New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-04-05

II that the money was expended as it had been
purposed when the issue was made. Mir. Cravatn
replied that the remedy sought would not be OBJ
tanned by the latter method, and that there was
little misuse OF the money after it was once in
the treasury.
In his argument on the Chicago & Alton transac-
lions Mr.. Cravath attempted to show that;
First-They were conducted lawfully
second-They were conducted openly; that with
nublicfty was given all of the essential facts and
that these facts have at all times been accessible
10 tho stockholders and investors in Chicago &
TbirdThey were in accordance with the approved
methods which were at the time in vogue In re-
capita liking other railroad companies and large IN
oqS1Ta tbTbev were conducted for the equal bene
fit of all stockholders, and there was no olscIll"-
FiFth0While the Chicago & Alton transactions may
be regarded typical of class OF hnalciai d
actions which have been common IN the pass, anu
which have generally been regarded as proper IN
spite of whatever oass fTre as Class there is
no for singing out for spec2i cLtISls hoI
they were conducted.
SALE TO SYNDICATE.
Regarding the sale to the stockholders syndicate
at the time when Messrs. Hartman Could schA
and stillman represented 81 per cent of the stock
holders Of $40 100000 of per cent bonds at 70 per
cent. and they were disposhs OF thehl al - "''N
above Mr.. Cravath said:
The bonds were sold on a AS basis In other
words the effect Of the sale. SO far as the COM
pany was concerned, was precisely the same as II
) per cent bonds had been sold at price slightly
above par Would any one question the proprlety
Of 6Ef S9ga AT p astn Per cent O0HuS
rates Is which prevailed in 1900 and Of the great de-
mand for bonds which were savings bank invest
SEQ oOOO0O of per cent bonds sold by the company
at Co. were resold by the stockholders at an aver
profit TO the stockholders much greater than was
inasmuch all the stockholders shared pro rata
in the purchase of the bonds and in the oppor-
tunty for profit. As matter of fact, the members
of the syndicate who elected to hold the bonds as
Investment have to-day very small profit
as. owing to the change in investment conditions
the bonds are now selling at but small advance
over the o p rs bonds e 1d soc 10 stock
holders at less than market value has been very
recently provoked adverse comment.
Concerning the Of $s6OOyOOo OF the proceeds Of
the sale Of the sS2CO0OoO bond issue pay divi-
dend of so per cent to the stockholders Mr.. era
vath said that this was merely carrying out the
purpose of the old management and represented
only part of the earnings invested in permanent
improvements.
Commissioner Harlan wanted to know If in
reality the whole business not merely the ac-
ceptance OF opportunity recaptazs rail-
road get the profits and leave the people upon
whom It unloaded to get out the best they
could. Mr. Cravath said that 1t was taking an
opportunity to apply business methods TO prop
erty. with a view Of increasing its value
Mr.. Lovett had Mr.. Cravath. presented
statistics showing the effect OF the recapitazation
but the principal point brought by these in the
oral proceedings that the figures did not agree.
The counsel spent time in explaining to Com
missioner Lane who raised this point. wherein the
basis on which they had been collected. differed.
PURCHASE OF SOUTHERN PACIFIC.
To Mr.. Lovett was assigned the task OF intro
ducng the argument regarding the alleged viola
ton Of the Sherman antitrust law by the Union
Pacihc's purchasing the Southern Pacific. After
stating that this not another Northern Sc
curites case in that the Union Pacific and the
Southern Pacific not parallel lines he made
the following statement 10 the basis of the con-
tention that there had been no violation of the
act of 1890, which foroids entering into contract
combination or conspiracy IN restraint Of trade
We hold that in so far as there restriction OF
competition the volume Of traffic was so small as
legal significance we go further and saw that IL
that traffic had been larger. and there had been
Violated because the object was not 10 suppress
competition but for the acquisition OF property.
To this Mr. Mnburn added later that should II
be held that the Sherman Antitrust Jaw forbade
the acquisition Of property IL it suppressed compeu
ton every railroad system in the United States
would be declared illegal
Mr.. Lovett contended that the purchase Of the
Southern Pacific by the Union Pacific was not an
other Northern Securities case because whereas
the Northern Pacific ana the Great Northern were
contiguous as well as parallel. the distance from
the Union Pacific lines 10 the Southern Pacific lines
Is fully thousand miles while there are many
other railway lines in the intervening territory
He also entered on argument 10 show that the
Union Pacific purchase OF the Southern Pacific had
been in every way legitimate and legal and not in
pursuance of a conspiracy, a was the case in the
northern Securities case. In the case Of the Union
Pacific and Southern Pacific there vas a purchase
RIGHT TO MAKE PURCHASES.
Mr. Loyett asserted with emphasis that no court
had ever held that bona hde purchase BY one
company Of the stock Of another was in violation OF
the antitrust act There could be no curtaiment
Of the right 10 buy property under the anti-trust
act even though the purchaser was a corporation
suppose the motive of the purchase was 10 get
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