The free lance. (Fredericksburg, Va.) 1885-1926, 1904-03-19
THE MERGER ILLEGAL
Government Wins in Northern Sc
curities Litigation.
VIOLATION OF ANTITRUST Law

Supreme Court Of the United States
Decides Combine Was to Prevent
Competition - Power Of Congress
over Interstate Commerce Complete
Washington, March 10. - In the
rnited States supreme court an opin-
ion was delivered in the merger case
of The Northern Securities Company
vs. the United states in favor OF the
governments contention that the
merger was Illegal. The opinion oil
the court was handed down by JUS
lice Harlan. and it upheld the decree
of the circuit court for the district OF
. Minnesota in every particular. Four
of the justices dissented from the five
constituting the majority.
The division in the court was due
to difference of opinion as to the
right of federal control of state cor
porations. The majority opinion pro-
ceeded on the theory that congress
has a right under the constitution to
control interstate commerce. no mat
ter by whom conducted while the mi
nority or dissenting opinion was based
on the theory that in the present case
Me effort is to regulate the ownership
of railroad stocks by state corpora
tons. and that such ownership is not
interstate traffic.
The opinion was read by Justice
Harlan. and was concurred in by Jus
tices Brown, Brewer. McKenna and
Day. while the chief justice and Jus.
tees White. Peckham and Holmes dis
scented.
Justice Harlan said that in the
+ merger of the Northern Pacific and the
Great Northern Railway companies
the stockholders disappeared and re-
appeared in the Securities Company
the two thus becoming practically con
solidated in holding company. the
principal object being TO prevent com
petition NO scheme or device could
certainly more effectively come within
the prohibition of the antitrust law
and il is within the meaning Of the
act trust" is the language Of the
opinion.
The contentious of the Securities
Company were reviewed. and Justice
Harlan said they had received full at
tention. lie quoted the various Op.n-
ions involving the trust question, say
ing that from them it is 70 be gathered
that all contracts in restraint OF trade.
reasonable or unreasonable. are pro
hibited by the sherman law, and that
congress has the power TO establish
such regulations as are laid down In
TIT law Congress had power 10 e..
act the statute.
He asserted the power Of congress
over interstate commerce to be as
complete as the power Of a state over
domestic commerce.
Owing to the plea Of the railroads
that the antitrust law should be de
clared unconstitutional. he said that
the court could not see its way to that
end. If" he went on. "the Securities
Companys contentious are sound,
why may not all the railroads of the
United States enter into a combina-
ton and by the device OF holding
corporation control rates throughout
the country in defiance of congress-
Justice Harlan also took occasion to
say that there had been nothing in the
+ Securities Company's certificate OF in
corporation TO indicate its purpose TO
be that OF destroying commerce. and
f he therefore absolyed the state of New
/ jersey from any charge of such knowl-
/ edge in advance. II might be Tue that
a federal court had no power to dis
solve a corporation of a state, but this
circumstance could not be an indica-
ton OF poweriessness to enforce the
law. than which no corporation is
stronger.
Justice Harlan said that in this day
there should be no doubt of the com
plete power of congress to control in
ter.state 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 unrestrained competition was
wise. he said. was an economic ques-
ton with which the court need not
concern itself; the question was that
Of statutory law.
Justice Harlan declared that the
only object OF the merger was to pre-
vent competition and he said that If
no one else knew this to be the case
]. Pierpont Morgan, one of the defend
ants, knew that to have been the case.
The extracts from Mr.. Morgan's testi-
mony were quoted in support of this
statement
Justice Holmes read the dissenting
opinion. He construed the antitrust
law as a criminal statute and declared
that there was nothing in 1t to indi-
cate that II had been enacted for the
control of large concerns. as IS gener-
ally contended. Indeed the law had not
been understood as applying to rail
roads until so construed by the SUI
preme court The act, he contended,
applies only to contracts and combina.
tions in restraint of trade and makes
no reference to competition.
Justice White also road . dissenfin"
opinion. taking up especially the power
of congress to control commerce. Be
ginning with an argument in support
of dissenting opinion, he outlined the
points involved in the case He re-
ferred to its importance and called at.
tention TO the fact that only -four
members of the court. one less than
4 majority, had united in the opinion
Of the court.
He then said such principles as are
laid down in that opinion are "de.
structive of government, destructive