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Northern Securities Company v. United States


NORTHERN SECURITIES COMPANY V. UNITED STATES, 193 U.S. 197 (1904), began as a contest between competitive railroad trunk lines over control of an intermediate feeder line and ended up as a struggle for supremacy that pitted railroad moguls John Pierpont Morgan and James J. Hill against Edward H. Harriman.

Harriman, who controlled the Union Pacific system, had attempted to wrest from Morgan and Hill a special interest in the Chicago, Burlington, and Quincy, thereby effecting an entrance into Chicago. At first by stealthy moves and then by frenzied bidding culminating in the "Northern Pacific panic" of 1901, Harriman acquired a majority of the voting rights outstanding in Northern Pacific stock. Negotiations ensued for a friendly settlement, and out of them emerged the Northern Securities Company, a massive conglomerate encompassing virtually all the contestants' stock.

Challenged for violation of the Sherman Antitrust Act, the defendants contended that that act did not embrace the mere transfer of proprietary interests in any enterprise from one person to another. However, the Supreme Court upheld the government's contention that the holding company had been used as an illegal device for restraining interstate trade, since its necessary effect was to eliminate competition in transportation service over a large section of the country. The decision gave teeth to the Sherman Antitrust Act and spurred the government's trust-busting efforts.


Himmelberg, Robert F., ed. The Monopoly Issue and Antitrust, 1900–1917. New York: Garland, 1994.

Kolko, Gabriel. Railroads and Regulation, 1877–1916. Princeton, N.J.: Princeton University Press, 1965.

McGraw, Thomas K., ed. Regulation in Perspective. Boston: Harvard University Press, 1981.

Myron W.Watkins/a. r.

See alsoAntitrust Laws ; Corporations ; Holding Company ; Monopoly ; Trusts .

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