The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-07-15
petition between

The Union Pacific and Oregon Short
Line have at each annual meeting OF
the stockholders of the Southern Pa
cific company since 1902 voted ma
jority Of the stock represented at such
meetings and have elected the directors
and other officers. For several years
last past the Union Pacific and South
ern Pacific have had a majority of
common directors, the same president,
vice president, director of traffic, direc-
tor of maintenance and operation, sec
rotary, treasurer, comptroller, auditor,
legal department and other chief Off
Gals. Whereas formerly the two COM
panies had separate commercial agents
in the principal cities throughout the
United States soliciting traffic over
their respective lines they now have
common agents and solicitors who rep
resent the unified Union Pacific and
Southern Pacific systems. While the
Union Pacific, through the oregon
Short Line, does not own a majority
it appears by the testimony that its
control over it is, for all practical pur-
poses, as absolute as though 1t owned
every share; and it was admitted by
Mr.. Hartman that the Union PACING
controls the Southern Pacific.
Competition Eliminated.
Before the acquisition of its stock by
the Union Pacific. the Southern Pacific
company, with it's lines of rail and
steamships, was engaged in competi-
ton with the Union Pacific for traffic
moving between the Atlantic seaboard
and the Pacific seaboard and between
the Atlantic seaboard and Oriental
ports. Through their several connec-
lions by rail these lines were also en-
gagged in competition for traffic from
practically all points east of the Mis-
souri, river between the great lakes
and the Gulf of Mexico. From At
lantic sea board territory east of Buff
falo and Pittsburg rates have general
haan business
tined to the Pacific coast, whether
moving by the all-rail route, including
the Union Pacific and Central Pacific,
or moving by rail to an Atlantic port,
thence by water to New Orleans and
Galveston and thence by Southern Pa
cif1c rails to Los Angeles, San Fran
cisco or Portland Rates from this
same Atlantic seaboard territory on
traffic moving by the Southern Pacific
steamships and its rail connections to
Colorado common points have like
wise been the same as on traffic carried
by rail over the Union Pacific lines to
such points, and of such traffic there
is great and increasing volume 1t Is
doubtless true the competition which
previously existed was not as complete
as If the Union Pacific had a line of
it's own into San Francisco. instead of
turning traffic over to the Central Pa
cific at Ogden For all this traffic
there exists at present no actual COM
petition between the Union Pacific and
Southern Pacific lines.
Prior to the enactment of the inter-
state commerce law the Union Pacific
and Southern Pacific belonged to what
was known as the tranScontinental
pool, in which each was regarded as a
competitor of the other and was ac-
cordingly awarded an allotted percent
age of transcontinental business; and
tn ere is on file with this commission
contract made in March, 1893, known
as the agreement of the transcontinen-
tai freight rate committee, to which
contract both the Union Pacific and
the Southern Pacific were parties and
under which all of the traffic west OF
the Missouri river and passing through
the gateways of st. Paul, Minneapolis,
Sioux City, Omaha. Kansas City and
Sabine Pass, to and from California
and Oregon, was treated as competi-
tive transcontinental business.
Recommendations.
1. The function of a railroad
corporation should be confined to the
furnishing of transportation. Rail-
roads should not be permitted to in
vest generally in the stocks, bonds
and securities of other railways and of
ing lines, for the purpose of forming
through routes of transportation, in
Guiding branches and feeders. 1t is to
the interest of the public to facilitate
The credit of a railway company is
founded upon the resources and pros
perity of the country through which 1t
runs. Its surplus funds and credit
should be used for the betterment of
it's lines and in extensions and branch
es to develop the country contiguous to
it. The testimony taken shows that
about $4,000 square miles of territory
in the state of Oregon, surrounded by
the lines of the Oregon Short Line
Railroad company, the Oregon Rail
road & Navigation company and the
Southern Pacific company, is not de-
while the funds of those COM
panies which could be used for that
purpose are being invested in stocks
like the New York Central and other
lines having only remote relation
to the territory in which the Union Pa
cific system is located.
Railroad securities should be safe and
investments for the people. |
To this end the risks of the railroad
should be reduced to a minimum. Every |
one knows that railroad securities f1uc-
tuate more or less, according to the
of the times, and also by rea-
son of the wide speculation in such Sc
curities. 1t therefore adds an element |
of hazard to a railroads capital and
credit to have its funds invested in the
stocks of other companies, thereby en- |
dangering its solvency and its ability |
to pay reasonable dividends upon It's |
own capital stock. 1t is serious me-
mace to the financial condition of the !
country to have large railway systems |
The hands of receivers, and the object of
legislation and administration should |
be to lessen the risks of railway invest |
ments.
Break of Pernicious System.
q 1t Is contrary to public policy, as |
we'll as unlawful. for railways to ac- |
1uire control of parallel and competing |
lines. This policy Is expressed in the |
federal laws and in the constitutions
and laws of nearly every state in thei
Union We have examined the constitu-
lions and laws of all the states, and find
N about forty of them prohibitions
against consolidation of capital stock or
franchises of competing railways, or the
purchase and acquisition by railway
If competing lines. Competition between
of in