Show NORTHERN SECURITIES DECISION HANDED DOWN I I Government Wins Irs t onte l i ir iC C p Point oln t t I tV i k kr li I i r 7 V Opinion Read by Justice JUStIC Harlan and Concurred in by Justices v T r McKenna I alt Day i iI i A I T ON l HIn the WASHING V V Ste m court to lo daT dayan an opinion was delivered in th tb merger m ease e ot of the Northern Se Sc company compaU V vs nned States In favor of oC Ute the so that the merger waS wad Illegal The Tho Of the court GOurt was handed down 1 Justice Harlan and jt it upheld lh time 1 I reo re of f the circuit court for the Die tnt or f In esery ry particular F ur or or of the justices from the fit IV the tho majority The Ili i lon In the court was due to Ie a dif I e or of opinion fon as to the right ot of control of oC state corporations The majority opinion proceeded on the that congress congre has II a right un under er ert t 1 h r constitution to control tUt 4 no n matter by whom coti 1 ted while the minority or dissent jr opinion was ItS bawd batted on the theo theory that In the pr present ent caSt case the h effort to tor r the Ule ownership Is not Inter inter la te traffic S Si i Effort at Secrecy m 10 th 11 elton was made b by the court to the knowledge of the tact fact that t th h opInion was wal to bt be rendered today f 1 to the public but never uever It was quite generally generall under among newspaper men attorneys s trl tr 1 oth others for tor an hour or so before beroN the 4 ot of court tod today that the pinion would be announced When hen hent V t the members member of the Ule court courtIl m Il ti d Into the chamber they were wre met l by an all expectant crow crowd 1 which fined filled V 1 seat both Inside and outside the liar lar Seated among the attorneys s weN Attorney General Knox and Secretary Taft and an unusual number of sea n nat at Irs and members of the house There Ther Theras tIIS as no surprise manifested when Jr iri on the of the tOrt purt Justice Harlan began the de del l i ry or of the The fact that he be heV 11 1 been selected for the preparation V 1 t the document at once led most 11 to tl t cite 1 4 ri lop th the Sherman law am fu lain th the contentions or of the govern lIr ll Ht It The justice rend hitS his opinion it in a printed OP which cove covered thirty pages pase and consumed about an hour and a quarter quart r hi iL H 1 7 Court Was Divided soon after atter Ju Justice JaTan had his hlA presentation of t the e case se seit it e evident that the t coUrt Urt had bei divided on Ute the questions at Issue and atul it other opinions were wereth U th eloped that there not only n a Tn ry close shave for th the t rn 1 ILU w thab one fc the he members s or of the ruin Ole cot With the tbt ma maj j Ii t entertained ethis own t fact art rendered the division lon aU all the marked and interesting This was I Brewer Who while he b con cont t 11 In the decision announced In an opinIon of his view that ir t decisions lied had been V tn mm re sweeping than was wat justified a F F ur of oC th the nIne justices dissented ti These were Chief Justice and Justices White rI I 1 Holmes The opinions or of Ju Urt and White were long while t Vu l t sc of Justices Bre Brewer r and Holmes O r comparatively brier brief All told the thet t ILi 11 t consumed two hours anti and three thre In ill disposing of the case The tad fa 1 was noted it b several persons lS that ti th argument In the ease caPe was begun ember 14 Just three months month pro pre 1 us UR to Lo th the d decision For so Import J J II f a case this Is considered a yer very 7 b ir Interim between the arguments sni the decision The case decided to toby by was brou brought ht by States 1 a the Northern rn Securities corn com lallY a corporation or of Ne New Jersey Jer ey the Northern Railway company a ar r of oC Minnesota the Northern Railway Hallway company compan a corpora tn t 0 or of Wisconsin James J Hill a ot of Minnesota and William p pugh VI ugh D Willis James John S Ken Kenw rl 1 l 1 Pierpont Morgan Morsan Robert Robfrt n on George F Baker and Daniel it ben or of Ne New York It gt object wai to enforce as t th ib defendants the pro proof its of statute or of Jul July 2 y known as aR the antitrust 2 t atI An Act to Protect Trade Against Unlawful I Il l p and M Monopolies Gist of the Contentions Vr tT the o origin ln and put vur 1 u ht to 0 be a accomplished hel It by the Harlan fd the facts tatt 1 i h by the record Ph Jh Ute the theS Ite S j th the g f case caR he be Id Thc g charges that It If the bald net nt to be In vie vio viol V l I II i t ion of ct th mt It or of then cli 1111 clift n ft Hr f t h he government tu to tuo o 1 n t tb people th the benefit or Of it iun amon among carriers en engaged J I d III ii interstate will b bit andall 2 lital tal indeed the entire railroad Sh a V of the country may be nb ab abE S E Id mergel and con ConSolidated thus ing the public at the I 1 rc TY Y f the holdIng iii or of the w e cane The V 1 I denied all the allege Ii 11 I S II tIlt bill Imputing tu to them a 1 I 1 tse to In evade ade the of th the ther r r f lr OT or tu to form orm a combia t I I having for Its object objectS S h r I r tn n or monopolise corn com J 1 ric or ir among UI the Mates ates or orV V S II I I h lot ign n nations The They y dented denied thAt 1 1 or was Va Vat t f in of th the act