Northern Securities Company v. United States (193 U.S. 197)/Opinion of the Court
[Syllabus, Complaint, and Answer from pages 197-257 intentionally omitted]

Mr. George B. Young argued the cause and filed a brief for appellant the Northern Securities Company:

[Argument of Counsel from Pages 257-265 intentionally omitted]

The government is not entitled to maintain this proceeding, nor had the circuit court jurisdiction of it; for the conspiracy or combination charged in the petition and found by the circuit court, if it ever existed, had done all it was formed to do, and had come to an end, before the proceeding was instituted.

The only combination of which there is any evidence is a combination formed in aid of commerce, to liberate, protect, and enlarge, and not to restrain it, and which has liberated, protected, aided, and enlarged it, and has not restrained, and does not threaten to restrain it.

All the facts and circumstances are to be considered in order to determine the fundamental question whether the necessary effect of the combination is to restrain interstate commerce.

Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 245, 44 L. ed. 136, 149, 20 Sup. Ct. Rep. 96; Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 68, 22 L. ed. 315, 318.

The law of self-defense and protection applies to one's business as well as to one's person.

United States Chemical Co. v. Provident Chemical Co. 64 Fed. 946.

The combination here is analogous to the covenant of the seller of a business that he will not engage in it, which has been declared not to testrain trade.

United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 329, 41 L. ed. 1007, 1023, 17 Sup. Ct. Rep. 540.

If this combination is to be adjudged a combination and conspiracy in restraint of commerce, there is scarcely an agreement or contract among business men that cannot be said to have, indirectly or remotely, some bearing upon interstate commerce, and possibly to restrain it.

Hopkins v. United States, 171 U.S. 578, 600, 43 L. ed. 290, 299, 19 Sup. Ct. Rep. 40.

Congress did not attempt by the antitrust act to limit and restrict the rights of corporations created by the states, or of citizens of the states, in the acquisition or disposition of property, or to make criminal the acts of persons in the acquisition and control of property, which the states of their residence or creation sanctioned or permitted.

United States v. E. C. Knight Co. 156 U.S. 1, 16, 39 L. ed. 325, 330, 15 Sup. Ct. Rep. 249.

At common law a cessation or diminution of competition, springing from a unity of ownership,-as, where one competitor sold his business to another, or both sold out to a third person, etc., was never regarded as a restraint of trade; such cessation or diminution being incident to the union of property or business in one ownership, and not a restraint imposed by contract.

And so such purchases, or agreements to purchase, have never been held contracts in restraint of trade.

Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 46 L. R. A. 255, 43 Atl. 723; Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

The formation of corporations for business or manufacturing purposes has never been regarded as in the nature of a contract in restraint of trade or commerce. The same may be said of the contract of partnership.

United States v. Joint Traffic Asso. 171 U.S. 505, 567, 43 L. ed. 259, 286, 19 Sup. Ct. Rep. 25.

The only question is, Does the contract or combination itself, or do the things the parties contracted to do, restrain commerce? If they do, the parties are criminals, however good their motives. If they do not, the parties are innocent, however reprehensible their designs.

United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 341, 41 L. ed. 1007, 1027, 17 Sup. Ct. Rep. 540; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 234, 44 L. ed. 136, 145, 20 Sup. Ct. Rep. 96.

The power to suppress competition is not of itself suppression.

State v. Northern Securities Co. 123 Fed. 592.

The position of the government rests on a wholly erroneons view of the relations of the shareholders of a railway company to the commerce of the company, and of the power of a majority of the shareholders to restrain or otherwise control that commerce.

Hoyt v. Thompson, 19 N. Y. 207; Burrill v. Nahant Bank, 2 Met. 163, 35 Am. Dec. 395; Pullman's Palace Car Co. v. Missouri P. R. Co. 115 U.S. 587, 29 L. ed. 499, 6 Sup. Ct. Rep. 194.

A monopoly of trade embraces two essential elements: (1) The acquisition of an exclusive right to or the exclusive control of the trade; and (2) the exclusion of all others from that right and control.

United States v. Trans-Missouri Freight Asso. 7 C. C. A. 15, 19 U.S. App. 36, 4 Inters. Com. Rep. 443, 58 Fed. 58.

An attempt to monopolize any part of the trade or commerce among the states must be an attempt to secure or acquire an exclusive right to such trade or commerce by means which prevent or restrain others from engaging therein.

Re Greene, 52 Fed. 104.

Monopolies are liable to be oppressive, and hence are deemed to be hostile to the public good. But combinations for a mutual advantage, which do not amount to a monopoly, but leave the fleld open to others, are within neither the reason nor the operation of the rule.

Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

The anti-trust act and the regulative power of Congress under the commerce clause of the Constitution are alike strictly confined to matters which directly and immediately affect interstate or foreign commerce.

United States v. E. C. Knight Co. 156 U.S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; United States v. Trans-Missouri Freight Asso. 166 U.S. 291, 41 L. ed. 1011, 17 Sup. Ct. Rep. 540; United States v. Joint Traffio Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Hopkins v. United States, 171 U.S. 578, 594, 43 L. ed. 290, 296, 19 Sup. Ct. Rep. 40; Anderson v. United States, 171 U.S. 604, 43 L. ed. 300, 19 Sup. Ct. Rep. 50; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

A state may not tax railway earnings from transportation as such, for that is taxing the commerce, and is a direct regulation of it.

Fargo v. Michigan, 121 U.S. 230, 30 L. ed. 888, 1 Inters. Com. Rep. 51, 7 Sup. Ct. Rep. 857; Philadelphia & S. Mail S. S.C.o. v. Pennsylvania, 122 U.S. 326, 338, 30 L. ed. 1200, 1202, 1 Inters. Com. Rep. 308, 7 Sup. Ct. Rep. 1118.

But it may tax the tolls received by a local railroad company for the use of part of its road by another company engaged in interstate commerce; for this is a tax on property, and not on commerce. Any increase of rates by the carrying company, consequent on a raising of the tolls because of the tax, is 'too remote and indirect' to make the act a regulation of commerce.

New York, L. E. & W. R. Co. v. Pennsylvania, 158 U.S. 431, 39 L. ed. 1043, 15 Sup. Ct. Rep. 896.

A state may tax the franchise of a foreign corporation upon a valuation measured by gross receipts from interstate and foreign as well as domestic commerce. This is not a direct regulation; the tax is not laid on the commerce itself.

Maine v. Grand Trunk R. Co. 142 U.S. 217, 35 L. ed. 994, 3 Inters. Com. Rep. 807, 12 Sup. Ct. Rep. 121, 163.

A law imposing a privilege tax of $50 on every sleeping car running over the railroads of the state is void as to cars used in interstate transportation, for it is a direct regulation of commerce.

Pickard v. Pullman Southern Car Co. 117 U.S. 34, 29 L. ed. 785, 6 Sup. Ct. Rep. 635.

But the state may tax the same cars, not because used in commerce, but because within the state, as property in the state; and the tax may take the form of a tax on the company's capital. Here the tax is laid directly on the property of the company,-its cars,-and not on the use of the cars in interstate commerce; and if it regulates such commerce at all, it does so indirectly.

Pullman's Palace Car Co. v. Pennsylvania, 141 U.S. 18, 25, 35 L. ed. 613, 617, 3 Inters. Com. Rep. 595, 11 Sup. Ct. Rep. 876.

A state may not tax United States bonds as such. It may not tax an individual or corporation on the value of the bonds held by him, for this would be to tax the bonds directly. But shares in a national bank are taxable by a state at their full value, like other property, no matter how much of the bank's capital is invested in United States bonds. Such tax does not fall directly on the bonds.

Van Allen v. The Assessors, 3 Wall. 575, 18 L. ed. 229.

If the power to regulate interstate commerce applied to all the incidents to which said commerce might give rise, and to all contracts which might be made in the course of its transaction, that power would embrace the entire sphere of mercantile activity in any way connected with trade between the states, and would exclude state control over many contracts purely domestic in their nature.

Hooper v. California, 155 U.S. 648, 655, 39 L. ed. 297, 300, 5 Inters. Com. Rep. 610, 15 Sup. Ct. Rep. 207; Williams v. Fears, 179 U.S. 270, 278, 45 L. ed. 186, 190, 21 Sup. Ct. Rep. 128.

A complete bar to the government's attempted encroachment on the rights of the states and their citizens is found in Pearsall v. Great Northern R. Co. 161 U.S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705, and Louisville & N. R. Co. v. Kentucky, 161 U.S. 677, 40 L. ed. 849, 16 Sup. Ct. Rep. 714.

Congress, when passing the act, knew that the railway system of the country rested on consolidations, actual or virtual, authorized by state laws, some of them having existed many years.

Chesapeake & P. Teleph. Co. v. Manning, 186 U.S. 238, 245, 46 L. ed. 1144, 22 Sup. Ct. Rep. 881.

These are also matters within the judicial knowledge of the court.

Ohio L. Ins. & T. Co. v. Debolt, 16 How. 416, 435, 14 L. ed 997, 1005; Baltimore & O. R. Co. v. Maryland, 21 Wall. 456, 469, 22 L. ed. 678, 683; Brown v. Piper, 91 U.S. 37, 42, 23 L. ed. 200, 202; Phillips v. Detroit, 111 U.S. 604, 606, 28 L. ed. 532, 533, 4 Sup. Ct. Rep. 580; Lehigh Valley R. Co. v. Pennsylvania, 145 U.S. 192, 201, 36 L. ed. 672, 675, 4 Inters. Com. Rep. 87, 12 Sup. Ct. Rep. 806; Louisville & N. R. Co. v. Kentucky, 161 U.S. 677, 699, 40 L. ed. 849, 858, 16 Sup. Ct. Rep. 714; Preston v. Browder, 1 Wheat. 115, 121, 4 L. ed. 50, 51; United States v. Union P. R. Co. 91 U.S. 72, 79, 23 L. ed. 224, 228; Platt v. Union P. R. Co. 99 U.S. 48, 25 L. ed. 424; Chesapeake & P. Teleph. Co. v. Manning, 186 U.S. 238, 245, 46 L. ed. 1144, 1147, 22 Sup. Ct. Rep. 881.

If Congress had meant to declare such consolidations and stock purchases of competing companies to be illegal, the securities issued by them void, and the state legislation unconstitutional, it would have said so in plain, specific, and apt language.

There can be no question but that every combination declared illegal by the act would have been equally so-no more, no less before the act.

Re Debs, 158 U.S. 564, 581, 39 L. ed. 1092, 1101, 15 Sup. Ct. Rep. 900; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 229, 44 L. ed. 136, 143, 20 Sup. Ct. Rep. 96.

[Argument of Counsel from pages 265-268 intentionally omitted]

Mr. John G. Johnson also argued the cause and filed a brief for appellant the Northern Securities Company:

[Argument of Counsel from pages 268-270 intentionally omitted]

The acts which can be prevented and restrained by proceedings in equity are those, and those alone, made criminal by the 1st and 2d sections of the Sherman act.  The statute is therefore a penal one, defining a criminal offense, for which it provides a punishment. It is an indispensable prerequisite to a conviction for a criminal misdemeanor,-especially if there be no criminal intent, and such did not exist in the present case,-that the offense condemned shall be clearly defined.

United States v. Wiltberger, 5 Wheat. 76, 5 L. ed. 37; United States v. Whittier, 5 Dill. 35, Fed. Cas. No. 16,688; Andrews v. United States, 2 Story, 213, Fed. Cas. No. 381; United States v. Hartwell, 6 Wall. 385, 396, 18 L. ed. 830, 832; Swearingen v. United States, 161 U.S. 446, 451, 40 L. ed. 765, 16 Sup. Ct. Rep. 562; France v. United States, 164 U.S. 676, 682, 41 L. ed. 595, 597, 17 Sup. Ct. Rep. 219; The Paulina v. United States, 7 Cranch, 61, 3 L. ed. 269; United States v. Reese, 92 U.S. 219, 23 L. ed. 565; United States v. Comerford, 25 Fed. 902; United States v. Chase, 135 U.S. 255, 261, 34 L. ed. 117, 119, 10 Sup. Ct. Rep. 756; United States v. Goldenberg, 166 U.S. 102, 42 L. ed. 398, 18 Sup. Ct. Rep. 3; Sarlls v. United States, 152 U.S. 570, 575, 38 L. ed. 556, 558, 14 Sup. Ct. Rep. 720.

The meaning of the words, 'contracts in restraint of trade,' was thoroughly understood in jurisprudence and in business when the Sherman act was passed. It was not the intention of Congress to create any new offense.

United States v. Trans-Missouri Freight Asso. 166 U.S. 328, 41 L. ed. 1023, 17 Sup. Ct. Rep. 540.

The Sherman act does not apply to the formation of a corporation to carry on any particular line of business by those already engaged therein, or to a contract of partnership or of employment between two persons previously engaged in the same line of business.

United States v. Joint Traffic Asso. 171 U.S. 567, 43 L. ed. 286, 19 Sup. Ct. Rep. 25.

The idea of monopoly involves something more than a mere acquisition of the whole, or of the major part, of a commodity or of shares of stock. It involves the idea of exclusion of other supply, as well as inclusion of what is actually acquired.

Re Greene, 52 Fed. 104; Charles River Bridge v. Warren Bridge, 11 Pet. 606, 9 L. ed. 847; 20 Am. & Eng. Enc. Law, p. 846; 2 Bouvier, Law Dict. Rawle's ed. p. 435; 4 Bl. Com. 159; Century Dict. Monopoly; United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

The purchase by one person of the property of his rival, with the intention thereby to destroy his competition, is not illegal, although by the purchase he will acquire the power to prevent the same.

Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. ed. 315.

The power of Congress to regulate commerce does not confer upon it a right to prescribe the persons who may engage therein, or to regulate or control the ownership of shares of stock of corporations which engage therein.

United States v. E. C. Knight co. 156 U.S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 294.

That construction of a statute should be adopted which, without doing violence to the fair meaning of the words used, brings it into harmony with the Constitution.

Grenada County v. Brogden, 112 U.S. 28 L. ed. 704, 5 Sup. Ct. Rep. 125.

In interpreting a statute the intention of the law-making power will prevail even against the letter of the statute. A thing may be within the letter of the statute, and not within its meaning, or within its meaning, though not within its letter.

Hawaii v. Mankichi, 190 U.S. 197, 47 L. ed. 1016, 23 Sup. Ct. Rep. 787.

In Baltimore & O. R. Co. v. Maryland, 21 Wall. 456, 22 L. ed. 678, a stipulation in the charter of a railroad company, that the company should pay to the state a bonus, or a portion of its earnings, was held, not repugnant to the Constitution of the United States.

In Ashley v. Ryan, 153 U.S. 436, 38 L. ed. 773, 4 Inters. Com. Rep. 664, 14 Sup. Ct. Rep. 865, a state was permitted, in allowing consolidation between corporations of different states, to charge upon the new consolidated company a percentage on its entire authorized stock as a fee, inasmuch as, without the franchises conferred by the state, it could not exist; and such charge was not an interference with interstate commerce.

The relief decreed was improper under any aspect of the case.

United States v. E. C. Knight Co. 156 U.S. 1, 17, 39 L. ed. 325, 331, 15 Sup. Ct. Rep. 249.

Mr. Charles W. Bunn argued the cause and filed a brief for appellant the Northern Pacific Railway Company:

The power of Congress has never been more accurately or completely described than by Chief Justice Marshall in Gibbons v. Ogden, 9 Wheat. 1, 189, 190, 6 L. ed. 23, 68: 'Commerce, undoubtedly, is traffic, but it is something more,-it is intercourse. It describes the commercial intercourse between nations and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on that intercourse.'

This definition has been frequently repeated by the court.

Passenger Cases, 7 How. 283, 394, 462, 12 L. ed. 702, 748, 777; Henderson v. Wickham, 92 U.S. 259, 270, 23 L. ed. 543, 548; Lottery Case, 188 U.S. 321, 346, 47 L. ed. 492, 497, 23 Sup. Ct. Rep. 321.

The power of Congress is only to regulate, and is the power to prescribe the rule by which commerce is to be governed.

Gibbons v. Ogden, 9 Wheat. 196, 6 L. ed. 79.

The interstate commerce power of Congress justifies only such regulations as act upon that commerce directly, and does not authorize regulations abridging the police powers of the states or the personal rights and privileges of individuals, if they affect that commerce only indirectly, remotely, incidentally, and collaterally.

