JUDICIAL INTERPRETATION OF ANTI-TRUST ACT
As had been the case with railroad regulation, the Supreme Court in the course of applying the Anti-Trust Law receded from some of the positions it had assumed in earlier decisions. In the Northern Securities Case the defendants claimed that the purchase of a controlling interest in the three railroad companies concerned was not a transaction in interstate commerce, did not involve any restraint on the operations or charges of these railroads, and was therefore not within the prohibitions of the Anti-Trust Law. Had the court adhered to the principle laid down in the E. C. Knight Case the transaction would not have been considered illegal. The majority of the justices, however, declared that the arrangement had been entered into for the purpose of monopolizing railroad transportation in the area served by these lines.
In the Standard Oil decision of 1911 the sweeping application of the law set forth in the Trans-Missouri Freight Association decision was greatly modified. While declaring that the great oil company had by its organization and methods shown that it was intended to monopolize the refining and selling of petroleum products, the court proceeded to lay down the principle that the Anti-Trust Law must be construed by the rule of reason. Its terms are not precise. If literally applied it "would be destructive of all right to contract or agree or combine in any respect whatever as to subjects embraced in interstate trade or commerce." The alternative would be non-enforcement because of its uncertainty. The decision in this case marks a turningpoint in the history of the relations of the government and private business.
Mr. Justice Harlan announced the affirmance of the decree of the circuit court, and delivered the following opinion: . . .
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 corn____________________
Supreme Court of the United States, 1904. 193 United States, 197.
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Publication information: Book title: Readings in Recent American Constitutional History, 1876-1926. Contributors: Allen Johnson - Editor, William A. Robinson - Editor. Publisher: C. Scribner's Sons. Place of publication: New York. Publication year: 1927. Page number: 140.
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