasonable rates and directly
ieSIalnS commerce by placing obsta cles
| IN the way of free and Unrestricted com
petition between carriers who are natural
rivals Tor patronage; and finally that con-
| ereSS mas the power under the grant of
authority contained in federal constitution
70 regulate commerce, to say that no CON
tract or combination shall be legal which
| snail restrain interstate trade or com
| mercs by shutting off the operation of the
| general law OF competition. United States
1s6 = 8 Missouri gas! Freight Association,
| Irafhc Association. III, U. S. 305: Addv-
SION Plpe & Steel Co. VS.. United States
1f5, u. s., 211.
Violated Anti Trust Act
erantad aakl9g the, the foregoing propositions for
Dy a court whose authority is cOntroIling
~. is almost too plain for argument that
me Ihe defendants would have Violated the
antitrust act If they had done through
the agency of natural persons. what thev
nave accomplished through an artificial
person OF their own creation. That is to
say II the same individuals who promoted
| previous understanding or agreement so 10
| 90: had transferred their stock in the two
rallroad companies to a third party or
! parles and had agreed to induce other
shareholders to do likewise, until a ma
lorlty OF the stock of both companies
ndu peen vested In single individual or
ASSOCIATION of individuals, and had en-
| powered the holder or holders to vote
Ihe stock as their own, receive all the
| dividends thereon and pro rate or divide
| them among all the shareholders of the
| two companies who had transferred their
| Stock-the result would have been a COM
Dnatlon In direct restraint of interstate
! commerce, because it would have placed
IN the EandS of a small coterie of men
the t power to suppress competition between
Two competing interstate carriers whose
INES are practically parallel.
IL VIII not do to say that so long as
each railroad company has its own board
| and are not controlled by the owner 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 methods in these days
| ana about the only method, of obtaining
| control OF corporation is to purchase
| the greater part of it's stock. 1t was the
met method pursued by the Northern Pacific
control of the Chicago Burlington &
| Quincy railroad; and so long as directors
are chosen by the stockholders. the lat
| ana IN real sense determine all i'm
portant corporate acts. The fact that
the owl ership of a majority of the cap
1tal stock of corporation gives one the
mastery and control of the corporation was
! distinctly recognized and declared in Pear
sail vs. Great Northern Railway, 161 u.
recogr lied and declared by other courts
| PeEl Sylvania r. Co. VS.. Commonwealth,
Z Att (Pa.) S6S, 81; Farmers Loan &
Trust co. vs.. New York & Northern Rail
way Co, $50 n. Y. 40. 423; People ex rel
| VS.. Chicago Gas Trust Co, 1870 III. 26S.
% NJ E. Rep 1876, S02.
Power to Stop Competition.
In opposition to this view counsel cite
| Pullman Car Co. vs.. Missouri Pacific Co,
| ll5 Mo. 3S7, 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 applicable to cases
| arising under the antitrust act when
| the point involved is whether the own
| erShip of all the stock of the two COM
| pet1ng and parallel roads vests the owner
thereof with the power to suppress COM
petition between such roads. We entertain
no doubt that it does. Indeed we regard
| suppression of competition, and to that
| extent a restraint of commerce. as the
! natural and inevitable result of such own
| erShip.
What has been done through the organi-
Zation of the Securities company accom-
plishes the object. which congress has
denounced as Illegal more effectually per-
| hapS than such combination as is last
| supposed That is to say, by what has
| been done the power has ben acquired
! (and provision made for maintaining it,
to suppress competition between two in
| terstate carriers who own and operate
| competing and parallel lines of railroad
| Competition, we think would not be more
| effectively restrained than it now is un-
der and by force of the existing arrange
| ment If the two railroad companies We're
| consolidated under a single charter 1t
| is manifest, therefore, that the New Jer-
Sey charter is about the only shield which
| the defendants can interpose between
themselves and the law.
| The reasoning which led to the acouisi-
| ton of that charter would seem to have
been that while as individuals the pro-
| moterS could not, by agreement between
themselves, place the majority of the