The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1904-03-18
Governments Contention Upheld
by the Supreme Court
THE MERGER WAS ILLEGAL

| eign nations and forbids attempts tn
monopolize such commerce"
1t was disputable, he continued. that
under the leadership OF Hill and Nor
gan, the stockholders of the two rail-
road companies. having practically par
| allel lines of road. had combined under
the laws of New Jersey by organizing
a corporation. for the holding of the
shares of the two companies upon an
agreed bar is of value.
Proceeding he said:
The stockholders of these two COM
peting companies disappeared as SUCH.
for the moment, but immediately re-
| appeared as stockholders of the holding
mpan which was thereafter to
guard the interests of both sets of
stockholders as a unit. and to manage,
or cause to be managed, both lines of
railroad as IL held in n ownership.
Necessarily by this combination or
arrangement, the holding company in
the fullest sense dominates the situa-
ton in the interest of those who were
stockholders of the constituent compa-
MES. as much so. for every practical
! purpose, as if it had been Itself a rail-
road corporation which had built, own
ed and operated both lines for the ex-
elusive benefit Of it's stockholders.
Necessarily also, the constituent COM
panfes ceased unde sue combination.
" NC lLIdIllNc competition y lTdUe ana
commerce along the railroads respec-
tive lines and have. become practically
n powerful corporation, by the name
of a holding corporation. the principal,
II not sole. object for the formation of
which was to carry out the purpose
Of the original combination under
which competition between the consti-
tuent companies would cease"
A Trust y Comli nation.
He said that the stockholders of the
two old companies are now united in
their interest in preventing all competi-
ton between the two lines. and that
they would take care that no persons
are chosen directors of the holding
company who will permit competition
between the constituent companies, the
result being that all the earnings of the
constituent companies make a common
fund in the hands of the securities
company. upon the basis of the certi-
ficates 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
a trust or otherwise = in re-
straint Of among the states
or with foreign nations, or could more
effectively and certainly suppress free
competition between the constituent
companies. This combination is, with
in the meaning of the act, a trust
DNN a avg ~ - " Iva, III ~
straint of interstate and international
commerce, and that is enough to bring
it under the condemnation of the act.
The mere existence of such a ~co11bina-
ton and the power acquired by the
holding company as trustee for the
combination. constitute a menace to.
and a restraint upon. that freedom OF
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 pub
lie under the operation of the general
law of competition, as between the
Great Northern and Northern Pacific
Railway companies, will be lost, and
the entire of the immense
territory in the Northern part of the
United States between the Great Lakes
n the Pacific at Puget sound will be
at the mercy Of a single holding cor
poration. organized in a state distant
from the people of that territory"
Motive for Competition Destroyed.
He agreed with the summing up bv
the circuit court of the results of the
combination, which was that it places
the control Of the two roads in the
hands of a single person. and second,
that it destroyed every motive for COM
petition etwee the two lines by pool
ing their earnings. Notwithstanding
both were engaged in interstate traffic.
Entering an Investigation Of the au-
thorities bearing upon the case, JUS
tice Harlan quoted the Knight. the
freight association, the joint traffic as
ISOLATION. the Hopkins, the Anderson,
the Addistone Pipe and Steel Company
and the Montague Lowery cases. He
deduced from the consideration of these
presidents the following propositions
as applying to the present cases:
Application OF Authorities to the Pres
ent Case.
That although the act of Congress. +.
known as the antitrust act, has not
reference to the mere manufacture and
production of articles or commodities
within the limits of the several states.
it embraces and declares to be illegal
every contract. combination or con-
spiracy. in whatever form, OF whatever
nature, and whoever may be parties TO
1t. which directly or necessarily oper-
ates in restraint of trade or commerce
among the several states or with for
eign nations.
That the act is not limited to re-
straints of interstate and i~nternation-
al trade or commerce tina are unreas-
enable in their nature but is directed
against all direct restraints bic
or unreasonable. imposed by any COM
bination. conspiracy, or monopoly upon
such trade or commerce.
THAT railroad carriers, engaged in
Interstate or international trade or
commerce are embraced by the act.
Tina combinations even among pri-
vate manufacturers or dealers where
by Interstate or international COM
merce is restrained are equally embrace
ed by the act.
That Congress has the power to es-
taoiish rules by which interstate and
International commerce shall be gov
erned, and, by the antitrust act, has
prescribed the rule of free competition
among those engaged in such COM
merce.
n every combination or conspir-
acy which would %extinguish compete
ton between otherwise competing rail-