New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-01-26

| Western Union Companies, on the one hand,
| and the American Union aud the AtIant'c anu
Pacific Companies the other, which it was one Oh
the principal objects OF the proposed cOnsonGa'ion
to put an end to. Mr. Chandler says also tnat tne
| receipts of the Western Union and Atlantic an9
| Pacific Companies during the year 1880 amounted
to about 10000, 000 and that be Is informed I1ag
| the receipts OF the American Union Company oio
| not exceed $S0O,OOO
| AFFIDAvITs FROM THE WESTERN UNION.
| Grosvenor T. Lowrey followed Mr.. Wheeler. and
on behalf of the Western Union Company read the
| anidavits of its president, DR.. Norvin Green,
John u. Van Every, the acting yice-president
| William Holmes, the superintendent OF the larih
Bureau, and the afidavits. of Edwin ID. Morgan
| Augustus Schell, Samuel F. Barger and Hamilton
| Mex. Tw0mbly, directors Of the company. D:
Green denies the conspiracy or combination" nj
Legged and declares that the negotiations for the con-
| sodation of the companies wer6 conducted LOT tne
| sole purpose of obtaining from the American union
| and AtanGc aud Pacific Companies lawful sale
OF their properties rights and accordingly
| tho agreement mentoned above. lie donles that
the consolidation is for tue purpose OF increasing he
rates of teleRraphing and ssserts mat 10 nus oeei
il will have the opposite effoot. de also sets iorCh
| that the agreement made in strict compliance
with all the requirements ut the statute; that the
expressions of opinion in the complaint and tine am
davit OF Rufus Hatch concerning WI at constitutes
| the value OF telegraph property are falaclous
and misleading" that the poles and ndr,n wires
constitute only part OF the value of such proper
| ties when established. DR.. Green concludes bis
| actu al property now held by the Western Union
| Company together with that which it will acquire
by said agreement fully justes the increase OF It's
capital stock stipulated IN said agreement" 49,
Mr.. Van Every asserts that In 1868 the western
Union Company took leases OF several other com
panies and entered into engagements to issue ITS
stock for the stock of those companies, Tor which
purpose the stock of the Western Union Company
was issued as to stand as about S4O.0OC.OOO;
and that between 1856 and 1868 the company con-
nued to issue its stock in exchange for the stocks
of these companies until the amount reached
SAL, O73. 410-at which 1t was fixed and now re-
mains. He also asserts that since 1858 the COM
pany has made expenditures for new property TO
the amount of more than $16,75O,00O.
William Holmes declares that the rates OF the
Western Union Company have been reduced from
time 60 time with reference to competing lines, but
much more frequently without any such reference.
and that this reduction has varied from to 70 per
cent. He asser s that tho Western Union Company
continued reduce Its rates after the organization
OF the American Union Company at points where the
latter had no competing lines. Inc reduction maze
since the establishment of tine American
Union Company average 70 per cent Inc above
named directors of the Western Union Company
mai the affidavit of Norvln Green their own and
deny in the positive terms conspiracy or cou-
bnation to deiraud the stockholders, OF for any
other illegal purposes No other papers on behait
of the companies presented TO the courts. -,
Mr.. SewelI asked 10 be ollowed to read tine an
davis of Abraham Allen anu seventeen other per-
sons in answer those read on behalf of tho COM
panies. The substance OF the aihdavlts Is TO the
effect that tue sales made by telegraph amount 10
hundreds uf millions year. and that any act inter
ferllg with the facilities OF teegraphng 10 dlerent
points of the United States would DO injurious 10
trade and commerce, and that cOnsO ldation
OF the companies would have this effect.
Ar. Lowrey objected to tue reading of tue affidavit
OF Mr. Allen on the ground thai 1t contained moth
ing IN answer to those offered on the part OF the
companies, but merely cumulative Justice
Barrett Oyerrdled tue objection
THE Arguments.
The papers on which the application was based
being now all before the Court, Mr.. Sewell opened
the argument for Mr.. datch. lie began with the
statement that there was issue on any material
facts between the parties to the suit that IL was
merely a question OF law whether the directors
of the American Union Company could strip
r corporation Of all capital and stock and leave
nothing but q mere corporate entity with paper
name. This, he held was ultra wires and beyond the
powers of tho corporation lie referred 10 an al
LEGGED statement IN ono Of the afidavits offered by
Mr. Swayno on the part of the American Union Com
pany. that Mr. Gould had entered into a scheme
TO make 'rool OF 100000 shares Of Western
Union stock IN the expectation that the shares
wnud rise in tho market when the consolation of
the compani. should have been effected.
rise 20 correct the gentleman" interrupted Mr..
mon a correct state of facts. The scheme To make
a pool OF the Western Union stock vas not as
serted 20 have been made by Mr. Could but by his
own cl,ent. MI Hatch"
"In that cas,.A rep ied Nr. Sewe 81 must re-
tract my statement. hut certainly understood the
abatement IN the affidavit differently"
Mr. Sewell then confined. undlsturbcd. saying
that the act upon which the COMPANIES relied for the
validity Of the agreement OF consolidation was |
passed III 1870 when the telegraph companies were |
corupgrai vry local and isolated ORGANIZATIONS. ard
that IFS object WAS I" make possible the establish
mont Of "a national ~ stem of tolegraphy by authouz-
ing companies within tins Stale To buy the stock of
companies without the State and pay for I In their
own stock. The statute did moi contemplate such |
case rs this tho Western Union Company hpd al |
ready extended Its lines over the lOeo i the Unled
States and the absorption OF the american Union |
Company would tend not To an increase to the pub
lie of the facilities for telegraphng hut to monop-
DIV. Mr. Sewcll held that according to the NEST |
liberal construction OF the statufo sale
only Of the property OF the American Union
Company was authorized. but that the
agreement was not a sale Tho money was not to
be paid into The the treasury of the company, but
was to be deposited with the Union Trust Company
10 be distributed by il among the stockholders.
Moreover. tho additional TiOO00OOO OF stock to
he issued by the Western Union Company was not
nil IN payment OF the property received from tue
American Union Company, but about h2o,OOoUOO
went back 10 tho stockholders oil the former couI-
Mr.. Sewell also asserted tina the American Union
Company had been organized under contract nc
cordinC 70 which it was to remain an independently
company and that even the statute might be deemed
To authorize such act rs that complained or sun
it could not. and did not make the agreement uh,er
which the stock OF the company was held Invalid.
Mr. SsWel further urged that the statute author
ized sale only in case of telegraph companies dong
business in any OF the states o. Tue Onipn au tn
proposed Of rights and property both IN Canada
and in The territories Of this country. DIT: Sewell
urged finally that the proposed consolidation WAS
against the interests of trade and commerce, and, us
such prohibited by law.
Wager Swayne opened the case for the American
Union Company with the statement that Mr. iiatch
took issue in his complaint. not so much with the
proved acts purpose OF the companies AZ with the
statute and powers of the Court He urged that the
third PRAYER OF the complaint asked that tho COM
panies be restrained from amalgamating their CON
Germs without fulfilling condition precedent,
without which tho law declares Their action
void; that it asked the Court. without any
suggestion that the companies are preparing
tHn atntnfe hu lie esser force of ChnnccrY and TO