Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1904-03-24
THE ZIG MERGER
| IS HND ILLEGAL
The Northern Securities Case
Goes Against Rail-
roadb.
VICTORY FOR }GovERNMENT
United States Supreme Court Up
holds Minnesota Coust-Injunction
Preventing Transfer of N. p. and
G. N. Stock Sustained.

Washington, March 15.-The opin-
ion of the supreme court of the Unit
ed States in the case of the North
ern Securities company VS.. the Unit
ed 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 Steates
circuit court for the district OF Min
nesota was affirmed
The effect is to sustain the conten-
tion that the Sherman antitrust law
applies to railroad combinations OF
the character in question.
Justice harlan said that in the mer-
ger Oh Inc two roads the stockholders
disappeared and reappeared in the Sc
curities company, the two thus be-
coming practically consolidated in a
holding company, the principal object
being to prevent competition. mo
scheme or device could certainly more
effectively come within the prohibi-
ton of the antitrust law and it is
within the meaning of the act trust"
The case mas 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 import
ance with those cases and with the
income tax case. 1t was argued in
December last for two days and at
tracted general attention at that time,
as 1T did previously when the decision
was rendered by the circuit court for
the district of Minnesota.
The action was brought in the cir
cult court under the law of February
II, 1903, which was for the purpose
Of eXpediting the case and was
heard by the four circuit court judges
Of the district. They united in de-
cision favorable to the United States
and opposed the contention of the
railroad companies.
The suit was instituted by the I'm
tied States against the Northern Sc
curities company and the two rail-
road companies and their leading
stockholders for the purpose of dis
solving the merger of the two roads
which, it was declared, was created
by the creation of a holding company,
the Securities company. This consol.
idation was claimed to be in violation
of the Sherman antitrust law. 1t
was claimed on behalf of the govern
ment that 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 rail-
roads claimed that the transfer of the
| stock Of the two companies to the Sc
curities company was in the nature of
a sale and perfectly legitimate. The
| contentious of the Securities COM
| pany were reviewed and Justice Har-
| Ian said they had received full atten-
| ton. He quoted the various opinions
| involving the trust question, saying
| that from them it is to be gathered
that all contracts in restraint OF
trade are prohibited by the Sherman
| law, and that congress has the power
to establish such regulations as are
laid down in that law. Congress had
power to enact the statute.
Replying in detail to the points
made for the Securities company, JUS
| tice Harlan said that 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
| owners of railroad stock to sell the
property, nor was 1t true that the
| right of the Securities company to
| hold and own railroad stock is the
only question involved. Such conten.
| tions are wide of the mark-mere men
| of straw. All that the government
| complains of is the existence of a
corporation to repress commerce and
| is not concerned with other points.
Justice Harlan said that in this
| day there should be no doubt Of the
| complete power of congress to con.
| troll interstate commerce, all approp
| rate means might be resorted to, fol-
lnau purpose. All the prior trust cases
| were in support of that contention
| Whether free and unrestrained com
petition was wise, he said, was an
economic question with which the
| court need not concern itself; the
question was that of statutory law.
He asserted the power Of congress
| over interstate commerce to be a.
complete as the power of a state tC
| cover domestic commerce. Coming
to the plea of the railroads that the
| antitrust law should be declared un
constitutional, he said that the court
| could not see it's way to that end
IF" ne went on, 1.-The securities com
pany's contentious are sound, why
may not all the railroads of the I'm
tied States enter into a combination
and by the device of holding corpora
tions control rates throughout the
country in defiance of congress?"
GOVERNMENT DEFEATED.