the advantages of adequate compensation, but also the shippers and the public lose the benefits of uniformity and stability of rates. Uncontrolled competition, therefore, injures, instead of benefits, the public interest.

40

While

some judges have been captivated by the supposed advantages of unrestricted competition among carriers, other and equally eminent judges, and as competent observers, have detected the fallacy in the reasoning, and have pointed out the danger." There are limits to legislation. Acts of Congress cannot control either the laws of nature or the laws of trade. As the statute, judicially construed, forbids treaties of peace between warring lines and consolidations of conflicting railway interests, some other way will be found, in the interest of the public, to accomplish the desired result.

It is difficult to reconcile the case of N. S. Co. v. U. S.41 with the case of U. S. v. E. C. Knight Co.42 Obviously a statutory prohibition of "every" restraint of trade cannot be so construed as to permit mercantile, and forbid transportation, restraints of trade. In each of those cases the controlling fact is that there is vested in one agency the ownership of, and control over, instrumentalities of interstate commerce, and, if there be a resultant restraint of trade, that result follows, not because of any agreement to abstain from competition, but only because such abstention may possibly follow the exercise of legal rights of purchase, sale and ownership.48

The result in N. S. Co. v. U. S.44 seems to be open to two further objections, which do not appear to be met by

"Hare v. L. & N. R., 2 J. & H. Ch. 80, 103; M. & L. R. v. C. R., 66 N. H. 100. See Report XIV of the Interstate Commerce Commission. 41193 U. S. 197.

42 156 U. S. 1.

* See the view of Holmes, J., 193 U. S. 405.

193 U. S. 197.

anything in the judgment of the court, as read by Harlan, J., or in the concurring judgment of Brewer, J.

1. The act, as construed in the T. M. F. A. and J. T. A. cases, forbids railways to agree not to compete, but it does not forbid non-competition in the absence of agreement. As well after as before the act, railways were, and are, bound in law to carry all passengers and freight that may be offered, to the extent of their facilities, at reasonable rates, and without unjust discrimination, either personal or local; and if the managers of any railway, while observing those requirements, charge the same rates as are charged by other railways under like conditions, but without entering into any agreement to that effect, they violate no law. If it be not unlawful for two railway companies owned by different shareholders to abstain from competition, it cannot be unlawful for two railway companies owned by one body of shareholders to similarly abstain. The fact of common ownership, therefore, is not in itself a restraint of trade, nor does it give rise to a presumption that any restraint of trade will be committed. How can it then be unlawful to organize a holding company to acquire the shares of two operating companies?

If it be said that the organization of the holding corporation is only a means to the end of so unifying the management of the operating companies as to prevent any possibility of competition as between those companies and that the organization is therefore a fraud upon the statute, the answer is that which the court, speaking by Mr. Justice Hunt, gave15 in a case where the question was as to the validity of that which was alleged to be a device to avoid the payment of a stamp duty; for in that case the court said "if the device is carried out by the means of legal forms, it is subject to no legal censure."

45 U. S. v. Isham, 17 Wall. 506.

2. In the case, there is neither contract, combination, nor conspiracy between the operating companies, but there is an organization of a holding company by shareholders of the operating companies, and, by force of that organization, the holding company becomes the majority shareholder of both operating companies. While the rights of the shareholders of a corporation entitle them to elect its directors, and to participate in net profits, when declared, and, upon dissolution, in net assets, those rights, nevertheless, do not give any power of direct corporate management. A corporation is a legal entity distinguishable from the body of its shareholders. It can act only by its officers and agents, and its shareholders are neither its officers nor agents. An agreement signed by every shareholder will not bind the corporation. If an express agreement of shareholders of the operating companies be not effective, how can effect be given to a sale and transfer of shares as legal evidence of presumptive corporate action?

Telegraphs.