Re Greene, 52 Fed. 104; United States v. E. C. Knight Co. 156 U.S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; Gibbons v. Ogden, 9 Wheat. 203, 6 L. ed. 71; United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; Hopkins v. United States, 171 U.S. 592, 43 L. ed. 296, 19 Sup. Ct. Rep. 40; Anderson v. United States, 171 U.S. 615, 43 L. ed. 305, 19 Sup. Ct. Rep. 50; Sherlock v. Alling, 93 U.S. 99, 23 L. ed. 819; Louisville & N. R. Co. v. Kentucky, 161 U.S. 677, 701, 40 L. ed. 849, 16 Sup. Ct. Rep. 714.

If the decision of the circuit court is correct, all the state laws either forbidding or authorizing consolidations of interstate carriers are and always have been void.

Cooley v. Port Wardens, 12 How. 299, 13 L. ed. 996; Cushing v. The John Fraser, 21 How. 184, 16 L. ed. 106; Pound v. Turck, 95 U.S. 459, 24 L. ed. 525; Robbins v. Shelby County Taxing Dist. 120 U.S. 492, 30 L. ed. 695, 1 Inters. Com. Rep. 45, 7 Sup. Ct. Rep. 592; Mobile County v. Kinball, 102 U.S. 691, 26 L. ed. 238; United States v. E. C. Knight Co. 156 U.S. 11, 12, 39 L. ed. 328, 329, 15 Sup. Ct. Rep. 249; Addyston Pipe & Steel Co. v. United States, 175 U.S. 230, 44 L. ed. 143, 20 Sup. Ct. Rep. 96.

Except as it punishes contracts, combinations, and conspiracies, the statute intreduces no new rule of law. Whatever is a restraint of commerce now was such before this statute. The act is new only in making the preliminary conspiracy a crime.

Re Debs, 158 U.S. 564, 39 L. ed. 1092, 15 Sup. Ct. Rep. 900; Addyston Pipe & Steel Co. v. United States, 175 U.S. 230, 44 L. ed. 143, 20 Sup. Ct. Rep. 96.

If a thing restrains interstate commerce, it is immaterial with what innocent intent it may be done. On the other hand, if the thing complained of does not restrain interstate commerce, it is immaterial how evil may be the intent.

United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 341, 41 L. ed. 1007, 1027, 17 Sup. Ct. Rep. 540.

If an action be lawful, it is elementary that its purpose is immaterial.

Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; Phelps v. Nowlen, 72 N. Y. 39, 28 Am. Rep. 93; Kiff v. Youmans, 86 N. Y. 324, 40 Am. Rep. 543; Wood v. Amory, 105 N. Y. 278, 11 N. E. 636; Lough v. Outer-bridge, 143 N. Y. 271, 25 L. R. A. 674, 38 N. E. 292; Adler v. Fenton, 24 How. 407, 410, 16 L. ed. 696, 697; United States v. Greenhut, 51 Fed. 205; Re Greene, 52 Fed. 104; Randall v. Hazelton, 12 Allen, 412; Brackett v. Griswold, 112 N. Y. 454, 20 N. E. 376; United States v. Isham, 17 Wall. 496, 21 L. ed. 728; Dickerman v. Northern Trust Co. 176 U.S. 181, 44 L. ed. 423, 20 Sup. Ct. Rep. 311; Fahrney v. Kelly, 102 Fed. 403; Mogul S. S.C.o. v. McGregor [1892] A. C. 25, 41; Allen v. Flood [1898] A. C. 1.

If buying and voting the stock restrains interstate commerce, it is illegal. If it does not restrain interstate commerce, it is legal; and the conspiracy behind the formation of the company was a conspiracy to do a lawful thing.

Bohn Mfg. Co. v. Hollis, 54 Minn. 223, sub nom. Bohn Mfg. Co. v. Northwestern Lumbermen's Asso. 21 L. R. A. 337, 55 N. W. 1119.

A combination may destroy competition without restraining trade.

United States v. Joint Traffic Asso. 171 U.S. 567, 43 L. ed. 286, 19 Sup. Ct. Rep. 25; United States v. Addyston Pipe & Steel Co. 46 L. R. A. 122, 29 C. C. A. 141, 54 U.S. App. 744, 85 Fed. 271.

The business of a rival in trade may be purchased for the very purpose of being rid of his competition.

Gamble v. Queens County Water Co. 123 N. Y. 91, 9 L. R. A. 527, 25 N. E. 201; Diamond Match Co. v. Roeber, 106 N. Y. 473, 60 Am. Rep. 464, 13 N. E. 419; Rafferty v. Buffalo City Gas Co. 37 App. Div. 618, 56 N. Y. Supp. 288; Trenton Potteries Co. v. Oliphant, 56 N. J. Eq. 680, 39 Atl. 923; Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 23 L. R. A. 639, 28 Atl. 973.

Mr. John W. Griggs also filed a brief for appellant the Northern Securities Company:

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.

Louisville & N. R. Co. v. Kentucky, 161 U.S. 702, 40 L. ed. 859, 16 Sup. Ct. Rep. 714.

The courts of the United States since the passage of the Sherman act have been called upon to restrain projected consolidations upon the ground that they were contrary to state statutes, but no suggestion has been made that the legislation of Congress expressed in the Sherman act had any bearing on the subject.

Pearsall v. Great Northern R. Co. 161 U.S. 648, 40 L. ed. 839, 16 Sup. Ct. Rep. 705; Louisville & N. R. Co. v. Kentucky, 161 U.S. 702, 40 L. ed. 859, 16 Sup. Ct. Rep. 714.

The power exists in each state, by appropriate enactments not forbidden by its own or the Federal Constitution, to regulate the relative rights and duties of all persons and corporations within its jurisdiction, so as to provide for the public convenience and the public good. State legislation relating to commerce is not to be deemed a regulation of interstate commerce simply because it may, to some extent or under some circumstances, affect such commerce.

Lake Shore & M. S. R. Co. v. Ohio, 173 U.S. 285, 43 L. ed. 702, 19 Sup. Ct. Rep. 465.

In Missouri, K. & T. R. Co. v. Haber, 169 U.S. 613, 42 L. ed. 878, 18 Sup. Ct. Rep. 488, it was held that the authority given by § 5258 of the Revised Statutes of the United States  to carry 'freight and property' over their respective roads from one state to another state did not authorize a railroad company to carry into a state cattle known, or which by due diligence might be known, to be in such condition as to impart or communicate disease to the domestic cattle of such state.

And it has been expressly adjudged that the above statutory provision was not intended to interfere with the authority of the states to enact such regulations with respect, at least, to a railroad corporation of its own creation, as were not directed against interstate commerce, but which only incidentally or remotely affected such commerce, and were not in themselves regulations of interstate commerce, but were designed reasonably to subserve the convenience of the public.

Lake Shore & M. S. R. Co. v. Ohio, 173 U.S. 285, 43 L. ed. 702, 19 Sup. Ct. Rep. 465; Cleveland, C. C. & St. L. R. Co. v. Illinois, 177 U.S. 514, 44 L. ed. 868, 20 Sup. Ct. Rep. 722.

All that has been done, even as contended by the government, has been to concentrate the ownership of a majority of the shares of the two companies into one hand, the owner being a corporation controlled by the same men who would own and control a majority of the capital stock of both railroad companies if the holding company had not been formed.

The companies remain distinct; the stockholders are not the corporation; each company is just as much subject to all the requirements of the law as though its stock-holders were entirely different.

Pullman's Palace Car Co. v. Missouri P. R. Co. 115 U.S. 587, 29 L. ed. 499, 6 Sup. Ct. Rep. 194.

When a contract, agreement, or arrangement of any kind is challenged as a combination in restraint of trade or commerce, the court will look at the form of the agreement, and if it appears on its face to have as a necessary and direct result the effect of restraining trade or commerce, no inquiry into the intention or motives of the parties is requisite.

United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

But if the arrangement is one which in itself is lawful, and is claimed to be invalid only because its ultimate object is to restrain commerce or competition, then it is necessary to examine the facts and circumstances to see if the forms of law are being used to further an illegal purpose.

United States v. Trans-Missouri Freight Asso. 166 U.S. 341, 41 L. ed. 1027, 17 Sup. Ct. Rep. 540; Hopkins v. United States, 171 U.S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. 40; United States v. Workingmen's Amalgamated Council, 26 L. R. A. 158, 4 Inters. Com. Rep. 831, 54 Fed. 994; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; State ex rel. Atty. Gen. v. Shippers' Compress & Warehouse Co. (Tex. Civ. App.) 67 S. W. 1049, 95 Tex. 603, 69 S. W. 58.

In every instance where the Supreme Court has had occasion to pass upon the meaning of the Sherman act, it has been extremely careful to distinguish between acts which directly restrain commerce, and acts which only indirectly or incidentally have that effect.

United States v. E. C. Knight Co. 156 U.S. 1, 12, 16, 39 L. ed. 325, 330, 15 Sup. Ct. Rep. 249; United States v. Joint Traffic Asso. 171 U.S. 505, 566, 43 L. ed. 259, 286, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

Over internal commerce and trade Congress has no power of regulation, nor any direct control. This power belongs exclusively to the states. No interference by Congress with the business of citizens transacted within a state is warranted by the Constitution, except such as is strictly incidental to the exercise of powers clearly granted.

License Tax Cases, 72 U.S. 462, 18 L. ed. 497.

The fact that an article was manufactured for export to another state does not make it an article of interstate commerce.

Coe v. Errol, 116 U.S. 517, 29 L. ed. 715, 6 Sup. Ct. Rep. 475; Kidd v. Pearson, 128 U.S. 1, 32 L. ed. 346, 2 Inters. Com. Rep. 232, 9 Sup. Ct. Rep. 6.

In United States v. Boyer, 85 Fed. 425, acts of Congress empowering the Secretary of Agriculture to make inspection of cattle, etc., at slaughter houses located in the several states, the products of which were intended for sale in other states or foreign countries, were declared to be without any constitutional warrant, and therefore void, although the government sought to sustain them as a legitimate exercise of the commerce powers.

The sale of the stock of the two railroad corporations, no matter to whom it may be sold, nor how often such sales and transfers of the stock may take place, cannot, in any proper sense, be said to affect the transportation business carried on by the company.

Clarke v. Central R. & Bkg. Co. 66 Fed. 16; Re Greene, 52 Fed. 104; Pearsall v. Great Northern R. Co. 161 U.S. 646, 671, 40 L. ed. 838, 846, 16 Sup. Ct. Rep. 705; Rogers v. Nashville, C. & St. L. R. Co. 33 C. C. A. 517, 62 U.S. App. 49, 697, 91 Fed. 312.

The Sherman act is a penal statute; every act which may be prevented by injunctive order would, if committed and proved, subject the parties to criminal prosecution. The rule of strict construction must therefore be applied. United States v. Whittier, 5 Dill. 35, Fed. Cas. No. 16,688; United States v. Sheldon, 2 Wheat. 119, 4 L. ed. 199; United States v. Hartwell, 6 Wall. 395, 18 L. ed. 832; United States v. Shackford, 5 Mason, 445, Fed. Cas. No. 16,262; United States v. Clayton, 2 Dill. 219, Fed. Cas. No. 14,814; United States v. Garreston, 42 Fed. 22; Dwarris, Stat. 641; Hubbard v. Johnstone, 3 Taunt. 177.

Acquiescence by the government for more than eleven years in the actual merger and consolidation of many important parallel and competing lines on railroads and steamships engaged in interstate and international commerce has given a practical construction to the act of July 2, 1890,  to the effect that it was not intended to forbid, and does not forbid, the natural processes of unification which are bronght about under modern methods of lease, consolidation, merger, community of interest, or ownership of stock.

Stuart v. Laird, 1 Cranch, 299, 2 L. ed. 115.

Mr. M. D. Grover filed a brief for appellant the Great Northern Railway Company:

The commerce clause of the Constitution of the United States does not take away from the several states the right to authorize the formation of corporations, define their business, fix the amount of their capital or purchasing power, and regulate the issue, sale, and ownership of their capital stock.

It has been the practice, since the infancy of railroads in this country, for one railroad company to purchase or lease the railroad of a competing company, or to acquire a majority of the shares of a competing company, or of two companies competing with each other, or to effect the consolidation of competing companies. This has been done without objection from any branch of the Federal government, and has invariably proved beneficial to the railway companies concerned, to their shareholders, and to the public.

Unity of ownership of shares of competing corporations engaged in interstate trade, does not restrain such trade, and is not forbidden by the anti-trust act, nor is such unity of ownership a regulation of interstate commerce, and thus subject to exclusive Federal jurisdiction under the commerce clause of the Constitution.

If the legislature undertakes to define a new offense by statute, and provide for its punishment, its will should be expressed in such language as not to deceive or mislead the common mind.

[Argument of Counsel from pages 280-287 intentionally omitted]

Tozer v. United States, 4 Inters. Com. Rep. 246, 52 Fed. 917; The Paulina v. United States, 7 Cranch, 61, 3 L. ed. 269; United States v. Reese, 92 U.S. 214, 23 L. ed. 563.

[Argument of Counsel from pages 287-290 intentionally omitted]

Messrs. Francis Lynde Stetson and David Willcox filed a brief for appellants Morgan, Bacon, and Lamont:

Each individual who has transferred his property to the Securities Company has obtained therefor something entirely different,-namely, an interest in a company holding stock of the other railway company as well. It is manifest that in the fullest possible sense this constituted a sale of the property.

Berger v. United States Steel Corp. 63 N. J. Eq. 809, 53 Atl. 68.

These transactions, being lawful, are not affected by allegations as to the motive which actuated them. As the means employed were lawful, the only question must be whether the result accomplished was unlawful.

Pettibone v. United States, 148 U.S. 197, 203, 37 L. ed. 419, 422, 13 Sup. Ct. Rep. 542.

All the action taken being authorized by law, the motive clearly is unimportant.

United States v. Isham, 17 Wall. 496, 21 L. ed. 728; Adler v. Fenton, 24 How. 407, 410, 16 L. ed. 696, 697; Kiff v. Youmans, 86 N. Y. 324, 40 Am. Rep. 543; Connolly v. Union Sewer Pipe Co. 184 U.S. 540, 546, 46 L. ed. 679, 684, 22 Sup. Ct. Rep. 431; Randall v. Hazelton, 12 Allen, 412; Dickerman v. Northern Trust Co. 176 U.S. 181, 190, 44 L. ed. 423, 430, 20 Sup. Ct. Rep. 311; Strait v. National Harrow Co. 51 Fed. 819; Phelps v. Nowlen, 72 N. Y. 39, 28 Am. Rep. 93; Wood v. Amory, 105 N. Y. 278, 11 N. E. 636; Lough v. Outerbridge, 143 N. Y. 271, 25 L. R. A. 674, 38 N. E. 292; National Protective Asso. v. Cumming, 170 N. Y. 315, 58 L. R. A. 135, 63 N. E. 369; Mogul S. S.C.o. v. McGregor [1892] A. C. 25, 41, 42; Allen v. Flood [1898] A. C. 1; Pender v. Lushington, L. R. 6 Ch. Div. 70.

No indirect or remote effect of these lawful transactions upon competition between the railway companies could bring them within the Federal anti-trust act.

United States v. E. C. Knight Co. 156 U.S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; Hopkins v. United States, 171 U.S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. 40; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 246, 44 L. ed. 136, 149, 20 Sup. Ct. Rep. 96.

The mere fact that a contract has the effect of restraining trade or suppressing competition in some degree does not render it injurious to the public welfare, and thus bring it within the police power.

Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. ed. 315; Gibbs v. Consolidated Gas Co. 130 U.S. 396, 32 L. ed. 979, 9 Sup. Ct. Rep. 553; Hyer v. Richmond Traction Co. 168 U.S. 471, 477, 42 L. ed. 547, 549, 18 Sup. Ct. Rep. 114, 366, Affirming 26 C. C. A. 175, 42 U.S. App. 522, 80 Fed. 839; Continental Ins. Co. v. Fire Underwriters, 67 Fed. 310; Diamond Match Co. v. Roeber, 106 N. Y. 473, 60 Am. Rep. 464, 13 N. E. 419; Hodge v. Sloan, 107 N. Y. 244, 17 N. E. 335; Leslie v. Lorillard, 110 N. Y. 519, 1 L. R. A. 456, 18 N. E. 363; Matthews v. Associated Press, 136 N. Y. 333, 32 N. E. 981; Lough v. Outerbridge, 143 N. Y. 271, 25 L. R. A. 674, 38 N. E. 292, 145 N. Y. 601, 40 N. E. 164; Oakes v. Cattaraugus Water Co. 143 N. Y. 430, 26 L. R. A. 544, 38 N. E. 461; Curran v. Galen, 152 N. Y. 33, 37 L. R. A. 802, 46 N. E. 297; Watertown Thermometer Co. v. Pool, 51 Hun, 157, 4 N. Y. Supp. 861, Approved in Tode v. Gross, 127 N. Y. 485, 13 L. R. A. 652, 28 N. E. 469; Central Shade Roller Co. v. Cushman, 143 Mass. 353, 9 N. E. 629.

