state objecting. But still further if effective to the point of exclusion, it would result only in isolating that state from the others, and enable its own industries to charge higher prices.

2. As to the second method, state and federal control of statecreated corporations. It perhaps is necessary here to take an inventory of the arsenal at hand. And first on the part of the state: (1) It has entire control and jurisdiction over its own corporations and their actions; (2) It has no control or jurisdiction of a corporation merely as a corporation formed in another state,-what it is, or may do, is for the state that creates it to determine; (3) It has no control over the interstate commerce of such corporation; (4) It has the power to control, or fix the terms upon which a corporation created in another state may enter into the state and carry on business there, other than interstate commerce; (5) All the states together could enact uniform corporation laws, and uniform laws for the admission and control of foreign corporations,-but the probability of such a thing being done is an idle dream.

Second, on the part of the National Government: (1) It has power to control interstate commerce, possibly to the extent of prohibiting it, though in the case of "a healthy commodity of trade, a necessity to life," it is doubtful if Congress could impress it "with a permanent condemnation," so that it could not be exported out of one state into another." (2) It can tax any one for the privilege of engaging in interstate commerce, if all are taxed uniformly, good and bad, alike. (3) It has no jurisdiction over a state-created corporation, merely as such, to prescribe what shall be its powers, rights or privileges; these are for the creating state to determine. The National Government can reach it only through the taxing or commerce power.

The recent discussions have centered around the state and national anti-trust acts, and the inter-holdings of stocks by corporations actually engaged in interstate commerce, and holding of the stocks in such corporations by other corporations not in any other way engaged in interstate commerce. But they will arise in, and have to be decided in connection with a telegraph company,-say like the Western Union Telegraph Co.; a railroad company, as in the Northern Securities Company; a manufacturing company, as the United States Steel Corporation; and a trading corporation. The anti-trust act of the National Government provides:

1 Mr. Stimson, Opinion to Indus. Com. Rep. Vol. XIX.,

p. 705.

" 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and on conviction thereof, shall be punished," etc.

"? 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a misdemeanor," etc.1

The state acts differ somewhat from this, but for the purpose of this discussion, this may be taken as a fair sample of the general tenor of the state acts, except that they relate to commerce within the individual states, some thirty-two 2 of the states having antitrust acts of various degrees of stringency.

These acts make contracts, and combinations, of the kind named and monopolies (whatever that may mean in the statute), crimes which neither of them would be without the statute. Without any statute such contracts and combinations in unreasonable restraint of trade, were looked upon as ultra vires in the case of a corporation not expressly authorized to make such contracts, to such extent that the state that created such offending corporation might by quo warranto proceedings forfeit its charter, or enjoin carrying out such a contract. Aside from this case of a corporation, the state had no right to complain of contracts in restraint of trade, it could only refuse to enforce them in a suit between the offending parties, and could not enjoin the parties from carrying them out, if they were willing.

4

Some of the questions involved are raised in the two Northern Securities cases-the state case, and the national case,5 now both before the Supreme Court.

The first involves the state's power, and the second the National Government's power. In the state case the question is whether certain acts in the way of organizing the Northern Securities Co., incorporated in New Jersey, and which exchanged its shares for the shares of a majority of the shareholders in the Great Northern Railway Co., incorporated in Minnesota, and for the shares of a majority of the shareholders in the Northern Pacific Railway Co., incor

1 Act of July 2, 1890, 26 Stat, at L. 209

2 2 Indus. Com, Report.

* People v. North River Sug. Ref. Co., 121 N. Y. 582; State v. Standard Oil Co., 49 U.S. 137. 4 Minnesota v. Northern Securities Co., 123 Fed. 692.

5 U. S. v. Northern Securities Co., 120 Fed. 721.

porated in Wisconsin, violates the Minnesota anti-consolidation of parallel lines of railway act, and the anti-trust act ot that state. The decision of Judge Lochren says they do not. An appeal has been taken to the Supreme Court, and argued, but not yet decided. If the decision of the lower court is sustained, it will destroy any effective state control of interstate railways, leaving no remedy in the state except a repeal of the charter (if the right to repeal exists, which we understand is not the case with the Great Northern), or condemning the lines of the offending companies under the power of eminent domain,2 and the state undertaking to operate them, or turning them over to a company formed as the state shall direct. Besides such a decision holding that such acts on the part of the organizers of the Northern Securities Company, do not violate the Minnesota anti-trust act, will make the trusts acts of the other thirty or more states of no legal consequence in preventing such combinations of interstate railways; such decision would seem also necessary to substantially annul the national act as a method of regulation.

If the decision of Judge Lochren is reversed on the ground that the act of organizing the Northern Securities Company, and giving it, through stock ownership, the control of two parallel lines of railway, violates the anti-consolidation law, as it seems to me the Court is likely to hold,-all states having such laws will have some authority over such lines within their state; but this pushed to the last extremity only enables the state to prevent them from being operated within the state under one management, and to be entirely effective would result in cutting the roads up into sections limited by the lines of such states as had or enforced such a law.

