davidaulloa/AmericanStories huggingface dataset:
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
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joyment of such rights would enable
those who possess them, if they en-
gage in interstate commerce, to exert
a power over the same. The PROPOSE
ton, he asserted, only states in an
other form that "the right to acquire
the stock was interstate commerce and
therefore was within the authority of
congress, and is refuted by the reasons
and authorities already advanced that
the proposition; if adopted. would ex-
tend the power of congress to all sub
jects essentially local.
$50 clearly is this the result of the
particular proposition now being con-
sidered that / again illustrate the
subject. Under this doctrine the
sum of property to be acquired by in
dividuals or by corporations, the con-
tracts which they would make, would
be within the regulating power of con-
gress. If the wage Garner organized to
better his condition and congress be-
lieved that the existence of such or
ganization would give power, if 1t
were exerted, to affect interstate
commerce, congress could forbid the
organization of all labor associations
Indeed, the doctrine must in reason
lead to a concession of the right in
congress to regulate concerning the
aptitude, the character and capacity
of persons
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
AVS EVIDENCE
SUSTAINS CHARGES

In our Judgment the evidence fully sus
ms the material allegations of the bill
I'd shows a violation of the act or con-
'ess. in so far as it declares Illegal every
lmbination or conspiracy in restraint Of
lmmerce among the several states and
it'll foreign nations, and forb1ds attempts
monopolize such commerce.
He again REQUIRED to the facts in
ie case and said that, laying aside
ny minor things, it was indisputable
lat upon the principal facts Of the
cord under the leadership of Hill and
organ the stockholders of the two
ilroad companies, having practically
iraIlel lines Of road, had combined
lder the laws of New Jersey by or
inizing a corporation for the holding
the shares Of the two companies
BON an agreed basis of value. Pro-
eding. he said:
The stockholders of these two competing
irnDanieS disappeared, as such for the
oment. but Immediately Teappeared as
ockholderS of the holding company,
lich was thereafter to guard the inter-
is of both sets of stockholders as unit,
I'd to manage or cause to be managed,
th lines of railroad as if held in one
worship. Necessarily by this combina-
On or arrangement the holding company
the fullest sense dominates the Situa
N in the interest of those VINO We're
ockholders of the constituent companies;
much so for every practical purpose
if it had been itself a railroad corpora
IN which had built. owned and ope-
ted both lines for the exclusive benefit
its stockholders. Necessarily, also, the
nstituent companies ceased. under such
combination, to be in active competition
trade and commerce along their re-
-ective lines, and have become practical
one powerful consolidated corporation,
the name of a holding corporation, the
incipal. if not sole, object for the form
,se of the original combination under
aich competition between the constitu-
[ companies would cease.
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15

of an ordinary incident OF property and
personsal freedom is enough to make that
exercise unlawful. there is hardly any
transaction concerning Commerce between
the states that may not be made crime
by the finding of a jury or a court. The
personal ascendancy Of one man may be
such thai. 1t would give to his advice the
effect OF b command, If he owned but a
single share In each road. The tendency
gof his presence In the stockholders, meet
tngs might be certain to prevent competi-
ton, and thus his advice, IL not his mere
existence, become crime.
Referring to the popular impression
concerning the intention Of the anti
trust law. Justice Holmes said:
There is natural feeling that somehow
or other the statute meant to strike at
combinations great enough to cause just
anxiety Oh the part of those who love
their country more than money. while it
viewed such little ones as have suppos-
ed with just Indifference. This notion it
may be said, somehow breathes from the
pores of the act although 1t seems to be
contradicted in every way by the words
in detail
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
QUESTION OF SIZE
PLAYS A PART

