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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (March 25, 1904)
o t MARCH 25, 1904. The Commoner 3 THE MERGER. DECISION Justice Harlan, speaking for a majority of tho United States supreme court, has sustained, in the most emphatic language, tho circuit court decision against the Northern Securities railway merger. The opinion delivered by Justice Harlan covers all phases of the case and announces tho doctrine that any combinat'on tending to restrain commerce between the states orwith foreign na tions is unlawful. According to Justice Harlan's decision, it is not necessary to show that the re straint is complete. When the natural effect of an agreement is to prevent competition, the agree ment is in restraint of trade and prohibited by law. To prove that a combination or monopoly exists within the meaning of the law, it is not necessary to show that the immediate effect is to suppress competition or establish a monopoly. It is sufficient to show ""that they tend to bring about these results. Justice HarlaiT"yery clearly shows that the opinion of the court does not interfere with tho rights of-the states and that no other power than the federal is competent to deal with interstate trusts. On this pointy Justice Harlan cays: "Is there, then, any escape from the con clusion that, subject to such limitations, tho power of congress over interstate and inter national commerce is as full and complete as is the power of any state over its domestic commerce? If a state may strike down com binations that restrain Its domestic commerce by destroying-free competition among those engaged in such commerce, what power, ex cept that of congress, is competent to pro tect the freedom of interstate and interna tional commerce when assailed by a combina tion that restrains such commerce by stifling competition among those engaged in it?" Referring to the contention that interference by tho federal government with the affairs of a state corporation would be an invasion of the rights of .the states under which the company was chartered, Justice Harlan said: "We reject any such-view of the -relations of the national government and the states composing the union; It cannot be given effect without destroying the just authority of the United States. Every corporation cre ated by a state is necessarily subject to the supremo law of the land. And yet the sugges tion is made that to restrain a state corpora tion from interfering with the free course of trade and commerce among the states, in vio lation of an act of congress, is hosle to the reserved rights of the states. J'The federal court may not have powor to forfeit the charter of the securities com pany; it may not declare how its shares of stock may be transferred on its -books, nor prohibit it from acquiring real estate nor -diminish or increase its capital stock. All these arid like matters are to be regulated by tho state which created the company. But p the end that effect bo given to. the national will, a3 lawfully expressed by congress, it may prevent that company, in its capacity as a holding corporation and trustee, from car rying out the purposes of a combination formed in restraint of interstate commerce." It is particularly important to observe that Justice Harlan leaves no ground for the violators of the anti-trust law to stand upon. Evidently, in his opinion, lawlessness is lawlessness and there can be no such thing as a "reasonable" vio lation of -the law.J Justice Harlan said that whether the freo pperation of the normal laws of competition is a wise and wholesome rule for trade and commerce is an economic question which the court need not consider or determine; but he adds: "Many persons, we may judicially know, of wisdom, experience and learning believe that such a rule is more necessary in these days of enormous wealth than it ever was in any former period of our history; maeed, that the time has come when1 the public needs to bo protected against the exactions of-corpora-tions wielding the power which attends the possession of unlimited capital." He pointed out that tho law declares to b illegal "every contract, combination or conspir acy, in whatever form, of whatever nature, and whoeyer make tho parties to it, which directly or necessarily operates in restraint of trade or com merce among tho several states, or with foreign nations." Tho following extracts from Justice Harlan's opinions on this point will bo of interest: "That the act is not liinltcd to restraints of interstate and international trade or com merce that aro 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 commerce. "That railroad cnrrlors engaged In inter state or international trade or commerce are embraced by the act. "That combinations qvon among private manufacturers or dealers whereby interstate or international commerce is restrained are equally embraced by tho act. "That congress has the power to establish rules by which interstate and international ' commerce shall bo governed, and by the anti trust act has prescribed tho rule of free com " petition among those engaged In such com merce. "That every combination or conspiracy .which would extinguish competition between otherwise competing railvoads engaged in in- terstate trade or commerqe, and which would in that way restrain such trade or commerco 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, restrains instead of promotes 'trade and commerce.' "That to vitiate a combination, such as the act of congress condemns, it need not be shown that such combination, in tact, results or will result in a total suppression of trade or in a complete monopoly, but-it is only es sential to show that by its necessary operation it tends to restrain interstate or international trade or commerce or tends to create a monop oly in such trade or commerce and to deprive the "public of the advantages that flow from free competition." T Tho opinion of tho court as delivered by Jus tice Harlan is tho most striking arraignment of the trust system that has over been made in tho history of this country. In effect, it holds with tho democratic national platform that "private monopolies are indefensible and intolerable." The only weak point In the attitude of the majority is in the opinidn delivered by Justice Brewer. While agreeing with Justice Harlan and his associates in the conclusion reached in this particular case, Justice Brewer discriminates be tween reasonable and unreasonable restraint of trade: Justice Brewer holds that the purpose of the lawmakers ,?was to aid a statutory prohibi tion with prescribed penalties and remedies to nullify those contracts which were in direct re straint of trade, unreasonable and against public policy.'