The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1904-03-18
GOVERNMENT wins
IN MERGER CASE
Supreme Court Hands Down d
Sweeping Opinion Against
Hill Railroad Trust.
DONE BY DIVIDED COURT
Majority Opinion by Justice Harlan Is
Vigorous in Its Position That The
Combination Was Subject
to the Law.

Washington, March 14.-The SUI
preme court today handed down Il de-
cision in the Northern Securities merg-
er case in favor of the government.
The opinion was read by Justice
Harlan. 1t atIirms the opinion of the
United States circuit court for the dis
trict of Minnesota. The effect Is to
sustain the contention that the Sher-
man anti-tyust law applies to railroad
combinations of the character In ques-
ton.
Justice Harlan sale chat in the merg-
er of the two roads the stockholders
disappeared and r%eappeared again in
the securities company, the two thus
| becoming practically consolidated in
! the holdings of the company, the prin-
cipal object being to prevent competi-
ton.
No scheme or device could certainly
more effectively come within the pro-
| hibition of the anti-trust law, and it is
within the meaning OF the act a trust"
Grounds for the Opinion.
Justice Harlan quoted various optn-
| ions involving the trust question. say
ing that from them it is to be gathered
| that all contracts in restraint of trade,
reasonable or unreasonable, are pro-
| hibited by the Sherman law, and that
| congress has power to establish such
regulations as are laid down in that
law. Congress had power to enact the
statute.
The case has attracted universal at
tention and has been regarded by
hanch and bar rs equal in Importance
, with the insular and income tax cases.
The suit was instituted by the United
States against the Northern Securities
| company, the Northern Pacific and
Great Northern railroad companies,
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 creation
of ii holding company. the Securities
onlpany
This consultation was claimed to be In
violation of the Sherman antitrust law,
and was in effect a pool created to pro-
mote the interests of both q at the
expense of the public. The railroads
claimed the transfer of stock of the two
| companies to the Securities company
was in the nature of a sale, and per-
fectly legitimate. The contentious of
the Securities company We're reviewed
by Justice Harlan, who said they had
received full attention.
How the Court Divided.
The decision was concurred in by
Justices Brown, Brewer, McINenna and
Day, while Chief Justice Fuller and
Justices White, Peckham and Holmes
dissented. Justice Brewer coneurred in
affirming the decision, but from differ
ent reasons than those of the majority.
Sweeping Conclusions.
Justice Harlan said the contention
that the law is an Interference with the
rights of the individual states by which
the companies are Incorporated was not
well founded. In such cases he said
the authority of congress is supreme.
He also declared it to be unnecessary
to determine the right of the wner
of railroad stock to sell the property;
nor was 1T true lat the right of the Sc
curities company to own and hold rail-
road stock was the only question in
volved.
He asserted, however, the power of
congress over interstate to
be as complete as the power of the
state over domestic m
Coming to the plea of the railroads
that the antitrust laws should be de-
clared unconstitutional. he said that
the court could not see its way to that
end.
If" he went on, "the Securities COM
pany's contentious are sound, why may
not all the railroads of the United
States enter into a combination, and
by the device of Holding corporation
control rates throughout the country,
in defiance of congress?"
Justice Harlan took occasion to say
that there had been nothing in the Sc
curities company's certificate of incor-
poration to indicate it's purpose to be
that of destroying commerce, and he,
therefore, absolved the state of New
Jersey from any charge of such knowl-
edge in advance.
No Disaster to Be Feared.
Justice Harlan also discussed the pre-
d%ictions of financial disaster from en-
forcement of the antitrust law, but
discouraged them, saying they were
usual under such circumstances and
need not be realized.
He declared the only object of the
merger was to prevent competition, and
said If no one else knew his to be the
case, j. Pierpont Morgan knew it to
lave been true. Extracts from Mr..
Morgan's testimony were quoted in
support of this slater ent.
The Dissenting Opinion.
Justice Holmes read the dissenting
opinion. He construed the antitrust
law as a criminal statute and declared
there was nothing in it to indicate that
it had been enacted merely for the con-
troll of large concerns, as is generally
commended. Indeed, the law had not
been understood as applying to rail-
roads until so construed by the supreme
court. The act. he contended. applies
only to contracts and combinations in
restraint of trade, and makes no refer
ence to competition.
The Trans-Missouri Case.
Previous to the present decision the
most significant decision of the su-
preme court under the Sherman law
was in the case Of the Trans-Missouri