And 1t has occurred to me that 1t might
be that when combination reached a
certain size 1t might have attributed to 1t
more of the character of monopoly
merely by virtue of it's size than would
be attributed to a smaller one am quite
clear that it is only in connection with
mOnopolies that size could play any. part.
But my answer has been indicated al
ready.
In the first place. size in the case Of
railroads is an Inevitable incident, and If
Great Northern and the Northern Pacific
already were too great and encountered
the law. In the next place, in the case Of
railroads 1t is evident that the. size of
the combinati ton Is reached for other ends
than those which would make them mo-
nopolies. The combinations are not formed
for the purpose of excluding others from
the field. Finally. even small railroad
will have the same tendency to exclude
others from its narrow area that great
ones have to exclude others from a greater
one. and the statute attacks the small
monOpOlieS as well as the great The very
words of the act make such a distinction
impossible in this case and it has not been
attempted in express terms.
He did not expect. he said, to hear
it contended that Mr.. Morgan could be
sent to Jail for buying in his individual
capacity shares of stock Of the two
railroad companies, even if he bought
them both at the same time and got
ulOTe IMAM nall OIL the STOCK Ol edCn
road. yet" he said, unless 1 am
entirely wrong in my understanding Of
what a combination in restraint of
trade means, then the same monopoly
may be attempted and effected by an
individual and is made equally Illegal
in the case by section two"
He discussed at some length the eff
feet Of partnership, and said that
such a combination is not contract
or combination in restraint of trade
between the partners unless words
were to be given a new meaning for
the purposes of this act, and he con-
tended that there had been no refer
ence to the suppression of competition
in the trans Missouri decision. ITO
suppress competition in that way" he
said, sis one thing; to suppress it by
fusion is another" Continuing in this
line he said:
The law says nothing about competition
and only prevents its suppression by con-
tracts or combinations in restraint of
trade, and such contracts or combinations
derive their character as restraining trade
from other features than the suppression
of competition alone
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
AUTHORITY OF THE
STATE CONSIDERED

Taking up the contention that rail-
road corporations created, under the
laws of a state can be consolidated
only with the authority of that state,
Justice Harlan said that he could not
understand why this suggestion was
made in this case, for" he went on,
there is no pretense that the COM
bination here in question was under
the authority of the states under whose
laws these railroad corporations were
created"
In the form Of an Interrogation he
added:
But even if the state allowed consolida-
tfon, would 1t not follow that the stock
holders of two or more state corpora tons
engaged in interstate commerce could
lawfully combine and form a distinct cor
poration to hold the stock of the con-
stituent corporations, and by destroying
competition between them restrain COM
merce among the states and with foreign
nations?
Many citations were given in re-
Spouse to this inquiry, all bearing upon
the right of states to control their own
domestic commerce, but intended at
the same time to show the authority
which the states possess to guard the
public against combinations which in
terfere with the operation of the nat
ural laws of competition within state
limits.
He then quoted the case Of Gibbons
VS.. Ogden, to the effect that "the pow
er over commerce with foreign nations
and among the several states is vest
ed in congress as absolutely as it would
be in single government having in
its constitution the same restrictions
on the exercise of power as are found
in the constitution Of the United
States"
With this quotation as text, Justice
Harlan proceeded with an interro-
| CATION:
rs there, then" he asked, amy es-
cape from the conclusion that, sub
| ject to such limitations, the power of
congress over interstate and interna-
tional commerce is as full and COM
plete as is the power of any state over
| its domestic commerce? If a state
may strike down combina atoms that re-
strain its domestic commerce by de-
| stroying free competition among those
| engaged in such commerce, what pow
| er, except that Of congress, is compe-
! tent to protect the freedom of inter-
state and international commerce when
assailed by a combination that re-
strains such commerce by sitting COM
petition among those engaged in it ?'
| AT this point Justice Harlan an
! nounced the inability of the court to
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15

slider such abstract general questions. The
court need not now concern itself in them.
They are not here to be examined and
determined and may as well be left for
consideration in, some cases necessarily in
volving their determination.
Justice Harlan also referred to the
argument that the. position of the gov
eminent amounts to declaring that the
ownerShfp OF stock in a railroad cor
poration is IN itself Interstate, COM
merce, and to other similar declara-
lions, and, commenting upon these. he
said:
We do not understand that the govern
ment makes any such contentious or
takes any such positions as those state
ments imply. 1t does not contend that
congress may control the mere ownership
OF stock In q state corporation, engaged
In interstate commerce. IT does not con-
tend that congress can control the organi-
zation or mere ownership OF state corpora
tions. authorized by their charters to en-
gage In Interstate and international Com
may protect the freedom OF interstate
commerce by any means that are appro-
pirate and that are lawful and not pro-
hibited by the constitution. 1t does con-
tend that no state, corporation can stand
In the way of the enforcement of the ma
tional will. legally expressed. What the
government particularly complains OF. in
deed, all that 1T complains of here, is the
existence OF combination among the
stockholders OF competing railroads. which
in violation of the act of congress re-
strains Interstate commerce through the
agency Of common corporate trustee
designated to act for both companies in
REFRESHING free competition by them.
The opinion then takes up the right
of congress to enact such legislation as
the antitrust law and goes into an
inquiry as to how far the courts may
go in order to give effect to such an
act and to remedy the evils designed
to be suppressed by 1t.
Quoting the famous declaration of
the court in the case of McCulloch VS..
Maryland, that the government or
dained and established by the consti-
tuition is. within the limits Of the power
granted to it, "the government of all;
that it represents and acts for all and
is supreme within its sphere of action,
Justice Harlan said it was the inten-
ton of legislation. of this character to
prescribe rule for interstate and in
ternational commerce, which should
prevent vexation by combinations,
conspiracies or monopolies' which re-
strain commerce by destroying or re-
stricting competition. He then added:
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
COMMENDS ACTION
OF CIRCUIT COURT