If the decision is reversed on the ground that the merger violates the state anti-trust act, then Minnesota and the other states having similar acts, could enjoin the operation of such roads in their respective states, by such offending company; but this, also at the last extremity, could be enforced only by breaking such lines up into sections limited by state boundaries. In both the foregoing cases, the laws of Minnesota, without being supplemented by the national law of a similar kind, could not prevent the lines of these companies being operated together under the Northern Securities charter in an

1 Minnesota v. Northern Securities Co. 123 Fed. 692.

Erie and North East Railroad v. Casey, 26 Pa. St. 287 (1856); People v. O'Brien, 111 N. Y.1 (1888).

adjoining state that did not object. Even if both companies were organized in Minnesota, and the state could compel a surrender of the shares by the Northern Securities Company, such a proceeding would not prevent the same persons incorporating in the adjoining state with the same amount of stock and turning it over to the Northern Securities Company, vesting the management of the parallel lines in the adjoining states in that company. In other words, such remedies as the state might enforce, if they had full power would be finally only to break continuous interstate railroads into state sections under separate companies, and then the remedy would be worse than the disease.

ground that the state antinecessarily follow that the This is the question direct

But if the decision is reversed on the trust act was violated, it would almost national anti-trust act was violated also. ly involved in the government case, and the decision of Judge Thayer is to the effect that the merger was formed by a "contract in restaiut of trade or commerce among the several states," substantially on the ground that the natural and inevitable tendency of the merger would be a restraint of such trade, and that the parties must have contemplated and intended the natural consequences of their acts. This decision has been severely criticised,2 though under the evidence and facts that seem to have been brought out the court did not appear to go far astray in refusing to believe the men who formed the company were too dull or too stupid to comprehend the natural result of their acts. This decision is now before the Supreme Court for consideration and if sustained upon the principles laid down in the unanimous decision of the court below, or upon the ground so clearly and so succinctly stated by Sir Frederick Pollock in a recent review,3 will yet leave many unsolved problems, such as, will it apply to the case of the purchase outright of one railroad by another as was done by the two companies, the Great Northern and the Northern Pacific, in the purchase of the Burlington? Or to a company formed as the Western Union Telegraph Co? Or to a manufacturing company,

1 U. S. v. Northern Securities Co. 120 Fed. 721,

* Prof. C. C. Langdell, in 16 Harv. L. R. 539; 17 Harv. L. R. 41. The decision in the Merger Case, by J. L. Thorndyke, (I have not seen this pamphlet, published by Little, Brown & Co.) See also "Considerations on the State Corporations in Federal and Interstate Relations," by Carmen F. Randolph, Columbia, L. R., March, April, May, 1903. This is much the best argument according to my view, that I have seen.)

* The Merger Case and Restraint of Trade, Sir Frederick Pollock, 17 Harv. L. R., Jan. 1904, p. 151.

as the United States Steel Corporation? Or to a purely trading company as some of the great department stores? Or to the inter-holdings of stocks by companies engaged in the same or different kinds of businesses? Or to an insurance company, or one of a similar kind, purchasing in the market enough stock to control various railways or manufacturing companies, primarily for investment, and incidentally resulting in management? No one of these questions can be completely answered by the decision of the government case, for they are not involved; they can be answered only after long continued litigation, every step of which will be stubbornly contested. It is more than doubtful that all or even most of these will be held to violate the anti-trust act. But suppose stockholding combinations such as the Securities Co. is, is declared to be illegal. Is it not certain that in some state, a corporation similar to it will be formed, its stock subscribed, the money paid in, and, the sum used to buy outright the property of competing companies? Will that be illegal? To take the case of the Western Union Telegraph Co. It was formed largely out of consolidations with, and purchases outright of the stock or property or both of, various other companies, all perhaps lawful by the laws of the places where they occurred and were completed before the national act was enacted. It has only a single competitor throughout the country of any consequence -the Postal Telegraph Co. It has been stated that these two companies have such an understanding about rates as to violate the antitrust act; but suppose they have not; nevertheless, the Western Union Telegraph Co. is, and has been, one of the most complete monopolies in the country, using that word in its popular significance, as expressing the condition of things that is deemed menacing. It is more than doubtful that the purchase outright of the property of one company by a competing company would be within either provision of the national act,1 and if it was held to be it is more than likely the act would be unconstitutional. Suppose the Postal Telegraph Company should fail, wind up its affairs, tear down its poles and go out of business,—then the Western Union Company would become the sole seller of telegraphic communication. Would the national anti-trust act apply? Would there be any contract in restraint of trade there? Would the second

1 U. S. v. E. C. Knight Co., 156 U. S. 1; State v. Shippers Compress Co. -Tex. -, 69 S. W. 58; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507; but compare Harding v. Am, Glucose Co., 182 Ill. 551: State v. Schlitz Brewing Co., 104 Tenn. 45.