Sherman Anti-Trust and Northern Securities Co.
Another major trust that met the Sherman Anti-Trust Act is the Northern Securities Company. The trust comprised two railroads, the Great Northern Railway Company, and the Northern Pacific Railway Company. J.P. Morgan and James J. Hill are the two puppeteers behind the Northern Securities Company. The trust at its peak controlled almost all of the Chicago railways, 98 percent. People begin to discuss the high percentage saying, “Northern Securities Company is, a combination and restraint of trade among the States, or, what comes to the same thing in my opinion, because the defendants, or some one of them, are monopolizing.” 8
Finally, Minnesota acts on the matter and sues the trust in State Court. The State concluded the company violated the first section of the Sherman Anti-Trust Act. The first Section is, “antitrust prohibition against contracts, combinations, and conspiracies "in restraint of trade or commerce among the several States or with foreign nations."9 A few months later, it is December 1903 and the case ends up at the United States Supreme Court. For months the Justices listen to arguments and finally reach a decision in March of 1904. The nine Justices ruled five to four in having Northern Securities Company disband. The Justices also found Northern Securities Company to break the first part of the Sherman Anti-Trust Act. Justice John Marshall Harlan’s opinion sheds light on the issue. He discusses how “the statute is not limited to unreasonable restraints of trade; that railroads operating in interstate trade are covered by the statute; and that every contract, combination or conspiracy that would extinguish such competition is illegal.” 10
In addition to a victory of the Sherman Anti-Trust. President Theodore Roosevelt is highly praised for taking a stance on big corporations and their monopolies. He is even given the nickname trust buster. At this point the Federal Government feels strongly they will be able to manage large trusts through the 1890 Act.
Footnotes
8 “VIOLATION OF ANTI-TRUST LAW.: SUPREME COURT OF THE UNITED STATES--No. 277--OCTOBER TERM, 1903. NORTHERN SECURITIES COMPANY ET AL., Appellants, v. THE UNITED STATES. Appeal from the Circuit Court of the United States for the District of Minnesota. SUPREME COURT OF THE UNITED STATES--NO. 277--OCTOBER TERM, 1903. NORTHERN SECURITIES COMPANY ET AL., Appellants, v. THE UNITED STATES. (March 14, 1904.).” The Albany Law Journal; A Weekly Record of the Law and the Lawyers (1870-1908) 66, no. 5 (May 1904).
9 THE U.S. DEPARTMENT OF JUSTICE, and THE FEDERAL TRADE COMMISSION. ANTITRUST ENFORCEMENT GUIDELINES FOR INTERNATIONAL OPERATIONS. Washington, D.C.: THE U.S. DEPARTMENT OF JUSTICE, 1995.
10 Krohnke, Duane W. “Federal Regulation of Railroads during U.S. President Theodore Roosevelt's First Term (1901-1905): The Northern Securities Case.” dwkcommentaries, September 18, 2014. https://dwkcommentaries.com/2014/07/20/federal-regulation-of-railroads-during-u-s-president-theodore-roosevelts-first-term-1901-1905-the-northern-securities-case/