V
WH "
The Commoner,
14
in
the two old companies are now united
Uy a volo of
compeall
preventing
on their interest in
United States supremo court,
tition between the two. He added:
Northern
March 14, decided that the
"They would take care that no
Securities merger is in violation of tne
are chosen directors of the hoidlaw,
unti-trucompeti
Justico Harlan delivered the opinion Lng coml)any who will permit compa
Which
LllO
COUrt.
r,. n,o n.nWItv nf
tion between the constituent
Harlan,
Justices
comprised
nies, the result being that all tne earnmajority
Day.
ings of the constituent companies
Brown, Brewer, McKonna and
While Justice Brewer was one of the make a common fund in the hands of
majority, he took occasion to say that the securities company upon the basis
he did not entirely ngree with ovciy of the certificates of stock issued by
point uppn "which the majority reached the holding company. No scheme or
J La conclusion.
device could more certainly come within
Chief
of
composed
was
the words of tho act 'combination
I ho minority
White,
Justices
and
in tho form of a trust or otherwise in
Justice Fuller
restraint of commerce among the
Pccklmm and Holmes.
or
Tho opinion delivered by Justico states or with foreign nations,
certainly
Harlan completely ailirms tho lower could more effectively and
court and directs it to make such or- suppress free competition between the
constituent companies. This combinaders as the circumstances may
Hill
tion is within tho meaning of the act
Messrs.
Tho result is that
a
other
some
'trust,' but if not, it is a combination
aic Morgan must find
in
Securities
restraint of interstate and internamethod than the Northern
commerce, and that, is enough
tional
cimpany to avoid tho law.
in
to
bring
it under the condemnation
Tho several opinions delivered
Chicago
of the act. The mere existence of such
this case are briefed by the
Record-Heral- d
a combination and the power acquired
as follows:
of
by the holding company 'as trustee for
After reviewing thoallegations
tho government in tho merger case and the combination constitute a menace
tho defonso of the Northern Securities to and a restraint upon that freedom
company, Justice Harlan practically of commerce which congress intended
indicated the decision of the supremo to recognize and protect, and which
court in tho first sentence of tho opin- the public is entitled to have protection! Ho said:
ed. If not destroyed all the advant"In our judgment the ovidence fully ages that would naturally come to the
sustains the material allegations uf public under the operation of the genttif bill, and shows a violation of ti.e eral law of competition as between
act of congress, in so far as it declares the Great Northern and Northern
illegal overy combination or consi
Railway companies will be lost,
in restraint of commerce among and the entire commerce of the imthe sevoral states and with foreign na- mense territory in the northern pait
tions, and forbids attempts to monop- of the United States between the great
olize such commerce."
lakes and the Pacific at Puget Sound
Ho again recurred to tho facts in the would be at the mercy of a single
caso and said that, laying aside any holding corporation, organized in a
minor things, it was indisputable that state, distant from the people of that
upon tho principal facts of the recoiJ territory."
under tho leadership of Hill and MorHe agreed with the summing up by
gan, the stockholders of tho two railtho
circuit court of the results of the
road companies,
having practically
combination,
which was that it places
parallel lines of road, had combined
tne
,.
control
of
the two roads in the
P NTrv,,,
1,..
linrint. Hn loitr
ln.n.
worth company was in the nnhM c mentioning the contention on the part vestment, saying that there had hS
of the securities company that tiio
question involved is the right of an inIn conclusion he said
dividual to dispose of his stock in a
such
"The
judgment of the court is
in
state corporation, and that
inthe
decree below be and hereby tan?
transactions the individuals whose
terests are involved are subject only firmed, with liberty to the circuit cciif
to proceed in the execution of its d
to the restraint of state laws.
U10
cree as the circumstances niav n
to
referred
also
Justice Harlan
argument that the position of the gov- quire."
Justico Brewer expressed the opiernment amounts to declaring that the
nion
corthat some of the recent decislors
ownership of stock in a railroad
com-'
of
tho court in anti-truporation is in itself interstate
cases hnri
declara-rgono
too far, and said:
merce and to other similar
i
Jll
tions, and he said:
luowuu mA
ut 1.1
uoiumg
mat
the ant"We do not understand that the gov- itrust act included all contracts reaernment makes any such contentions sonable or unreasonable, in restraint
or takes any such positions as thoGO of interstate trade, the ruling should
tt
five to four,
pei-so- ns
st
re-oui- ro.
Fa-cif-
lc
.y
'
8
7t
ganSing a cuomVion
.w
w.
e ho'
L
f
.Lt'
rT'
tirnahnrl naifle as scarcely
st
"Tnol-nfij- l
statements imply. It does not contend
that congress may control the mere
ownership of stock in a state corporation, engaged in interstate commerce,
It does not contend that congress can
control the organization or mere ova-ersh- ip
of state corporations, authorized by their charters to engage in interstate and international commerce."
