The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-06-22
Mr.. MORTON GETS
HIS WH|TE-WASH
President Gives Out Let
tersin Rebate Scandal.
WHY COUNSEL QUIT
Harmon and hudson. Wishing to Hol
Secretary OF Navy For Contempt
OF Injunction, Resigned when
Administration flushed the
Matter Up.
lBv thc Associated Press.)

(By the Associated Press)
Washington, June 21.-President
Roosevelt has taken occasion to ex-
press himself in most positive terms
complimentry OF the integrity and
ability of Paul Morton, former vice
president of the Atchison, Topeka q
Santa Fe Railroad, and now conclud-
ing his duties as secretary of the navy
that he may assume the chairmanship
of the board of directors of the Equit-
able Life Assurance Society. These
expressions are contained in two let
terS one addressed to the attorney
general and the other to Mr. Morton.
he letters were made public today
by the administration. together with
u pumher of others, which taken to-
gethef, show the precise point OF diff
terence between the Department OF
Justice and MessrS Harmon and Jud-
son, who recently resigned as special
counsel for the government in the re-
bate case involving the Santa Fe road
and the Colorado Fuel a. Iron Com
pany. The special counsel wished TO
bring contempt proceedings against
the officers of the road. which would
have included Mr.. Morton. Their po-
sition was that the testimony adduced
before the Interstate Commerce Com
mission established a violation of the
court order OF March IS. restraining
the company from executing any
agreement to transport inter state
tI,,tlc at rates lower than the pub
liShed tariff of thas road This testi-
mony. they contcnded. constituted a
prima facie case against the officers
of the road and the only way to ascer-
tain their guilt or innocence was
through contempt proceedings.
Attorney General Opposed.
Attorney General Moody opposed
bringing the contempt proceedings ol
the ground that White the evidence be-
fore the commission might show a
violation of the injunction by the road.
it contained nothing connecting any Of
ncer of the company with such viola
ton. President Roosevelt took the
same view. Both the President and
the Attorney General agreed that con-
tempt proceedings should be instituted
impersonally against the corporations
i'll both the Colorado Fuel and the In
ternational Harvester case. The LAT
ter case the President says stands en-
actly on the same footing and involves
practically all OF the Western roads.
The correspondence began with a
letter from Messrs. Harmon and Jud-
son to the Attorncv General dated Feb
ruary IS. last in which vas given q re-
view of the testimony in the Colorado
Fuel case before the Interstate Com
merce Commission, with the concluS'
ion that violation of tho injunction
has been shown. In part the letter
iIId
Persistent Violations by Road.
From August, 4J02, until Decem
Der, 1904, the railway company re-
ferred to- the Santa Fee, continuously
transported coal for the Colorado Fuci
:rs' IRON Company at less than the
published rates then in force, from
- % ~, II to!orado and else
where to Ell Paso, Texas. Deming. New
4,.,AIUv, and other places to which
such transportation was Interstate
commerce. This was done by secret
arrangement between the two com
panies under which the coal was ap-
parentiy billed at the published rate Of
freight, although in fact the price
Of the coal was included. The rail
road company collected the amount
shown by the billing, and paid over
part cf it to the fuel company as the
price of the coal. making the real
charge for transportation less than the
published rate by just that amount.
At the same time the rates given and
charged other shippers were the pub
liShed tariff rates without any deduc-
ton. This plan. and the way Il was
tention to deceive the government and
the public and to enable the fuel
company to gain monopoly of the
coal supply at the points involved by
giving them a strong advantage over
competitors in the actual cost of trans
portation."
The letter recited that only one of
the chief officers of either company
had been called as witnesses, and that
no immunity from prosecution could
be claimed by any of the other Off
GERS cf either company. No papers
had been submitted by the fuel COM
pany and consequently no immunity
could he claimed for It. Certain pa
pers had been submitted by the rail
road company. but only such as are
by law made public. consequently no
immunity claim would stand thereby
NeSsrs. Harmon and Judson recon-
mended that the railroad company
and all of its principal officers ana
agents, perhaps INCLUDING some SUB
ordinate officers and agents. be ar
raigned for contempt OF court in max
ing and carrying out the agreemen.
referred to.
Some further correspondence ensuei
ending in second recommendation ~
Messrs Harmon and .Tudson of con
tep1pt proceeding on the ground that
only by. judicial process could formal
proof be obtained to punish for con-
tor,rt Of court and also criminaiiy
Attnrney-General MOODY replied:
Before proceedings for contempt. or
criminal proceedings. against either