The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1903-03-22
LATE PHASES OF
Mr., KEENE'S FIGHT
Sure Of Representation on
Southern Pacific Board
TEMPORARY ADVANTAGES
Bankers Identified With Standard oil
Interests Are Preaching Lower
Prices for stoeks-eates to
Appear Before Commission.
nY w. G. NICHOLAS.

New York, March N.-Interest grows
in the fight between James R. Keene on
one side and Messrs. Schiff and Harrl-
man, representing the Union Pacific. on
the other. The scope and Importance of
the controversy broadens as the situa-
ton is studied. Mr.. Keenes initial move
is an attack on the Union Pacific center
in securing q temporary Kentucky In
junction to prevent Hartman voting the
$50, 600 600 Union Pacific holdings of South
ern Pacific stock. and he feels that he
has. gained a signal victory. Whether
the injunction is allowed to stand or not,
Mr.. Keene Is sure of representation on
the Southern Pacific directorate. The
kentucky statutes allow cumulative vot-
ing by minority interests and Inat vi
give him place in the directorate. even
though he should be beaten in his pre-
liminary moves. The annual meeting,
however, will by no means enc the bat
tie, no matter which way 1t goes, for 1t
is the announced Keene purpose to pre-
vent If possible the further expenditure
of Southern Pacific revenues upon the
Central Pacific, which he contends Is
now part of the Union Pacific line
proper and natural competitor Of the
Southern Pacific.
Mr.. Keene is aiming directly at the
overthrow of the consolidation of the
two systems and bases his legal fight
squarely on the proposition that in eff
fecting this combination the Hartman
party has violated not only the laws of
Kentucky (under which the Southern Pa
cific was organized), but also those of
the states through which the several /
lines pass, and besides acting In contra
vention of broad public policy. The le-
gal points are laid somewhat along the
lines adopted by the state and federal
authorities in the Northern Securities
litigation, but Mr. Keene's case Is con-
sidered the stronger of the two from the
fact that the consolidation of Union and
Southern Pacific Is the more open. No
attempt is made to conceal the fact that
the two properties are operated as one
and under one direction, whereas in the
Northern Securities the pretense OF sep
arate official arrangements is kept up.
There Is no connection between the gov
eminent case in the north and the keene
case In the south. The latter is strictly
a private enterprise and can be forced to
a conclusion regardless of the jugglery,
mystery and suspicion OF good faith
which is beginning to attach to the
Northern SECURITIES AllBdlloH. hSic 10
very good ground for the suspicion that
the Northern Securities case will never
be brought to a finaity under the pres
ent direction. 1t is beginning to be UNI
derstood in Wall street that the railroad
companies recognize the weakness of
their position in antagonizing the stat
utes prohibiting a consolidation of com
peting lines. That knowledge Is the UNI
DERIVING bulwark of Mr.. Keene's pro-
ceedings against the Schiff- Hartman
party.
Mr.. Keenes attempts to prevent
blessrs. Schiff and Hartman from using
Southern Pacific earnings on the Central
Pacific main line recalls the fact that
the property he is now trying to save
was built largely at the expense of Cen
trail Pacific. Under the management of
Mr.. Huntington and his associates Cen
trail Pacific was starved for long period
of years and Union Pacific half starved
In order to build the Southern Pacific
line. The Schiff- Hartman policy now
proposes a reversal of the Huntington
scheme. These people are now rehabil-
itating the Central Pacific line at the
expense of the Southern Pacific. Mr..
Keene admits that this might be justice
If the Huntington people or their heirs
were paying the debt but as an inno-
Ct and new holder of Southern Pacific
stock he objects to having the Hunting
ton obligations saddled off on him and
his friends. lie wants Southern Pacific
earnings to go to Southern Pacific stock
holders or to be reinvested in the South
ern Pacific line, instead of III the up
building of a understanding himself to
feed the opposition. This is the nub of
the contention AS the fight de-
velops It will become increasingly inter-
esting to minority stockholders In all
kinds of corporations and it may also
end in settlement of issues of highest
public importance-the upbuilding or the
notification of the laws destined to protect
the people against schemes to kill COM
petition among railroads.
Preaching Lower Prices.
Leading bankers more or less identified
with Standard Oil finances have been for
several weeks preaching lower prices for
stocks. The burden of their discourse is
that people will not invest their money
In 3A and per cent securities and keep
AN AHSOIlITE NECEeSITX