Albuquerque citizen., 1908-01-04
UNCLE SAM AND
H AR R | N A n
N'TAGREE
Mdgndte Changes His Mind
About DivOrCing the
Southern Pacific.

Washington, d. G.. Jan. At is
now generally conceded that all ne
gotiations looking to a peaceful se,-
element between the government and
f. II. Hartman have been broken
off. Mr. Hartman at first expressed
willingness to divorce the Union Pa
cific and Southern Pacific railroads,
both of which are under his control.
Later on he seems to have come to
the conclusion that he could defy
the government once more, and the
negotiations have been dropped.
Within a few days. unless some
word is received from Mr.. Hartman,
the attorney general will announce
the intention of the department of
Justice to file a suit to compel the
dissolution of the close relations now
existing between the Union Pacific
and Southern Pacific. 1t may be two
or three weeks before the suit ac-
tually is brought, owing, to the abb
sence in Europe at the present time
of one of the special counsel, who
Is particularly familiar with this case.
The suit naturally Will be nieG in
the west, and possibly at Omaha,
which is the natural eastern terminal
of the Union Pacific system, although
Kansas City would be equally advan-
tageous as a point or prosecution.
The general lines OF the suit will
be conducted on the principle estab-
lished i'm the Northern Securities
cases as result of which the COM
bination between the northern trans
continental lines was utterly brok-
en- up.
Real Point of Weakness.
1t was shown on the trial of the
case that the Northern Pacific and
the Great Northern were unquestion-
ably competing lines. Each system
ran east and west through the states
of Minnesota, North Dakota, Mon
tana. Idaho and Washington. Each
reached Duluth, Helena, Seattle and
other common points. The circuit
court found that these roads were,
and in the public estimation they
have ever been, regarded as parallel
and competing lines.
In the case of the Northern Sc
curities one great point at issue was
10 determine whether or not a hold
ing company created by the principal
owners of two competing railroads,
being a device expressly intended to
restrain and monopolize interstate
commerce by merging the interests of
the Northern Pacific and the Great
Northern railways, could prevail
against the law, which declares that
all devices of that kind are illegal.
The principles laid down by the
government We're: First, that the
Northern Securities company was a
III restraint Ol lnlSTSldlS
commerce; second, that it constitut-
ed monopoly under the second Sec
tion of the Sherman law, and third.
that the federal courts had authority
to prevent, restain, or otherwise pro-
hibit it.
HaTriman's Great Coup.
Hartman then had applied to the
combination to secure a joint inter-
est in the Burlington, because he
feared that much of its traffic would
be diverted from the Union Pacific If
the two northern lines secured its
control.
Hartman was promptly turned
down by HILL Morgan and their as
sociates, and then he made his fam
Gus coup as result of which he Sc
cured practical control of the Great
Northern, and its shares went sky
ward. He apparently was in control
of the Northern Pacific, but he could
not exercise his power, owing to an
extraordinary position. Morgan con-
trolled The existing board of direc-
tors That board under the charter,
had the power to retire all of the
preferred stock. Morgan and his as
sociates held the majority of the
common stock and Hartman was
soon forced TO see that if all the pre-
ferred stock were retired the Morgan
interests would once more control the
Northern Pacific. The result was a
truce, and within two or three days |
of the panic of May, 1901, the rival |
interests met in Harriman's own Of |
flee, as a result of which it was an |
nounced that the Northern Pacific |
would be left in the hands of Pier |
pont Morgan and that complete har- |
mony reigned between him and Har- |
riman.
Deadly Parallels.
From this little financial history II |
Will be seen that Hartman has been |
doing today what Hill and Morgan |
tried to do five or six years ago. They |
first proposed to combine the North |
ern Pacific and the Great Northern in |
the control of the Burlington. They |
did this by issuing securities of their |
two roads exactly as Hartman issued |
the bonds of the Union Pacific and |
its affiliated lines to buy out the !
Southern Pacific.
The direct community of interest |
between the Northern Pacific and |
Great Northern was first knocked out |
by the supreme court in the Pearsall |
case, and then Morgan, Hill, the pres |
ent assistant secretary of state, and |
Dan Lamont proceeded to organize |
a holding corporation, which is exact |
ly what Hartman is said to be con-
templating now. This was the North I
westernWestern Securities company |
which was declared by the supreme |
court Of the United States to be an /
illegal device in restraint of interstate !
commerce and as such prohibited by
law.
Cash for gunny sacks. all sizes:
wagon will call for them. Phone 16,