Northern Securities Co. v. United States


Northern Securities Co. v. United States
Northern Securities Co. v. United States
Seal of the United States Supreme Court.svg
Supreme Court of the United States
Argued December 14–15, 1903
Decided March 14, 1904
Full case name Northern Securities Company, et al., Appts. v. United States
Holding
Court membership
Case opinions
Majority Harlan, joined by Day, Brown, McKenna
Concurrence Brewer
Dissent Holmes, joined by Fuller, White, Peckham
Laws applied
Sherman Antitrust Act

Northern Securities Co. v. United States, 193 U.S. 197 (1904), was an important ruling by the U.S. Supreme Court. The Court ruled 5 to 4 against the stockholders of the Great Northern and Northern Pacific railroad companies, who had essentially formed a monopoly, and to dissolve the Northern Securities Company.

Contents

Facts

In 1901, James Jerome Hill, president of and the largest stockholder in the Great Northern Railway, won the financial support of J. P. Morgan and attempted to take over the Chicago, Burlington and Quincy Railroad (CB&Q).[1] Hill's strategy was for his railroad and Morgan's Northern Pacific Railway to jointly buy the CB&Q.[1] However, Edward Henry Harriman, president of the Union Pacific Railroad and the Southern Pacific Railroad, also wanted to buy the Chicago, Burlington and Quincy.[1] Harriman demanded a one-third interest in the CB&Q, but Hill refused him.[1] Harriman then began to buy up Northern Pacific's stock, forcing Hill and Morgan to counter by purchasing more stock as well.[1] Northern Pacific's stock price skyrocketed, and the artificially high stock threatened to cause a crash on the New York Stock Exchange.[1] Hill and Morgan were ultimately successful in obtaining more Northern Pacific stock than Harriman, and won control not only of the Northern Pacific but also the Chicago, Burlington and Quincy.[1]

Alarmed by Harriman's actions, Hill created a holding company—the Northern Securities Company—to control all three of the railroads. The public was greatly alarmed by the formation of Northern Securities, which threatened to become the largest company in the world and monopolize railroad traffice in the western United States.[1] President William McKinley, however, was not willing to pursue antitrust litigation against Hill.[1] McKinley was assassinated, however, and his progressive Vice President, Theodore Roosevelt, ordered the United States Department of Justice to pursue a case against Northern Securities.[1]

.

Outcome

Hill was forced to disband his holding company and manage each railroad independently.[1] The Northern Pacific, Great Northern, and Chicago, Burlington and Quincy finally merged in 1969.[1]

Notes

  1. ^ a b c d e f g h i j k l Solomon, Brian. Burlington Northern Santa Fe Railway. St. Paul, Minn.: MBI Publishing, 2005, p. 51.

External links

  • Text of Northern Securities Co. v. United States, 193 U.S. 197 (1904) is available from: Justia · Findlaw

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