The Washington herald., 1911-06-25
HARTMAN MERGER
HELD TO Be LEGAL
Circuit Court of Appeals
Hands Down Decision.

st. Louis. June A-The United State,
Circuit Court of Appeals handed down
decision here to-day, holding the Har
riman merger Of the Southern Pacific
with the Union Pacific to be legal
Judge Hook filed b dissenting opinion
holding that the governments petition
was wen founded and should have beer
granted.
Suit Begun In 19OS.
The so-called merger suit against the
Union Pacific and Southern Pacific Rail-
way companies by the government was
begun on February /. 1908, In the United
States Circuit Court Of the Eighth dis
trict. The suit was fled as the result
OF a series OF Investigations undertaken
by the Interstate Commerce Commission
relative to- the relations among Western
railroads
The bill was fled against the Union
Pacific and auxiliaries, including the
Southern Pacific, Northern Pacific, Great
Northern. Atchison, San Pedro, Salt Lake
and Los Angeles, the Farmers' Loan and
Trust Company, and the following indi-
viduals: e. H. Hartman, Jacob H.
Schin, Otto Kahn, James Stillman, Henry
H. Rogers. Henry c. Frick, and William
A. Clark.
The basic allegation in the suit in equity
was that the individuals named had con-
spired to effect a virtual consolidation
Of the Union Pacific and other transcon-
tinental lines with the unlawful intention
OF restraining and monopolizing trans
continental commerce.
The court was petitioned to adjudge
,tolo Of
Sherman antitrust law. and to enjoin
perpetually the Union Pacific and its
auxtliaries from purchasing, acquiring,
holding, receiving, or voting as owner
any shares OF the Southern Pacific,
Northern Pacific, Great Northern. Atchi-
son. or Salt Lake line.
Not n Competitor.
In arguing the testimony in the case,
the chief bone Of contention was the
California traffic. The defendants argued
that the Union Pacific was not a COM
petitor with the Southern Pacific for
this California business; that It had no
control over this traffic by reason OF its
line to Portland and connecting vessels
TO San Francisco, alleging further that
this route required several days more
time than a direct rail system over the
Southern Pacific lines, and could not
possibly be operated without causing the
Southern Pacific to retaIiate by turning
the richer east-bound business over to
the Rio Grande at Ogden, Utah.
On these grounds the defendants as
serted that the Southern Pacific abso-
utely controlled California traffic before
the merger, and that purchase of a sub
Stantial amount of Southern Pacific
stock by the Union Pacific Company
amounted therefore to merely facilitating
he Southern Pacific's traffic from Ogden
70 Omaha and in no wise affected COM
Oetitive conditions
Much Of the suit was heard in this CITY
before Special Examiner Williams, of the
In June, 1905 Frank B.
kellogg, who gained considerable repu-
alton as trust buster" and C. A |
severance had charge OF the case for |
he government
Paul Morton n Witness.
The leading witnesses called were the |
ate Paul Morton. who was vice president |
n charge of traffic for the Atchison road |
rom BS5-19O4; Edwin Hawley, and Judge |
2 +. Loyett, the present head of the |
Hartman systems. In addition to these
nen, a large number Of other railroad |
nen and traffic experts were called as
witnesses for the government.
The final argument in the case was
eard on October IS of last year at ST. |
PAUL, where Mr.. Kellogg closed the case
or the government. In his final |
rgument he sought to prove that |
he Southern Pacific and Union Pacific
we're individual competitors and were, In
act, competitors before the merger, and
hat II the Union Pacific did not now
xercise the powers of ownership over
he Southern Pacific, by virtue OF stock
the two roads would now be
ompetitors.