This act is a criminal statute pure and simple, and its meaning and effect as now determined must also be its meaning and effect when made the basis of a criminal proceeding. Conversely, the act should now receive such construction only as it would receive upon the trial of those indicted for violating its provisions.

Criminal intent is essential to constitute a crime, and the testimony bearing thereon is always a question for the jury.

People v. Wiman, 148 N. Y. 29, 42 N. E. 408; People v. Flack, 125 N. Y. 324, 11 L. R. A. 807, 26 N. E. 267.

Such restraints as result from the sale or the purchase of property are not within the provisions of anti-trust statutes. Indeed, it is the settled law that the transfer of a business is not illegal because it restrains trade, even by an express covenant.

Oregon Steam Nav. Co. v. Winsor, 20 Wall. 64, 22 L. ed. 315; Union Sewer-Pipe Co. v. Connelly, 99 Fed. 354, Affirmed in 184 U.S. 540, 46 L. ed. 679, 22 Sup. Ct. Rep. 431; Fisheries Co. v. Lennen, 116 Fed. 217; Harrison v. Glucose Sugar Ref. Co. 53 C. C. A. 484, 116 Fed. 304; Hodge v. Sloan, 107 N. Y. 244, 17 N. E. 335; Leslie v. Lorillard, 110 N. Y. 519, 1 L. R. A. 456, 18 N. E. 363, 13 L. R. A. 652; Oakes v. Cattaraugus Water Co. 143 N. Y. 430, 26 L. R. A. 544, 38 N. E. 461; Watertown Thermometer Co. v. Pool, 51 Hun, 157, 4 N. Y. Supp. 861, Approved in Tode v. Gross, 127 N. Y. 485, 13 L. R. A. 652, 28 N. E. 469; Wood v. Whitehead Bros. Co. 165 N. Y. 545, 59 N. E. 357; Walsh v. Dwight, 40 App. Div. 513, 58 N. Y. Supp. 91; John D. Park & Sons Co. v. National Wholesale Druggists' Asso. 54 App. Div. 223, 66 N. Y. Supp. 615, 175 N. Y. 1, 62 L. R. A. 632, 67 N. E. 136; Diamond Match Co. v. Roeber, 106 N. Y. 473, 60 Am. Rep. 464, 13 N. E. 419.

So, too, it has been ruled precisely that the formation of associations or corporations is not illegal because the result will be to restrain competition.

Hopkins v. United States, 171 U.S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. 40; United States Vinegar Co. v. Foehrenbach, 148 N. Y. 58, 42 N. E. 403; Matthews v. Associated Press, 136 N. Y. 333, 32 N. E. 981; Central Shade Roller Co. v. Cushman, 143 Mass. 353, 9 N. E. 629; Rafferty v. Buffalo City Gas Co. 37 App. Div. 618, 56 N. Y. Supp. 288; United States v. Greenhut, 51 Fed. 205; Re Terrell, 51 Fed. 213; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 46 L. R. A. 255, 43 Atl. 723; Mogul S. S.C.o. v. McGregor [1892] A. C. 25; Lough v. Outerbridge, 143 N. Y. 283, 25 L. R. A. 674, 38 N. E. 292; State ex rel. Crow v. Continental Tobacco Co. (Mo.) 75 S. W. 737.

If the result of restricting competition should follow from the lawful transactions involved herein, it would not be their direct result, but only an incidental and collateral result, such as must always follow when business interests of a similar character pass into the same ownership. It would be precisely such a result as those recognized as lawful by the court in United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

It has been denied, and it is very doubtful whether in any case the 2d section of the anti-trust act applies to railroads.

16 Harvard Law Rev. 545, June, 1903.

It has generally been deemed wise and safe to use rather a process of exclusion, and determine what is not a monopoly, so far as the case in hand required.

Laredo v. International Bridge Co. 14 C. C. A. 1, 30 U.S. App. 110, 66 Fed. 246.

Corporations can invoke the benefits of the provisions of the Constitution and laws which guarantee to persons the enjoyment of property, or afford to them the means for its protection, or prohibit legislation injuriously affecting it.

Minneapolis & St. L. R. Co. v. Beckwith, 129 U.S. 26, 28, 32 L. ed. 585, 586, 9 Sup. Ct. Rep. 207.

Corporations are persons within the meaning of the constitutional provision forbidding the deprivation of property without due process of law, as well as a denial of the equal protection of the laws.

Covington & L. Turnp. Road Co. v. Sandford, 164 U.S. 578, 592, 41 L. ed. 560, 565, 17 Sup. Ct. Rep. 198; Gulf, C. & S. F. R. Co. v. Ellis, 165 U.S. 150, 154, 41 L. ed. 666, 668, 17 Sup. Ct. Rep. 255; Lake Shore & M. S. R. Co. v. Smith, 173 U.S. 684, 690, 43 L. ed. 858, 861, 19 Sup. Ct. Rep. 565; Santa Clara County v. Southern P. R. Co. 9 Sawy. 165, 18 Fed. 385; San Mateo County v. Southern P. R. Co. 8 Sawy. 238, 13 Fed. 722.

This constitutional provision protects the right to acquire property, equally with the right to hold the same after it has been acquired.

Holden v. Hardy, 169 U.S. 366, 391, 42 L. ed. 780, 790, 18 Sup. Ct. Rep. 383; State v. Goodwill, 33 W. Va. 179, 6 L. R. A. 621, 10 S. E. 285; State v. Julow, 129 Mo. 163, 29 L. R. A. 257, 31 S. W. 781.

These rights are not affected by the statute now invoked.

United States v. E. C. Knight Co. 156 U.S. 1, 16, 39 L. ed. 325, 330, 15 Sup. Ct. Rep. 249.

The 5th Amendment to the Federal Constitution secures all persons in their 'liberty,' and invalidates any legislation by Congress depriving them of liberty 'without due process of law.'

As thus used, 'liberty' means not merely bodily liberty, freedom from physical duress,-but in effect comprehends substantially all those personal and civil rights of the citizen which it is meant to place beyond the power of the general government to destroy or impair.

Slaughter-House Cases, 16 Wall. 36, 122, 127, 21 L. ed. 394, 423, 425; Munn v. Illinois, 94 U.S. 113, 142, 24 L. ed. 77, 90; People ex rel. Annan v. Walsh, 117 N. Y. 621, 22 N. E. 682; Reg. v. Druitt, 10 Cox C. C. 592; Butchers' Union S. H. & L. S. L. Co. v. Crescent City L. S. L. & S. H. Co. 111 U.S. 746, 28 L. ed. 585, 4 Sup. Ct. Rep. 652; Allgeyer v. Louisiana, 165 U.S. 578, 41 L. ed. 832, 17 Sup. Ct. Rep. 427; United States v. Joint Traffic Asso. 171 U.S. 505, 572, 43 L. ed. 259, 288, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 228, 229, 41 L. ed. 136, 143; 20 Sup. Ct. Rep. 96; Bertholf v. O'Reilly, 74 N. Y. 509, 30 Am. Rep. 323; Re Jacobs, 98 N. Y. 98, 50 Am. Rep. 636; People v. Gillson, 109 N. Y. 389, 17 N. E. 343; People v. King, 110 N. Y. 418, 1 L. R. A. 293, 18 N. E. 245; Godcharles v. Wigeman, 113 Pa. 431, 6 Atl. 354.

As used in the 5th constitutional Amendment, 'liberty' includes equality of rights under the law, and secures citizens similarly situated against discriminations between them, which are arbitrary and without foundation in reason.

United States v. Cruikshank, 92 U.S. 542, 554, 555, 23 L. ed. 588, 592; Yick Wo. v. Hopkins, 118 U.S. 356, 369, 30 L. ed. 220. 6 Sup. Ct. Rep. 1064; Gulf, C. & S. F. R. Co. v. Ellis, 165 U.S. 150, 160, 41 L. ed. 666, 670, 17 Sup. Ct. Rep. 255.

This court has held invalid statutes singling out railroad companies and requiring them to pay attorneys' fees to successful adverse litigants (Gulf, C. & S. F. R. Co. v. Ellis, 165 U.S. 150, 41 L. ed. 666, 17 Sup. Ct. Rep. 255), and singling out a single stockyard company, under pretense of classification, for reduction of charges (Cotting v. Kansas City Stock Yards Co. 183 U.S. 79, 46 L. ed. 92, 22 Sup. Ct. Rep. 30), and permitting two or more live-stock raisers to combine to prevent competition, while making it criminal for two or more persons holding property for sale or exchange to combine for the same purpose (Connolly v. Union Sewer Pipe Co. 184 U.S. 540, 46 L. ed. 679, 22 Sup. Ct. Rep. 431).

One of the objects of this suit is to annul all sales of stock of the railway companies to the Securities Company, and to cancel all certificates of stock of the latter company issued in purchase thereof. Even if there were any prohibition in the premises on the railway companies, it would not apply to their stockholders.

A corporation and its stockholders are entirely different entities.

Pullman's Palace Car Co. v. Missouri P. R. Co. 115 U.S. 587, 29 L. ed. 499, 6 Sup. Ct. Rep. 194; Watson v. Bonfils, 53 C. C. A. 535, 116 Fed. 157; American Preservers' Co. v. Norris, 43 Fed. 711; Electric R. Co. v. Jamaica & B. R. C0. 61 Fed. 655.

Any effort to limit the right to sell would necessarily deprive these defendants of their property without due process of law.

Cleveland, C. C. & St. L. R. Co. v. Backus, 154 U.S. 439, 445, 38 L. ed. 1041, 1046, 4 Inters. Com. Rep. 677, 14 Sup. Ct. Rep. 1122;

Any combination 'for the purpose of 146 N. Y. 304, 40 N. E. 996; Ingersoll v. Nassau Electric R. Co. 157 N. Y. 453, 43 L. R. A. 236, 52 N. E. 545; People ex rel. Manhattan Sav. Inst. v. Otis, 90 N. Y. 48; Holden v. Hardy, 169 U.S. 366, 391, 42 L. ed. 780, 790, 18 Sup. Ct. Rep. 383; People v. Marx, 99 N. Y. 377, 52 Am. Rep. 34, 2 N. E. 29; People v. Gillson, 109 N. Y. 389, 17 N. E. 343; Forster v. Scott, 136 N. Y. 577, 18 L. R. A. 543, 32 N. E. 976; Purdy v. Erie R. Co. 162 N. Y. 42, 48 L. R. A. 669, 56 N. E. 508; Buffalo v. Collins Baking Co. 39 App. Div. 432, 57 N. Y. Supp. 347; Rochester & C. Turnp. Co. v. Joel, 41 App. Div. 43, 58 N. Y. Supp. 346; People v. Meyer, 44 App. Div. 1, 60 N. Y. Supp. 415; Ingraham v. National Salt Co. 72 App. Div. 582, 76 N. Y. Supp. 1016; Janesville v. Carpenter, 77 Wis. 288, 8 L. R. A. 808, 46 N. W. 128.

Whatever view be taken of the character of the transaction, the decree of the circuit court transcended the authority of the court under the statute, which was the sole ground and source of its jurisdiction.

Thorndike on the Merger Case (Boston, 1903).

Attorney General Knox argued the cause, and, with Mr. W. A. Day, filed a brief for appellee:

The anti-trust act is not primarily a criminal statute.

The civil remedy by injunction, and the liability to punishment under the criminal provisions of the act, are entirely distinct.

[Argument of Counsel from pages 297-300 intentionally omitted]

United States v. Trans-Missouri Freight Asso. 166 U.S. 342, 41 L. ed. 1028, 17 Sup. Ct. Rep. 540.

In its remedial aspect it ought to be construed liberally and given the widest effect consistent with the language employed. It ought not to be frittered away by the refinements

Broom, Legal Max. 5th Am. ed. 3d London ed. 80; Potter's Dwarr. Stat. & Const. p. 234.

And it makes no difference in the application of these rules that the statute has a penal as well as a remedial side.

Dwarris, Stat. 653, 655; Sedgw. Stat. & Const. Law, 2d ed. p. 309, 310; Hyde v. Cogan, 2 Dougl. 702.

Every contract, combination, or conspiracy in restraint of interstate of foreign commerce is illegal. The method adopted in bringing about the combination is immaterial; and the device of a holding corporation for the purpose of circumventing the law can be no more effectual than any other means.

Noyes, Intercorporate Relations, § 393.

The anti-trust act applies to and covers common carriers by railroad, as well as all other persons, natural or artificial.

United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540.

The words, 'in restraint of trade or commerce,' as used in the anti-trust act, are not confined to unreasonable or total restraints only, but extend to any and all direct restraints of trade or commerce, even if reasonable or only partial.

Ibid; United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25.

And while this rule applies with equal force to restraints upon individuals, private corporations, and quasi-public corporations, such as railroads, there is a peculiar reason for its application to restraints upon the latter.

United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540.

In exercising the powers over commerce vested in the Federal government, Congress may to some extent limit the right of private contract, the right to buy and sell property, without violating the 5th Amendment. It may declare that no contract, combination, or monopoly which restrains trade or commerce by shutting out the operation of the general law of competition shall be legal.

United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

Any combination 'for the purpose of avoiding the effects of competition' in interstate or international trade or commerce is within the prohibition of the act.

United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540; United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 244, 44 L. ed. 136, 148, 20 Sup. Ct. Rep. 96.

As used in the act, the word 'monopoly' is not confined to its common-law meaning of an exclusive grant to one or a few to do that which before had been free and open to all in common.

United States v. Trans-Missouri Freight Asso. 166 U.S. 342, 41 L. ed. 1028, 17 Sup. Ct. Rep. 540.

The term, as used by modern legislators and judges, signifies the combining or bringing together, in the hands of one person or set of persons, of the control, or the power of control, over a particular business or employment, so that competition therein may be suppressed.

People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 294, 8 L. R. A. 497, 22 N. E. 798; People v. North River Sugar Ref. Co. 54 Hun, 377, 2 L. R. A. 33, 3 N. Y. Supp. 401; United States v. E. C. Knight Co. 156 U.S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249.

A combination or consolidation of two competing railroads, brought about by transferring to one road a majority of the stock of the other, is such a monopoly.

Pearsall v. Great Northern R. Co. 161 U.S. 646, 677, 40 L. ed. 838, 16 Sup. Ct. Rep. 705; Louisville & N. R. Co. v. Kentucky, 161 U.S. 677, 40 L. ed. 849, 16 Sup. Ct. Rep. 714.

To prove that a combination or monopoly exists within the meaning of the act, it is not necessary to show that the immediate effect of the acts complained of is to suppress competition or to create a complete monopoly. It is sufficient to show that they tend to bring about those results.

People v. North River Sugar Ref. Co. 54 Hun, 377, 3 N. Y. Supp. 401; United States v. E. C. Knight Co. 156 U.S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 237, 44 L. ed. 136, 146, 20 Sup. Ct. Rep. 96; Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 672.

The very existence of the power to restrain trade constitutes a restraint.

United States v. Joint Traffic Asso. 171 U.S. 505, 571, 43 L. ed. 259, 288, 19 Sup. Ct. Rep. 25; United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96; Pearsall v. Great Northern R. Co. U.S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705.

It is not necessary in order to bring a combination or conspiracy within the operation of the act, that the members bind themselves each with the other to do the acts alleged to be in restraint of trade. It has always been held to be enough that they act together in pursuance of a common object, and while, of course, this presupposes agreement between them in a broad sense, an agreement or contract in the technical sense is not at all essential.

Reg. v. Murphy, 8 Car. & P. 397.

If in point of law the effect or the tendency of the combination is to restrain trade or commerce the combination is unlawful, and the motive behind it, however beneficent, does not alter that fact in the slightest degree.

United States v. Trans-Missouri Freight Asso. 166 U.S. 341, 342, 41 L. ed. 1028, 17 Sup. Ct. Rep. 540; Addyston Pipe & Steel Co. v. United States, 175 U.S. 234, 44 L. ed. 145, 20 Sup. Ct. Rep. 96; Chesapeake & O. Fuel Co. v. United States, 53 C. C. A. 256, 115 Fed. 623.

