What was the ruling of Northern Securities case? What was the background?
Northern Securities Company was created to control the reserves of significant railway facilities. In 1903, the U.S. Supreme Court ruled that the monopoly was illegal, and ruled against stockholders of railway companies to dissolve Northern Securities.
U.S. federal relations were built according to the scheme of intense federal center – robust states. The judicial interpretation and application of the clause consolidated the objective strengthening process of the national level of power, activating the regulation of socio-economic relations. Towards this goal, the U.S. Supreme Court applied an expansive interpretation of the concept of interstate commerce regulation in terms of borders, aims, and methods of federal control.
The judicial doctrinal mechanism allows those manifestations of social and economic activity to be included in the sphere of federal competence that does not involve the movement of business objects between states. However, such companies as Northern Securities in 1904 had a direct impact on interstate commerce. Roosevelt, using his position as head of the executive branch, sought popular support in his crusade against the trusts. The formation of U.S. Steel Company, the first billion-dollar corporation, and the Northern Securities Company railroad holding served as the background for Roosevelt’s campaign against industrial abuse. Under pressure from the president, who sought to expedite the federal investigation into antitrust lawsuits in federal courts, on February 11, 1903, Congress passed the law on the acceleration of litigation and resolution of a fair trial. It was called the Expedition Act, and such lawsuits were considered as a matter of priority.
The foundation of the Northern Securities Company did not limit competition between the two previously competing railway systems. On the contrary, in the transaction parties’ view, it led to an efficient and highly expedient consolidation of railway assets. Giving evidence of the union effectiveness, tariffs on railway lines continued to decrease from November 1901 to 1903. Both the economic facts and economic analysis did not play any role in the final decision of the Supreme Court.
Northern Securities holding company acquired a major share of stock in two previously independent and competing Northern Pacific and Great Northern railways linking different states. Most Supreme Court members have agreed that Northern Securities is a trust or an association aimed at limiting interstate commercial relations. The decision on the company’s case was not unanimous, because it was not a matter of trade or trade relations, but assets ownership. The unlawful restriction was not possible for Judge Holmes until an agreement was reached with a third party to limit trade and competition. Nevertheless, in the case of Northern Securities, there was never even an attempt to apply such an agreement. The Northern Securities creation was aimed at preventing raids on Great Northern and Northern Pacific stocks, as well as to strengthen the position of both companies and their links in competition with other roads.
Thus, in the context of cooperative federalism, the Supreme Court drastically reduced the scope of exclusive jurisdiction of the United States. At the same time, judicial federalism reflected a significant trend in cooperation and harmonization of the interests of both the federation and states. Therefore, the compromise balancing approach used by the Court in assessing the constitutionality of state acts took into account the importance of the rules as partners of the federal center in solving socio-economic problems.
"What was the ruling of Northern Securities case? What was the background?" Custom-Writing, 9 Apr. 2020, custom-writing.org/qna/northern-securities-case/.
1. Custom-Writing.org. "What was the ruling of Northern Securities case? What was the background?" April 9, 2020. https://custom-writing.org/qna/northern-securities-case/.
Custom-Writing.org. "What was the ruling of Northern Securities case? What was the background?" April 9, 2020. https://custom-writing.org/qna/northern-securities-case/.
Custom-Writing.org. 2020. "What was the ruling of Northern Securities case? What was the background?" April 9, 2020. https://custom-writing.org/qna/northern-securities-case/.
Custom-Writing.org. (2020, April 9). What was the ruling of Northern Securities case? What was the background? Retrieved from https://custom-writing.org/qna/northern-securities-case/
Custom-Writing.org. (2020) 'What was the ruling of Northern Securities case? What was the background'. 9 April.