The Birmingham age-herald., 1911-07-18
SEPARATE RAILWAY AND COAL COMPANY Attempt to Dissolve Read
 ing Corporation
NEW MOVE IN FIGHT
Action Similar to Lehigh Valley Government Determined to Sep- arate Coal Carrying Roads
 and Coal Companies

| Washington. July TIA government l suit to compel bona fide ds-association of the Reading Railway company from |, the Reading Coal company was filed to- day in the federal court, Philadelphia The action parallels asrecent one against | the Lehigh Valley and Is the govern | ment's second move in its new fight to separate the coal carrying railroads from their virtual control of the coal busi- ness.
 The governments suit takes the form of an amended complaint to the original commodities clause action of 1908, which is In conformance with the commodities clause decision of the supreme court. 1 It is charged by the government that the Philadelphia and Reading Coal and Iron company, the Fulton Coal company. the Locust Gap Improvement company, | the Fremont Coal company, the Mammoth Vein Coal and Improvement company, the Preston Coal and Improvement com pany and the Delaware Coal company are merely dummies of the Reading Rail- way company and the Reading company, which Is the holding corporation.
 
 ernment charges that the Reading Coal company and its subsidiaries are buying anthracite from independent Operators along the line of the Reading railway, with the object of removing competition, transporting it to market at loss and there regulating the selling price. If the. coal company loses on such transactions. the government alleges that the railway company may profit from the freight charges.
 As a further evidence that the coal company Is not a bona fide corporation but a mere adjunct of the railroad and a device for evading the commodities clause of the interstate commerce law, the government charges that the officers of the railway company and the coal company are the same and that the rail- way company has advanced more than s7o0oo,ooo to the coal company, which is carried as an open charge. The govern ment cites that the railway company ha1 paid as high as per cent for money fop the coal companies operations, while the coal companies have seldom paid any in- terest at all and never more than per Ctut to lHe TdllWdy company.
 Company's Formation Traced The governments bill traces the for nation of the present Reading holding company. It rectes how the Philadelphia and Reading Railway company in 1S9S acquired the National company, a Penn- sylvania corporation of s50,000 capital but with no property or business, increased it's capital from $50000 to $l4O,O0O OOO. changed its name to the Reading com pany and made it holding corporation. Aside from the fact that holding cor poration is involved, the suits parallel the one against the Lehigh Valley When the Lehigh Valley suit was begun it was considered to be an action of little im- portance and more or less friendly suit. It is now that the department of jus tice intends to fight for a strict com pliance with the terms of the commod- ties clause by all the coal carrying rail- roads,
 Philadelphia, July 17.-Attorneys for the three Reading companies appeared sur prised when informed tonight that the government had instituted action to dis associate the Philadelphia and Reading company and the Philadelphia and Read ing Coal and Iron company In the min-
 ing and transportation of anthracite coal. George F. Baer, president of the three Reading companies. and no one else, in authority would talk of the suit
 While the action is an amendment to the suit brought some years ago, 1t ir practically a new move. When the origi- nal suit was brought against nearly all the anthracite roads the Reading rail- way and the Reading Coal and Iron conn., pany were named among the defendants.
 The Reading, in it's answer to the gov ernment, declared that the Reading Rail- way company did not own one share of Reading Coal and Iron stock: that tho stock was owned by the Reading com pany. holding corporation, and not a transportation company. When the final argument came up the Reading com panies were not called upon to defend themselves and the decisions of the cir cult court and the United States su- preme court did not include the Reading companies.