The Birmingham age-herald., 1911-06-25
HARTMAN LINES
 WIN 4 B|G VICTORY
 OVER GOVERNMENT
The Eighth District Circuit Court Holds That Mer-
 ger Is Legal
THE RULE OF REASON
 COMES INTO PLAY
Majority Opinion States Suppression of Competition Is Infinitesmal and Cites Recent Supreme
 Court Decision

Court Decision
 St. Louis, June 24.-The govern ment's petition to enjoin the Union Pacific Railroad company from contn- uing to control the Southern Pacific Railroad company was dismissed today by the United States circuit court of the Eighth district. Judge Elmer B. Adams wrote the majority opinion which was concurred in by Judge San born and former judge, now Supreme Court Justice Van Deveenter. Judge William c. Hook wrote a dissenting opinion
 1 The decree was entered at Salt Lake City, where suit was filed February 1906, and the opinions were handed down in St. Paul, Salt Lake City and here. Judge Adams found that the 1 railroad merger, engineered by the late Edward H. Hartman and his associates In 1901, and subsequently, did moi amount to direct and substantial re- straint of trade, interstate or internal He found that the suppression of competition between the Union Pacific and the Southern Pacific was infinite small and unimportant. In connection with this feature of the decision Judge Adams cited the recent Standard oil decision in which the rule of reason was first laid down by the United States supreme court.
 Judge Hook in his dissenting opin- ion, said the majority opinion "so ,s greatly narrows the act of CongressS that very little is left of it when ap- piled to railroads" and that under the tests which the majority opinion was based on the Union Pacific could have lawfully purchased control of all the great railroads of the United states.r' Judge Adams prefaced his opinion with the statement that the govern ment must prove the restraint in trade l alleged in the bill to be substantial in l character the direct and immediate effects of the combination. The gov ernment he said later. failed to prove this.
 The Only Question
 The majority decision was mailed to the clerk of the court here. Accord ing to this opinion the only question was this Was the Union Pacific l company extending only from Omaha and Kansas City on the east to Ogden on the west, a competing line prior to 1 901 for trans continental business with the Southern Pacific company whose line extended from New York on the east over the sea to New Orleans and thence by rail to San Francisco and Portland on the west?' While the Union Pacific was entirely dependent upon Southern Pacific for | its connection westward the Southern Pacific was not at all dependent upon the Union Pacific for its connection eastward" read the majority opinion. Our conclusion" continued the opin- ion, "is that all the facts of this case, considered in their natural, reasonable l and practical aspect and given their ap- propriate relative signifcation do not make the Union Pacific a substantial competitor for ans-continental busi- ness with the Southern Pacific in or l prior to the year 1901.
 "We therefore pass to a considera- tion of some less important matters relied upon by the government to es- | tablish destruction of competition be- tween those companies. Certainly the desire to appropriate the trifling business done by the South ern Pacific the minor lines or to l suppress a competition in traffics which was in the aggregate of such small proportions could not have been the in spiration of the vast outlay involved In the purchase of the Huntington stock. It did not amount to direct and sub stantial restraint of either interstate or l international commerce. This Is not suf- hcient to bring 1t within the consid eration of the antitrust law. "This concludes consideration of the effect on the transaction chiefly relied | upon by the government in this case. | But 1t is contended that the pur- chase by the Union Pacific of con | trolling interest in the stock of the | Northern Pacific company was also vio- lative of the antitrust law.
 Control Lost
 "Without dwelling on the reason for the purchase of this stock, disclosed | in the preceding statement of facts, is is suffiicent to say that if any con- 1 trolling interest was thereby acquired | it was lost some time before this suit was instituted and that none of this | stock is held by or for the Union Pa | cific company.
 l "As there is no showing of any like | ambitious project in this respect for the future, we fail to discover any op portunity or reason for the injunctive relief on this account"
 The court held also that the invest ment of the Hartman lines in the Santa Fe was not for acquiring control and that if 1t was for obtaining inside information | concerning the operation Of a great com- petitor they chose lawful way for do- ing it
 ''The conclusion of facts disposed of this case" the opinion concluded. with ont the necessity of determining the ques- .I ton whether securing control of the Southern Pacific company by purchas- ing stock of individual owners could in any view of the case have contravened | the antitrust law. Of the facts of this | case with all their reasonable and fair inferences, we conclude that the gov ernment has failed to substantiate the averments of this bill
 MT. Justice Van DeVanter. while a circuit iudge participated in the hear ing delberation and conclusion in this case and now concnrs in this opinion.
 "The bill must be dismissed and a de- cree will be entered to that effect"
 The merger. according to the court. did not cause a change in rates, no complaints of discrimination and no conspiracy. Con- 1 corning those features the opinion reads:
 "The proof shows that after l9ol as well as before, the rates for transcon-
 tinental traffic were the same over both
 the Union Pacific and Southern Pacific lines.
 There has since then been. with re-
 spect to either of these lines. no im- Il >~-~~~-~~~>~~~-~~-~---~ ---~~~~~~-~~~-~-~~~~~.
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