The Worthington advance. [volume] (Worthington, Minn.) 1874-1908, 1904-03-18
THE MERGER :.
Declared ILlCAL.
The Supreme Court of the United
States Decides that Mer-
ger Cannot Obtain.
This Decision does not Affect the
Case of the State of Min
nesota Now Pending.

Ease OF INC 0CdCe O1 mAU.
nesota Now Pending.
Washington, March 15.-The opin-
ion of the supreme court of the
United States in the case of the
Northern Securities Company VS. the
United States, involving the merger
of the Northern Pacific and the Great
Northern Railroad companies, was
| handed down yesterday, and was in
favor of the government. The opin-
ion was read by Justice Harlan.
The opinion of the United States
circuit court for the district of Min.
nesota was affirmed.
The effect is to sustain the conten--
ton that the Sherman antitrust law
| applies to railroad combinations OF
the character in question.
Justice Harlan said that in the
merger of the roads the stockholders
| disappeared, and reappeared in the
| securities company, the two thus be-
coming practically consolidated in a
| holding company, the principal OBJ.
ject being to prevent competition. He
continues:
"No scheme or device could more.
certainly, more effectively come
within the prohibition of the anti
trust law, and it is within the mean
ing of the act q trust"
The case has attracted more atten-.
ton than any other suit before the
court since the first insular cases.
were decided, and has been regarded
by bench and bar as equal in impor-
lance with those cases, and with the
income tax case.
"a - n4n1~oolo,n oc+ foy>.
two days and attracted general at.
tention at that time, as it did prev,
viously, when the decision was rem
dered by the circuit court for the dis.
trict of Minnesota.
The action was brought in the cir
chit court under the law of Feb. II.
1903, which was for the purpose of
expediting the case and was heard
by the four circuit judges of the cir
cult.
They united in a decision favorable.
to the United States and opposed to-
the contentious of the railroad COM.
panies.
The suit was instituted by the.
United States against the Northern
Securities Company and the two rail
road companies, the Northern Pacific,
and the Great Northern, and their
leading stockholders, for the purpose
of dissolving the merger of the two
roads which the United States de-.
clared had been created by the crea--
ton of a holding company, the Sec
urities company.
This consolidation was in effect a.
pool created 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 conn.,
| panies to the Securities company
| was in the nature of a sale and per-
fectly legitimate.
The contentious of the Security
company were reviewed and Justice,
Harlan said they had received full at
tention.
The following is synopsis, pre-
pared by an expert, showing clearly
the points involved in the Northern
Securities case:
/. Has a combination been accom-
P Pany Of Section Of the antitrust act?
2. Have the defendants monopolized or
attempted to monopolize any part Of the
8. Was the relief granted BY the cir
cult court by that an a
frmative answer should be given to- each.
OF these questions. If either question or
in the the
ment contends that the decree Of the
circuit court must be affirmed.
4. That a combination has been formed
| by centering. the title to- majority OF
the railway shares in the Securities Com
pany. ., -
taininE oa' ma majority Of the stock q The
two reads has &c aeanirfd
G. When the natural effect of an agree
ment is to prevent competition, the agree
ment, is in restraint Of trade and prohtb-
ton or monopoly exists within the mean
that the immediate effect is to suppress
composition or establish a monopoly. 1t
is sufficient to show that they tend to"
! s. 1t is not necessary to show that the
combination has actually raised prices.
suppressed competition or established a
sary effect Of the combination Is to give
the combination the power to do these
s. 1t is not necessary to show even
that the combinat ton agreed to do the un-
lawful acts: 1t is. enough that the COM
' 10. II It be shown that a co COZ
or monopoly has been formed the neces-
sary effect Of which Is to restrain. trade
violated and it is not necessary to show
the motive or desire.
Of interstate railways is combination Of
trade within the meaning Of the anti
trust act.
T.. It is no violation Of the reserved
rights Of states but on the contrary IS
clearly within the federal power. for con-
gress to prohibit anything which has a
tendency to restrain interstate trade.
10. Ownership Of q majority Of it's
stocks constitutes the control Of a corpor-
alton when the inquiry Is whether a COM
bination has been formed to restrain
trade.
4. Therefore. by transferring ma
jority Of their stock to common trustee
the two railway companies have COM
bined, a violation Of the. act.
is. The Securities Company has mono
polized part Of interstate commerce, the
violation Of section 2, by acquiring a ma
5ority Of the stock Of two competing
BRO. olckEY's SAYINGS.