Law Plainly Violated L the Ju t I i ice Harlan came e I to lv the judicial of thc and practically In t the e deci decision l n of the court In iii the first ot or U the e proper Ir that sentence he said sala In o stir r judgment the evidence Must the material allegations or of the bill and shows a or orthe o othe the act or of congress In so fa far I l alt q It do de dares Illegal megal every con 11 iii restraint or of among ral states and with for forein ein countries and forbids attempts to t monopolize such comm He again recurred to the facts itt the tho case rase and said that aside an minor minar things Jt It was I indisputable ha hauron n uron the princIpal facts ot of the record the leadership of Hill and gun the stockholders of the two ran rail read companies having parallel lines of road had combined under the laws of New Jersey by bJ or organizing n a corporation for the of the shares or of time two an agreed bais of Y lu Fr cee he said V 5 CompetItion Ceased V Time The stockholders or of these two corn com comP P ling companies disappeared red as such for the moment but immediately r re reappeared appeared as stockholders of the hold holding holding ing company compan was vae thereafter to guard the of both sets of ns a unit and to or o cause to be managed both lines Us o ot railroad as It if held in ono one own ownership Necessarily b by thIs combination r 1 ar arn n the holding company In the fullest sense dominates the situation In the interest of those who were stockholders of the constituent compa companiEs companies niEs AS much so for tor every practical purpose as aa it If It had been It itself a rail railroad railroad road corpor corporation which had bad built hullt owned and operated both lines for the tho exclusive benefit of its stockholders N also the tom coat patties t ceased a l under such a combination tion to be in active competition for fol trade and commerce along xiong their lr f ti tive e ne anti and have become one lone powerful consolidated corporation I b by Ue n name me ot of a holding corporation the principal if not sole object for the of which was to carr carry out the purpose of the original combination lion tion under which competition bet between een I the constituent companies would How the he Scheme Works He i Id that the sto s cit fb fbI the two old companion ue are now united In I their In p P tuba the lines a and that they e wo would tak 40 persons f are chosen directors of th holding company who will between n the constituent companIes the there I re result being that all the of the constituent make muk a corn com common moo mon nail furd In the hands of the Sf uri ties company upon the basis basi of th the cr r of stock by th the holding Nr No scheme or device could more come within the words of oC th the act n in the form of ofa ofa a trustor trust or otherwise a In restraint of commerce among the states or with for foreign nations or could moo effect Iel iely and certainly suppress fEt frOe e cin corn V between the e t corn com This combination Is the meaning ot the ad act a trust out if not it ft Is a combination In restraint f later state ant and International commerce Rn and that I Is enough to bring It under the condemnation of the art act The mere existence or of such n a combination and amI th the power acquired by the ho corn com 19 a trustee for th the n constitute a menace to and a restraint upon that fr om of comm commerce tahichi congress Int to recognize and protect and which the public i is n titled to hare hac protect d If not de cJe destroyed all the advantages tint tAt naturally come om to the public under ulder the i operation of oC the gen genera raJ law corn eom 1 I petition as nt Northern I and Northern its i lost and the entire commerce of the j t r In th tb part I of oC the United States between great lakes and t the Pa PaCific at Pug l Sound 1 would De be at the mero mer of nr a hn in lug corporation d In a stat tat distant front toom Ute the people of that tern j tor tory V Agreed With Circuit Court Hp Ho agreed with the u I up by bythe y I Ithe the circuit court ot of th the results un qt of the n which that t It 1 tI the control of the two tao l loads l hands of 01 Il a single merson and that It t very every motive between the two lines by In lag Ih ir m S both Wets fHe hl hi interstate tram 1 Entering upon ian Of j jI I the authorities bearing upon the cone case I II I lIar Ja deduced rom from the on con tt It thes th fol following I lowing prop as applIed to the pr present nt ease case That although act of congress congre s known as the antitrust act has no reference to the mere I tore ture and production of articles or coimi COI I II I I within the limits of 5 r I It embraces and d to he H ever every contract combination or I Ip in whatever form or cvet r nature antI and b be par part parties t ties leA to It which directly or ri I Operates In restraint of trade coin I I lI the 8 eral tale stated Or with fo nations S LIW Not Limited T t the he I tJ Is nut not limite ti tre re or and Int n l S Jl ott 08 Page lage 2 I I I I I I I l I I I I I I 1 J WN 0 from Page 1 1 trade or commerce that are unreason unreasonable able l the but r a direct restraint restraints or l imposed by any 1 on O or monopoly p n such or OIS commercE commerce criers carriers ii In Interstate