The Washington herald., 1908-02-16
BY JOHN E. LATHRoP.

by residents of that territory.
They declare that so far as the people
affected are concerned, the Northern Sc
curites ease might as we'll have been de-
clded IN favor of the Hiu-AIorgan con-
trollers of the railroads involved: that
since the Northern Securities decision
competition has not been maintained; that
the community of interest theory Of
James J. Hill promulgated before the Sc
eurities company was formed and the
basis Of that holding cOmpanys foTma-
tion, has been actually made reality.
Western men in Washington are prone
to refer TO claims in connection with the
Northern Securities case Of great benefit
to the people as absolutely unfoupded.
and they point out that certain conceded
facts sustain their position
HilFs Great 'DiscoVery.v
James J. Hill, with whom worked as his
hacker J. Pierpont Morgan conceived the
idea that waste was caused by compet-
ton between railroads serving a common
territory. He argued that competition
compelled maintenance Of as many forces
Of employees in the traffic-getting depart
ment as there were roads in the given
territory. He asserted that. were compe-
ttion eliminated expense would be cur
tailed and the common controlling head
OF the roads could grant lower freight
rates by reason of the lessened expense.
Il was the community of interest" the
ory, based on a degree Of socialIstic ap-
prOXimatiOn ia the management of COM
mon carriers. The individualism of the
roads was to be destroyed, and a COM
munal interest created between all COM
mon carriers, rail and water, in the ter
ritory concerned.
To bring that theory into operation. Mr..
Hill caused the organization of the North
ern Securities Company. which was to be
holding company, TO take over the
stocks of the Great Northern Company
and the Northern Pacific. and the two
were 10 control the Burlington. as the
ultimate move in the elimination of COM
petition In the territory westward from
ST. Paul and Duluth and southwark to
the territory traversed by the Hartman
Union Pacific system,
Function of the Company.
The securities company was organized
under the laws of New Jersey, and was
10 have no part in the actual operation of
the constituent roads It's only function
was to see that the operating heads Of
the several roads should indulge in no
destructive" competition TO get freights,
which were TO be regulated from a COM
mon center of cOntrol-the Northern Sc
curities Company.
Attorney General lnOw Senator) Knox,
at the instance of President Roosevelt.
went into the Federal courts TO test the
constitutionalty Of the merger, and the
court decided that it was repugnant 10
the organic law of the nation, as well as
antagonistic to the statutory inhibitions.
Quickly Mr.. Hill dissolved his securities
company. and. so far as the records OF
the courts are concerned. to-day there is
no community Of interest" and there is
competition between the Great Northern
and Northern Pacific. and Burlington.
Yet this legal fiction Is well recognized
in all quarters 1t is unnecessary TO
prove, for it is conceded by all. that Mr
Hill and Mr.. Morgan absolutely control
all three roads. and dictate rates through
their subordnates: that they have elimi-
mated competition just as effectively as it
was designed they should do through the
Northern Securities Company.
Hill Jokes About Evasion.
So absolute is this control, that Mr..
lin at one time even made IT the subject
Of pleasantly, when, at banquet,
given in honor Of himself and President
Elliott of the Northern Pacific at Port
land, Greg he tapped his breast-pocket
and said.
We cannot maintain holding companies
for our roads; but they cannot prevent
Us from carrying here the stocks of as
many roads as we choose 10 buy"
Wall street bases all operations touch
ing the roads mentioned on the positive
knowledge that Mr.. Hill controls them
Financial writer's refer TO them as the
Hill-Morgan roads In short. James j.
Hill. counseling with his co-fnancier. Mr..
Morgan, has eliminated competition from
one quarter of this continent. absolutely
dominates the transportation situation
therein; and the so-called victory Of the
government in the Northern Securities
case has been hollow and meaningless. /
bringing no visible benefits 20 the people
who live in the territory affected 20
1t may be argued by some that the
transportation organism, with air. Hin
only as the head. falls short Of accom- |
plishing the purpose of Mr.. Hin and Mr. |
Morgan, because. in the event of the
death of both these fnanciers the roads |
might tau apart and cease to be members
OF common body, and that they are /
held together now solely by the conf /
dence of the dutch bondholders" in tbpir |
safety and reliability
Westerners Are Dissatisfied.
Western people, however. answer that
it is a hope very long deferred, indeed, |
To win court victory, place on the rec |
urds the alleged fact backed by the high |
est tribunal in the land that there is now |
competition in the Northwest. and that
the wicked merger has been destroyed. (
and then for the people concerned pa /
tiently 70 sit and wait until two quite /
healthy men die before that tpresenD /
court fiction can become a substantially /
Much the same sort of a suit Just now |
is pending IN the Federal court at Salt /
Lake instituted by the government 10 /
dissolve the Hartman Rockefeller merger
OF the Union Pacific, Southern Pacific /
oregon Railroad and Navigation, Oregon /
Short Line and other smaller roads. Not
the same technical legal points are raised
but so far as the people are concerned. it
comes TO the same thing-elimination of
needless expense" in the other West
ern quarter of the continent, and the sub
stltuton Of community of interest" for
destructive competition
IL Is positively known that Western
shippers and consumers are counting on
no substantial benefits; that they expect