The Washington herald., 1907-03-03
WILL SUE HARTMAN
Government to Test Validity
of Some of His Acts.
SIMPLY A BANKING SYSTEM
Attorneys Believe They VIII BE Able
10 show That Union Pacific Corr
pOratiOn Is Really Huge Financial
Institution, Dealing ia the secuFI-
ties of other Roads in the West.

New York. March Much has been
said in the last few years Of the grip
which +. II Hartman was getting on
the railroads of this country by his sys-
tenn of stock operations and of the results
of il. The recent investigation Of Nj.
Harriman's operations by the Interstate
Commerce Commission has had the result
or bringing this out for the first time IN
evidence. That the result of this Will be
a suit by the Attorney General Of the
United States 10 test the legality of at
least some of Mr. Harrimans doings Is
certain, aside from whatever other re-
suits the investigation may have in the
way of corrective legislation.
The commission held hearings in New
York. Chicago, Seattle, Portland. san
Francisco. and Los Angeles. While the
hearings here were important as throwing
light upon Mr Harrimans stock deals,
they were not any more important. so far
as the purposes of the inquiry went, than
the hearings in Chicago and on the Pa
cifc Coast as it was at those hearings
most attention was paid TO the elimina-
ton of competition that, it is alleged. has
resulted through Mr. Harriman's acquisi-
ton of the Southern Pacific system and
the plan he has consistently followed, it
is charged, Of buying into any lines that
threatened his own.
simply n Banking system.
The resolution under which the inves-
tigation was held authorized the commits
sion to inquire not only into the Southern
Pacific deal, but into all of Mr. Harri-
mans purchases Of stock of other roads,
with a view Of ascertaining what effect
this had on interstate commerce. The
result of the investigation has been to
show, the governments attorneys be
lieve, that the Union Pacific and Oregon
Short Line, which may be virtually treat
ed as one concern, are no longer rail-
roads, but "A tremendous banking system.
An idea of what the size of this bank
ing system has become may be gained
from the evidence that since 1898 the sys-
tenn has purchased $1S3 0O0,O0O more Sc
curities than it has sold. and has out
standing more than 100000 Of obliga-
tiOns
While the development of this enor-
nous banking system. founded upon d
railroad system, is of interest in itself,
it is the effect it has had on rates
and competition between the great car
riers of the country that the government
has been interested in. The lawyers be
lieve they have proved that, first, COM
petition between the Southern Pacific and
Union Pacific two great railroad systems
across the continent. alleged to be par
allel. has been entirely wiped put; sec
Ondly, that as a result of the purchase
by this railroad banking system of stock
in the Atchison, Topeka and Santa Re
Railroad system. running from Chicago
to California, competition by the only
direct competitors of the Southern Pa
cifc and Union Pacific has been to ali
intents and purposes eliminated, and con-
tracts have been made for the division
of freight; third. that as a result of this
the State of California. though connected
by three great railroad systems with the
rest of the continent. is virtually at the
mercy of the directors of this bank
ing system; and fourth, that in all the
important connecting lines enough stock
has been bought virtually to control all
Of the tributaries to the transcontinental
lines Of the system.