or International trade or on mer e are nrc embraced by the act ac That combinations s even rate ate manufacturers Or deal r or International commerce Is re restrained act trained are equally embraced by the That has the power to Os rles rules by which interstate and international commerce shall be gO gov governed and by the antitrust act has hasI I the rule of fre free competitiOn among those engaged In such com coin commerce merce suet Illegal Conspiracy That er combination or Cn con conspiracy which extinguIsh corn com petton petition otherwise competing railroadS engaged In Interstate trade or commerce and which would In that way r restrain such trade or commerce Is b by the act I That the natural effect cf cf II ton tion is to Increase commerce and nn an agreement whose direct eted effect Is to pre prevent vent ent this Dla play or of restrains Instead or of promote promotes trade and corn com I I mores i That to vitiate a combination such I as the act of congre congress condemns i It need not be shown that such combination In fact re or wi result in a t total tal suppression of trade Or ft In a complete monopoly but I it Is only e essential to show that b by Is Its operatiOn I It tends to retrain restrain Interstate or Inter trade rade or commerce or tend to crete create a monopoly In such trade or commerce and te to deprive the PUbIc ot of the advantages that foW flow from free Tat That th thE constitutional guarantee of Ubety liberty or of contract do does not prevent from the thu rule rul of fre free for those engage engaged In te and That unde under Us Itu power to regulate commerce among the several states and i foreign nations congress had authority to enact the statute in question state States Rights Bights Plea I Speaking of the states right rights plea of the representatives Justice Harlan sid said TIle This view does not Impress ur ue There 1 Is 10 reason to suppose that had hod any purpose to Interfere wih with the Internal affairs of the state nor 10 the contention that the r l ac act reGulate regulates their dorn o i merce Just Justice brushed aside as scarcely worth orth mentioning the conten ton on the part o of the Securities cm corn pan pany that the involved is the rIght of an Individual to dispose of his stock In a state corporation ton and th that t tIn In such transactions tl th individuals whON whose Interests are involved are sub subJect jet only to the tho restraint or of state laws Jaws Justice Harlan Halan also referred to the thearg arg t tha that the position of the gov eminent amounts to declaring that the ownership or of stock Block In n a railroad cor corp corporation p raton is In Iselt corn com commare mare and to other SImilar said eaid tons and commenting on these he Congress Can Protest We Ve do not ilot understand that the gov government eminent makes nn any such contentions or take takes nn any such as tho Imply I It does not contend that ma may con l the mer mere ownership of oC stock In n a Sate state corpora corporation ton tion engaged In interstate commerce I It doe does not contend that congre c can control the organization or mere ownership of oC state corporations authorized b by their charter charters to engage In Interstate and International corn com mere merco But I It does cont contend nd that con gross may may protect the freedom or of In Interstate Interstate commerce b bY an any means that are appropriate and that a are lawful and not prohIbited by the constitution tion ton The opinion then tako takes up the rights of congress to enact such legislation as the antitrust aw and goes into an inquiry aso asto how t far rth the court courts may go 0 In order to gIve ered effect to o such an act and to remedy the evis evils designed to be suppressed by bj I it Justice Harlan said idl It was the intention ton tion ot of legislation of this character to prescribe a a rule for interstate and In commerce which should preot provost vexation b combinations con or or monopole monopolIes which restrain commerce b by destroying destroying or restricting competition He then added I Combination F n nWe We st sAy tat that congress has prescribed such a rule because In ni all the prior the antitrust act cn cases In this court has beets been construed us as forbidding any combination which by It Its necessary 0 op erton destroys destros or restricts free corn com petton petition among those engaged in Inter Interstate interstate state commerce In other words that thatto thatto to detro destroy or fre free competition In interstate was a t t retrain restrain SUCh No Now can this court court courtin In ral reason S say that sch such a rule Is pro prohibited by ti the 6 or isn ti tion one on that appropriately J Its power un under under der tl the commerce claus clause of the const constitution Tam Taking u the contention that ral rail railroad I road created under th I or of a late state Cn can b be consolidated I onlY only with the authority of the state Ju Justice Harln Harlan said ld that he could not why this suggestion was made hi this ease ee For lie he went on there hee h Is n i pretense that t e ato mitten her here In question was unde under the of the states under which ot uner lu laws created te railroad corporations were Bt even If the state allowed con on I it would not follow that |