The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1904-03-15
(CONCLrDED FRoM FIRsT PAGEl


ganizing a corporation for the holding of
the shares of the two companies upon an
1 agreed basis OF value. Proceeding, he said:
THE stockholders of these two competing
/ acknowledgement such. for the mo-
/ ment, but Immediately Eeappeared as stock
holders of5the holding company. which was
! thereafter. TO guard the interests of both
|. sets of stockholders as unit. and TO man
/ age or catSse OF be managed both lines OF
railroad a!.if held in one ownership. Neces-
| sarily by ,this combination or arrangement
or holding company in the fullest sense
/ dominates the situation in the interest OF
those who were stockholders OF the con-
/ stituent companies; much for every
/ practical purpose as if it had been itself
| railroad corporation which had built, owned
and operated botn lines for the exclusive
/ benefit or its stockholders. Necessarily,
/ also. the constituent companies ceased. un-
/ der such combination. to be in active COM
/ petition for trade and commerce along their
| respective lines. and have become practi
! cally one powerful consolidated corpora
/ ton, by the name of a holding company
| the principal, If not the sole object for the
/ formation of which was to carry out the
| purpose Of the original combination under
which competition by the cons .ituent COM
panies would cease
He said the stockholders of the two old
companies are now united in their interest
/ in preventing all competition between the
| two lines and that they would take care
/ that no persons are chosen directors of the
holding company who will permit COM
petition between the constituent companies,
the, the result being that al the earn
Il
make common fund in the hands of the
| Securities Company upon the basis of the
certificates of stock issued by the holding
company. No scheme or device could more
certainly come within the words of the
act combination In the form of trust or
otherwise sarao s in restraint OF com
| nations, or could more effectively and GER
| tainly suppress free competition between
| the constituent companies. The combina-
| ton is within the meaning of the act a
| trust, but II not a combination In re-
strafnt of interstate and interna tional COM
| merce, and that is enough to bring it under
| the condemnation OF the act. The mere ex-
| istence OF such combination. and the
power acquired by the holding company as
| trustee for the combination constitute a
| menace to and restraint upon that free
| dom of commerce which Congress intended
| TO recognize and protect, and which the
public is entitled to have protected. If not
| destroyed, all the advantages that would
| naturally come to the public under the
/ operation of the general law of competition
as between the Great Northern and NJ ,
| and the entire commerce of the immense
| territory In the northern part of the United
States between the great lakes and the
| Pacific, at Puget sound, would be at the
| mercy of a single holding corporation Or
| gained In a State distant from the people
| OF that territory.
RESULTS OF THE COMBINE
He agreed with the summing up by the
Circuit Court of the results of the combi-
nation. which was that it places the con-
troll OF the two roads in the hands of a
single person, and second, that it destroyed
every motive for competition between the
| two lines by pooling their earnings, not
withstandng both were engaged in inter-
state traffic
Entering upon an investigation of the au-
thorities bearing upon the case Justice
Harlan quoted the knight. the Freight As
ISOLATION, the Joint Traffic Association. the
Hopkins. the Anderson. the Addistone Pipe
| and Steel Company and the Montague and
Lauray cases He deduced from the con-
| sideration of these presidents the following
| propositions as applied 10 the present case:
| That, although the act of Congress,
| ence to the mere manufacture and produc-
ton of articles or commodities within the
declares TO be illegal every contract. COM
| bination or conspiracy, in whatever form. or
| whatever nature, and whoever may be par
ties to it, which directly or necessarily
| operates in restraint of trade or commerce
among the several states or with foreign
| nations.
THAT the act is not limited to restraints
| of interstate and international trade or
| commerce that are unreasonable In their
| nature, but is directed against all direct re-
| straints, reasonable or unreasonable, i'm
posed by any combination, conspiracy or
monopoly upon such trade or commerce.
| That railroad carriers engaged in inter-
state or international trade or commerce
are embraced by the act
THAT combinations even among private
manufacturers or dealers whereby inter-
state or international commerce is re-
strained are equally embraced by the act.
That Congress has the power to estab-
lish rules by which interstate and interna-
tional commerce shall be governed. and by
the antitrust act has prescribed the rule OF
free competition among those engaged in
such commerce.
THAT every combination or conspiracy
which would extinguish competition be-
tween otherwise competing railroads, en-
gagged in interstate trade or commerce, and
which would in that way restrain such
trade or commerce is made illegal by the
THAT the natural effect of competition is
to increase commerce, and an agreement
whose direct effect is to prevent this play
of competition restraints instead of pro-
notes trade and commerce.
That to vitiate combination, such as
the act of Congress condemns, Ii need not
be shown that in effect such combination
results or will result in total suppress
sion of trade, or in complete monopoly,
but IL is only essential to show that by its
necessary operation ii tends TO restrain
interstate or international trade or COM
merce. or tends to create monopoly In
such trade or commerce and to deprive the
public of the advantages that fow from
free competition.
liberty of contract does not prevent Con-
gress from prescribing the rule OF free
competition for those engaged In Interstate
and International commerce.
THAT under its power to regulate the
| commerce among the several States and
foreign nations Congress had authority to
enact the statute in question.
CONVENTIONS OF DEFENSE.
Justice Harlan took up the contention Of
the counsel for the Securities Company,
and in presenting them said that underly-
ing their argument is the idea that the
Northern Securities Company is a corpora
ton. and as it's acquisition of the stock OF
the railroad companies is not consistent
with the powers conferred by its charter
the enforcement of the act of Congress as
against their corporations will be in its
| operation an interference by the national
government with the internal commerce
of the States creating those corporations
To this objection Justice Harlan directed
a very large share of his opinion, return
ing frequently during the course of his
| remarks to a presentation of the right OF
| federal control over state direction in such
| cases. Speaking of the States rights plea
| of the railroad interests, he said:
| This view does not impress us. There
is no reason TO suppose that Congress had
| any purpose to interfere with the internal
affairs of the State, nor is there any ground
| whatever for the contention that the anti
| trust act regulates their domestic com
merce. BY its very terms the act regu-
| lates only commerce among the States and
in the foreign states. Viewed in that light
| cit words of the Constitution that instru-
ment and the laws enacted by Congress in
pursuance of its provisions are the SUI
| preme law of the land. anything in the
| Constitution or the laws of any States A.
| the contrary Notwithstanding, supreme