The commoner. (Lincoln, Neb.) 1901-1923, March 25, 1904, Page 14, Image 14
V WH " The Commoner, VOLUME 4, NUMBER 10, 14 8 E6e NORTHERN SECURITIES DECISION Uy a volo of five to four, the United States supremo court, on March 14, decided that the Northern Securities merger is in violation of tne unti-trust law, Justico Harlan delivered the opinion Lng coml)any who will permit competi r,. n,o n.nWItv nf LllO COUrt. Which majority comprised Justices Harlan, Brown, Brewer, McKonna and Day. While Justice Brewer was one of the majority, he took occasion to say that he did not entirely ngree with ovciy point uppn "which the majority reached J La conclusion. I ho minority was composed of Chief Justice Fuller and Justices White, Pccklmm and Holmes. Tho opinion delivered by Justico Harlan completely ailirms tho lower court and directs it to make such or ders as the circumstances may re ouiro. Tho result is that Messrs. Hill aic Morgan must find some other method than the Northern Securities cimpany to avoid tho law. Tho several opinions delivered in this case are briefed by the Chicago Record-Herald as follows: After reviewing thoallegations of tho government in tho merger case and tho defonso of the Northern Securities company, Justice Harlan practically indicated the decision of the supremo court in tho first sentence of tho opin ion! Ho said: "In our judgment the ovidence fully sustains the material allegations uf ttif bill, and shows a violation of ti.e act of congress, in so far as it declares illegal overy combination or consi ir a".y in restraint of commerce among the sevoral states and with foreign na tions, and forbids attempts to monop olize such commerce." ' Ho again recurred to tho facts in the caso and said that, laying aside any minor things, it was indisputable that upon tho principal facts of the recoiJ under tho leadership of Hill and Mor gan, the stockholders of tho two rail road companies, having practically parallel lines of road, had combined two old companies are now united in their interest in preventing all compe tition between the two. He added: "They would take care that no pei sons are chosen directors of the hoid- tion between the constituent compa nies, the result being that all tne earn ings of the constituent companies make a common fund in the hands of the securities company upon the basis of the certificates of stock issued by the holding company. No scheme or device could more certainly come -within the words of tho act 'combination in tho form of a trust or otherwise in restraint of commerce among the states or with foreign nations, or could more effectively and certainly suppress free competition between the constituent companies. This combina tion is within tho meaning of the act a 'trust,' but if not, it is a combination in restraint of interstate and interna tional commerce, and that, is enough to bring it under the condemnation of the act. The mere existence of such a combination and the power acquired by the holding company 'as trustee for the combination constitute a menace to and a restraint upon that freedom of commerce which congress intended to recognize and protect, and which the public is entitled to have protect ed. If not destroyed all the advant ages that would naturally come to the public under the operation of the gen eral law of competition as between the Great Northern and Northern Fa ciflc Railway companies will be lost, and the entire commerce of the im mense territory in the northern pait of the United States between the great lakes and the Pacific at Puget Sound would be at the mercy of a single holding corporation, organized in a state, distant from the people of that territory." He agreed with the summing up by tho circuit court of the results of the combination, which was that it places tne control of the two roads in the tt tirnahnrl naifle as scarcely worth mentioning the contention on the part of the securities company that tiio question involved is the right of an in dividual to dispose of his stock in a state corporation, and that in such transactions the individuals whose in terests are involved are subject only to the restraint of state laws. Justice Harlan also referred to U10 argument that the position of the gov ernment amounts to declaring that the ownership of stock in a railroad cor- company was in the nnhM c - vestment, saying that there had hS In conclusion he said "The judgment of the court is tint the decree below be and hereby tan? firmed, with liberty to the circuit cciif to proceed in the