The anti-trust act, prohibiting combinations and monopolies in restraint of interstate and foreign commerce, is an exercise of the power granted to Congress to regulate commerce.

Lottery Case, 188 U.S. 321, 47 L. ed. 492, 23 Sup. Ct. Rep. 321.

The term 'commerce,' as used in that grant, embraces the instrumentalities by which commerce is or may be carried on.

Chicago & N. W. R. Co. v. Fuller, 17 Wall. 560, 568, 21 L. ed. 710, 714; Welton v. Missouri, 91 U.S. 275, 280, 23 L. ed. 347, 349; Pensacola Teleg. Co. v. Western U. Teleg. Co. 96 U.S. 1, 24 L. ed. 708; Gloucester Ferry Co. v. Pennsylvania, 114 U.S. 196, 203, 29 L. ed. 158, 161, 1 Inters. Com. Rep. 382, 5 Sup. Ct. Rep. 826.

The commerce powers of the Federal government are broad and ample enough to prevent the restraint or obstruction of interstate commerce by combinations and monopolies of competing lines or instrumentalities of interstate transportation.

Gibbons v. Ogden, 9 Wheat. 1, 6 L. ed. 23; Brown v. Maryland, 12 Wheat. 419, 6 L. ed. 678; Passenger Cases, 7 How. 283, 12 L. ed. 702; Re Debs, 158 U.S. 564, 39 L. ed. 1092, 15 Sup. Ct. Rep. 900; Lottery Case, 188 U.S. 321, 47 L. ed. 492, 23 Sup. Ct. Rep. 321; Stockton v. Baltimore & N. Y. R. Co. 1 Inters. Com. Rep. 411, 32 Fed. 11; Boardman v. Lake Shore & M. S. R. Co. 84 N. Y. 157; Noyes, Intercorporate Relations, § 19; Louisville & N. R. Co. v. Kentucky, 161 U.S. 701, 40 L. ed. 859, 16 Sup. Ct. Rep. 714.

Of the various reasons for investing the Federal government with the power to regulate commerce among the several states, the one uppermost in the minds of the members of the constitutional convention was to keep the channels of such commerce open and free from obstructions and restraints.

Pensacola Teleg. Co. v. Western U. Teleg. Co. 96 U.S. 1, 24 L. ed. 708.

The exclusive jurisdiction of the Federal government over commerce with foreign nations and among the states, and over the instrumentalities of such commerce, includes the power of police, or that which is its equivalent, over those subjects in all its undefined breadth and fullness.

Cooley, Const. Lim. 722, 723; Thayer, Cases on Const. Law, p. 742, note.

The police power-or equivalent power-of the Federal government over interstate and foreign commerce is not less plenary and complete because, as to those commercial subjects which are local and do not admit of uniform regulation, the states are permitted to exercise the power until Congress, by its legislation, covers the same field.

Cooley, Const. Lim. 723.

Laws against combinations for the purpose of restricting production, maintaining prices, or suppressing competition have a relation to the end of all police regulations,-the comfort, welfare, or safety of society.

Noyes, Intercorporate Relations, § 409.

Anti-trust statutes therefore are enacted in the exercise of the police, or an analogous, power.

State ex rel. Crow v. Firemen's Fund Ins. Co. 152 Mo. 46, 45 L. R. A. 363, 52 S. W. 363; State ex rel. Astor v. Schlitz Brewing Co. 104 Tenn. 715, 59 S. W. 1033; Waters-Pierce Oil Co. v. State, 19 Tex. Civ. App. 1, 44 S. W. 936.

The police powers or the reserved powers of the states, are not, for any purposes, paramount to the powers of Congress in fields wherein the Federal government has been invested by the Constitution with complete and supreme authority.

New Orleans Gaslight Co. v. Louisiana Light & H. P. & Mfg. Co. 115 U.S. 650, 661, 29 L. ed. 516, 520, 6 Sup. Ct. Rep. 252.

When, in Louisville & N. R. Co. v. Kentucky, 161 U.S. 677, 40 L. ed. 849, 16 Sup. Ct. Rep. 714, the court said that to the states remains the power to regulate the instruments of interstate commerce, it had in mind those regulations of a local character which the states are permitted to make in the absence of Federal legislation covering the same subjects, and did not intend to change any old principle, or to enunciate any new principle, of constitutional construction.

California v. Central P. R. Co. 127 U.S. 1, 32 L. ed. 150, 2 Inters. Com. Rep. 153, 8 Sup. Ct. Rep. 1073; Welton v. Missouri, 91 U.S. 275, 23 L. ed. 347; Cooley v. Port Wardens, 12 How. 299, 320, 13 L. ed. 996, 1005; Sherlock v. Alling, 93 U.S. 99, 104, 23 L. ed. 819, 821; Morgan's L. & T. R. & S. S.C.o. v. Louisiana Bd. of Health, 118 U.S. 455, 463, 30 L. ed. 237, 241, 6 Sup. Ct. Rep. 1114; Smith v. Alabama, 124 U.S. 465, 31 L. ed. 508, 1 Inters. Com. Rep. 804, 8 Sup. Ct. Rep. 564; Nashville, C. & St. L. R. Co. v. Alabama, 128 U.S. 96, 32 L. ed. 352, 2 Inters. Com. Rep. 238, 9 Sup. Ct. Rep. 28; Hennington v. Georgia, 163 U.S. 299, 41 L. ed. 166, 16 Sup. Ct. Rep. 1086; New York, N. H. & H. R. Co. v. New York, 165 U.S. 628, 631, 41 L. ed. 853, 854, 17 Sup. Ct. Rep. 418 Missouri, K. & T. R. Co. v. Haber, 169 U.S. 613, 626, 42 L. ed. 878, 882, 18 Sup. Ct. Rep. 488.

Ownership of a majority of its stock constitutes the control of a corporation, when the inquiry is whether a combination or monopoly has been formed to stifle competition between two or more rival and competing railroads.

Noyes, Intercorporate Relations, § 294; Farmers' Loan & T. Co. v. New York & N. R. Co. 150 N. Y. 410, 34 L. R. A. 76, 44 N. E. 1043; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497, 22 N. E. 798; Pearsall v. Great Northern R. Co. 161 U.S. 646, 671, 40 L. ed. 838, 846, 16 Sup. Ct. Rep. 705; Pennsylvania R. Co. v. Com. (Pa.) 4 Cent. Rep. 495, 7 Atl. 368.

There is no great difficulty in getting at what Congress meant by a 'trust.' Century Dict.; State ex rel. Watson v. Standard Oil Co. 49 Ohio St. 137, 15 L. R. A. 145, 30 N. E. 279; Eddy, Combinations, § 582; Noyes, Intercorporate Relations, § 304; Dodd, Combinations; Their Uses & Abuses.

The trustee in a trust combination may be either a natural or an artificial person.

Beach, Monopolies & Industrial Trusts, § 159; Eddy, Combinations, § 582; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 275, 8 L. R. A. 497, 22 N. E. 798.

The charter of a corporation is the unanimous agreement of its stockholders, declaring the nature and conditions of the trust relation between them and the corporate entity.

Morawetz, Priv. Corp. § 237.

While a written trust agreement between the stockholders is a usual element of the trust form of combination, it is not an essential one. It is sufficient to show that the stockholders acted in pursuance of any understanding, plan, or scheme, written, verbal, or otherwise.

Harding v. American Glucose Co. 182 Ill. 551, 55 N. E. 577.

The Securities Company constitutes a 'combination in the form of a trust.'

Beach, Monopolies & Industrial Trusts, § 159; Noyes, Intercorporate Relations, §§ 310, 393; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497, 22 N. E. 798; Harding v. American Glucose Co. 182 Ill. 551, 55 N. E. 577.

The disguise by which the defendants sought to hide the fact of a combination of the Great Northern and Northern Pacific, and their connection therewith, appears so thin and transparent that it is a cause of wonder that they should ever have adopted it.

Atty. Gen. v. Great Northern R. Co. 6 Jur. N. S. 1006, 1 Drew. & S. 159; Stockton v. Central R. Co. 50 N. J. Eq. 52, 17 L. R. A. 97, 24 Atl. 964.

Devices of exactly the same character had already been repudiated by courts of high standing.

Ford v. Chicago Milk Shippers' Asso. 155 Ill. 166, 27 L. R. A. 298, 39 N. E. 651; Distilling & Cattle Feeding Co. v. People, 156 Ill. 448, 41 L. ed. 188.

[Argument of Counsel from pages 310-312 intentionally omitted]

Fictions of law, invented to promote justice, can never be invoked to accomplish its defeat.

Mostyn v. Fabrigas, Cowp. 177; Morris v. Pugh, 3 Burr. 1243.

It is well settled that, when it is in the interest of the administration of justice to do so, courts may and will ignore the fiction that a corporation is a legal being apart from the stockholders, and will consider its acts as the acts of its constituent members; and this is emphatically the case when the state-the sovereign authority-is the complaining party.

People v. North River Sugar Ref. Co. 121 N. Y. 582, 9 L. R. A. 33, 24 N. E. 834; Morawetz, Private Corp. §§ 1, 227; Taylor, Priv. Corp. § 50; Clark & M. Private Corp. pp. 17, 22; State ex rel. Watson v. Standard Oil Co. 49 Ohio St. 137, 15 L. R. A. 145, 30 N. E. 279; Ford v. Chicago Milk Shippers' Asso. 155 Ill. 166, 27 L. R. A. 298, 39 N. E. 651; Atty. Gen. v. Great Northern R. Co. 6 Jur. N. S. 1006, 1 Drew & S. 157; Pennsylvania R. Co. v. Com. (Pa.) 4 Cent. Rep. 495, 7 Atl. 368; Stockton v. Central R. Co. 50 N. J. Eq. 52, 17 L. R. A. 97, 24 Atl. 964.

'To monopolize' signifies the combining or bringing together, in the hands of one person or set of persons, of the control of, or the power to control, several rival and competing businesses, to the end that competition between them may be suppressed.

United States v. E. C. Knight Co. 156 U.S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249; United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540.

By acquiring a majority of the shares of the Great Northern and Northern Pacific the Securities Company has obtained the control of, and therefore the power to suppress competition between, two rival and competing lines of railway engaged in interstate commerce, and in that way has monopolized a part of interstate commerce.

Pearsall v. Great Northern R. Co. 161 U.S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705; People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497, 22 N. E. 798.

In the exercise of its regulative and police powers over interstate commerce, Congress may suppress monopolies in restraint thereof, by whomsoever created, notwithstanding that in doing so it restricts the right of private contract to some extent.

United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96.

Even if a natural person could lawfully have done what the Securities Company has done, that would be no argument to prove that the Securities Company, in so doing, has not violated the law against monopolies.

People v. North River Sugar Ref. Co. 121 N. Y. 625, 9 L. R. A. 33, 24 N. E. 834.

Because a person has the right to purchase stock it does not follow that stockholders of two or more competing corporations can combine among themselves and with such person to sell him their stock and induce others to do the same, so as to center the controlling stock interests of the several corporations in a single head, in violation of statutes against combinations, consolidations, and monopolies.

Noyes, Intercorporate Relations, § 36; Pennsylvania R. Co. v. Com. (Pa.) 4 Cent. Rep. 495, 7 At1. 373.

The failure to observe the distinction between an actual, bona fide sale, and what is nominally a sale, but in reality only a cloak under which to accomplish a combination of corporate properties or interests, has sometimes led to confusion of language, if not of thought, in the discussion of trade combinations.

Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 46 L. R. A. 255, 43 Atl. 723; Noyes, Intercorporate Relations, § 354.

Even if it were true that the government had acquiesced for eleven years in the creation of combinations like the one now in issue, it would not thereby be estopped from prosecuting the case at bar; nor could its inaction for that period be considered a contemporaneous or practical construction of the act.

Louisville & N. R. Co. v. Kentucky, 161 U.S. 677, 689, 690, 40 L. ed. 849, 855, 16 Sup. Ct. Rep. 714.

That a combination or monopoly of competing interstate carriers affects interstate commerce directly, and not incidentally or remotely, is universally conceded.

Noyes, Intercorporate Relations, § 392.

The court below, as a court of equity, had ample power to decree the relief it did, and in the form it did.

Pomeroy, Eq. Jur. 2d ed. § 111, p. 115; § 170, p. 192; Taylor v. Salmon, 4 Myl. & C. 141; Chicago, R. I. & P. R. Co. v. Union P. R. Co. 47 Fed. 15.

Mr. Justice Harlan announced the affirmance of the decree of the circuit court, and delivered the following opinion:

This suit was brought by the United States against the Northern Securities Company, a corporation of New Jersey; the Great Northern Railway Company, a corporation of Minnesota; the Northern Pacific Railway Company, a corporation of Wisconsin; James J. Hill, a citizen of Minnesota; and William P. Clough, D. Willis James, John S. Kennedy, J. Pierpont Morgan, Robert Bacon, George F. Baker, and Daniel S. Lamont, citizens of New York.

Its general object was to enforce, as against the defendants, the provisions of the statute of July 2d, 1890, commonly known as the anti-trust act, and entitled 'An Act to Protect Trade and Commerce Against Unlawful Restraints and Monopolies.' 26 Stat. at L. 209, chap. 647, U.S.C.omp. Stat. 1901, p. 3200. By the decree below the United States was given substantially the relief asked by it in the bill.

As the act is not very long, and as the determination of the particular questions arising in this case may require a consideration of the scope and meaning of most of its provisions, it is here given in full:

'§ 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 by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

'§ 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, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

'§ 3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such territory and another, or between any such territory or territories and any state or states or the District of Columbia, or with foreign nations, or between the District of Columbia, and any state or states or foreign nations, is hereby declared 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 by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

'§ 4. The several circuit courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and, pending such petition, and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises.

'§ 5. Whenever it shall appear to the court before which any proceeding under section four of this act may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not; and subpoenas to that end may be served in any district by the marshal thereof.

'§ 6. Any property owned under any contract or by any combination, or pursuant to any conspiracy (and being the subject thereof) mentioned in section one of this act, and being in the course of transportation from one state to another, or to a foreign country, shall be forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for the forfeiture, seizure, and condemnation of property imported into the United States contrary to law.

'§ 7. Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee.

'§ 8. That the word 'person,' or 'persons,' wherever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the territories, the laws of any state, or the laws of any foreign country.'

Is the case as presented by the pleadings and the evidence one of a combination of a conspiracy in restraint of trade or commerce among the states, or with foreign states? Is it one in which the defendants are properly chargeable with monopolizing or attempting to monopolize any part of such trade or commerce? Let us see what are the facts disclosed by the record.

The Great Northern Railway Company and the Northern Pacific Railway Company owned, controlled, and operated separate lines of railway,-the former road extending from Superior, and from Duluth and St. Paul, to Everett, Seattle, and Portland, with a branch line to Helena; the latter extending from Ashland, and from Duluth and St. Paul, to Helena, Spokane, Seattle, Tacoma and Portland. The two lines, main and branches, about 9000 miles in length, were and are parallel and competing lines across the continent through the northern tier of states between the Great Lakes and the Pacific, and the two companies were engaged in active competition for freight and passenger traffic, each road connecting at its respective terminals with lines of railway, or with lake and river steamers, or with seagoing vessels.

Prior to 1893 the Northern Pacific system was owned or controlled and operated by the Northern Pacific Railroad Company, a corporation organized under certain acts and resolutions of Congress. That company becoming insolvent, its road and property passed into the hands of receivers appointed by courts of the United States. In advance of foreclosure and sale a majority of its bondholders made an arrangement with the Great Northern Railway Company for a virtual consolidation of the two systems, and for giving the practical control of the Northern Pacific to the Great Northern. That was the arrangement declared in Pearsall v. Great Northern R. Co. 161 U.S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705, to be illegal under the statutes of Minnesota which forbade any railroad corporation, or the purchasers or managers of any corporation, to consolidate the stock, property, or franchises of such corporation, or to lease or purchase the works or franchises of, or in any was control, other railroad corporations owning or having under their control parallel or competing lines. Minn. Gen. Laws, 1874, chap. 29, 1881, chap. 109.

