Case," was the most important, as it was the most sweeping in effect. In that case the basis of the complaint brought by the federal government was the acquisition by the Northern Securities Company, a corporation of the State of New Jersey, of the control of the Great Northern Railway Company, operating lines of railway which extended from Duluth and St. Paul in the State of Minnesota, to Portland in the State of Oregon, and to Everett and Seattle in the State of Washington, and the Northern Pacific Railway Company, operating lines of railway from Ashland in the State of Wisconsin, and from Duluth and St. Paul in the State of Minnesota, to Portland in the State of Oregon, and to Spokane, Seattle and Tacoma in the State of Washington, which were parallel and competing lines, and were engaged in active competition for interstate freight and passenger traffic. This was effected by means of an exchange of the stock issued by the Northern Securities Company for that of the two railroads above mentioned, and the possession of such stock vested in the Northern Securities Company the control of both railroads, with the direct and necessary effect, as the court said, "to restrain and monopolize interstate commerce by suppressing or (to use the words of this court in United States v. Joint Traffic Association) 'smothering' competition between the lines of two railway carriers" (p. 354). A majority of the court held this transaction to be a violation of the Anti-Trust Act, so called, and the Northern Securities Company was required to reconvey to the former holders all of the stock of the Great Northern Railway Company and the Northern Pacific Railway Company which had come into its possession. After reviewing and summarizing the previous decisions upon the Anti-Trust Act, the majority opinion laid down certain principles as established by such decisions and within which the case before the court was held to fall. These principles, as declared by the court, speaking through Mr. Justice Harlan, were as follows:

That although the act of Congress known as the Anti-Trust Act has no reference to the mere manufacture or production of articles or commodities within the limits of the several States, it does embrace and

declare to be illegal every contract, combination or conspiracy, in whatever form, of whatever nature, and whoever may be parties to it, which directly or necessarily operates in restraint of trade or commerce among the several States or with foreign nations;

That the act is not limited to restraints of interstate and international trade or commerce that are unreasonable in their nature, but embraces all direct restraints imposed by any combination, conspiracy or monopoly upon such trade or commerce;

That railroad carriers engaged in interstate or international trade or commerce are embraced by the act;

That combinations even among private manufacturers or dealers whereby interstate or international commerce is restrained are equally embraced by the act;

That Congress has the power to establish rules by which interstate and international commerce shall be governed, and, by the Anti-Trust Act, has prescribed the rule of free competition among those engaged in such

commerce;

That every combination or conspiracy which would extinguish competition between otherwise competing railroads engaged in interstate trade or commerce, and which would in that way restrain such trade or commerce, 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 the combination, in fact, results or will result in a total suppression of trade or in a complete monopoly, but it is only essential to show that by its necessary operation it tends to restrain interstate or international trade or commerce or tends to create a monopoly in such trade or commerce and to deprive the public of the advantages that flow from free competition;

That the constitutional guarantee of liberty of contract does not prevent Congress from prescribing the rule of free competition for those engaged in interstate and international commerce; and

That under its power to regulate commerce among the several States and with foreign nations, Congress had authority to enact the statute in question.

The court also, in effect, decided that the Anti-Trust Act might be enforced against a State corporation acting within its charter powers, provided that such action created a combination or conspiracy which was in restraint of interstate trade; and disposed of the contention upon the part of the defendants

that if the statute were held to embrace the particular case then under consideration it would be repugnant to the Constitution of the United States.

Such, then, in brief, are the affirmative propositions established by the Northern Securities case, and the statute must now be taken to extend to every combination or conspiracy in restraint of interstate commerce, whether reasonable or unreasonable. See Shawnee Compress Co. v. Anderson, supra; United States v. American Tobacco Co., supra.

If the principle so declared is to be accepted without reservation or qualification, it must be conceded that it would reach and forbid every kind of combination of individuals or corporations in any way engaged in interstate commerce, and would in and of itself be decisive of the present inquiry; but in the Northern Securities decision the court did not have before it a case which involved the consolidation by express authority of a State of two domestic railroad corporations engaged in interstate traffic, or the control of one by the other, expressly sanctioned by the same authority; on the contrary, the combination before the court was expressly forbidden by the State in which one of the constituent railroads was incorporated and both were extensively operated (see Gen. Laws of Minn., 1899, c. 359; Laws of Minn., 1881, p. 109; 1874; p. 154), and was effected by means of a corporation of a State at a distance from the territory in which such railroads were located.