execution of its d cree as the circumstances niav n quire." J c Justico Brewer expressed the opin ion that some of the recent decislors poration is in itself interstate com-' of tho court in anti-trust cases hnri declara-rgono too far, and said: merce and to other similar tions, and he said: "We do not understand that the gov ernment makes any such contentions or takes any such positions as thoGO statements imply. It does not contend that congress may control the mere ownership of stock in a state corpora tion, engaged in interstate commerce, It does not contend that congress can control the organization or mere ova ership of state corporations, author ized by their charters to engage in in terstate and international commerce." The opinion then takes up the right of congress to enact such legislation as the anti-trust law, and says: "We say that congress has pre scribed such a rule, because in all tho prior cases in this court the anti-trusc act has been construed as forbidding any combination which by its neces sary operation destroys or restricts free competition among those engaged in interstate commerce in other words, that to destroy or restrict fiee competition in interstate commerce was to restrain such commerce. Nor can this court, in reason, say that such a rule is prohibited by the constitution or is not one that congress could ap propriately prescribe when exerting its power under the commerce clause of the constitution. Whether the free operation of the normal laws of com petition is a wise and wholesome rule for trade and commerce is an ern- nomic question which this court need linrint. Hn loitr P -NTrv,,, ln.n. 1,.. ,. "" wu"' " "0 -" 1UUUH 1U IUO ganSing a cuomVion 7 t e ho' L f .Lt' rT' ons V'juSuvknown? ST .-!- , 0. .w w. v.ntw. . vi nnnl( !. ! 1 L In i i I H1U.V. QUI I H T11IO 1C1 i i ii ii i i i i i 11 u ii ill I'll i ii iru Ti r run r r-iriv-n - rm v a lavj - pooling their earnings, notwithstand ing both were engaged in interstate traffic. ceeding, ho sato: "The stockholders of these two com- tintlntr nrlY1nTl00 .1lnnnnni.mrl n nnl ET rZTV , "V rJiTr --V"' Justice Harlan took ur, the eonten. poared as stockholders of tho holding 3? th?i C?UM?J f2 Q Securities company, which was thereafter to rr T'' " ua luc "UUIlurn &ecun gaard tho interests of both sets of stockholders as a unit, and to mau&oO cr cause to be managed, both lines ci! railroad as if held in one ownershlr. Isecessarily by this combination or ar rangement tho holding company in tf,e fuicst sonBe dominates tho "sltuatio 1 iu tho interest of those who were stockholders of tho constituent com panies; as much so, for every practi cal purpose, as if it had boon itself a iailroad corporation which had built, owned, and operated both lines for the exclusive benefit of its stockholders. Necessarily, also, tho constituent cocr- panies ceased, under such a combina tion, to bo in active competition ior trade and commerce along their :c spoctlvo linos, and have become prac tically one powerful consolidated cor poration, by the name of a holdirg corporation, 'the principal, if not sole, object for tho formation of which was to carry out the purpose of tho original combination under which competition between the constituent companies would cease." He said that the stockholders of the Your Nerves Furnish the motive power of sthe en tire body. Dr. Miles' Nervine will keep the nerves strong and healthy or restore their strength if weakened. Bold on guarantee, Write for free book on ucrvoua diseases. ' - Ck, MilsJ MiuhoaiCo., Elkhart, Ind, ties company is a corporation, and as iwb uuquisiiion oi tne stock of the railroad companies is not consistent with the powers conferred by its char ter, the enforcement of the act of con gress as against these corporations will be in its operation an interfer ence by the national government with the internal commerce of the state "vu"b muse corporations. He said- TWlBi VlW deS n0t imPresS US. MnCTesa haS IT SUpPOSe ihai ?!?? i d any PllrPOse to interfere with the internal affair., nf m!!m'6 nor is there any ground whatever for tho contention that the ami ,,! , roEulatoa tlml- .1 "l-.?11""18- "ct . ...wi UUIllt'SI in !,-..,. " --v vumuiuixe. moro niwnoMv,, .-. these days of enormous wealth than it wCi woo ui any rormer period of our history; indeed, that the time 1ms come when the public needs to be pro tected against the fivnoHrm f .. f-iw Riding the power which at tends the possession of unlimited capi- !" f?tllIs as"lt may' congress has, in effect recognized the rule of free competition, when declaring illegal ev ery combination or conspiracy in u straint of interstate and intern aSona gress tne public convenience or fim general welfare will be best subset when the natural laws of comnJm are left undisturbed hv fh ncompetILion is to remain a trovm.nm "!"