The Washington herald., 1907-07-18

It is not unlikely that the next radical
step taken By the Department OF Justice
in its prosecution of the trusts will be a
suit aimed at the practice of railroad
I corporations in acquiring shares of stock
in other railroads.
The Interstate Commerce Commission
has recently expressed the opinion that
this practice should be broken up. and
that new legislation Is necessary 70 ac-
complish that end. Milton D. Purdy. as
sistant 10 the Attorney General. and un-
der Mr.. Bonaparte. the chief prosecutor of
Illegal corporations, believes that the al
! legged evil is fully covered by existing
law.
The particular cause of complaint
against the acquisition by railroad com
panies OF the stock Of other railroads was
/ the Hartman case, the report on which
was made public few days ago by the
/ Interstate Commerce Commission. X was
shown TO the satisfaction of the commits
sion that the buying Of stock in supposed
/ Is competing roads was responsible for
many Of he evils brought 10 light by the
/ Hartman Investigation. and Chairman
/ Knapp IS among those who declare that
such purchases should be absolutely pro-
hibited by law.
Friendly Feeling Results.
Mr. knapp believes that even the ac-
/ QUESTION Of a small block Of railroad
stock by another railroad is sufficient In
many cases 10 create such a friend, at
titude on the part Of each railroad toward
the other. and to bring about such q
community of interest" that the spirit Of
| true competition is destroyed.
Chairman Knapp and. so far as known
the other members Of the commission do
not hold that the present interstate com
merce and antitrust laws are broad
enough 10 cover the alleged evil OF which
they complain, and they will probably
urge President Roosevelt TO recommend
10 Congress next December some new
legislation to cover railroad stock pur-
chases by railroads. Mr.. Purdy, and
possibly other officers OF the Department
Of Justice, believe, on the other hand.
that the broad language Of the Sherman
sct viii cover the case now in question.
This opinion is based on the comprehen-
sve terms Of section l. which declares
that every contract in restraint of trade
or commerce among the several States
is illegal
Necessary TO Prove Restraint.
It Is admitted by officers OF the De-
partment Of Justice that !t would De
necessary in every individual case 10
prove that the purchases Of stock re-
suited IN a restraint Of trade" and
this seems TO sustain the reluctant
opinion Of Chairman Knapp that the
stock purchases are not, in themselves.
Illegal Mr.. Knapp would have these
stock purchases prohibited on the
ground that they tend toward limita-
ton Of competition, but he does not be-
lieve that they can be stopped under the
present statutes except where it can
clearly be shown that they have resulted
directly IN an impairment of competition.
The question of how far The present
laws are adequate TO deal with the con-
ditioa complained Of might possibly be
settled, or at least discussed. before the
courts. If the administration should de-
eide 10 bring a prosecution against +. H.
Hartman on criminal grounds Il is
cited by Chairman Knapp that although
the Union Pacific Railroad proper is not
a great railroad system. the acquisition
Of stock In other lines by the Hartman
interests has been such that a great
combination destructive of competition
has been built up; and that these trans
actions have In some cases been such
that the law cannot offer a remedy.