Early in 1901 the Great Northern and Northern Pacific Railway Companies, having in view the ultimate placing of their two systems under a common control, united in the purchase of the capital stock of the Chicago, Burlington, & Quincy Railway Company, giving in payment, upon an agreed basis of exchange, the joint bonds of the Great Northern and Northern Pacific Railway Companies, payable in twenty years from date, with interest at 4 per cent per annum. In this manner the two purchasing companies became the owners of $107,000,000 of the $112,000,000 total capital stock of the Chicago, Burlington, & Quincy Railway Company, whose lines aggregated about 8,000 miles, and extended from St. Paul to Chicago, and from St. Paul and Chicago to Quincy, Burlington, Des Moines, St. Louis, Kansas City, St. Joseph, Omaha, Lincoln, Denver, Cheyenne and Billings, where it connected with the Northern Pacific Railroad. By this purchase of stock the Great Northern and Northern Pacific acquired full control of the Chicago, Burlington, & Quincy main line and branches.

Prior to November 13th, 1901, defendant Hill and associate stockholders of the Great Northern Railway Company, and defendant Morgan and associate stockholders of the Northern Pacific Railway Company, entered into a combination to form, under the laws of New Jersey, a holding corporation, to be called the Northern Securities Company, with a capital stock of $400,000,000, and to which company, in exchange for its own capital stock upon a certain basis and at a certain rate, was to be turned over the capital stock, or a controlling interest in the capital stock, of each of the constituent railway companies, with power in the holding corporation to vote such stock and in all respects to act as the owner thereof, and to do whatever it might deem necessary in aid of such railway companies or to enhance the value of their stocks. In this manner the interests of individual stockholders in the property and franchises of the two independent and competing railway companies were to be converted into an interest in the property and franchises of the holding corporation. Thus, as stated in article 6 of the bill, 'by making the stockholders of each system jointly interested in both systems, and by practically pooling the earnings of both for the benefit of the former stockholders of each, and by vesting the selection of the directors and officers of each system in a common body, to wit, the holding corporation, with not only the power, but the duty, to pursue a policy which would promote the interests, not of one system at the expense of the other, but of both at the expense of the public, all inducement for competition between the two systems was to be removed, a virtual consolidation effected, and a monopoly of the interstate and foreign commerce formerly carried on by the two systems as independent competitors established.'

In pursuance of this combination, and to effect its objects, the defendant, the Northern Securities Company, was organized November 13th, 1901, under the laws of New Jersey.

Its certificate of incorporation stated that the objects for which the company was formed were: '1. To acquire by purchase, subscription, or otherwise, and to hold as investment, any bonds or other securities or evidences of indebtedness, or any shares of capital stock created or issued by any other corporation or corporations, association or associations, of the state of New Jersey, or of any other state, territory, or country. 2. To purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds or other securities or evidences of indebtedness created or issued by any other corporation or corporations association or associations, of the state of New Jersey, or of any other state, territory, or country, and while owner thereof to exercise all the rights, powers, and privileges of ownership. 3. To purchase, hold, sell, assign, transfer, mortgage pledge or otherwise dispose of shares of the capital stock of any other corporation or corporations, association or associations, of the state of New Jersey, or of any other state, territory, or country, and while owner of such stock to exercise all the rights, powers, and privileges of ownership, including the right to vote thereon. 4. To aid in any manner any corporation or association of which any bonds or other securities or evidences of indebtedness or stock are held by the corporation, and to do any acts or things designed to protect, preserve, improve, or enhance the value of any such bonds or other securities or evidences of indebtedness or stock. 5. To acquire, own, and hold such real and personal property as may be necessary or convenient for the transaction of its business.'

It was declared in the certificate that the business or purpose of the corporation was from time to time to do any one or more of such acts and things, and that the corporation should have power to conduct its business in other states and in foreign countries, and to have one or more offices, and hold, purchase, mortgage, and convey real and personal property, out of New Jersey.

The total authorized capital stock of the corporation was fixed at $400,000,000, divided into 4,000,000 shares of the par value of $100 each. The amount of the capital stock with which the corporation should commence business was fixed at $30,000. The duration of the corporation was to be perpetual.

This charter having been obtained, Hill and his associate stockholders of the Great Northern Railway Company, and Morgan and associate stockholders of the Northern Pacific Railway Company, assigned to the Securities Company a controlling amount of the capital stock of the respective constituent companies upon an agreed basis of exchange of the capital stock of the Securities Company for each share of the capital stock of the other companies.

In further pursuance of the combination, the Securities Company acquired additional stock of the defendant railway companies, issuing in lieu thereof its own stock upon the above basis, and, at the time of the bringing of this suit, held, as owner and proprietor, substantially all the capital stock of the Northern Pacific Railway Company, and, it is alleged, a controlling interest in the stock of the Great Northern Railway Company, 'and is voting the same and is collecting the dividends thereon, and in all respects is acting as the owner thereof, in the organization, management, and operation of said railway companies and in the receipt and control of their earnings.'

No consideration whatever, the bill alleges, has existed or will exist, for the transfer of the stock of the defendant railway companies to the Northern Securities Company, other than the issue of the stock of the latter company for the purpose, after the manner, and upon the basis stated.

The Securities Company, the bill also alleges, was not organized in good faith to purchase and pay for the stocks of the Great Northern and Northern Pacific Railway Companies, but solely 'to incorporate the pooling of the stocks of said companies,' and carry into effect the above combination; that it is a mere depositary, custodian, holder, or trustee of the stocks of the Great Northern and Northern Pacific Railway Companies; that its shares of stock are but beneficial certificates against said railroad stocks to designate the interest of the holders in the pool; that it does not have and never had any capital to warrant such an operation; that its subscribed capital was but $30,000, and its authorized capital stock of $400,000,000 was just sufficient, when all issued, to represent and cover the exchange value of substantially the entire stock of the Great Northern and Northern Pacific Railway Companies, upon the basis and at the rate agreed upon, which was about $122,000,000 in excess of the combined capital stock of the two railway companies taken at par; and that, unless prevented, the Securities Company would acquire, as owner and proprietor, substantially all the capital stock of the Great Northern and Northern Pacific Railway Companies, issuing in lieu thereof its own capital stock to the full extent of its authorized issue, of which, upon the agreed basis of exchange, the former stockholders of the Great Northern Railway Company have received or would receive and hold about 55 per cent, the balance going to the former stockholders of the Northern Pacific Railway Company.

The government charges that if the combination was held not to be in violation of the act of Congress, then all efforts of the national government to preserve to the people the benefits of free competition among carriers engaged in interstate commerce will be wholly unavailing, and all transcontinental lines, indeed, the entire railway systems of the country, may be absorbed, merged, and consolidated, thus placing the public at the absolute mercy of the holding corporation.

The several defendants denied all the allegations of the bill imputing to them a purpose to evade the provisions of the act of Congress, or to form a combination or conspiracy having for its object either to restrain or to monopolize commerce or trade among the states or with foreign nations. They denied that any combination or conspiracy was formed in violation of the act.

In our judgment, the evidence fully sustains the material allegations of the bill, and shows a violation of the act of Congress, in so far as it declares illegal every combination or conspiracy in restraint of commerce among the several states and with foreign nations, and forbids attempts to monopolize such commerce or any part of it.

Summarizing the principal facts, it is indisputable upon this record that under the leadership of the defendants Hill and Morgan the stockholders of the Great Northern and Northern Pacific Railway corporations, having competing and substantially parallel lines from the Great Lakes and the Mississippi river to the Pacific ocean at Puget sound combined and conceived the scheme of organizing a corporation under the laws of New Jersey which should hold the shares of the stock of the constituent companies; such shareholders, in lieu of their shares in those companies, to receive, upon an agreed basis of value, shares in the holding corporation; that pursuant to such combination the Northern Securities Company was organized as the holding corporation through which the scheme should be executed; and under that scheme such holding corporation has become the holder-more properly speaking, the custodian-of more than nine tenths of the stock of the Northern Pacific, and more than three fourths of the stock of the Great Northern, the stockholders of the companies who delivered their stock receiving upon the agreed basis shares of stock in the holding corporation. The stockholders of these two competing companies disappeared, as such, for the moment, but immediately reappeared as stockholders of the holding company, which was thereafter to guard the interests of both sets of stockholders as a unit, and to manage, or cause to be managed, both lines of railroad as if held in one ownership. Necessarily by this combination or arrangement the holding company in the fullest sense dominates the situation in the interest of those who were stockholders of the constituent companies; as much so, for every practical purpose, as if it had been itself a railroad corporation which had built, owned, and operated both lines for the exclusive benefit of its stockholders. Necessarily, also, the constituent companies ceased, under such a combination, to be in active competition for trade and commerce along their respective lines, and have become, practically, one powerful consolidated corporation, by the name of a holding corporation, the principal, if not the sole, object for the formation of which was to carry out the purpose of the original combination, under which competition between the constituent companies would cease. Those who were stockholders of the Great Northern and Northern Pacific and became stockholders in the holding company are now interested in preventing all competition between the two lines, and, as owners of stock or of certificates of stock in the holding company, they will see to it that no competition is tolerated. They will take care that no persons are chosen directors of the holding company who will permit competition between the constituent companies. The result of the combination is that all the earnings of the constituent companies make a common fund in the hands of the Northern Securities Company, to be distributed, not upon the basis of the earnings of the respective constituent companies, each acting exclusively in its own interests, but upon the basis of the certificates of stock issued by the holding company. No scheme or device could more certainly come within the words of the act,-'combination in the form of a trust or otherwise . . . in restraint of commerce among the several states or with foreign nations,'-or could more effectively and certainly suppress free competition between the constituent companies. This combination is, within the meaning of the act, a 'trust;' but if not, it is a combination in restraint of interstate and international commerce; and that is enough to bring it under the condemnation of the act. The mere existence of such a combination, and the power acquired by the holding company as its trustee, constitute a menace to, and a restraint upon, that freedom of commerce which Congress intended to recognize and protect, and which the public is entitled to have protected. If such combination be not destroyed, all the advantages that would naturally come to the public under the operation of the general laws of competition, as between the Great Northern and Northern Pacific Railway Companies, will be lost, and the entire commerce of the immense territory in the northern part of the United States between the Great Lakes and the Pacific at Puget sound will be at the mercy of a single holding corporation, organized in a state distant from the people of that territory.

The circuit court was undoubtedly right when it said-all the judges of that court concurring-that the combination referred to 'led inevitably to the following results: First, it placed the control of the two roads in the hands of a single person, to wit, the Securities Company, by virtue of its ownership of a large majority of the stock of both companies; second, it destroys every motive for competition between two roads engaged in interstate traffic, which were natural competition for business, by pooling the earnings of the two roads for the common benefit of the stockholders of both companies.' 120 Fed. 721, 724.

Such being the case made by the record, what are the principles that must control the decision of the present case? Do former adjudications determine the controlling questions raised by the pleadings and proofs?

The contention of the government is that, if regard be had to former adjudications, the present case must be determined in its favor. That view is contested and the defendants insist that a decision in their favor will not be inconsistent with anything heretofore decided and would be in harmony with the act of Congress.

Is the act to be construed as forbidding every combination or conspiracy in restraint of trade or commerce among the states or with foreign nations? Or, does it embrace only such restraints as are unreasonable in their nature? Is the motive with which a forbidden combination or conspiracy was formed at all material when it appears that the necessary tendency of the particular combination or conspiracy in question is to restrict or suppress free competition between competing railroads engaged in commerce among the states? Does the act of Congress prescribe, as a rule for interstate or international commerce, that the operation of the natural laws of competition between those engaged in such commerce shall not be restricted or interfered with by any contract, combination, or conspiracy? How far may Congress go in regulating the affairs or conduct of state corporations engaged as carriers in commerce among the states or of state corporations which, although not directly engaged themselves in such commerce, yet have control of the business of interstate carriers? If state corporations, or their stockholders, are found to be parties to a combination in the form of a trust or otherwise, which restrains interstate or international commerce, may they not be compelled to respect any rule for such commerce that may be lawfully prescribed by Congress?

These questions were earnestly discussed at the bar by able counsel, and have received the full consideration which their importance demands.

The first case in this court arising under the anti-trust act was United States v. E. C. Knight Co. 156 U.S. 1, 39 L. ed. 325, 15 Sup. Ct. Rep. 249. The next case was that of United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540. That was followed by United States v. Joint Traffic Asso. 171 U.S. 505, 569, 571, 43 L. ed. 259, 287, 288, 19 Sup. Ct. Rep. 25; Hopkins v. United States, 171 U.S. 578, 43 L. ed. 290, 19 Sup. Ct. Rep. 40; Anderson v. United States, 171 U.S. 604, 43 L. ed. 300, 19 Sup. Ct. Rep. 50; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96, and W. W. Montague & Co. v. Lowry, 193 U.S. 38, ante, p. 307, 24 Sup. Ct. Rep. 307. To these may be added Pear sall v. Great N. R. Co. 161 U.S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705, which, although not arising under the anti-trust act, involved an agreement under which the Great Northern and Northern Pacific Railway Companies should be consolidated and by which competition between those companies was to cease. In United States v. E. C. Knight Co. it was held that the agreement or arrangement there involved had reference only to the manufacture or production of sugar by those engaged in the alleged combination; but if it had directly embraced interstate or international commerce, it would then have been covered by the anti-trust act and would have been illegal; in United States v. Trans-Missouri Freight Asso. that an agreement between certain railroad companies providing for establishing and maintaining, for their mutual protection, reasonable rates, rules, and regulations in respect of freight traffic, through and local, and by which free competition among those companies was restricted, was, by reason of such restriction, illegal under the anti-trust act; in United States v. Joint Traffic Asso. that an arrangement between certain railroad companies in reference to railroad traffic among the states, by which the railroads involved were not subjected to competition among themselves, was also forbidden by the act; in Hopkins v. United States and Anderson v. United States, that the act embraced only agreements that had direct connection with interstate commerce, and that such commerce comprehended intercourse for all the purposes of trade in any and all its forms, including the transportation, purchase, sale, and exchange of commodities between citizens of different states, and the power to regulate it embraced all the instrumentalities by which such commerce is conducted; in Addyston Pipe & Steel Co. v. United States, all the members of the court concurring, that the act of Congress made illegal an agreement between certain private companies or corporations engaged in different states in the manufacture, sale, and transportation of iron pipe, whereby competition among them was avoided; and in W. W. Montague & Co. v. Lowry, all the members of the court again concurring, that a combination created by an agreement between certain private manufacturers and dealers in tiles, grates, and mantels, in different states, whereby they controlled or sought to control the price of such articles in those states, was condemned by the act of Congress. In Pearsall v. Great Northern R. Co. which, as already stated, involved the consolidation of the Great Northern and Northern Pacific Railway Companies, the court said: 'The consolidation of these two great corporations will unavoidably result in giving to the defendant [the Great Northern] a monopoly of all traffic in the northern half of the state of Minnesota, as well as of all transcontinental traffic north of the line of the Union Pacific, against which public regulations will be but a feeble protection. The acts of the Minnesota legislature of 1874 and 1881 undoubtedly reflected the general sentiment of the public,-that their best security is in competition.'

We will not encumber this opinion by extended extracts from the former opinions of this court. It is sufficient to say that from the decisions in the above cases certain propositions are plainly deducible and embrace the present case. Those propositions are:

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 promoting 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 guaranty 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.

No one, we assume, will deny that these propositions were distinctly announced in the former decisions of this court. They cannot be ignored or their effect avoided by the intimation that the court indulged in obiter dicta. What was said in those cases was within the limits of the issues made by the parties. In our opinion, the recognition of the principles announced in former cases must, under the conceded facts, lead to an affirmance of the decree below, unless the special objections, or some of them, which have been made to the application of the act of Congress to the present case, are of a substantial character. We will now consider those objections.

Underlying the argument in behalf of the defendants is the idea that, as the Northern Securities Company is a state corporation, and as its acquisition of the stock of the Great Northern and Northern Pacific Railway Companies is not inconsistent with the powers conferred by its charter, the enforcement of the act of Congress, as against those corporations, will be an unauthorized interference by the national government with the internal commerce of the states creating those corporations. This suggestion does not at all impress us. There is no reason to suppose that Congress had any purpose to interfere with the internal affairs of the states, nor, in our opinion, is there any ground whatever for the contention that the anti-trust act regulates their domestic commerce. By its very terms the act regulates only commerce among the states and with foreign states. Viewed in that light, the act, if within the powers of Congress, must be respected; for, by the explicit words of the Constitution, that instrument and the laws enacted by Congress in pursuance of its provisions, are the supreme law of the land, 'anything in the constitution or laws of any state to the contrary notwithstanding,'-supreme over the states, over the courts, and even over the people of the United States,-the source of all power under our governmental system in respect of the objects for which the national government was ordained. An act of Congress constitutionally passed under its power to regulate commerce among the states and with foreign nations is binding upon all; as much so as if it were embodied, in terms, in the Constitution itself. Every judicial officer, whether of a national or a state court, is under the obligations of an oath so to regard a lawful enactment of Congress. Not even a state, still less one of its artificial creatures, can stand in the way of its enforcement. If it were otherwise, the government and its laws might be prostrated at the feet of local authority. Cohen v. Virginia, 6 Wheat. 264, 385, 414, 5 L. ed. 257, 286, 293. These views have been often expressed by this court.

