New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-05-05
AGREEMENT CANCELLED
SOUTHERN PACTFIC'S 4CT.
Traffic Contract 1cith San Pedro
Line 4brOgated.


reached the Interstate Commerce Commission
to-day Of the cancellation of traffic agreement
entered into on June IS. 1903. between the
Southern Pacific Company and the San Pedro,
Los Angeles & Salt Lake Railroad Company.
In the opinion of the commission the abroga-
ton Of the agreement IS Of tho highest impor-
lance. The facts concerning It We're developed
at the inquiry recently conducted 10y the COM
mission into the relations Of the Southern Pacific
Company with other corporations and were
made the subject Of much discussion. It was
known TO be the opinion OF members Of the
Interstate Commerce Commission that the agree
ment was IN restraint of traffic and that it
might subject the officials who entered into II
10 prosecution under the Sherman antitrust act.
Notice of the abrogation of the agreement was
received by the commission in a letter from r. s
Lovett Of New York, general counsel OF the
Southern Pacific Company Mr., Lovett assigns
as the reason for the cancellation Of the agree
nent the enactment of statute by the Cali
fornia Legislature which prohibits contracts re
stricting competition. Mr.. Lovetts letter fol-
lows:
New York, MAY 3, 1907.
Interstate Commerce Commission, Washington
Gentlemen: The California Legislature. al its
last session, enacted statute che text of which
- Ol 800 "ei-l-tS!, a. titi,,e an,
pfohlbt contracts restricting competitions anu
counsel Of the Southern Pacific Company III
that state and of the san Pedro. Los Angeles x
Salt Lake Railroad Company advise mat me
validity OF the contract dated June Is, 1903. be
tween the Southern Pacific Company ana me
San Pedro, los Angeles & Salt Lake Railroad
COMPANY designated Traffic Agreement,
would be open 20 question upon the taxing ell
feet of said act. In consequence Of such advice,
the two companies named agreed 10 abroSate.
cancel and aTnul, and have entered into an
agreement, dated April -, l9et aoTogatlnS,
CanCeliing and annung the said agreement l
inclose herewith \ copy Of the said agreement.
dated april u, 1907.
AS the contract of June is. 1903, was intro
ouced IN evidence and was the subject or more
or less discussion in the inquiry recently con-
Quoted by you into The relations between the
Southern Pacific Company and other corpora
tons II seems proper that should inform you
Of its cancellation.
am sending a copy OF the inclosed agree
ment, ana OF this letter 10 Nessrs- Kellogg g
Severance, at 81. Paul Very respectfully,
r. S. L0VETT. Counsel
The agreement referred TO by Mr. Lovett pro-
vides that for good consideration TO each by
other paid, the receipt whereof IS hereby ac-
lrowledged i is covenanted and agreed by and
between the parties hereto that said agreement
between the parties hereto of date June IS,
1903, and each and every part thereof be and
the same is hereby cancelled. abrogated and
nuI!ed. so that no part OF the same shall here
after be Of any binding force or validity be-
tween the parties heretofore or otherwise"
FACTS BROUGHT OUT AT INQUIRY.
It will be recalled that part Of the commits
sion's inquiry into the operations Of the Harri-
man lines. including the Southern Pacific COM
pany was conducted at Los Angeles In that
inquiry J. Ross Clark. an official Of the San
Pedro line arc a brother of ex-senator w. \.
Clark president Of the San Pedro road, adj
1rlitted on the stand that he understood, when
the traffic agreement made between his
road and the Southern Pacific, that for ninety
nine years on the class Of traffic mentioned in
the agreement the San Pedro officials could not
make 4 change Of rate without the consent Of
the Southern Pacific. Mr.. Clark further said
that that provision vas. not put into the agree
nent at the instance OF his line The examina-
ton then continued:
Commissioner Lane-KYhy. did you consent 20 the
making 81 Z contract with that provision in?
Mr.. C!ark-Why. that let into Southern Cali
fornia. There is provision IN there that hey
they interchange with the Santa re company.
Now. ar time we had probably little more
than 100 miles or ca-lroad IN southern CaIIcTnia,
and that would give us access, by interchange TO
300 additional miles slrea2y constructed by the
Comr7issi5re- Lane-iou say that lets You into
Southern California. Could YOU not have got in
M C.arS-In time, yes sir-at an enormous ex-
pense. Those lines were already constructed and
in operation
In response to further inquiries. Mr. Clark
said the contract applied only to local traffic
that is. traffic picked up IN California and laid
down within the state.
When his attention was called TO a clause of
the contract which provided that no change
should be made IN the rates unless such change
be made necessary by some requirement OF state
or national law, and he was asked by Mr.. Sew
erance. of counsel for the commission. if that
did not show clearly that il never the in
tention that the provision should apply 10 traffic
local in the State of California. Mr.. Clark after
some urging, said he would not undertake to