Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1904-03-16
DECLARE MERGER VOID,
Government Wins the Northern
Securities Case.
IS A GREAT VICTORY.
United States Supreme Court Decides
That the Combination Violated the
Sherman Antitrust Law.


Securities company VS.. the United States,
involving the merger of the Northern
Pacific and the Great Northern Railroad
companies, was handed down today and
was in favor Of the government. The
opinion was read by Justice Harlan.
The opinion of the United States cir
cult court of Minnesota was affirmed.
The effect is to sustain the contention
that the Sherman antitrust law applies
to railroad combinations Of the character
in question.
Court Divided to a.
The decision was concurred in by JUS
tees Brown. Brewer, McKenna and
Day. while the chief justice and JUS
tees White, Peckham and Holmes dis
sented.
Competition Prevented.
Justice Harlan said that in the merger
of the two roads these stockholders disap-
peared and reappeared in the Securities
company, the two thus becoming practi-
cally consolidated in holding company,
the principal object being to prevent COM
petition. The court says that mo scheme
or device could certainly more effectively
come within the prohibition of the anti
trust law and it is within the meaning Of
the act a trust"
Case of Greatest Importance.
The case has attracted more attention
than any other suit before the court since
the first lnSular cases were decided. and
has been regarded by bench and bar as
equal III Importance with those cases and
with the income tax case. 1t was argued
in December last for two days and at
tracted general attention at that time as
it did previously when the decision was
rendered by the circuit court for the dis
trict of Minnesota.
The action was brought in tho circuit
court under the law of February II,
1908, which was for the purpose of ex-
peditiDg the case and was heard by the
four circuit court judges of the circuit.
They united in a decision favorable to
the United States and opposed to the
contentious OF the railroad companies.
Wanted to Do Up the Public.
g. The suit was instituted by the United
States against the Northern Securities
company and the two railroad COM
panies, the Northern Pacific and the
Great Northern and their leading stock
holders for the purpose of dissolving the
merger Of the two roads which the Unit
ed States declared had been created by
the creation of holding company, the
was claimed to be in violation of the
Sherman antitrust law. 1t was claimed
on behalf of the government that this
consolidation was in effect q pool Great
ed to promote the interests, not of one
system at the expense Of the other, but
OF both at the expense Of the public
The railroads claimed that the transfer
of the stock of the two companies to the
securities company was In the nature
of sale and perfectly legitimate.
Sherman Law Valid.
The contentious of the Securities com
pany were reviewed, and Justice Harlan
said they had received full attention He
quoted the various opinions involving the
trust question, saying that from them it
is to be gathered that all contracts in
restraint Of trade, reasonable or unreason-
able, are prohibited by the Sherman law
and that Congress has the power to estab-
lish such regulations as are laid down in
that law. Congress had power to enact
the statute.
Replying in detail to the points made
for the Securities company, Justice Harlan
said that the contention that the law is
an interference with the rights of the in
dividual states by which the companies
are incorporated, was not we'll founded.
In such cases, he said, the authority of
Congress is supreme. He also declared
it to be unnecessary to determine the
right of owners Of railroad stock to sell
the property, nor was 1t true that the
right of the Securities company to own
and hold railroad stock is the only ques-
ton involved. Such contentious are wide
of the mark, mere men Of straw.
All that the government complains of
is the existence of q corporation to re-
press commerce and is not concerned
with the other points.
Congress Has Power.
Justice Harlan said that in this day
there should be no doubt Of the complete
power of Congress to control Interstate
commerce, all appropriate means might be
resorted to for that purpose. All the
prior trust cases were in support of that
contention. Whether free and unre-
strained competition was wise, he said,
vas all economic question with which the
curt need not concern itself, the question
was that of statutory law.
He asserted the power of Congress over
interstate commerce to be as complete as
the power of state over domestic COM
merce.
Law Not Unconstitutional
Coming to the plea of the railroads that
he antitrust law should be declared I'M
,e Institutional, he said that the court
sould not See its way to that end. If
ae went on, 'the Securities companys
contentious are sound, why may not all
the railroads Of the United States en-
ter into a combination and by the de-
rates throughout the country in defiance
of CongreSs?'
New Jersey Not Blamed.
Justice Harlan also took occasion to
say that there had been nothing in the
Securities company's certificate of incor-
poration to indicate its purpose to be
that Of destroying commerce, and he
therefore absolved the state of New Jer-
sey from any charge Of such knowledge
In advance. 1t might be true that fed
eral court had no power to dissolve a
corporation Of a state but this circum-
stance could not be az indication of pow
erlessness to enforce the law, than which
90 corporation is stronger No device
could suffice to prevent this enforcement
IF the national statutes.
The courts had indeed consistently held
to the supremacy of the national laws in
case Of conflict between those laws and
the laws Of the states. So long as Con-
gress confined itself to its prescribed func-
tons, he said, there could be no danger.
At any rate the error, If any, was with
Congress. and it was for Congress to sup
ply the remedy, and not for the courts.
No Danger of Financial Panic.
IJ1ctt IL