It is said that whatever may be the power of a state over such subjects, Congress cannot forbid single individuals from disposing of their stock in a state corporation, even if such corporation be engaged in interstate and international commerce; that the holding or purchase by a state corporation, or the purchase by individuals, of the stock of another corporation, for whatever purpose, are matters in respect of which Congress has no authority under the Constitution; that, so far as the power of Congress is concerned, citizens, or state corporations, may dispose of their property and invest their money in any way they choose; and that in regard to all such matters, citizens and state corporations are subject, if to any authority, only to the lawful authority of the state in which such citizens reside or under whose laws such corporations are organized. It is unnecessary in this case to consider such abstract, general questions. The court need not now concern itself with them. They are not here to be examined and determined, and may well be left for consideration in some case necessarily involving their determination.

In this connection, it is suggested that the contention of the government is that the acquisition and ownership of stock in a state railroad corporation is itself interstate commerce if that corporation be engaged in interstate commerce. This suggestion is made in different ways; sometimes in express words, at other times by implication. For instance, it is said that the question here is whether the power of Congress over interstate commerce extends to the regulation of the ownership of the stock in state railroad companies, by reason of their being engaged in such commerce. Again, it is said that the only issue in this case is whether the Northern Securities Company can acquire and hold stock in other state corporations. Still further, it is asked, generally, whether the organization or ownership of railroads is not under the control of the states under whose laws they came into existence? Such statements as to the issues in this case are, we think, wholly unwarranted, and are very wide of the mark; it is the setting up of mere men of straw to be easily stricken down. We do not understand that the government makes any such contentions or takes any such positions as those statements imply. It does not contend that Congress may control the mere acquisition or the mere ownership of stock in a state corporation engaged in interstate commerce. Nor does it contend that Congress can control the organization of state corporations authorized by their charters to engage in interstate and international commerce. But it does contend that Congress may protect the freedom of interstate commerce by any means that are appropriate and that are lawful, and not prohibited by the Constitution. It does contend that no state corporation can stand in the way of the enforcement of the national will, legally expressed. What the government particularly complains of-indeed, all that it complains of here-is the existence of a combination among the stockholders of competing railroad companies which, in violation of the act of Congress, restrains interstate and international commerce through the agency of a common corporate trustee, designated to act for both companies in repressing free competition between them. Independently of any question of the mere ownership of stock or of the organization of a state corporation, can it in reason be said that such a combination is not embraced by the very terms of the anti-trust act? May not Congress declare that combination to be illegal? If Congress legislates for the protection of the public, may it not proceed on the ground that wrongs, when effected by a powerful combination, are more dangerous and require more stringent supervision than when they are to be effected by a single person?  Callan v. Wilson, 127 U.S. 640, 556, 32 L. ed. 223, 228, 8 Sup. Ct. Rep. 1301. How far may the courts go in order to give effect to the act of Congress, and remedy the evils it was designed by that act to suppress? These are confessedly questions of great moment, and they will now be considered.

By the express words of the Constitution, Congress has power to 'regulate commerce with foreign nations and among the several states, and with the Indian tribes.' In view of the numerous decisions of this court there ought not, at this day, to be any doubt as to the general scope of such power. In some circumstances regulation may properly take the form and have the effect of prohibition. Re Rahrer, 140 U.S. 545, 35 L. ed. 572, 11 Sup. Ct. Rep. 865; Lottery Case, 188 U.S. 321, 355 47 L. ed. 492, 500, 23 Sup. Ct. Rep. 321 and authorities there cited. Again and again this court has reaffirmed the doctrine announced in the great judgment rendered by Chief Justice Marshall for the court in Gibbons v. Ogden, 9 Wheat. 1, 196, 197, 6 L. ed. 23, 70, that the power of Congress to regulate commerce among the states and with foreign nations is the power 'to prescribe the rule by which commerce is to be governed; that such power 'is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution;' that 'if, as has always been understood, the sovereignty of Congress, though limited to specified objects, is plenary as to those objects, the power over commerce with foreign nations and among the several states is vested in Congress as absolutely as it would be in a single government having in its constitution the same restrictions on the exercise of the power as are found in the Constitution of the United States; that a sound construction of the Constitution allows to Congress a large discretion 'with respect to the means by which the powers it confers are to be carried into execution, which enable that body to perform the high duties assigned to it, in the manner most beneficial to the people;' and that if the end to be accomplished is within the scope of the Constitution, 'all means which are appropriate, which are plainly adapted to that end, and which are not prohibited, are constitutional.'  Brown v. Maryland, 12 Wheat. 419, 6 L. ed. 678; Sinnot v. Davenport, 22 How. 227, 238, 16 L. ed. 243, 246; Henderson v. Wickham, 92 U.S. 259, 23 L. ed. 543; Hannibal & St. J. R. C.o. v. Husen, 95 U.S. 465, 472, 24 L. ed. 527, 530; Mobile County v. Kimball, 102 U.S. 691, 26 L. ed. 238; Missouri, K. & T. R. Co. v. Haber, 169 U.S. 613, 626, 42 L. ed. 878, 882, 18 Sup. Ct. Rep. 488; Lottery Case, 188 U.S. 321, 348, 47 L. ed. 492, 498, 23 Sup. Ct. Rep. 321. In Cohen v. Virginia, 6 Wheat. 264, 413, 5 L. ed. 257, 293, this court said that the United States were, for many important purposes, 'a single nation,' and that 'in all commercial regulations we are one and the same people;' and it has since frequently declared that commerce among the several states was a unit, and subject to national control. Previously, in M'Culloch v. Maryland, 4 Wheat. 316, 405, 4 L. ed. 579, 601, the court had said that the government ordained and established by the Constitution was, within the limits of the powers granted to it, 'the government of all; its powers are delegated by all; it represents all, and acts for all,' and was 'supreme within its sphere of action.' As late as the case of Re Debs, 158 U.S. 564, 582, 39 L. ed. 1092, 1101, 15 Sup. Ct. Rep. 900, 905, this court, every member of it concurring, said: 'The entire strength of the nation may be used to enforce in any part of the land the full and free exercise of all national powers and the security of all rights intrusted by the Constitution to its care. The strong arm of the national government may be put forth to brush away all obstructions to the freedom of interstate commerce or the transportation of the mails. If the emergency arises, the army of the nation, and all its militia, are at the service of the nation to compel obedience to its laws.'

The means employed in respect of the combinations forbidden by the anti-trust act, and which Congress deemed germane to the end to be accomplished, was to prescribe as a rule for interstate and international commerce (not for domestic commerce) that it should not be vexed by combinations, conspiracies, or monopolies which restrain commerce by destroying or restricting competition. We say that Congress has prescribed such a rule, because, in all the prior cases in this court, the anti-trust 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 free competition in interstate commerce was to restrain such commerce. Now, can this court 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 exonomic question which this court need not consider or determine. Undoubtedly, there are those who think that the general business interests and prosperity of the country will be best promoted if the rule of competition is not applied. But there are others who believe that such a rule is more necessary in these days of enormous wealth than it ever was in any former period of our history. Be all this as it may, Congress has, in effect, recognized the rule of free competition by declaring illegal every comoination or conspiracy in restraint of incerstate and international commerce. As, in the judgment of Congress, the public convenience and the general welfare will be best subserved when the natural laws of competition are left undisturbed by those engaged in interstate commerce, and as Congress has embodied that rule in a statute, that must be, for all, the end of the matter, if this is to remain a government of laws, and not of men.

It is said that railroad corporations created under the laws of a state can only be consolidated with the authority of the state. Why that suggestion is made in this case we cannot understand, for there is no pretense that the combination here in question was under the authority of the states under whose laws these railroad corporations were created. But even if the state allowed consolidation, it would not follow that the stockholders of two or more state railroad corporations, having competing lines and engaged in interstate commerce, could lawfully combine and form a distinct corporation to hold the stock of the constituent corporations, and, by destroying competition between them, in violation of the act of Congress, restrain commerce among the states and with foreign nations.

The rule of competition, prescribed by Congress, was not at all new in trade and commerce. And we cannot be in any doubt as to the reason that moved Congress to the incorporation of that rule into a statute. That reason was thus stated in United States v. Joint Traffic Asso.: 'Has not Congress, with regard to interstate commerce, and in the course of regulating it, in the case of railroad corporations, the power to say that no contract or combination shall be legal which shall restrain trade and commerce by shutting out the operation of the general law of competition? We think it has. . . . It is the combination of these large and powerful corporations, covering vast sections of territory and influencing trade throughout the whole extent thereof, and acting as one body in all the matters over which the combination extends, that constitutes the alleged evil, and in regard to which, so far as the combination operates upon and restrains interstate commerce, Congress has power to legislate and to prohabit.' pp. 569, 571, L. ed. pp. 287, 288 Sup. Ct. Rep. p. 32. That such a rule was applied to interstate commerce should not have surprised anyone. Indeed, when Congress declared contracts, combinations, and conspiracies in restraint of trade or commerce to be illegal, it did nothing more than apply to interstate commerce a rule that had been long applied by the several states when dealing with combinations that were in restraint of their domestic commerce. The decisions in state courts upon this general subject are not only numerous and instructive, but they show the circumstances under which the anti-trust act was passed. It may well be assumed that Congress, when enacting that statute, shared the general apprehension that a few powerful corporations or combinations sought to obtain, and, unless restrained, would obtain, such absolute control of the entire trade and commerce of the country as would be detrimental to the general welfare.

In Morris Run Coal Co. v. Barclay Coal Co. 68 Pa. 173, 186, the supreme court of Pennsylvania dealt with a combination of coal companies seeking the control, within a large territory, of the entire market for bituminous coal. The court, observing that the combination was wide in its scope, general in its influence, and injurious in its effects, said: 'When competition is left free, individual error or folly will generally find a correction in the conduct of others. But here is a combination of all the companies operating in the Blossburg and Barclay mining regions, and controlling their entire productions. They have combined together to govern the supply and the price of coal in all the markets from the Hudson to the Mississippi rivers, and from Pennsylvania to the Lakes. This combination has a power in its confederated form which no individual action can confer. The public interest must succumb to it, for it has left no competition free to correct its baleful influence. When the supply of coal is suspended the demand for it becomes importunate, and prices must rise. Or if the supply goes forward, the price fixed by the confederates must accompany it. The domestic hearth, the furnaces of the iron master, and the fires of the manufacturer all feel the restraint, while many dependent hands are paralyzed and hungry mouths are stinted. The influence of a lack of supply or a rise in the price of an article of such prime necessity cannot be measured. It permeates the entire mass of the community, and leaves few of its members untouched by its withering blight. Such a combination is more than a contract; it is an offense. . . . In all such combinations where the purpose is injurious or unlawful, the gist of the offense is the conspiracy. Men can often do by the combination of many what, severally, no one could accomplish, and even what, when done by one, would be innocent. . . . There is a potency in numbers when combined which the law cannot overlook, where injury is the consequence.' The same principles were applied in Arnot v. Pittston & E. Coal Co. 68 N. Y. 558, 565, 23 Am. Rep. 190, 194, which was the case of a combination of two coal companies in order to give one of them a monopoly of coal in a particular region, the court of appeals of New York holding that 'a combination to effect such a purpose is inimical to the interests of the public, and that all contracts designed to effect such an end are contrary to public policy, and therefore illegal.' They were also applied by the supreme court of Ohio in Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666, 672, which was the case of a combination among manufacturers of salt in a large salt-producing territory, the court saying: 'It is no answer to say that competition in the salt trade was not in fact destroyed, or that the price of the commodity was not unreasonably advanced. Courts will not stop to inquire as to the degree of injury inflicted upon the public; it is enough to know that the inevitable tendency of such contracts is injurious to the public.'

So, in Craft v. McConoughy, 79 Ill. 346, 350, 22 Am. Rep. 171, 174, which was the case of a combination among grain dealers by which competition was stifled, the court saying: 'So long as competition was free, the interest of the public was safe. The laws of trade, in connection with the rigor of competition, was all the guaranty the public required; but the secret combination created by the contract destroyed all competition, and created a monopoly against which the public interest had no protection.' Again, in People ex rel. Peabody v. Chicago Gas Trust Co. 130 Ill. 269, 297, 8 L. R. A. 497, 506, 22 N. E. 798, 804, which involved the validity of the organization of a gas corporation which obtained a monopoly in the business of furnishing illuminating gas in the city of Chicago by buying the stock of four other gas companies, it was said: 'Of what avail is it that any number of gas companies, may be formed under the general incorporation law, if a giant trust company can be clothed with the power of buying up and holding the stock and property of such companies, and, through the control thereby attained, can direct all their operations and weld them into one huge combination?' To the same effect are cases almost too numerous to be cited. But among them we refer to Richardson v. Buhl, 77 Mich. 632, 6 L. R. A. 457, 43 N. W. 1102, which was the case of the organization of a corporation in Connecticut to unite in one corporation all the match manufacturers in the United States, and thus to obtain control of the busines of manufacturing matches; Santa Clara Valley Mill & Lumber Co. v. Hayes, 76 Cal. 387, 390, 18 Pac. 391, which was the case of a combination among manufacturers of lumber, by which it could control the business in certain localities; and India Bagging Asso. v. Kock, 14 La. Ann. 164, which was the case of a combination among vaious commercial firms to control the prices of bagging used by cotton planters.

The cases just cited, it is true, relate to the domestic commerce of the states. But they serve to show the authority which the states possess to guard the public against combinations that repress individual enterprise and interfere with the operation of the natural laws of competition among those engaged in trade within its limits. They serve also to give point to the declaration of this court in Gibbons v. Ogden, 9 Wheat. 197, 6 L. ed. 70,-a principle never modified by any subsequent decision, that, subject to the limitations imposed by the Constitution upon the exercise of the powers granted by that instrument, 'the power over commerce with foreign nations and among the several states is vested in Congress as absolutely as it would be in a single government having in its constitution the same restrictions on the exercise of the power as are found in the Constitution of the United States.' Is there, then any escape from the conclusion that, subject only to such restrictions, the power of Congress over interstate and international commerce is as full and complete as is the power of any state over its domestic commerce? If a state may strike down combinations that restrain its domestic commerce by destroying free competition among those engaged in such commerce, what power, except that of Congress, is competent to protect the freedom of interstate and international commerce when assailed by a combination that restrains such commerce by stifling competition among those engaged in it?

Now, the court is asked to adjudge that, if held to embrace the case before us, the anti-trust act is repugnant to the Constitution of the United States. In this view we are unable to concur. The contention of the defendants could not be sustained without, in effect, overruling the prior decisions of this court as to the scope and validity of the anti-trust act. If, as the court has held, Congress can strike down a combination between private persons or private corporations that restrains trade among the states in iron pipe (as in Addyston Pipe & Steel Co. v. United States) or in tiles, grates, and mantels (as in W. W. Montague & Co. v. Lowry), surely it ought not to be doubted that Congress has power to declare illegal a combination that restrains commerce among the states, and with foreign nations, as carried on over the lines of competing railroad companies exercising public franchises, and engaged in such commerce. We cannot agree that Congress may strike down combinations among manufacturers and dealers in iron pipe, tiles, grates, and mantels that restrain commerce among the states in such articles, but may not strike down combinations among stockholders of competing railroad carriers, which restrain commerce as involved in the transportation of passengers and property among the several states. If private parties may not, by combination among themselves, restrain interstate and international commerce in violation of an act of Congress, much less can such restraint be tolerated when imposed or attempted to be imposed, upon commerce as carried on over public highways. Indeed, if the contentions of the defendants are sound, why may not all the railway companies in the United States, that are engaged, under state charters, in interstate and international commerce, enter into a combination such as the one here in question, and, by the device of a holding corporation, obtain the absolute control throughout the entire country of rates for passengers and freight, beyond the power of Congress to protect the public against their exactions? The argument in behalf of the defendants necessarily leads to such results, and places Congress, although invested by the people of the United States with full authority to regulate interstate and international commerce, in a condition of utter helplessness, so far as the protection of the public against such combinations is concerned.

