Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-04-03
CASE GOES 10 JUDGE.
End of Argumentsin Southern
Pacific.
FORAKER'S ARGUMENT
AGAINST PUBLIC POLICY TO DE-
sTRoY COMPETITION.
He Contends That the Two Roads of
Right Should Be Active
Competitors.

NASHVILLE. Tenn, April 3.-The hear
ing of the argument in the Southern Pacific
case was resumed today before Judge Lur-
ton. Court adjourned yesterday while the
closing arguments in the case were being
made by Senator Foraker for Talbot j.
Taylor and Company.
Senator Foraker in reply to a question by
counsel for the defendants at the opening
of todays session as to why the suit was
not brought in New York, said it would
| have been quite convenient for the COM
plainants but that the suit could not be
instituted against a corporation in a dis
trict where it had no residence He said
the complainants in applying for an injunc-
ton wished the court to compel defendants
to do what 1t Is their duty to perform
Judge Lurton then asked Senator For
aker to state what other relief was desired
| in the event an injunction was not granted
as prayed. Senator Foraker replied that
the injunction was asked to prevent the
voting of the stock held by the Union Pa
cific at the coming meeting on April 8, and
to prohibit the leasing or severing of the
Central Pacific. The speaker then took I'D
the question of competition, and said that
both roads had common terminus at Port
land, and that they are competitors in
| transcontinental traffic. The affidavit of
Traffic Manager Stubs was read. to the
effect that If the Union Pacific wished to
divert business from the Southern Pacific
1t could be done by changing the tariffs.
Senator Foraker's Query.
Senator Foraker said that no better proof
of competition than this could be given, and
that by a change Of rates business could
be sent over the former road
IF they are competing lines" said Sena-
tor Foraker. what are the rights Of bona
fide minority stockholders? This suit was
brought to ascertain the rights Of stock
holders and compliments argue and insist
that the corporation should have a board
| fluence of any other line and who would be
devoted singly to the interests Of this COM
pany.
while this injunction was seeking to
prevent the execution of a contract" said
Senator Foraker, 'the compliments con-
tend that this contract is illegal. There
was no redress for wrong done by one
corporation to another unless the act COM
planned of was illegal, and there would
! have been no illegality in this contract
had it been entered into between the d.
rectors of both companies acting solely for
the particular interests they represented.
Senator Foraker insisted that the contract
was Illegal for the reason that it was in
| contravention of public policy and against
such acts some remedy should be had. The
statement that the Southern Pacific was
being improved for the benefit of stock
holders was no answer and that the de-
PENDANTS were doing wrong honestly was
no defense. y 'a'fa
Rights of Stockholders.
1.-The law" said Senator Foraker. will
not tolerate repusnant4 trusteeship. The
courts in all such matters have taken the
position that stockholders have a right to
have the property managed for their inter
ests.'' ---,-sa--- ---.---- ----..---------- 3D..
The speaker said that while there were
allegations in the bill which had not been
supported by evidence, there was not one
recklessly idly made
The defendants had said that they had
no intention of Severing the Central Pa
cif1c from the Southern Pacific, yet they
had spent $50 200 900 in improving it. They
wanted a through trans-continental line
from Chicago to San Francisco. Certain
improvements had been made but not one
word had been said in court concerning
them. The earnings of the Southern Pa
cific. over and above operating expenses
and fixed charges. were being spent on i'm
provements, and these sums amounted to
many millions.
One could not help thinking that If tho
Union Pacific had no idea now of acquiring
the Central Pacific the time might come
when they would think of 1t, and this
would be when they had made the road
more valuable, and should they decide to
sever it from the Southern Pacific it could
be done in five minutes by a resolution
adopted at meeting of directors.
The cutoff in Salt Lake, said Senator
Foraker, would cost $13,OO0.OO0, and yet
saying a word about this cutoff or the tun-
mel through the Sierras. He spoke of the
recent fall Of a section of the cutoff into
the lake to show the impracticability Of
the scheme.
Senator Foraker said that it was not
necessary for the complainants to show
that the defendants were doing wrong.
but to show that they might do it. A
change in tariff rates would work detrf-
ment to the stockholders Of the Southern
Pacific.
rbo
der advisement by Judge Lurton shortly
after noon. The decision will be an
nounced in Louisville next Monday.