New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-01-03
THE MERGER DEFENDED
Briefs for Appellees Filed in North
~ ern Securities Case.


wsshington. Jan 1.-TWO briefs on behalf OF the
appellees in the case Of the State OF Minnesota
against the Northern Securities Company and
others involving the consolidation OF the owner
chip Of the Northern Pacific and Great Northern
railroads IN the securities company were filed to-
day in the United States Supreme Court. One was
q general argument in behalf OF all the appellees
and the other a special brief in support of the
position OF the securities company only The gen
eral brief is signed by John G. Johnson. George
B. Young. n. d. Grover and c. w. Bum. The
other is signed by W. p. C1ough. Both briefs
contend for the regularity OF the purchase Of the
shares Of the companies by the securities COM
psny and urge that the Minnesota Antitrust law
does not cover the transaction.
CALL THE UNION IMPERATIVE
The general brief necessarily traverses much of
the ground covered IN the case OF the United States
against the companies involved. The attorneys re-
view The incidents Of the consolidation and say
that & necessary, IN order TO extend the trade
OF the United States TO the Orient. that it
sential 70 both the Northern Pacific and the Great
Northern 10 have Eastern connection. which
vas secured through the purchase Of the Burling-
ton road. and also that the union became almost
imperative after the raid made by the Union
Pacific on Northern Pacific stock in 1901" They
then say:
And as just such an attack might be renewed
by The same or other parties. as change Of own
a. GLy TINE i result rom death or other~se-would
enSnse lte naLanSe OF power IN The corporation
possibly make the ImIistaake Of buying preferred
J. P. Morgan & co. deemed it absolutely necessary
10 Iake measures whcn should protect their prop
the commerce OF the two roads. and the enter
nectiOn could give.
1t IS said that MI Morgan's first thought in
connection with the Union Pacific raid was 10
protect the Northern Pacific shares, and that the
consolidation Of the two roads in the securities
company was afterthought. AT first they
say, he hac in mind placing the shares in q trust
company but this was soon abandoned as. from
its small capitalization, a trust company could
be bought up easier than the railroad company.
About the month Of September. learning of the
enlargement OF the plan OF the Great Northern
holding company and the large capitalization
sulting therefrom, which large capitalization
would add greatly 10 the protection OF the North
ern Pacific stock transferred 10 it. AIR. Morgan
proposed TO Mr.. Hi! that he would turn in the
Northern Pacific stock Of J. 2 Morgan & Co. and
their friends to this proposed holding company
1t is contended that the Incorporation OF the Sc
curities company in New-JeTsey instead Of Min
nesota was perfectly regular On this point they
say:
AS nearly all the shareholders of both railway
companies lived or the Atlantic Coast, ard as no.
body Incorporates in Minnesota who can help it,
TO the prejudice, of the defendants in this case
that the company was Incorporated in New-Jer:
tey. glz,l9
RESTRAINT OF TRADE DENIED.
effect OF preventing competition where the two
roads run. the attorneys contend:
Taking all the facts into account. # cannot be
said that the net result has been or will be = re-
proved. And al the factS-au the commerce Of the
railway cOmQ@nies-must be taken into account.
and not merely the small portion, If any. that may
have been incidentally restrained.
They maintain that the consolidation was not
nct OF the corporations themselves but OF the share
holders and say that the sales Of stock thus made
BY the shareholders were the acts Of the
railways themselves than any other sale OF stock
would be. 1t is also asserted that the evidence
falls 70 show that the Securities Company has
taken any part in the management OF the railway
lines In conclusion it is asserted the entire
transaction WIS legal and regular.
Mr.. Coughs brief is devoted to a discussion OF
the bearing Of the Minnesota antitrust law this
case. He says:
% This statute Is plain attempt by a State reg
Ilate commerce between the States and with for
elSn countries. The legislation did not proceed upon
the theory or separation Of State trade from In
terstate and international This highly penal law
have been willing adopt Il il its operation would
be restricted TO trade within the Jurisdiction of
the STATE. Ihls may be an instance where the
plain ingalidity Of part Of what the legislature
den acts must be done within the Jurisdiction Of
the State. This limitation attaches all State
Hesitation. The things questioned here have been
.lLnled 10 purchases mace IN the state OF New
York by i corporation Of the State Of New-Jersev
Of shares, some in corporation Of the State OF
Wisconsin ana Others in corporation Of the State
these purchases has ever been done IN the State OF
minnesota. No act Of any Kind in connection with
any Of the shares purchased has been OF is intended
10 be done in the State OF Minnesota.