Los Angeles herald., 1909-01-07
MAGNATE TELLS
OF S. P. MERGER
EDWIN HAWLEY WITNESS IN
DISSOLUTION SUIT
COMPETITION GENERAL BEFORE
BIG ROADS COMBINED
Union Pacific Compelled to Use Lines
of Santa Fe or the Texas
Pacific in Southern
Traffic

NEW YORK, Jan. 6.-Edwin Hawley
of this city, president of the Iowa Cen
traI Railway company and of the Min
neapolis & St Louis railway, and a.
director in several other roads, includ-
ing the Western Pacific, was the first
witness called by the government to-
day in the hearing of the action to
dissolve the merger of the Hartman
roads.
Mr.. Hawley said he had been in the
railroad business for forty years, hav-
ing become connected with the South
ern Pacific in 1883.
Mr.. Hawley was questioned concern
ing transcontinental business of the
Union and Southern Pacific at the time
OF the alleged merger. Mr.. Hawley
said that he was general eastern agent
of the Southern Pacific at first, and
that he had Jurisdiction over the Nor
gan line Of steamers which was used
as a part of the Sunset Route.
Competition among the rival rail-
road companies before the formation
Of the merger, he said, was general.
He declared that he always opposed
the consolidation Of the commercial
agencies Of the Union and Southern
Pacific railroads.
On cross examination counsel for
the government asked Mr.. Hawley if
1t were not absolutely necessary for
the Union Pacific to use the Southern
Pacific line in transcontinentaI trade.
Could Divert Traffic
Mr.. Hawley replied the Union Pacific
did it. He said it was quite possible
that if the Union Pacific attempted to
force an issue with the Southern Pa
cific the latter road could divert it's
traffic at Ogden to the Denver e. Rio
Grande. D..
In it's southern traffic he said the
Union Pacific has always been obliged
to use the Atchison, Southern Pacific
or the Texas Pacific.
In reply to questions as to whether
the Southern Pacific was not a domi-
nant factor in transcontinental traffic
and practically has controlled the
rates, the witness said the Southern
Pacific was an important factor and
that even freight shipped directly by
way of the Texas Pacific and Union
Pacific had to be turned over to the
Southern Pacific at the terminals.
He denied that specific agreements
as to rates had been made prior to the
merger, but said there had been dis
cussions as to the division of rates be-
tween the various roads over which it
passed.
The witness said freight could be
shipped from New York to San Fran
cisco by an all-rail route which would
avoid the use of the Morgan line Of
steamers from New York to New Or
leans.
Canadian Road Tried /.
The Canadian Pacific tried it, he said,
some years ago. Separate agencies
were maintained by the Union Pacific
and Southern Pacific, he said, in New
York, Boston and Philadelphia.
Mr.. Hawley said the Southern Pa
cific, Union Pacific and Oregon Short
Line were included in an agreement or
pool which existed for transcontinental
rates a few years ago.
Henry c. Ely, general agent of the
Trunk Line association for thirty
years, was the next witness. Counsel
for the government asked him to bring
from New York to California and the
west in the period between 1888 and
1901, so as to show how much went by
rail and how much by steamer.
Mr.. Ely said: 1.-THE Morgan line got
mad about something and quit report
ing about 1901. I did nothing about it.
That was up to my superiOrs.'
Frank M. White, auditor of the
division of rates and transportation of
the interstate commerce commission,
presented a statement on commodity
rates between points east of the Mis-
sissippi river and California terminals.
This showed that the rates charged on
the various lines were about the same.
Shows Western Rates
Whites statement also shows the
rates from New York to San Francisco
and other California points by way of
the Mallory and Morgan lines and the
all-rail lines. Such differences as these
were, the witness said, insignificant
items.
Charles Throckmorton, a stock broker
and former soliciting agent for the
Southern Pacific, testified that prior to
the date Of the merger had been COM
petition, but after 1901, when the mer-
ger was effected, this competition had
been eliminated, at least in part.
Although the Southern Pacific had
controlled one of the links of the all
rail route via ogden it had, prior to
the merger, solicited business indepen-
IDENTIFY for the Sunset route, which it
controlled exclusively, the witness said.
The Union Pacific was working ac-
lively to secure patronage for the Og-
den route, Mr.. Throckmorton declared.
Attorneys for all parties agreed to
put on record the testimony by E. H.
Hartman before the commission. This
action was taken to indicate that Mr..
Hartman would not be called in the
present suit.