New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-08-05
SOFT COAL TRUST SUED;
CONSPIRACY CHARGED
Government Asks Federal Court
to Enioin Combination from
Continuing Business.
TRADE RESTRAINT ALLEGED
Six Railroad Companies and
Three Bituminous Mining Con-
Germs Are Charged with
Crushing Competition.

CruShlng COmpeIltlOn.
Columbus. Ohio, Aug. 4-sut was hled by
tho United States government In the Feo-
eral Circuit Court to-day against six ran
road companies and three coal mining con-
Germs. charging a combination in restraint
Of trade and asking that the combination be
entoned from continuing business.
The government charges that the Hook
ing Valley Railroad amalganation' owner
ship Of the capital stock of the Toledo q
Ohio Central. the Kanswha 81 Michigan ana
the GAINESVILLE 2 Western roads and its
connection with the mining concerns named
has crushed competition.
The defendant companies are:
The Lake Shore & Michigan Southern
Railroad. the Chesapeake q Ohio Railroad.
the Hooking Valley Railroad, the Toledo
& Ohio Central Railroad. the Kanavha N
Michigan Railroad. the GAINESVILLE e. West
eru Railroad. the Sunday Creek coal Com
pany, tho Continental Coal Company and
the Ksnawha and Hooking Coal and Coke
company.
The governments petition alleges that
the combination thus formed affects four
of tho great coal mining fields. namely the
Pittsburg. the West Virginia, the Kanawha
Valley and the Hooking Valley.
II is alleged that the six railroads are
affiliated and that the three coal COM
ranies are also. not only among them
selves. hut with the railroad companies.
The Hooking Valley. the Toledo & Ohio
Central the Kanawha & Michigan and the
GAINESVILLE e Western were until recently
under control Of the trunk line syndi-
cate" The Sunday Creek Coal Company
is holding company. controlling the Con-
tinental Coal Company and other com
psnies owning properties IN Virginia. West
Virginia and Ohio.
The government purpose Is 70 prevent
the change ~ ownership agreed Oh last
wear. when the trunk line syndicate turned
over the four railroads and their affiliated
coal companies 10 the Lake Shore & Mich
igan Southern and the Chesapeake q Ohio.
the latter taking charge Of the Hooking
Valley. which is the principal one OF the
four roads.
To Break Alleged Combination.
The suit seeks further 10 break up en-
tirely the alleged combination between the
four roads and the Sunday Creek company
and it's subsidiary coal companies, which
had been complained OF by OHIO coal
operators FOR two or three years and
which has been the basis for innumerable
suits brought in county and United States
courts In Ohio.
Back Of the fight has been the Ohio
Coal Operators Association. ~ which
Howard Warrington. of Columbus. is
secretary. He laid the case before the
Department of Justice and President Taft
paf
action he brought. and the government
has been investigating conditions since
that time.
The whole suit hinges on the Hooking
Valley Railroad. The officials Of this COM
pany. IL Is alleged. we're placed in Offices
corresponding 10 those held in the parent
company soon after the Hooking valley
road gained control Of the capital stock
OF it's subsidiaries, and. according 70 the
petition. were Instructed 70 operate the
roads along tho same lines as the parent
company had been managed.
Competition stifled.
The company then set about controlling
the larger coal companies and succeeded
in placing the Continental Coal Company
which owns 5000 acres OF coal lands in
the Hooking Valley district on its list,
along with the Kanavha & Hooking Val
lev Coal Company The Sunday Creek
Coal Company was formed as blind. the
government charges 10 permit the Lake
shore & Michigan Southern Railroad and
the Chesapeake & Ohio. along with the
four Ohio companies. 70 sti1e competition
nv merging all the railroads and the prtn-
cipal coal companies in the state into one
corporation. while still retaining their own
individuality.
The majority of the capital stock Of the
sunday Creek company was held by the
Hooking Valley Railroad az the time it was
formed. according to the government petit
ZION hut was later turned over 10 the Cen
trail Trust Company OF New York In order
Ia avoid prosecution under the Hepburn law.
The consideration in this transfer was 81
and a mortgage for the full value Of the
stock. Another allegation contained in the
governments petition is thar the directors
on the board Of the Sunday Creek Coal Com
pany we're merely dummy directors, and
were instructed how they should vote and
conduct themselves at all meetings Of the
board.
Another element entering into the goveIs-
ment's perition is the trunk line syndicate
which from 1898 10 1910 dominated the
Hooking Valley Railroad through majority
ownership Of It's capital stock. What stand
the government will take regarding the syn
dictate is not made plain in the petition
Agreements Offered as Evidence.
Five agreements among the railroad
cor1pan MES. the coal companies and the Zen
trial Trust Company Of New York are Of
fered by the government as evidence in It's
netition. one Of these agreements. made
between the Continental Coal Company and
the Toledo & Ohio Central Railroad. stated
that in exchange FOR the coal oompanys
placing its entire capital stock, with the eX-
ception Of five shares, in the hands Of ]. p.
Morgan &. Co. as a guarantee Of its good
faith. and subject to the disposal, but not
Tho sale Of tho Toledo & Ohio Central Rail-
road. the railroad would take a block of the
coal company bonds off its hands and lend
: support.
Another agreement between the Hook
ing Valley Railroad and the Toledo &
Ohio Central was made, IL is charged. IN
which the former company was to pur-
chase one half the bonds OF the Contin-
entail Company. held by the railroad, and
20 accept one half OF the traffic Of the
Continental Company's mines.
Restraint Of Trade.
In conclusion the government prays the
court to adjudge the combination between
The railroad companies and the coal COM
NAMES unlawful and in restraint Of trade,
and To grant An injunction forever enjon-
ing them from paying each other dvi-
dends on tho stock they hold I'm the CON-