Discussing the effectiveness of re-
lief at the hands Of the court, he
quoted approvingly the disposal by the
circuit court of the point, and con-
tinued:
The circuit court has only done what
the actual situation demanded. Its de-
cree has done nothing more than to meet
the requirements Of. the statute It could
not have done less without declaring its
impotency In dealing with those who have
violated the law.
The decree. If executed. will destroy
not the property interests of the original
stockholders of the constituent compan-
les, but the power of the holding corpor-.
combination, to do that which, If done.
would restrain interstate and information
commerce. The exercise of that power
being restrained. the object of congress
the act in question will be valueless for
any practical purpose.
Attention also was given to the ar
gument that the antitrust act must
be strictly construed In it's criminal
features. Quoting authorities on this
subject, Justice Harlan said:
Guided by these long established rules
of construction it is manifest that if the
antitrust act is held not to embrace a
intention of the legislative branch OF
the government will be defeated. II con-
gress has not. by the words used in the
act. described this and like cases it
would. we apprehend be impossible to
find words that would describe them.
This, it must be remembered. is a suit
in equity instituted by authority of con-
gress ito prevent and restrain viola
lions of the act" and the court in vir-
tue of a well-settled rule governing pro-
Nceedings in equity, may mold it's decree
so as to. accomplish practical results
such results as law and justice demands
M
complain Of the decree in matter Of law
and 1t should be affirmed.
Justice Harlan, in conclusion, said:
The judgment of the court is, that the
decree below be and hereby is affirmed
with liberty to the circuit court to pro-
coed in the execution OF it's decree as
the circumstances may require.
Justices Brewer, Brown, McKenna
and Day concurred in this opinion, and
they, with Justice Harlan, constituting
a majority of the court, made it the
opinion of the court
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
CONCLUSIONS DEDUCED
BY THE COURT

Entering upon an investigation OF
the authorities bearing upon the case,
Justice Harlan quoted the Knight, the
Freight association, the Joint Traffic
association, the Hopkins, the Ander-
son, the Addistone Pipe and Steel
company and the Montague-Lowery
cases. He deduced from the consider
alton of these presidents the following
propositions as applied to the present
case:
That although the act of congress
known as the anti trust act has no ref
erence to the mere manufacture and pro-
duction of articles or commodities within
the limits of the several states 1T en-
braces and declares to be illegal every
contract combination or conspiracy, In
whatever form, of whatever nature. and
whoever may be parties to 1t: which al.
rectly or necessarily operates in restraint
of trade or commerce among the several
states or with foreign nations.
That the act is not limited to- re,
straints of Interstate and international
trade or commerce that are unreasonable
in their nature. but is directed against all
direct restraints, reasonable or unrea-
sonable. imposed by any combination.
commerce.
That railroad carriers engaged in in
terstate or international trade or COM
MERGE 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 inter
national 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 conspira cy
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 act.
That the natural effect Of competition
is to increase commerce and an agree
ment whose direct effect is to prevent
this play of competition, restraints in
stead of promotes trade and commerce.
That to vitiate combination, such as
the act of congress condemns, it need
not be shown that such combination, in
fact, results or will result in a total
suppression of trade or in complete
monopoly, but it is only essential to show
that by it's necessary operation it tends
to restrain interstate Of international
trade or commerce or tends to create a
monopoly in such trade or commerce and
to deprive the public of the advantages
that flow from free competition
That the constitutional guarantee Of
liberty of contract does not prevent con-
gress from prescribing the rule of free
competition for those engaged in inter
state and international commerce.
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
CONTENDS FORRIGHT
OF FEDERAL CONTROL