The opinion then takes up the right
of congress to enact such legislation
as the anti-trulaw, and says:
"We say that congress has prescribed such a rule, because in all tho
prior cases in this court the anti-trus- c
act has been construed as forbidding
any combination which by its necessary 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 appropriately prescribe when exerting
its power under the commerce clause
of the constitution. Whether the free
operation of the normal laws of competition is a wise and wholesome rule
for trade and commerce is an ern- nomic question which this court need
st
ons
V'juSuvknown? ST
a lavj
moro niwnoMv,,
pooling their earnings, notwithstand H1U.V. QUIv I H T11IO
these
days
of
enormous
ing both were engaged in interstate
wealth than it
"The stockholders of these two com- - traffic.
wCi woo ui any rormer period of our
tintlntr nrlY1nTl00 .1lnnnnni.mrl n nnl
history;
Justice Harlan took ur, the eonten. come whenindeed, that the time 1ms
ET rZTV , "V
the public needs to be proQ Securities
th?i C?UM?J f2
poared as stockholders of tho holding 3?
tected against the fivnoHrm
..
f
" ua luc "UUIlurn &ecun
company, which was thereafter to rr
Riding the power which
company is a corporation, and as w
gaard tho interests of both sets of ties
possession of unlimited capi- iwb uuquisiiion oi tne stock of
the
stockholders as a unit, and to mau&oO railroad
as"lt may' congress has,
companies is not consistent
f?tllIs
cr cause to be managed, both lines ci!
recognized
the rule of free
with
powers
the
conferred by its char- competition,
railroad as if held in one ownershlr. ter, the
when
declaring
illegal evIsecessarily by this combination or ar- gress enforcement of the act of con- ery combination or
conspiracy
as against these corporations
rangement tho holding company in tf,e
be in its operation an interfer- straint of interstate and intern aSona
fuicst sonBe dominates tho "sltuatio 1 will
ence
by the national government
iu tho interest of those who were
with
the
internal commerce of the state gress tne public
stockholders of tho constituent comgeneral
panies; as much so, for every practi- "vu"b muse corporations. He said- when thewelfare will be
comnJm
cal purpose, as if it had boon itself TWlBi VlW deS n0t imPresS US. are left natural laws of ncompetILion
undisturbed
hv fh
a iailroad corporation which had built,
SUpPOSe ihai
haS
operated
and
owned,
both lines for the
PllrPOse to
the internal affair., nf m!!m'6
exclusive benefit of its stockholders.
u thls
is to remain a trovm.nm
Necessarily, also, tho constituent cocr- - nor is there any ground whatever
Ui
iawa aud
for not of men."
panies ceased, under such a combina- tho contention that
.,
Justice
..
"ct
Harlnn
- UUIllt'SI in
tion, to bo in active competition ior roEulatoa tlml...wi
tne
ina- billtv
f
"
nf
::..r?uuuett
uy. its very terms,
vumuiuixe.
"u
trade and commerce along their
ourt
to
the
act regulates view that the aVti-tru- st
Uie
..
linos, and have become prac- onlv mmmnvnn
ot i ,
States
and
tically one powerful consolidated cor in the foreign stao,5 v?e
unue(
states. "Thp ponfonfi
poration, by the name of a holdirg
".lcsPected. by
corporation, 'the principal, if not sole, the oxniir.it. wnr
UL uu
constitution camea without
ofp V
object for tho formation of which was that instrumfin;
Ct.OVGrruling
the
decision
to carry out the purpose of tho original by congress in pmuance oMfaenacU?
nniirf or. i. j.
scope and
combination under which competition sions, are thn
y of tho a
act."
between the constituent companies
wnBtltution or
the laws o
would cease."
' UlG contrary
He said that the stockholders of the uotwlthstandlnc'-l;,;- ;
me, 0ver tbe
states, over thf
the people 0 f 11
over
source of all
Lhe
that Jl8a-lto buslS
i,nltates'
and 552;
our
fnS?ep
cmmental
ruin wouid
MDroaa fln"n- 8v"
Furnish the motive power of sthe en- objects for system
o the
Ita provisions an7,the
J8?Sct
tton
tire body. Dr. Miles' Nervine will ordained. . , ""jg.J11 institution was
keep the nerves strong and healthy less one
ts...n.rtlflc.lal a state, aim
uuu in
A,i
oil
iiiun
creatures
or restore their strength if weakened. stand in
..PK?ed,?F
cases
?nder that
it wore othlS.?;
Bold on guarantee, Write for free book on
enforcemen
mm' tbGy
T,?
ucrvoua diseases.
Seen vepinSa..'
a.ud its laws ,i" .TV00 Bovernmenh
'
Ck, MilsJ MiuhoaiCo., Elkhart, Ind,
t
at
as
1
stock by
0.
ceeding, ho sato:
,
!-
v.ntw.
rJiTr
.
vi
i
I
1C1
.
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T''
f-i-
!"
subset
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IT
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.1
.
v
!,-..-,.
n'
lvo
re,
sus-Pri-
S
or
ni
T
Your Nerves
al
ZTw
"
UVSlg5l
-
.
' V
10,
SECURITIES DECISION
E6e NORTHERN
ir-a"-
VOLUME 4, NUMBER
!
u
ttrs"
thoarSntl'rL0
..
that the
have been
j
contracts there
presented were in themselves
asonable
restraints of interstate
and therefore - within the scope
act"
unretrade
of tre
Justico Holmes, in his dissenting
opinion contended that the anti-trustatute is "'of a criminal nature, and
ot
--
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 imprisonment 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 another, but all agree that before a statute 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 antitrust 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 connection 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 congressional supervision extends to the regulation of the- - ownership of stock &
railroads, which is, fie said, not commerce at all. He dwelt on the nece--
--
for observing this distinction. He
announced his opinion to.be that
in a state corporation ca-
ssity
ip
stock-ownersh-
be said to. be in any sense traffic
between tile .stages or intercourse between them.
Power to control l&8
ownership of interstate railroads w
contended necessarily would erahvace
nnot
--
their organization. "Hence It would
result," said the justice, "that to
.'
would bo in tho power of congress
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
J Poraont.
wl
.t'l
WJ
BHHMM
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