I conceive, therefore, that the first and more important question which is presented by the communication of the committee is in substance whether or not the provisions of the Anti-Trust Act include and prohibit a consolidation of two railroad corporations, such consolidation being duly authorized by the State by which they were created, or a control of one such railroad by the other, duly sanctioned by the Legislature of such State; and to this inquiry I reply as follows:

The right of a State to authorize or require or forbid the consolidation of corporations which are subject to its jurisdiction is clearly recognized by the decisions of the Supreme Court of the United States. In Louisville & Nashville Railroad Co. v. Ken

tucky, 161 U. S. 677, where the court was dealing with the consolidation of the Louisville & Nashville Railroad Company, the Chesapeake, Ohio & Southwestern Railroad Company and certain subordinate corporations, a consolidation alleged to be in violation of the provisions of section 201 of the Constitution of Kentucky of 1891, which forbade the consolidation of the capital stock, franchise or property, or the pooling of the earnings, of certain corporations, including railroad corporations, it is nowhere intimated that the power of a State to authorize or forbid the consolidation of railroad corporations within its limits is to be confined to lines of railroad engaged exclusively in intrastate commerce. Upon the other hand, the court, at page 702, uses language which expressly concedes and confirms the right of a State to create and to regulate the instruments of interstate commerce within its jurisdiction, even to the extent of permitting the purchase by one railroad corporation of the stock of another:

It has never been supposed that the dominant power of Congress over interstate commerce took from the States the power of legislation with respect to the instruments of such commerce, so far as the legislation was within its ordinary police powers. Nearly all the railways in the country have been constructed under State authority, and it cannot be supposed that they intended to abandon their power over them as soon as they were finished. The power to construct them involves necessarily the power to impose such regulations upon their operation as a sound regard for the interests of the public may seem to render desirable. In the division of authority with respect to interstate railways Congress reserves to itself the superior right to control their commerce and forbid interference therewith; while to the States remains the power to create and to regulate the instruments of such commerce, so far as necessary to the conservation of the public interests.

If it be assumed that the States have no right to forbid the consolidation of competing lines, because the whole subject is within the control of Congress, it would necessarily follow that Congress would have the power to authorize such consolidation in defiance of State legislation,— a proposition which only needs to be stated to demonstrate its unsoundAs we have already said, the power of one railway corporation to purchase the stock and franchises of another must be conferred by express language to that effect in the charter; and hence, if the charter of the Louisville & Nashville Company had been silent upon that point, it will

ness.

be conceded that it would have no power to make the proposed purchase in this case. As the power to purchase, then, is derivable from the State, the State may accompany it with such limitations as it may choose to impose.

See also Railroad Co. v. Maryland, 21 Wall. 456.

The case of Louisville & Nashville Railroad Co. v. Kentucky was decided on March 30, 1896, more than five years after the passage of the Anti-Trust Act; and while the statute was not involved in the question at issue, and was not referred to in the opinion, the court must be deemed to have been well aware of its provisions, and upon that date to have declared that such provisions did not limit the right of a State to regulate and control domestic railroad corporations so far as necessary to the conservation of the public interests; and that even in the case of competing railroads such regulation and control did not constitute an interference with interstate commerce. See Pearsall v. Great Northern Railway Co., 161 U. S. 646; Cleveland, etc., Ry. Co. v. Illinois, 177 U. S. 514; Wisconsin, Minnesota & Pacific Railroad v. Jacobson, 179 U. S. 287, 297; Louisville & Nashville Railroad Co. v. Kentucky, 183 U. S. 503, 519; see also Missouri Pacific Railway v. Larrabee Mills, 211 U. S. 612, 621.

It is evident that the several States have never regarded the statute as prohibiting or even limiting their action with respect to the regulation and control of domestic railroad corporations as an exercise of the police power. In this Commonwealth the New York, New Haven & Hartford Railroad Company, the Boston & Maine Railroad and the Boston & Albany Railroad Company, as they now exist, are the result of numerous consolidations, leases and other forms of control authorized by the statutes of this Commonwealth and of other States in which they have been incorporated. Subsequent to 1890, when the Anti-Trust Statute was enacted, the Boston & Albany Railroad Company has been leased to the New York Central & Hudson River Railroad Company by authority of St. 1900, c. 468; the Fitchburg Railroad Company has been leased to the Boston & Maine Railroad by authority of St. 1900, c. 426; the Old Colony