Will it be said that Congress can meet such emergencies by prescribing the rates by which interstate carriers shall be governed in the transportation of freight and passengers? If Congress has the power to fix such rates-and upon that question we express no opinion-it does not choose to exercise its power in that way or to that extent. It has, all will agree, a large discretion as to the means to be employed in the exercise of any power granted to it. For the present, it has determined to go no farther than to protect the freedom of commerce among the states and with foreign states by declaring illegal all contracts, combinations, conspiracies, or monopolies in restraint of such commerce, and make it a public offense to violate the rule thus prescribed. How much further it may go, we do not now say. We need only at this time consider whether it has exceeded its powers in enacting the statute here in question.

Assuming, without further discussion, that the case before us is within the terms of the act, and that the act is not in excess of the powers of Congress, we recur to the question, How far may the courts go in reaching and suppressing the combination described in the bill? All will agree that if the anti-trust act be constitutional, and if the combination in question be in violation of its provisions, the courts may enforce the provisions of the statute by such orders and decrees as are necessary or appropriate to that end and as may be consistent with the fundamental rules of legal procedure. And all, we take it, will agree, as established firmly by the decisions of this court, that the power of Congress over commerce extends to all the instrumentalities of such commerce, and to every device that many be employed to interfere with the freedom of commerce among the states and with foreign nations. Equally, we assume, all will agree that the Constitution and the legal enactments of Congress are, by express words of the Constitution, the supreme law of the land, anything in the constitution and laws of any state to the contrary notwithstanding. Nevertheless, the defendants, strangely enough, invoke in their behalf the 10th Amendment of the Constitution, which declares that 'the powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively or to the people;' and we are confronted with the suggestion that any order or decree of the Federal court which will prevent the Northern Securities Company from exercising the power it acquired in becoming the holder of the stocks of the Great Northern and Northern Pacific Railway Companies will be an invasion defeat the act of Congress. Upon like the Securities Company was chartered, as well as of the rights of the states creating the other companies. In other words, if the state of New Jersey gives a charter to a corporation, and even if the obtaining of such charter is in fact pursuant to a combination under which it becomes the holder of the stocks of shareholders in two competing, commerce. All this can be done without infringing in any degree upon the just competition between the respective roads of those companies is to be destroyed and the enormous commerce carried on over them restrained by suppressing competition, Congress must stay its hands and allow such restraint to continue, to the detriment of the public, because, forsooth, the corporations concerned or some of them are state corporations. We cannot conceive how it is possible for anyone to seriously contend for such a proposition. It means nothing less than that Congress, in regulating interstate commerce, must act in subordination to the will of the states when exerting their power to create corporations. No such view can be entertained for a moment.

It is proper to say in passing that nothing in the record tends to show that the state of New Jersey had any reason to suspect that those who took advantage of its liberal incorporation laws had in view, when organizing the Securities Company, to destroy competition between two great railway carriers engaged in interstate commerce in distant states of the Union. The purpose of the combination was concealed under very general words that gave no clue whatever to the real purposes of those who brought about the organization of the Securities Company. If the certificate of incorporation of that company had expressly stated that the object of the company was to destroy competition between competing, parallel lines of interstate carriers, all would have seen, at the outset, that the scheme was in hostility to the national authority, and that there was a purpose to violate or evade the act of Congress.

We reject any such view of the relations of the national government and the states composing the Union as that for which the defendants contend. Such a view cannot be maintained without destroying the just authority of the United States. It is inconsistent with all the decisions of this court as to the powers of the national government over matters committed to it. No state can, by merely creating a corporation, or in any other mode, project its authority into other states, and across the continent, so as to prevent Congress from exerting the power it possesses under the Constitution over interstate and international commerce, or so as to exempt its corporation engaged in interstate commerce from obedience to any rule lawfully established by Congress for such commerce. It cannot be said that any state may give a corporation, created under its laws, authority to restrain interstate or international commerce against the will of the nation as lawfully expressed by Congress. Every corporation created by a state is necessarily subject to the supreme law of the land. And yet the suggestion is made that to restrain a state corporation from interfering with the free course of trade and commerce among the states, in violation of an act of Congress, is hostile to the reserved rights of the states. The Federal court may not have power to forfeit the charter of the Securities Company; it may not declare how its shares of stock may be transferred on its books, nor prohibit it from acquiring real estate, nor diminish or increase, its capital stock. All these and like matters are to be regulated by the state which created the company. But to the end that effect be given to the national will, lawfully expressed, Congress may prevent that company, in its capacity as a holding corporation and trustee, from carrying out the purposes of a combination formed in restraint of interstate commerce. The Securities Company is itself a part of the present combination; its head and front; its trustee. It would be extraordinary if the court, in executing the act of Congress, could not lay hands upon that company and prevent it from doing that which, if done, will defeat the act of Congress. Upon like grounds the court can, by appropriate orders, prevent the two competing railroad companies here involved from co-operating with the Securities Company in restraining commerce among the states. In short, the court may make any order necessary to bring about the dissolution or suppression of an illegal combination that restrains interstate commerce. All this can be done without infringing in any degree upon the just authority of the states. The affirmance of the judgment below will only mean that no combination, however powerful, is stronger than the law, or will be permitted to avail itself of the pretext that to prevent it doing that which, if done, would defeat a legal enactment of Congress, is to attack the reserved rights of the states. It would mean that the government which represents all, can, when acting within the limits of its powers, compel obedience to its authority. It would mean that no device in evasion of its provisions, however skilfully such device may have been contrived, and no combination, by whomsoever formed, is beyond the reach of the supreme law of the land, if such device or combination, by its operation, directly restrains commerce among the states or with foreign nations in violation of the act of Congress.

The defendants rely, with some confidence, upon the case of the Baltimore & O. R. Co. v. Maryland, 21 Wall. 456, 473, 22 L. ed. 678, 684. But nothing we have said is inconsistent with any principle announced in that case. The court there recognized the principle that a state has plenary powers 'over its own territory, its highways, its franchises, and its corporations,' and observed that 'we are bound to sustain the constitutional powers and prerogatives of the states, as well as those of the United States, whenever they are brought before us for adjudication, no matter what may be the consequences.' Of course, every state has, in a general sense, plenary power over its corporations. But is it conceivable that a state, when exerting power over a corporation of its creation, may prevent or embarrass the exercise by Congress of any power with which it is invested by the Constitution? In the case just referred to the court does not say, and it is not to be supposed that it will ever say, that any power exists in a state to prevent the enforcement of a lawful enactment of Congress, or to invest any of its corporations, in whatever business engaged, with authority to disregard such enactment or defeat its legitimate operation. On the contrary, the court has steadily held to the doctrine, vital to the United States as well as to the states, that a state enactment, even if passed in the exercise of its acknowledged powers, must yield, in case of conflict, to the supremacy of the Constitution of the United States and the acts of Congress enacted in pursuance of its provisions. This results, the court has said, as well from the nature of the government as from the words of the Constitution. Gibbons v. Ogden, 9 Wheat. 1, 210, 6 L. ed. 23, 73; Sinnot v. Davenport, 22 How. 227, 243, 16 L. ed. 243, 247; Re Debs, 158 U.S. 564, 39 L. ed. 1092, 15 Sup. Ct. Rep. 900; Missouri, K. &. T. R. Co. v. Haber, 169 U.S. 613, 626, 627, 42 L. ed. 878, 883, 18 Sup. Ct. Rep. 488. In Texas v. White, 7 Wall. 700, 725, 19 L. ed. 227, 237, the court remarked 'that 'the people of each state compose a state, having its own government, and endowed with all the functions essential to separate and independent existence,' and that 'without the states in union, there could be no such political body as the United States.' Lane County v. Oregon, 7 Wall. 76, 19 L. ed. 104. Not only, therefore, can there be no loss of separate and independent autonomy to the states, through their union under the Constitution, but it may be not unreasonably said that the preservation of the states, and the maintenance of their governments, are as much within the design and care of the Constitution as the preservation of the Union and the maintenance of the national government.' These doctrines are at the basis of our constitutional government, and cannot be disregarded with safety.

The defendants also rely on Louisville & N. R. Co. v. Kentucky, 161 U.S. 677, 702, 40 L. ed. 849, 859, 16 Sup. Ct. Rep. 714, 724, In that case it was contended by the railroad company that the assumption of the state to forbid the consolidation of parallel and competing lines was an interference with the power of Congress over interstate commerce. The court observed that but little need be said in answer to such a proposition, for '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.' But that case distinctly recognized that there was a division of power between Congress and the states in respect to interstate railways, and that Congress had the superior right to control that commerce and forbid interference therewith, while to the states remained the power to create and to regulate the instruments of such commerce, so far as necessary to the conservation of the public interests. If there is anything in that case which even intimates that a state or a state corporation may in any way directly restrain interstate commerce, over which Congress has, by the Constitution, complete control, we have been unable to find it.

The question of the relations of the general government with the states is again presented by the specific contention of each defendant that Congress did not intend 'to limit the power of the several states to create corporations, define their purposes, fix the amount of their capital, and determine who may buy, own, and sell their stock.' All that is true, generally speaking, but the contention falls far short of meeting the controlling questions in this case. To meet this contention we must repeat some things already said in this opinion. But if what we have said be sound, repetition will do no harm. So far as the Constitution of the United States is concerned, a state may, indeed, create a corporation, define its powers, prescribe the amount of its stock and the mode in which it may be transferred. It may even authorize one of its corporations to engage in commerce of every kind, domestic, interstate, and international. The regulation or control of purely domestic commerce of a state is, of course, with the state, and Congress has no direct power over it so long as what is done by the state does not interfere with the operations of the general government, or any legal enactment of Congress. A state, if it chooses so to do, may even submit to the existence of combinations within its limits that restrain its internal trade. But neither a state corporation nor its stockholders can, by reason of the nonaction of the state or by means of any combination among such stockholders, interfere with the complete enforcement of any rule lawfully devised by Congress for the conduct of commerce among the states or with foreign nations; for, as we have seen, interstate and international commerce is, by the Constitution, under the control of Congress, and it belongs to the legislative department of the government to prescribe rules for the conduct of that commerce. If it were otherwise, the declaration in the Constitution of its supremacy, and of the supremacy as well of the laws made in pursuance of its provisions, was a waste of words. Whilst every instrumentality of domestic commerce is subject to state control, every instrumentality of interstate commerce may be reached and controlled by national authority, so far as to compel it to respect thc rules for such commerce lawfully established by Congress. No corporate person can excuse a departure from or violation of that rule under the plea that that which it has done or omitted to do is permitted, or not forbidden, by the state under whose authority it came into existence. We repeat that no state can endow any of its corporations, or any combination of its citizens, with authority to restrain interstate or international commerce, or to disobey the national will as manifested in legal enactments of Congress. So long as Congress keeps within the limits of its authority as defined by the Constitution, infringing no rights recognized or secured by that instrument, its regulations of interstate and international commerce, whether founded in wisdom or not, must be submitted to by all. Harm, and only harm, can come from the failure of the courts to recognize this fundamental principle of constitutional construction. To depart from it because of the circumstances of special cases, or because the rule, in its operation, may possibly affect the interests of business, is to endanger the safety and integrity of our institutions and make the Constitution mean not what it says, but what interested parties wish it to mean at a particular time and under particular circumstances. The supremacy of the law is the foundation rock upon which our institutions rest. The law, this court said in United States v. Lee, 106 U.S. 196, 220, 27 L. ed. 171, 181, 1 Sup. Ct. Rep. 240, is the only supreme power in our system of government. And no higher duty rests upon this court than to enforce, by its decrees, the will of the legislative department of the government, as expressed in a statute, unless such statute be plainly and unmistakably in violation of the Constitution. If the statute is beyond the constitutional power of Congress, the court would fail in the performance of a solemn duty if it did not so declare. But if nothing more can be said than that Congress has erred,-and the court must not be understood as saying that is has or has not erred,-the remedy for the error and the attendant mischief is the selection of new senators and representatives, who, by legislation, will make such changes in existing statutes, or adopt such new statutes, as may be demanded by their constituents and be consistent with law.

Many suggestions were made in argument based upon the thought that the anti-trust act would, in the end, prove to be mischievous in its consequences. Disaster to business and wide-spread financial ruin, it has been intimated, will follow the execution of its provisions. Such predictions were made in all the cases heretofore arising under that act. But they have not been verified. It is the history of monopolies in this country and in England that predictions of ruin are habitually made by them when it is attempted, by legislation, to restrain their operations and to protect the public against their exactions. In this, as in former cases, they seek shelter behind the reserved rights of the states and even behind the constitutional guaranty of liberty of contract. But this court has heretofore adjudged that the act of Congress did not touch the rights of the states, and that liberty of contract did not involve a right to deprive the public of the advantages of free competition in trade and commerce. Liberty of contract does not imply liberth in a corporation or individuals to defy the national will, when legally expressed. Nor does the enforcement of a legal enactment of Congress infringe, in any proper sense, the general inherent right of every one to acquire and hold property. That right, like all other rights, must be exercised in subordination to the law.

But even if the court shared the gloomy forebodings in which the defendants indulge, it could not refuse to respect the action of the legislative branch of the government if what it has done is within the limits of its constitutional power. The suggestions of disaster to business have, we apprehend, their origin in the zeal of parties who are opposed to the policy underlying the act of Congress or are interested in the result of this particular case; at any rate, the suggestions imply that the court may and ought to refuse the enforcement of the provisions of the act if, in its judgment, Congress was not wise in prescribing as a rule by which the conduct of interstate and international commerce is to be governed, that every combination, whatever its form, in restraint of such commerce and the monopolizing or attempting to monopolize such commerce, shall be illegal. These, plainly, are questions as to the policy of legislation which belong to another department, and this court has no function to supervise such legislation from the standpoint of wisdom or policy. We need only say that Congress has authority to declare, and by the language of its act, as interpreted in prior cases, has, in effect, declared, that the freedom of interstate and international commerce shall not be obstructed or disturbed by any combination, conspiracy, or monopoly that will restrain such commerce, by preventing the free operation of competition among interstate carriers engaged in the transportation of passengers and freight. This court cannot disregard that declaration unless Congress, in passing the statute in question, be held to have transgressed the limits prescribed for its action by the Constitution. But, as already indicated, it cannot be so held consistently with the provisions of that instrument.

The combination here in question may have been for the pecuniary benefit of those who formed or caused it to be formed. But the interests of private persons and corporations cannot be made paramount to the interests of the general public. Under the Articles of Confederation commerce among the original states was subject to vexatious and local regulations that took no account of the general welfare. But it was for the protection of the general interests, as involved in interstate and international commerce, that Congress, representing the whole country, was given by the Constitution full power to regulate commerce among the states and with foreign nations. In Brown v. Maryland, 12 Wheat. 419, 446, 6 L. ed. 678, 688, it was said: 'Those who felt the injury arising from this state of things, and those who were capable of estimating the influence of commerce on the prosperity of nations, perceived the necessity of giving the control over this important subject to a single government. It may be doubted whether any of the evils proceeding from the feebleness of the Federal government contributed more to that great revolution which introduced the present system than the deep and general conviction that commerce ought to be regulated by Congress.' Railroad companies, we said in the Trans-Missouri Freight Asso. Case, 'are instruments of commerce, and their business is commerce itself.' And such companies, it must be remembered, operate 'public highways, established primarily for the convenience of the people, and therefore are subject to governmental control and regulation.' Cherokee Nation v. Southern Kansas R. Co. 135 U.S. 641, 657, 34 L. ed. 295, 302, 10 Sup. Ct. Rep. 965; Chicago, St. L. & N. O. R. Co. v. Pullman Southern Car Co. 139 U.S. 79, 90, 35 L. ed. 97, 102, 11 Sup. Ct. Rep. 490; Interstate Commerce Commission v. Brimson, 154 U.S. 447, 475, 38 L. ed. 1047, 1056, 4 Inters. Com. Rep. 545, 14 Sup. Ct. Rep. 1125; United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 332, 41 L. ed. 1007, 1024, 17 Sup. Ct. Rep. 540; Smyth v. Ames, 169 U.S. 466, 544, 42 L. ed. 819, 848, 18 Sup. Ct. Rep. 418; Lake Shore & M. S. R. Co. v. Ohio, 173 U.S. 285, 301, 43 L. ed. 702, 708, 19 Sup. Ct. Rep. 465. When such carriers, in the exercise of public franchises, engage in the transportation of passengers and freight among the states, they become-even if they be state corporations-subject to such rules as Congress may lawfully establish for the conduct of interstate commerce.