! u thls not of men." Ui iawa aud Justice Harlnn ., .. billtv nf f ::..r?uuuett tne , .t , "u ourt to ina- view that the aVti-trust ot i , Uie states. "Thp ponfonfi unue( camea without r ofp V UL uu sus Prior decision S Ct.OVGrruling the scope and act." uy. its very terms, the act rom Z onlv mmmnvnn n' .. Cl regulates in the foreign stao,5 v?e States and the oxniir.it. wnr ".lcsPected. by that instrumfin; re, constitution by congress in pmuance oMfaenacU? sions, are thn c!, Ilce of "S provi- the laws o ni wnBtltution or uotwlthstandlnc'-l;,;; ' UlG contrary states, over thf courtJ me, 0ver tbe the people 0 f 11 T over source of all power i,nltates' Lhe cmmental system fnS?ep our 8v" objects for whi th J8?Sct o the ordained. . , ""jg.J11 institution was less one of ts art ? a state, aim stand in A,i ...n.rtlflc.lal creatures " it wore othlS.?; enforcemen a.ud its laws ,i" .TV00 Bovernmenh .ThBh VTtua. t UVSlg5l at thoarSntl'rL0 as MUcl- nniirf or. i. j. y of tho a f to buslS and 552; that Jl8a lal ruin wouid foil MDroaa fln"n- Ita provisions an7,the tton iiiun virh oil uuu in ?nder that Z Tw ..PK?ed,?F cases T,? Seen vepinSa..' mm' tbGy 1 stock by ttrs" "Tnol-nfijl mA 1.1 Jll .. i j luowuu ut uoiumg mat the anti trust act included all contracts rea sonable or unreasonable, in restraint of interstate trade, the ruling should have been that the contracts there presented were in themselves unrea sonable restraints of interstate trade and therefore - within the scope of tre act" Justico Holmes, -in his dissenting opinion contended that the anti-truot statute is "'of a -criminal nature, and said: "It is in vain to insisc that this is not a criminal proceeding. The woids cannot be read one way in a suit which is to end in fine and imprison ment and another way in one whlcn seeks an injunction. I am no friend of artificial interpretations because tho statute is of one kind rather than an other, but all agree that before a stat ute is to be taken to punish that which always has been lawful it must express its intent in clear words, ao I say we must read -the words beforo us as if the question were whether two small exporting grocers should go to jail." Referring to the popular impression concerning the intention of the anti trust law, Justice Holmes said: "There is a natural feeling that somehow or other the statute meant to strike at- combinations gieat enough to cause just anxiety on the part of those who love their country more than money, while it viewed such little ones as I have supposed with just Indifference. This notion, it may be said, somehow, breathes from the pores of the act, although it seems, to be contradicted in every way by the words in detail. And it has occurred, to me that it might be that when a combination reached a certain size it might have attributed to it more of the character- of a monopoij, merely by -virtue of its size, than would be attributed to a smaller one. I am quite clear that it is only in con nection with monopolies that size could play any part." Justice White, In considering the question of power, held that the point at issue really was whether congres sional supervision extends to the reg ulation of the- ownership of stock & railroads, which is, -fie said, not com merce at all. He dwelt on the neces sity for observing this distinction. He announced his opinion to.be that stock ownership in a state corporation can not be said to. be in any sense traffic between tile -.stages or intercourse be tween them. Power to control l&8 ownership of interstate railroads w contended necessarily would erahvace their organization. .' "Hence It would result," said the justice, "that would bo in tho power of congress to abrogate every such railroad cbarlw granted by the state from the begin ning if congress deemed that tw rights conferred by such state cwp ters tended to restrain commerce w tween, the states or to create a monop oly concerning the same." ,, Ho held that by tho majority 0 ion congress could forbid tho organ zatioh of all labor associations, AJJ that the doctrine must in reason HJJ to a 'concession of tho right in coj tude, the .character .and capacity wl Securities J Poraont. . . ' V ! u .t'l WJ BHHMM ?' 25f!'Ai V' V, , t ,? 4. i"