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 conten-
ton of the counsel for the Securities,
company and in presenting that said:
Underlying their argument is the idea
that as the Northern Securities COM
pany is a corporation, and as its &C
QUESTION of the stock of the railroad
powers conferred by its charter, the en-
forcement of the act of congress as
against these corporations will be in its
operation an interference by the nation
al government with the internal COM
merce of the states creating these cor
porationS.
To this objection Justice Harlan
directed a very large share of his
opinion, returning frequently during
his remarks to a presentation of the
right of federal control over state d.
rection in such cases. Speaking Of the
state rights plea of the railroad rep
resentatives, 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 con-
tention that the antitrust act regulates
their domestic commerce. BY it's very
terms the act regulates only commerce
among the states and in the foreign
states.
Viewed in that light the act must be
respected. By the explicit words of the
constitution. that instrument and the
laws enacted by congress in pursuance
OF its provisions, are the. supreme law
of the land, anything in the constitution
or the laws of any state to the contrary
Notwithstanding -supreme over the
states, over the courts and even over
the people of the United States, the source
of all power under our governmental sys-
tenn in respect of the objects for which
the constitution was ordained.
An act of congress constitutionally
passed under it's power to regulate COM
merce among the states and among for
eign states is binding upon all as much
so as if it were embodied in terms in
the constitution itself
Every judicial officer, whether of a ma
tional or a state court. is under the
obligations of an oath to so regard a
lawful enactment of congress. Not even
a state still less one of its artificial
creatures, can stand in the way of its
enforcement If it were otherwise the
government and its laws might be pros
trated at the feet of local authority
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15

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The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
COURT DISMISSES
WEIDENFELD CASE

In the United States circuit court Of
appeals yesterday the appeal of
Camille Weidenfeld from de-
cree in the United States circuit
court Diminishing the appellants inter-
yening petition in the case of Peter
Power VS.. The Northern Pacific Rail-
way Company, was yesterday dis
missed.
The decision was written by Judge
Hook, Judge Sanborn and Van De-
venter concurring.
The origin of the suit dates back to
the year 1901, when Peter Power, as
an alleged holder of 100 preferred
shares in the Northern Pacific Railway
company, sought to obtain an injunc-
ton in the Hennepin court circuit court
preventing the company from entering
into a combination with the Chicago,
Burlington & Quincy and Great North
ern railways. Power at the time also
sought to restrain the Northern Pacific
Railway company from retiring it's pre-
ferred stock, alleging that this was be-
ing done III the interests of the pro-
posed merger.
The case was removed to the United
States circuit court, where it was
shown that Power had no stock in the
Northern Pacific railway and had no
interest in any of the matters stated in
the complaint When the case was
ready for hearing in September, 1902,
long after the preferred stock had been
converted into common stock, the ap-
pellant, Camille Weidenfe1d. with the
permission of the court, filed his inter-
yening petition seeking to have the re-
tirement of fthe preferred stock de-
clared unlawful and to have the North
ern Pacific Railway company declared
guilty of having unlawfully CONSOLE
dated its lines with the Great Northern
railway.
In the decision handed down yester-
day the court holds that the Northern
Pacific railway acted entirely within
it's right in retiring the preferred stock
and that the petition of the appellant
is at fault in every point contended for.
The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-15
concur IN ffe View that the antitrust
act is repugnant to the constitution OF
the United States.
NOT REPUGNANT TO
The CONSTITUTION

"The contention of The tdefendants,v
he said. could not be ,sustaiHed with
out Fri effect overrHiing the prior de-
eisions of this court as to the scope
and validity Of the antitrust act. IT,
as the court has held. congress can
strike down a COMBINATION between
private persons OF private corporations
that restrain trade among the states
In iron pipe or In tiles, crates and fnan-s
tells, surely It ought not to be doubted
that congress has powerjto. declare IL
legal q combination that restraints COM
merce among the states and with for
eign nations as carried On over: the
lines of competing railroad companies
In the exercise Of public franchises.
and engaged In such commences.
Proceeding further, in propounding
this line of argument, he said:
Indeed II the contentious of the de-
PENDANTS are sound, why may not all the
railway companies in the United states,
that are engaged unaen s.ae ter, an Al
ter iinto q combination such as the one
here in question. and by the device OF q
holding corporation obtain the apsoiute
control throughout the entire country OF
rates for passengers and freight, beyond
the poWer of congress to protect the pup
lie against their exactfonS? The argument
in behalf of the defendants necessarily
leads to such results, and places congress.
although invested by the. people OF tne
United States with full authority to reg
ulate interstate and international COM
merce. in condition of utter helplessness.
SO far as the protection OF the public
against such combinations Is concerned
Coming again to the consideration OF
the contention that interference py
the federal government with the al :.
fairs Of state corporation will pre-
vent the Securities company from ex-.
ercising its functions and will be an
invasion of the rights Of the state lun-
der which the company was chartered,
he said: eve cannot conceive how 1T
Is possible for anyone to seriously
contemplate such proposition" Con
tin,linp on this line, he said; =