54. Congress has authorized 46 any telegraph company organized under the laws of any state "to construct, maintain, and operate lines of telegraph through and over any portion of the public domain of the United States, over and along any of the military or post roads 47 of the United States which have been or may hereafter be declared such by act of Congress, and over, under, or across, the navigable streams or waters of the United States" upon certain conditions, including priority to government messages, a reservation of the privilege of

"Act of 24th July, 1866, 14 Stat. 221; Rev. Stat. 5263, etc.

"Congress, by Act of 8th June, 1872, c. 335, 17 Stat. 308; Rev. Stat. 3964, declared all railway lines in the United States to be post roads.

purchase by the government, and the written acceptance by the company of the restrictions and obligation of the act.48 Under this legislation it has been decided that a state may require telegraph companies to receive on payment of their charges messages to be transmitted to points in other states, and to deliver messages with due diligence.49 A state may require a telegraph company doing interstate business to pay to the municipality a rental for the use of public highways by its poles.50 A state may tax the property owned by a telegraph company within the state.51 A state may require from a telegraph company payment of a license tax on business done within the state by the company, though it also carries on an interstate business.52

A state may not, as against the privileges conferred by the United States,58 vest an exclusive monopoly in one telegraph company.54 A state may not tax messages sent to points without the state, nor messages sent by officers of the United States on public business.55 A state may not, as affecting delivery in other states of messages from points within the state, require delivery by special messengers.56 A state may not require a license for the

18 This act does not apply to telephone companies: Richmond v. S. B. T. Co., 174 U. S. 761.

"W. U. T. Co. v. James, 162 U. S. 650.

50 St. Louis v. W. U. T. Co., 148 U. S. 92; P. T. C. Co. v. Baltimore, 156 id. 210. See also W. U. T. Co. v. New Hope, 187 id. 419; but of. A. & P. T. Co. v. Philadelphia, 190 id. 160; P. T. C. Co. v. New Hope, 192 id. 55; P. T. C. Co. v. Taylor, ibid. 64.

51 Massachusetts v. W. U. T. Co., 141 U. S. 40; P. T. Co. v. Adams, 155 ia. 688; W. U. T. Co. v. Taggart, 163 id. 1; W. U. T. Co. v. Missouri, 190 id. 412.

62 Ratterman v. W. U. T. Co., 127 U. S. 411; P. T. C. Co. v. Charleston, 153 id. 692.

privilege of doing interstate business.57 A state may not prohibit, until all state taxes have been paid by it, the doing of business by a corporation which has accepted the privileges granted by the act of Congress.58

Commerce with the Indian tribes.

55. The Indian tribes are not foreign but domestic and dependent nations; their relation to the United States resembles that of a ward to his guardian; and they are completely under the sovereignty and dominion of the United States. They, therefore, cannot sue in the courts of the United States as foreign states.59 The regulation of the relation between the several states and the Indian tribes is exclusively vested in the United States, and state laws cannot operate within an Indian reservation.60 Congress, under the power to regulate commerce with the Indian tribes, may grant to a railroad corporation a right of way through their lands.61 It may also forbid the sale of spirituous liquors to all persons belonging to Indian tribes within the territorial limits of a state, even outside the bounds of an Indian reservation,62 and it is competent for the United States, in the exercise of the treaty-making power, to stipulate in a treaty with an Indian tribe, that the introduction and sale of spirituous liquors shall be prohibited within certain territories ceded by the tribe to the United States, and such stipulation operates proprio vigore, and is binding though the ceded

57

Leloup v. Port of Mobile, 127 U. S. 640 (overruling Osborne v. Mobile, 16 Wall. 479); W. U. T. Co. v. Alabama, 132 U. S. 472.

58 W. U. T. Co. v. Massachusetts, 125 U. S. 530.

5 Cherokee Nation v. Georgia, 5 Pet. 1; Worcester v. Georgia, 6 id. 515; Cherokee Nation v. S. K. Ry., 135 U. S. 641.

Worcester v. Georgia, 6 Pet. 515.

1 Cherokee Nation v. S. K. Ry., 135 U. S. 641. "U. S. v. Holliday; U. S. v. Haas, 3 Wall. 407.