.:! Justice Brewer intimated that he held. with the majority because he looked upon tno Northern Securities merger as "an unreasonable combina tion In restraint of Interstate commerce one in conflict with state law and within the letter and spirit of the statute and the power of congress." But, Justice Brewer said that some of the recent decisions of the supreme court in the anti-trust cases had gone too far, and ho added: "Instead of holding that . the anti-trust act .included all contracts, reasonable or un reasonable, in restraint of interstate trade, the ruling should have been that the contracts there presented were in themselves unreason able restraints of interstate trade, and there fore within the scope of the act Congress did not intend by that act to reach and destroy those minor contracts in partial restraint of ' trade which the long course of decisions at common law had affirmed were reasonable and ought to be upheld." It will be seen, therefore, that while Justice Brewer concurred in the judgment of the court in this particular case, he is distinctly at variance with Justice Harlan and his associates Jn the clear and striking interpretation they put upon the law. Should Justice Brewer's theory prevail the .entire question as to what the law prohibited would be "left to tho court and would be detei mined by an inquiry into the reasonableness or unreasonable ness of the violation; and so, while this decision is of tho greatest importance, we may find in the next case Justice Brewer joining the four justices .who took their stand on the side of the trust sys tem, and holding that tho restraint is "reasonable" and thoroforo lawful. Aside from this particular consideration, largo significance attaches to Justice Brower's opinion. Tho Brewer theory rolatos to tho Forakor bill re cently introduced in tho senate. This feature is re ferred to in another article in this issue. Tho dissontlng opinion of Justice Holmes is, In at least one particular, of great importance. Justice Holmes said that, logically construed, tho decision should bo followed by tho criminal prose cution of tho parties at interest. That is quito truo and it remains to bo seen whether tho ad ministration will avail itself of tho powerful weapon within its reach. It may bo said, how ever, that there is no likelihood that criminal prosecution will follow in any case. On the con trary, republican newspapers, speaking ovldcntly with authority, say that it is not tho purpose of the administration to proceed against other trusts or in any wise engage in an anti-trust crusade. Emphasis has been laid upon tho fact that of tho four justices who dissented from tho opinion of tho majority of tho court, three are democrats. These are Chief Justice Fuller, Justice White and Justice Beckham. Democrats may not fairly bo held responsible for the attltudo of these three justices. They were appointed by Mr. Cleveland and ovidently reflect the sontimont of tho Clove land element. It is fair to say that the attltudo taken with respect to the trust question by theso Cleveland appointees would be reflected in any administration controlled by the Cleveland wing. JJJ All for Capital. Secretary of War Taft has made a trip to Wall street to interest capitalists In the Philip pines. Starting out with the theory that Ameri can capital must bo induced to go to tho Philip pines it will not take the administration long to reach tho second proposition, namely that It must make tho terms liberal, as liberal as is de manded, and as it will bo giving away property belonging to the Filipinos and giving it to in fluential Americans tho inducements are likely to be sufficient. Then having, by generous promises, jnducod Amorlcan capita! to go to tho Philippines the administration will insist that a largo army and navy aro necessary to protect American in terests there, and tho more liberal the concessions to capital the more soldiers will bo needed to hold in subjection the desnoiled and disinherited natives. Nothing shows better the commercialization of the American conscience than the willingness of so many republicans to turn the Filipinos over to the tender mercies of the syndicates organized in Wall street for their development. But how can we expect ,the plundering of dis tant islands to arouse public Indignation when trusts are allowed to oppress our own people, when railroads are permitted to collect dividends upon watered stock, and when Amorlcan finan ciers aro invited to convert the federal treasury into a business asset7 If it seems that everything done In tho Philippines is done for capital, it does not im prove the situation to know that our domestic legislation is also very largely in the interest of capital not In tho interest of that capital which represents tho slow accumulations of honest ef fort and Is widely diffused, but that capital which represents the pilferings of predatory wealth. For a quarter of a century the corporations have been increasing in size and in boldness and now that the resources of this country are about monop olized the administration solicits capitalists to en tor tho virgln,flelds of the Orient. How long will it be before the public conscience will bo awakened and an effective protest be made? JJJ Attorney General Knox seems to think that having shown that tho trusts can be killed 'It la not necessary to do more. He is like the .old toper who, having shown that he could go by a saloon without going in, rewarded himself by going back and taking a drink. So many cartoons are malicious that it la refreshing to find one that contains a little inno cent fund. The editor haa recently had his at tention called to one of these which appeared in the Indianapolis Journal. It appeared while" Mr. Bryan was in Russia and represented him as sip ping tea with the czar. The following was, ac cording to tho Journal, tho conversation: The Czar; "Havesky you over trledovitch to be presl dentsky?" Mr. Bryan: "Yesovitch; twlcesky," W , i H i t-i t .. Au,ltLi.J j'Jt-ai