The Birmingham age-herald., 1904-03-15


 holding of the shares of the two compa- nles upon an agreed basis of value. Pro- eeeding, he said:
 Disappeared and Reappeared.
 'eThe stockholders of these two compet- ing companies disappeared as such for the moment, but immediately reappeared as stockholders of the holding company and were thereafter able to guard the inter ests of both sets of stockholders as unit, and to manage or cause to be managed both lines of railroad, as if held In one ownership. Necessarily by this comblna- ton 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- nies as much so, for every practical pur- pose. as If 1t had been Itself a railroad which had built, owned and operated both lines for the exclusive ben eft of its stockholders. Necessarily, also, the constituent companies ceased. under such combination to be in active compe- tition for trade and commerce along their respective lines, and have become praeti- cally one powerful consolidated corpora ton by the name of a holding corporation. the principal, if not sole object of the formation of which was to carry out the purpose of the original combination under which competition between the constitu- ent companies would cease"
 He said that the stockholders of the two old companies are now united in their in- terest, preventing all competition be- tween 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 con- sttuent companies, the result being that all the earnings of the companies make a common fund in the hands of the securi- ties company upon the basisi of the cer- tifcates of the stock issued by the hold ing 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 restraint of com merce among the states or with foreign nations" or could more effectively and ceratinly suppress free competition be- tween the constituent companies. This combination is within the meaning of the act trust" but if not 1t is a com bination in restraint of inter state and international commerce, and that is enough to bring 1t under the condemna- ton of the act.
 Constitute a Menace.
 The mere existence of such a combina- tion, and the power acquired by the hold ing company as trustee for the comblna- tion, continue a menace to and re- straint upon that freedom 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 Northern Pacific Railway companies will be lost, and the q tF~f FNr1aNa .F in the northern part of the United States between the great lakes ard the Paeifc at Puget Sound would be at the mercy of single holding corporation organized in state distant from the people of that territory"
 lie agreed with the stunning up by the circuit court of the results of the combi- nation, which was that 1t places the con trol of the two roads in the hands of a single person, and second that 1t de- stroyed every motive for competition be- tween the two lines pooling their earn ings, notwithstanding both were engaged in interstate traffic.
 Entering upon an investigation of the authorities bearing upon the case, Justice Harlan quoted the Knight. the Freight association, the Joint Traffic assiciation. the Hopkins. the Anderson, the Addistone Pipe and Steel company, and the Mon tague-Lowery cases. He deducted from the consideration of these precedents, the following proposition as applied to the present case:
 Declares Them Illegal.
 That although the act of congress known as the antitrust act makes no reference to the mere manufacture and production of articles or commodities within the 1im- It's or the several states, 1t embraces and declares to be illegal every contract, com bination or conspiracy in what ever form. or whatever nature, and whoever may be parties to 1t 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 restraints. reasonable or unreasonable, imposed by any combination, conspiracy or monopoly upon such trade or com merce.
 That railroad carriers engaged in inter- state or international trade or commerce are embraced by the act.
 The combinations even among private manufacturers or dealers whereby inter state or international commerce is re-
 
 act.
 That congress has the power to estab- fish rules by which interstate and inter national commerce shall be governed, and by the antitrust act has prescribed the rule of free competition among those en- gagged in such commerce.
 That every combination or conspiracy which would extlnguish competition be- tween otherwise competing railroads en- f.. 4x.t-
 and which would in that way restrain such trade or commerce, is made illegal by the act.
 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 promotes trade and commerce
 Does Not Mean Fatality.
 That to vitiate a combination such as the act of congress condemns, 1t need not be shown that such combination in fact results or will result in total suppress sion of trade, or in a complete monopoly, but 1t is only essential to show that by its necessary operation 1t tends to restrain Interstate or international trade or com merce, or tends to create a monopoly In such trade or commerce., and to deprive the public of the advantages that follow from free competition.
 That the constitutional guarantee of lib- erty of contract does not prevent congress from prescribing the rule of free competi- ton for those engaged in interstate and international commerce.
 That under it's power to regulate com merce among the several states and for eign nations. congress had authority to enact the statute in question.
 Justice Harlan took up the contentious
 e. and in presenting them said that under 1vinR their arR1rnent is the idea that a q