The Washington herald., 1908-01-26
Big FIGHT IS NOW ON
Government Opens Contest
to Regulate Commerce.
CHARGES AGAINST RAILROADS
Suit Directed by Attorney General
for Dissolution of Alleged Illegal
Combinations by f. III. Hartman,
Railroad King, and Jacob III.
SchiR, Otto Kahn, and others.

The most important railway suit un-
dertaken by the government since the
/ Northern Securities case, early in Pres
ident Roosevelts administration. is about
to be launched against the Hartman
lines in the West
The action will be instituted in the
! United States Circuit Court at salt Lake
City early this week, probably to-mor-
row or Tuesday c. a. Severance, Of St.
| Paul. one Of the special counsel for the
/ government, is now on his way to Salt
/ Lake
! The governments action is in the form
Of a bill in equity to dissolve the alleged
merger Of the Union Pacific and the
! Southern Pacific and the San Pedro. Los
! Angeles and Salt Lake road Also, the
| government viii undertake 10 have de
clared illegal the ownership by the Union
Pacific or the Oregon Short Line of stocks
/ in the Santa Fe, the Great Northern, and
/ the Northern Pacific roads The latter is
a new departure in the administration $
! prosecution of railroads
/ Named as Defendants.
Besides the railway companies. the
Farmers Loan and Trust Company. Of
New York and several individuals are
/ named as defendants. The individuals are
/ E. II. Hartman, Jacob II. Schlff, Otto II.
Kahn, James Sullman, Henry c. Frick,
Henry II. Rogers, and William A. Clark,
who are charged with having Conceived
and carried out the conspiracy complained
/ Of"
This statement was issued by Attorney
General Bonaparte yesterday;
The Attorney General has directed that
a bill in equity be fled to set aside the
control by the Union Pacific Railroad
Company and its subsidiary corporations
/ Of the Southern Pacific and the san
/ Pedro, Los Angeles and Salt Lake road.
/ also 20 have declared illegal the owner
| ship by the Union Pacific or the Oregon
Short Line Of stock in the Santa Fe. the
/ Great Northern. and Northern Pacific all
/ Of said lines being competitors of the
1 Union Pacific
The Interstate Commerce Commission
/ some time ago conducted an Investigation
4 into the relations existing between the
various lines of road engaged IN trans
continental traffic. The conclusion of
/ the commission after such Investigation
was summed up i'm a report which, with
the testimony. was submitted 10 the De-
paTment OF Justice for its consideration
From the evidence so adduCed and from
Independent Investigation the department
has arrived at the conclusion that the
stockholders Of the Union Pacific and
its subsidiary company in the other cor
pOratiOns mentioned above. is In direct
violation of the sherman act
The Testimony In Hand.
1T appears by the testimony in pos
session Of the department that a combi-
nation was formed about the beginning
of the year 1901 by Mr. E. H. Hartman.
Of New York, the president and chairman
Of the executive committee of the Union
Pacific, and certain of his associates. for
the purpose Of obtaining a monopoly of
all transcontiuental transportation busi-
ness.
The first move made was the ac-
QUESTION of sufficient stock Of the South
ern Pacific Company to insure its con
troll. That company owned a line Of
railroad, extending from New Orleans.
and points in Texas on tide water.
through California to Portland Greg: also
another line from ogden, Utah, TO san
Francisco.
The Southern Pacific had been for
years one of the principal competitors Of
the Union Pacific. AS the result OF such
control by stock ownership, the manage
ment Of the two companies has been
amalgamated and, since 1892, a majority
Of the board of directors Of the South
ern Pacific have been members of the
board Of directors Of the Union Pacific.
Competition between the two companies
has been substantially eliminated
The San Pedro. Los Angeles and Salt
Lake road was projected as an independ-
ent line bY Mr.. W. A. Clark and his asso-
ciates, 10 run from San Pedro. on tide
water, IN California, through Los An
geles, 70 Salt Lake City, having con
nection at that point with the Union
Pacific and with the Gould system.
After the work Of construction was in
progress, the parties in control of the
Union Pacific, by means of harassing
litigation, designed TO prevent the acquisi-
ton Of necessary rights of way, and by
threats Of paralleling the line if con
structed, induced Clark and his associates
to abandon the scheme Of an independent
road and join with the Oregon Short
A1Al4Er ldhlIlB over tam TRACK owned or
controlled by that company in Southern
Utah and Eastern Nevada, and giving to
the Oregon Short Line an equal stock in
terest in the San Pedro. Los Angeles and
Salt Lake road with that held by Clark
and his associates.
Other Contracts Made.
In addition, traffic agreements and
other contracts were made between the
San Pedro and various corporations in
cluded in the Hartman system, so-called,
which depTives the San Pedro Of its in
dependence and makes it in effect a part
of the same system
las TO the Santa Fe. which is a com
peting line with both the Union Pacific
and Southern Pacific, it appears Mr.. Har-
riman and his associates acquired suffi-
cient interest in the Santa Fe so that
two members of the Union Pacific board,
to wit Messrs. Frick and Rogers. be-
came, and still are, directors of the Santa
Fe, and the Union Pacific as a corpora
ton, purchased and still holds a large
block of Santa Fe stock. As the result
of the close union between these lines.
competition has to a large extent been
destroyed. The oregon Short Line is also
a holder of a large amount of stocks Of the
Northern Pacific and Great Northern
Dot