It was said in argument that the circumstances under which the Northern Securities Company obtained the stock of the constituent companies imported simply an investment in the stock of other corporations,-a purchase of that stock; which investment or purchase, it is contended, was not forbidden by the charter of the company, and could not be made illegal by any act of Congress. This view is wholly fallacious, and does not comport with the actual transaction. There was no actual investment, in any substantial sense, by the Northern Securities Company in the stock of the two constituent COMPANIES. IF IT WAS, IN FORM, SUCH A Transaction, it Was not, in fact, one of that kind. However that company may have acquired for itself any stock in the Great Northern and Northern Pacific Railway Companies, no matter how it obtained the means to do so, all the stock it held or acquired in the constituent companies was acquired and held to be used in suppressing competition between those companies. It came into existence only for that purpose. If anyone had full knowledge of what was designed to be accomplished, and as to what was actually accomplished, by the combination in question, it was the defendant Morgan. In his testimony he was asked, 'Why put the stocks of both these [constituent companies] into one holding company?' He frankly answered: 'In the first place, this holding company was simply a question of custodian, because it had no other alliances.' That disclosed the actual nature of the transaction, which was only to organize the Northern Securities Company as a holding company, in whose hands, not as a real purchaser or absolute owner, but simply as custodian, were to be placed the stocks of the constituent companies,-such custodian to represent the combination formed between the shareholders of the constituent companies, the direct and necessary effect of such combination being, as already indicated, to restrain and monopolize interstate commerce by suppressing, or (to use the words of this court in United States v. Joint Traffic Asso.) 'smothering' competition between the lines of two railway carriers.

We will now inquire as to the nature and extent of the relief granted to the government by the decree below.

By the decree in the circuit court it was found and adjudged that the defendants had entered into a combination or conspiracy in restraint of trade or commerce among the several states, such as the act of Congress denounced as illegal; and that all of the stocks of the Northern Pacific Railway Company and all the stock of the Great Northern Railway Company, claimed to be owned and held by the Northern Securities Company, was acquired, and is by it held, in virtue of such combination or conspiracy, in restraint of trade and commerce among the several states. It was therefore decreed as follows: 'That the Northern Securities Company, its officers, agents, servants, and employees, be and they are hereby enjoined from acquiring, or attempting to acquire, further stock of either of the aforesaid railway companies; that the Northern Securities Company be enjoined from voting the aforesaid stock which it now holds or may acquire, and from attempting to vote it, at any meeting of the stockholders of either of the aforesaid railway companies, and from exercising or attempting to exercise any control, direction, supervision, or influence whatsoever over the acts and doings of said railway companies, or either of them, by virtue of its holding such stock therein; that the Northern Pacific Railway Company and the Great Northern Railway Company, their officers, directors, servants, and agents, be and they are hereby respectively and collectively enjoined from permitting the stock aforesaid to be voted by the Northern Securities Company, or in its behalf, by its attorneys or agents, at any corporate election for directors or officers of either of the aforesaid railway companies; that they, together with their officers, directors, servants, and agents, be likewise enjoined and respectively restrained from paying any dividends to the Northern Securities Company on account of stock in either of the aforesaid railway companies, which it now claims to own and hold; and that the aforesaid railway companies, their officers, directors, servants, and agents, be enjoined from permitting or suffering the Northern Securities Company or any of its officers or agents, as such officers or agents, to exercise any control whatsoever over the corporate acts of either of the aforesaid railway companies. But nothing herein contained shall be construed as prohibiting the Northern Securities Company from returning and transferring to the Northern Pacific Railway Company and the Great Northern Railway Company, respectively, any and all shares of stock in either of said railway companies which said The Northern Securities Company may have heretofore received from such stockholders in exchange for its own stock; and nothing herein contained shall be construed as prohibiting the Northern Securities Company from making such transfer and assignments of the stock aforesaid to such person or persons as may now be the holders and owners of its own stock originally issued in exchange or in payment for the stock claimed to have been acquired by it in the aforesaid railway companies.'

Subsequently, and before the appeal to this court was perfected, an order was made in the circuit court to this effect: 'That upon the giving of an approved bond to the United States by or on behalf of the defendants in the sum of $50,000, conditioned to prosecute their appeal with effect and to pay all damages which may result to the United States from this order, that portion of the injunction contained in the final decree herein which forbids the Northern Pacific Railway Company and the Great Northern Railway Company, their officers, directors, servants, and agents, from paying dividends to the Northern Securities Company on account of stock in either of the railway companies which the Securities Company claims to own and hold, is suspended during the pendency of the appeal allowed herein this day. All other portions of the decree and of the injunction it contains remain in force and are unaffected by this order.'

No valid objection can be made to the decree below, in form or in substance. If there was a combination or conspiracy in violation of the act of Congress, between the stockholders of the Great Northern and the Northern Pacific Railway Companies, whereby the Northern Securities Company was formed as a holding corporation, and whereby interstate commerce over the lines of the constituent companies was restrained, it must follow that the court, in execution of that act, and to defeat the efforts to evade it, could prohibit the parties to the combination from doing the specific things which, being done, would affect the result denounced by the act. To say that the court could not go so far is to say that it is powerless to enforce the act or to suppress the illegal combination, and powerless to protect the rights of the public as against that combination.

It is here suggested that the alleged combination had accomplished its object before the commencement of this suit, in that the Securities Company had then organized, and had actually received a majority of the stock of the two constituent companies; therefore, it is argued, no effective relief can now be granted to the government. This same view was pressed upon the circuit court and was rejected. It was completely answered by that court when it said: 'Concerning the second contention, we observe that it would be a novel, not to say absurd, interpretation of the anti-trust act to hold that after an unlawful combination is formed and has acquired the power which it had no right to acquire,-namely, to restrain commerce by suppressing competition,-and is proceeding to use it and execute the purpose for which the combination was formed, it must be left in possession of the power that it has acquired, with full freedom to exercise it. Obviously, the act, when fairly interpreted, will bear no such construction. Congress aimed to destroy the power to place any direct restraint on interstate trade or commerce, when, by any combination or conspiracy, formed by either natural or artificial persons, such a power had been acquired; and the government may intervene and demand relief as well after the combination is fully organized as while it is in process of formation. In this instance, as we have already said, the Securities Company made itself a party to a combination in restraint of interstate commerce that antedated its organization, as soon as it came into existence; doing so, of course, under the direction of the very individuals who promoted it.' The circuit court has done only what the actual situation demanded. Its decree has done nothing more than to meet the requirements of the statute. It could not have done less without declaring its impotency in dealing with those who have violated the law. The decree, if executed, will destroy not the property interests of the original stockholders of the constituent companies, but the power of the holding corporation as the instrument of an illegal combination of which it was the master spirit, to do that which, if done, would restrain interstate and international commerce. The exercise of that power being restrained, the object of Congress will be accomplished; left undisturbed, the act in question will be valueless for any practical purpose.

It is said that this statute contains criminal provisions and must therefore be strictly construed. The rule upon that subject is a very ancient and salutary one. It means only that we must not bring cases within the provisions of such a statute that are not clearly embraced it, nor by narrow, technical, or forced construction of words, exclude cases from it that are obviously within its provisions. What must be sought for always is the intention of the legislature, and the duty of the court is to give effect to that intention as disclosed by the words used.

As early as the case of King v. Hodnett, 1 T. R. 96, 101, Mr. Justice Buller said: 'It is not true that the courts, in the exposition of penal statutes, are to narrow the construction.' In United States v. Wiltberger, 5 Wheat, 76, 95, 5 L. ed. 37, 42, Chief Justice Marshall, delivering the judgment of this court and referring to the rule that penal statutes are to be construed strictly, said: 'It is a modification of the ancient maxim, and amounts to this; that though penal laws are to be construed strictly, they are not to be construed so strictly as to defeat the obvious intention of the legislature. The maxim is not to be so applied as to narrow the words of the statute to the exclusion of cases which those words, in their ordinary acceptation, or in that sense in which the legislature has obviously used them, would comprehend. The intention of the legislature is to be collected from the words they employ. Where there is no ambiguity in the words, there is no room for construction.' In United States v. Morris, 14 Pet. 464, 475, 10 L. ed. 543, 548, this court, speaking by Chief Justice Taney, said: 'In expounding a penal statute the court certainly will not extend it beyond the plain meaning of its words; for it has been long and well settled that such statutes must be construed strictly. Yet the evident intention of the legislature ought not to be defeated by a forced and overstrict construction. 5 Wheat. 95, 5 L. ed. 42.' So, in The Industry, 1 Gall. 114, 117, Fed. Cas. No. 7,028, Mr. Justice Story said: 'We are undoubtedly bound to construe penal statutes strictly, and not to extend them beyond their obvious meaning by strained inferences. On the other hand, we are bound to interpret them according to the manifest import of the words, and to hold all cases which are within the words and the mischiefs to be within the remedial influence of the statute.' In another case the same eminent jurist said: 'I agree to that rule in its true and sober sense; and that is, that penal statutes are not to be enlarged by implication or extended to cases not obviously within their words and purport. . . . In short, it appears to me that the proper course in all these cases is to search out and follow the true intent of the legislature, and to adopt that sense of the words which harmonizes best with the context, and promotes in the fullest manner the apparent policy and objects of the legislature.' United States v. Winn, 3 Sumn. 209, 211, 212, Fed. Cas. No. 16,740. In People v. Bartow, 6 Cow. 290, the highest court of New York said: 'Although a penal statute is to be construed strictly, the court are not to disregard the plain intent of the legislature. . . . It is well settled that a statute which is made for the good of the public ought although it be penal, to receive an equitable construction.' So, in Com. v. Martin, 17 Mass. 359, 362, the highest court of Massachusetts said: 'If a statute creating or increasing a penalty be capable of two constructions, undoubtedly that construction which operates in favor of life or liberty is to be adopted; but it is not justifiable in this any more than in any other case, to imagine ambiguities merely that a lenient construction may be adopted. If such were the privilege of a court, it would be easy to obstruct the public will in almost every statute enacted; for it rarely happens that one is so precise and exact in its terms as to preclude the exercise of ingenuity in raising doubts about its construction.' There are cases almost without number in this country and in England to the same effect.

Guided by these long-established rules of construction, it is manifest that if the antitrust act is held not to embrace a case such as is now before us, the plain intention of the legislative branch of the government will be defeated. If Congress has not, by the words used in the act, described this and like cases, it would, we apprehend, be impossible to find words that would describe them. This, it must be remembered, is a suit in equity, instituted by authority of Congress 'to prevent and restrain violations of the act,' § 4; and the court, in virtue of a well-settled rule governing proceedings in equity, may mould its decree so as to accomplish practical results,-such results as law and justice demand. The defendants have no just cause to complain of the decree, in matter of law, and it should be affirmed.

The judgment of the court is that the decree below be and hereby is affirmed, with liberty to the Circuit Court to proceed in the execution of its decree as the circumstances may require.

Affirmed.

I cannot assent to all that is said in the opinion just announced, and believe that the importance of the case and the questions involved justify a brief statement of my views.

First, let me say that while I was with the majority of the court in the decision in United States v. Trans-Missouri Freight Asso. 166 U.S. 290, 41 L. ed. 1007, 17 Sup. Ct. Rep. 540, followed by the cases of United States v. Joint Traffic Asso. 171 U.S. 505, 43 L. ed. 259, 19 Sup. Ct. Rep. 25; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 44 L. ed. 136, 20 Sup. Ct. Rep. 96, and W. W. Montague & Co. v. Lowry (decided at the present term) 193 U.S. 38, ante, 307, 24 Sup. Ct. Rep. 307, and while a further examination (which has been induced by the able and exhaustive arguments of counsel in the present case) has not disturbed the conviction that those cases were rightly decided, I think that in some respects the reasons given for the judgments cannot be sustained. Instead of holding that the anti-trust act included all contracts, reasonable or unreasonable, in restraint of interstate trade, the ruling should have been that the contracts there presented were unreasonable restraints of interstate trade, and as such within the scope of the act. That act, as appears from its title, was leveled at only 'unlawful restraints and monopolies.' Congress did not intend to reach and destroy those minor contracts in partial restraint of trade which the long course of decisions at common law had affirmed were reasonable and ought to be upheld. The purpose rather was to place a statutory prohibition, with prescribed penalties and remedies, upon those contracts which were in direct restraint of trade, unreasonable, and against public policy. Whenever a departure from common-law rules and definitions is claimed, the purpose to make the departure should be clearly shown. Such a purpose does not appear, and such a departure was not intended.

Further, the general language of the act is also limited by the power which each individual has to manage his own property and determine the place and manner of its investment. Freedom of action in these respects is among the inalienable rights of every citizen. If, applying this thought to the present case, it appeared that Mr. Hill was the owner of a majority of the stock in the Great Northern Railway Company, he could not, by any act of Congress, be deprived of the right of investing his surplus means in the purchase of stock of the Northern Pacific Railway Company, although such purchase might tend to vest in him through that ownership a control over both companies. In other words, the right which allother citizens had, of purchasing Northern Pacific stock, could not be denied to him by Congress because of his ownership of stock in the Great Northern Company. Such was the ruling in Pearsall v. Great Northern R. Co. 161 U.S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705, in which this court said (p. 671, L. ed. p. 847, Sup. Ct. Rep. 712), in reference to the right of the stockholders of the Great Northern Company to purchase the stock of the Northern Pacific Railway Company: 'Doubtless these stockholders could lawfully acquire, by individual purchases, a majority or even the whole of the stock of the reorganized company, and thus possibly obtain its ultimate control; but the companies would still remain separate corporations, with no interests, as such, in common.'

But no such investment by a single individual of his means is here presented. There was a combination by several individuals, separately owning stock in two competing railroad companies, to place the control of both in a single corporation. The purpose to combine, and by combination destroy competition, existed before the organization of the corporation, the Securities Company. That corporation, though nominally having a capital stock of $400,000,000, had no means of its own; $30,000 in cash was put into its treasury, but simply for the expenses of organization. The organizers might just as well have made the nominal stock a thousand millions as four hundred, and the corporation would have been no richer or poorer. A corporation, while by fiction of law recognized for some purposes as a person, and, for purposes of jurisdiction, as a citizen, is not endowed with the inalienable rights of a natural person. It is an artificial person, created and existing only for the convenient transaction of business. In this case it was a mere instrumentality by which separate railroad properties were combined under one control. That combination is as direct a restraint of trade by destroying competition as the appointment of a committee to regulate rates. The prohibition of such a combination is not at all inconsistent with the right of an individual to purchase stock. The transfer of stock to the Securities Company was a mere incident, the manner in which the combination to destroy competition, and thus unlawfully restrain trade, was carried out.

If the parties interested in these two railroad companies can, through the instrumentality of a holding corporation, place both under one control, then in like manner, as was conceded on the argument by one of the counsel for the appellants, could the control of all the railroad companies in the country be placed in a single corporation. Nor need this arrangement for control stop with what has already been done. The holders of $201,000,000 of stock in the Northern Securities Company might organize another corporation to hold their stock in that company, and the new corporation, holding the majority of the stock in the Northern Securities Company, and acting in obedience to the wishes of a majority of its stockholders, would control the action of the Securities Company and through it the action of the two railroad companies; and this process might be extended until a single corporation whose stock was owned by three or four parties would be in practical control of both roads; or, having before us the possibilities of combination, the control of the whole transportation system of the country. I cannot believe that to be a reasonable or lawful restraint of trade.

Again, there is by this suit no interference with state control. It is a recognition rather than a disregard of its action. This merging of control and destruction of competition was not authorized, but specifically prohibited by the state which created one of the railroad companies, and within whose boundaries the lines of both were largely located and much of their business transacted. The purpose and policy of the state are therefore enforced by the decree. So far as the work of the two railroad companies was interstate commerce, it was subject to the control of Congress, and its purpose and policy were expressed in the act under which this suit was brought.

It must also be remembered that under present conditions a single railroad is, if not a legal, largely a practical, monopoly; and the arrangement by which the control of these two competing roads was merged in a single corporation broadens and extends such monopoly. I cannot look upon it as other than an unreasonable combination in restraint of interstate commerce,-one in conflict with state law, and within the letter and spirit of the statute and the power of Congress. Therefore I concur in the judgment of affirmance.

I have felt constrained to make these observations for fear that the broad and sweeping language of the opinion of the court might tend to unsettle legitimate business enterprises, stifle or retard wholesome business activities, encourage improper disregard of reasonable contracts, and invite unnecessary litigation.

Mr. Justice Holmes, with whom concurred the Chief Justice, Mr. Justice White, and Mr. Justice Peckham, dissenting: 

Notes