Milford chronicle., 1904-03-18
MERGER
DECLARED ILLEGAL
Government Wins in Northern SeCur-
tiles Litigation.
VIOLATION OF ANTITRUST LAW


of the Northern Securities Company
VS.. the United States in favor OF the
contention that the
merger was illegal. The opinion OF
the court was handed down by JUS
tice Harlan, and it upheld the decree
of the circuit court for the district OF
Minnesota in every particular -Four
of the justices dissented from the hVe
constituting the majority.
The division in the court was due
to a difference of opinion as to the
right of federal control of state cor
porations. The majority opinion pro
ceeded on the theory that congress
has a right under the constitution TO /
control interstate commerce, no mat
ter by whom conducted. while the NIL
nority or dissenting opinion was based
on the theory that in the present case
the effort is to regulate the ownership
Of railroad stocks by state corpora
tions, and that such ownership IS not
interstate traffic.
The opinion was read by Justice
Harlan. and was cOncurred in by JUS
tices Brown, Brewer McKenna and
Dav. while the chief justice and JUS
tices White. Peckham and Holmes dis
sented.
Justice Harlan said that in the
merger of the Northern Pacific and the
Great Northern Railway companies
the stockholders disappeared and re-
aDpeared in the Securities Company,
! the two thus becoming practically con-
solidated in a holding company, the
principal object being to prevent COM
| petition. "No scheme or device could
/ certainly more effectively come within
the prohibition of the antitrust law
and it is within the meaning OF the
act a trust" is the language OF the
opinion.
The contentious of the Securities
Company were reviewed. and Justice
Harlan said they had received full at
tention. He quoted the various opin-
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
bibited bv the Sherman law, and that
congress has the power to establish
such regulations as are laid down in
tht law. Congress had power to en-
act the statute
; He asserted the power of congress
over interstate commerce to be as
complete as the power of state ovel
domestic commerce.
Owing to the plea of the railroads
that the antitrust law should be de
r clared unconstitutional, he said tina
the court could not see its way to tha
end. "If," he went on, ''the Securities
= Company's contentious are sound
whv may not all the railroads OF th'
United States enter into combina
? ton. and by the device of holding
corporation control rates throughou
the country in defiance of congressF'
Justice Harlan also took occasion tt
saw that there had been nothing in tn
Securities Company's certificate of in
corporation to indicate its purpose Il
be that of destroying commerce, ant
he therefore absolved the state of New
Jersey from any charge of such know
edge in advance. 1t might be true tha
a federal court had no power to dis
= solve a corporation of a state, but thi
circumstance could not be an indica
'' ton of powerlessness to enforce tn
law. than which no corporation /
g stronger.
No device could suffice to preven
= = this enforcement of the national stai
= utes.
Justice Harlan said that in this da
there should be no doubt of the CON
plete power of congress to control il
ter-state commerce; all appropriat
means might be resorted to for tina
- purpose. Ali the prior trust cases wer
in support Of that contention. Whethe
free and unrestrained competition wa
{ wise. he said, was an economic que'
tion with which the court need nc
concern itself; the question was tha
I of statutory law.
Justice Harlan declared that tn
only object of the merger was to pr'
vent competition. and he said that
no one else knew this to be the cas-
4 J. Pierpont Morgan. one OF the defen'
ants. knew that to have been the eas'
% The extracts from Mr.. Morgan's test
h mony were quoted in support of thi
h statement.
II Justice Holmes read the dissentin
o opinion. He construed the anti-tru'
S. law as a criminal statute and declare
that there was nothing in it to ind
e, cate that it had been enacted for tn
1t control of large concerns, as is gene
n allv contended. Indeed, the law had NJ
II been understood as applying to raj
IS roads until so construed by the s.
Is preme court. The act. he contends
IN APPLIES only to contracts and combin
s tions in restraint Of trade and make
4. no reference to competition.
Justice White also read a dissentin
opinion, taking up especially the pow'
of congress to control commerce. B
lg ginning with an argument in suppo
r of dissenting opinion, he outlined IL
in points involved in the case. He r
H. ferred to its Importance and called a
Ito, 20 tho facf that OnlV fol