Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-04-05
Mr., M|LBURN CLOSES
Submits General Propositions
as to the Antitrust Act.
REAL PURCHASES EXEMPT
Restraint of Trade, He Claims, Would
Be Merely Incidental.
GOVERNMENTS CASE OPENED
legality of Mr. Harriman's Operations
Being Considered by the Interstate
Commerce Commission.
REAL PURCHASES EXEMPT
GOVERNMENTS CASE OPENED

John G. Milburn. the last Of the Hartman
legal forces to have his say before the In
terstate commerce commission, closed his
argument today relating to the comb!na-
ton Of the Southern Pacific and the Union
Pacific lines. He declared that the Sher-
man antitrust law had no bearing on the
case because the acquisition OF the Union
Pacific and the Southern Pacific were out
right purchases by the same individual or
group of individuals. He laid down the
following general propositions:
/. A restraint of trade to be within the
anti trust act must be direct, fmmeolate
and necessary effect Of the transaction. ana
not merely an indirect or incidental result.
2 restraint of trade consequent upon
purchase of property. in any OF It's various
FORMS is Incidental merely and therefore
not within the act
3 The purchase must, of course. be real:
if a mere device for the suppression or COM
petition as 1t was held to be in the North
ern Securities case. while 1t may pc Ell
fective to operate upon the legal title as
between the parties. It Is, In 1act' unSuo-
stantial and may be disregarded
L. Provided the purchase be real ana
substantial the motive which induces IT
cannot affect the result. for any resultant
restraint of trade Is still only consequential
and Incidental to the exercise of an abso-
lutte and undoubted right; that Is, the right
to acquire property.
). Therefore. the purchase by railroad
company, within its corporate powers OF
an interest in another line of railway. Is
not within the act. because the restraint
upon trade. If any, is not direct, but merely
Incidental to the purchase.
8 IT, however. the purchase by rail-
road company. within it's corporate powers.
of line of railway made to suppress COM
petition. be obnoxious to the act, that re-
suit does not follow if the purchase be
n4f44
of the purchasing company.
I. In any event purchase by rail-
road company of an interest in line Of
railway which is not parallel and Compel
ing is not within the act.
& The purchase by the Union Pacific of
its interest in the Southern Pacific was not
made to suppress competition. but to pro-
tect its property by extension of its line
in that way to the Pacific coast.
9 The Union Pacific and Southern Pa
ciiC are not parallel or competing lines or
systems.
Propositions Elaborated.
This summary proved to be the outline Of
his entire speech. and he followed its pres
entation with an elaboration. giving special
attention to the contention that the pur-
chase of the Southern Pacific by the Union
Pacific was legitimate business transac-
ton. and not in any way in contravention
or the antitrust law. He said that if the
laws of the state by which the Union Pa
cihce was chartered had prohibited such
purchase 1t could not have been legiti-
mately made. but that in no event could
the federal antitrust law be held appli-
cable.
He commended that the main purpose of
the purchase had been to gain a through
line from Omaha to San Francisco and
declared that there had been no subter-
huge about the deal or hidden motive in
IT. IT had been bona fide purchase and
could not be criticised a business trans
action from any point of view Having
no purpose of preventing competition it did
not fall within the meaning of the Sher-
man law.
Calling attention to the fact that Mr.
Harriman's purchase of Southern Pacilic
stock had occurred at the same time as
has purchase of Northern Pacific stock,
Commissioner Lane suggested that the two
transactions might indicate a purpose to
control competition in transcontipental
business. but Mr.. Milburn said that the
record in the case indicated no such pur-
pose-the two transactions being independ-
ent and separate.
A Reasonable Inference.
"But is 1t not reasonable inference
that the primary purpose was to get con-
troll of these three great transcontinental
lines for the control OF rates?' MIR. Lane
asked but Mr.. Milburn would not consent
that any motive had been shown in the
purchase of Southern Pacific stock except
to get the line from Ogden to San Fran
cisco.
Taking that portion, it must also take the
line from New Orleans to San Francisco
and Portland Moreover. the negotiations
for the Southern Pacific stock had cen be-
gun long before an effort was made to OBJ
tain Northern Pacific stock.
ANY other theory is a mere dream" he
declared
III ii is a dream. it is not the dream of
this commission, but of Mr.. Hartman" re-
Sponded Commissioner Lane, and Mr.. Mil
ned aft emf to hn IN,
whether the Union Pacific and Southern
Pacific are parallel and competitive. He de-
claTed they were not.
In reply To Commissioner Clements. Mr..
Milourn said IL was his contention that
purchase such that made in this case,
even though IL does effect a restraint of
trade. is not controlled by the antitrust
act II was sufficient IL there was a pur-
chase He would not. however go to the
extent of expressing an opinion to what
should be said in case monopoly is cstab
lshed.
MIR. Hartman" said the commissioner,
stated that but for the restraint of the
laws he would take over the Santa Fe.
and that he would get control of the
Northern Pacific. Suppose he had carried
out this plan and also controlled the ILL.,
nois Central. he would thus control all the
lines running into Oregon and California
Does he rot acknowledge that he was
Checked by the restraint of the law"
Hartman a Dreamer.
Mr. Milhurn replied: II don't think that
too much stress should be laid on such a
remark. Mr.. Hartman was not speaking
from legal point of view. but was ex-
pressing an idea he had in his mind and
which cannot be carried into practical
operation except through government own
ership-from which God save US, His am
bition was mere dream
In further answer to the question he
elaborated the views already outlined and.
with an appeal TO the commission not to go
too far In disturbing existing business rela-
tions. closed the case LOT Mr.. Hartman.
The Government Contention.
Special Attorney C.. A. Severance made
the first address for the government, Civ
Ing his first attention to the contention that
the Sherman antitrust law does not cover
the Union Pacific-Southern Pacific deal be-
cause IL a purchase. He said that the
DECISIONS of the Supreme Court afford suffi-
cient REPUTATION of this contention He also
entered upon an argument to show that 1t
- not necessary that roads should be par
ailei we'll competing in order to rem
der the law applicable.
Would Have a General INQUIRY.
Mr,. Miiburn complained of the course OF
the commission in singing out the Harri-