Rensselaer Semi-Weekly Republican, Volume 36, Number 60, Rensselaer, Jasper County, 18 March 1904 — MERGER IS DEFEATED [ARTICLE+ILLUSTRATION]

MERGER IS DEFEATED

SUPREME COURT DECIDES FOR GOVERNMENT. Northern Securities Company Doses Its Case—Court Holds that Congress Can Control Commerce and Has Fullpower to Regulate Interstate Traffic.

The government lias triumphed .over the merger. In a decision handed down by tiie United States Supreme Court the

Northern Securities Company, tlie greatest railroad combination ever formed, is dissolved, and the__ business world has. received tlie dictum of the highest tribunal on the authority of the government to regulate

trusts aud combinations. Justice Harlan read the opinion affirming the order of the Federal Circuit Court of Minnesota, .sustaining the contention that the Sherman anti trust law npplies to railroad combinations. Justice Brewer concurred in affirming the merger decision, but for different reasons than those of tlie majority. Justice Hnrlan said that in the merger of the two ponds tlie stockholders disappeared and that they reappeared in the Securities company, the two thus lie- oining practically consolidated- in a holding company, the principal object being to prevent competition. "So scheme or device could certainly more effectively come within tlie prohibition of the anti trust law and it is within the meaning of tlie act a trust.” State Nights Not Hit. Replying in detail for the securities company, Justice Harlan said that the contention that tlie law is an interference with tlie rights of the individual States by which the companies are incorporated was not well founded. In such cases, he said, the authority of Congress is supreme. He declared it to be unnecessary to determine the right of owners of railroad stock to sell the property. Nor was it true, he added, that tlie right of tlie securities company to own and hold railroad stock is the only question involved. Such contentions are wide of tlie mark—mere men of straw. All that tlie government complains of is tlie existence of a corporation to repress commerce, ahd it is not concerned with the other points. Justice- Harlan snid that in this day there should be no doubt of the complete power of Congress to control interstate commerce. Ail appropriate means might lie resorted to for that purpose. All the prior trust case*

were in support of that contention. Whether free and unrestrained competition was wise, lie said, was an economic question with which the court need not concern itself: the question was that of statutory law. The suit was instituted by the United States against the Northern Securities Company and the three railroad companies—the Northern Pacific, the Great Northern and the Burlington—and their leading stockholders for the purpose of dissolving the merger of the two roads, which the United States declared had been created by the formation of a holding company. This consolidation was alleged to he in violation of the Sherman anti trust law. It was clnimed on behalf of the government that the consolidation was in effect a pool created to promote the interests not of one system at the expense of the otiier, bat of both nt the expense of the public. The railroads claimed that the transfer of the sbx-k of the two companies to the securities company was in the nature of n sale nnd perfectly legitimate.

JAMES J. HILL.

J. PIERPONT MORGAN.