The Indianapolis journal., 1903-04-10
HILLS MERGER NULLIFIED.

bination of interests as that above de-
serlbed falls within the inhibition Of the
act brands as illegal every contract, COM
plnatlon in the form of trust or otherwise,
or conspiracy In restraint of trade or COM
foreign nations Learned counsel on both
SIDES nave commented on the general Ian
guage of the act. doing so, of course, for
dinerent purpose. and the generality of the
language employed Is, in our judgment, OF
great significance. 1t indicates, we think.
that Congress, being unable to foresee and
describe all the plans that might be formed
and all the expedients that might be re-
sorted to to place restraints on interstate
trade or commerce, deliberately employed
words of such general import as, in its
opinion, 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
dlvduals or corporations for the purpose
of monopolizing the manufacture of or
traffic in various articles and commodities
which was well known and fully under
stood when the antitrust act was ap-
proved Combinations in this form were
accordingly prohibited, but Congress, evil
IDENTIFY anticipating that combination
declare that a combination in any other
form, if in restraint of interstate trade or
commerce, that it, if ii directly occasioned
or effected such restraint, likewise should
be deemed Illegal.
Moreover, in cases arising under the act
it has been held by the highest judicial au
thority in the Nation, and its opinion has
been reiterated in no uncertain tone that
the act applies to interstate carriers of
freight and passengers as well as TO all
other persons, natural or artificial; that
the words in restraint Of trade or COM
merce' do not mean in unreasonable or par
x~..~ l>.,x
any direct restraint thereof; that an agree
ment between competing railroads which
requires them to act in concert and fixing
the rate for carriage of passengers or
freight over their respective lines from one
State to another, and which by that means
restricts temporarily the right of any one
of such carriers to name such rates for
carriage of such freight or passengers over
its road, as II pleaSeS, is contract in di-
rect restraint of commerce within the
meaning of the act in that it tends to pre-
vent competition; that it matters not
whether, while acting under such con-
tract the rate fixed is reasonable or unrea-
sonable, the vice of such contract or COM
bination being that IL confers the power to
establish unreasonable rates and directly
restraints commerce by placing obstacles In
the way of free and unrestricted competi-
ton between carriers who are natural rivals
for patronage. and. finally. that Congress
has the power, under the grant Of authority
contained in federal legislation, to regulate
commerce. to say that no contract or COM
binatiOn shall restrain Interstate trade
commerce by shutting off the operation of
the general law of competition. UNITED
States VS.. Transmissouri Freight Associa-
ton. 166 u. s., 290; United States vs.. Joint
Traffic Association, III U. s., sos: Addystop
Pipe and Steel Company VS.. United States,
175 u. s., 2l1.1
Taking the foregoing propositions for
granted because they have been decided by
q court whose authority is controlling. il
is almost too plain for argument that the
defendants would have violated the anti
trust act If they had done, through the
agency of natural persons, what they have
accomplished through an artificial person
of their own creation. That is to say, if
the same individuals who promoted the
vious understanding or agreement so to do,
had transferred their stock in the two rail-
road companies to a third party or parties.
and had agreed to induce other sharehold-
ers to do likewise, until a majority of the
stock of both companies had been vested in
a single individual or association of indi-
viduals, and had empowered the holder or
holders to vote the stock as their own, re-
ceive all the dividends thereon or pro rata
divide them among all the stockholders of
the two companies who had transferred
their stock, the result would have been a
combination in direct restraint of interstate
commerce because ii would have placed i'm
the hands of a small body of men the power
to suppress competition between two COM
peting interstate carriers whose lines are
practically parallel.
STOCKHOLDERS CONTROL.
1T will not do to say that so long as
each railroad company has its own board
of directors they operate independently and
are not controlled by the owner of the ma
jority of their stock. 1t is the common ex-
perience of mankind that the acts of cor
porations are dictated, and that their policy
is controlled by those who own the major
ity of their stock. Indeed. one of the favor
ite methods in these days, and about the
only method of obtaining control of cor
poration. is to purchase the greater part of
its stock 1t was the method pursued by
the Northern Pacific and Great Northern
companies to obtain control of the Chicago,
Burlington & Quincy Railroad, and so long
latter will necessarily dominate the former,
and in a real sense determine all important
corporate acts.
'''The fact that the ownership of a major
ity of the capital stock of a corporation
gives one the mastery and control of the
corporation was distinctly recognized and
declared in in, ReaTsa sis VS. Great TSs Northern
has been recognized and declared by other
courts: Pennsylvania Railroad Company
VS.. Commonwealth. Att. (Pa.), 1868, 81;
Farmers Loan and Trust Company VS.
New York & Northern Railway Company,
$50 New York 40. 425; People ex rel. VS..
Chicago Gas Trust Company, 130 Ill. 26S, %
n. E. Rep. 79S, S02. In opposition to this
view counsel cites Pullman Car Company
VS.. Missouri Pacific Company lis Mo. 5S7,
$780, but in that case the meaning of the
word controlled as used in private con-
tract, 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 ownership of all the stock
of two competing and parallel roads vests
the owner thereof with the power to sup
press competition between such roads. We
entertain no doubt that ii does. Indeed, We
regard suppression of competition and to
the natural and inevitable result of such
ownership.
What has been done through the organ.
ization of the Securities Company accom-
plishes the object which Congress has de-
nounced as illegal, more effectually, per-
haps. than such combination is last
supposed. That is TO say, by what has
been done the power has been acquired
(and provision made for maintaining IT'D to
suppress competition between two inter-
state carriers who own and operate COM
peting and parallel lines of railroad. Com
petition. we think. would not be more ef-
fectually restrained than IL now is under
If the two railroad companies were con-
solidated under single charter.
THE NEW JERSEY CHARTER.
1T is manifest, therefore. that the New
Jersey charter is about the only shield
which the defendants can interpose be-
tween themselves and the law. The rea-
soning which led 10 the acquisition of that
charter would seem to have been that
while as individuals the promoters could
not. by agreement between themselves
place the majority of the stock of the two