The Olneyville times. (Olneyville [Providence, R.I.]) 1887-1917, 1912-12-06
BLOW STRUCK.
R. R. MERCER
New Haven May Be Forced to
Lift Monopoly.
HARTMAN LINES DIVORCED
Court Holds Combination illegal Be-
cause 1o%o of Traffic is Com
petitive-The Decision
is Far-reaehine.

Washington The greatest blow
which the United States government
has yet struck at the domination Oh
any railroad empire, embodying mon
opolistic tendencies, by one man or
group of men, was delivered when the
supreme court handed down it's de-
cision in the famous Hartman merger
suit, and declared the Southern Pacific
Union Pacific merger illegal.
The decision is one Of the most
far-reaching ever rendered by the su-
preme court. The famous Northern Sc
curities case, of 1904, was, in its ulu-
mate application, Of limited scope. The
current decree is broad extension OF
the principles embodied in the deci-
sion in the Northern Securities case.
But it not only breaks up the combin--
alton, which the late +. II. Hartman
built up, but in it's ultimate applica-
ton, il may result in the shattering OF
the dreams of a Mellen in New Eng
land: of a Cassatt, in the Pennsylvania
field, OF a Vanderbilt, in the empire
dominated by New York Central; and
of a Baer in the field in which Read
ing is the greatest single factor. In
the decision lie potentialities for
shake up in the American railroad.
world, such as has never before been
seen, or even imagined
vital point is the fact that the de-
cisicn in favor of the government is
based on the fact that under inde-
pendent control 10 per cent of the
total Union Pacific and Southern Pa
cific traffic would be competitive. Such
an application could easily result in
rending asunder the stockcontrolled
lines of many great railway systems.
An impressive feature of the courts.
action was that it was directed by a
unanimous bench Associate Justice
Van de Vanter did not take part in
the hearing, bus his eight judicial col
leagues all assented to the views eX--
pressed by Associate Justice Day.
This case came to the supreme court
on an appeal by the government from
q decision Of United States circuit
court sitting in Utah dsmissing the
governments bill to declare the merg-
er a combination in restraint of trade.
Of the main question involved,
whether the Union Pacific actually OBJ
tanned control of the Southern Pacific,
the hearing, but his eight judicial col
tentions that at no time did the Union
Pacific acquire majority of Southern
Pacific stock; that at first it acquired
only 81 per cent, which was increased
subsequently until about 46 per cent
of the stock is now held.
"In any event." says the court, this
stock did prove sufficient to obtain
the control of tho Southern Pacific. It
nay be true that in small corporations,
the holding of less than majority Of
the stock would not amount to con-
troll, but the testimony in this case is
ample to snow that distributed as the
stock is among many stockholders, a
compact, united ownership of 46 per
cent, is ample TO control the operations
Of the corporation. This is frankly
admitted by Mr. Hartman, the prime.
mover in the purchase of the South
ern Pacific.
Among the combinations which
might be affected by the decision may
be mentioned the control by the New
York. New Haven & Hartford of the
Boston & Maine, and the Ontario &
Western, the former through the Bos-
ton Holding Company and the latter
through it's ownership Of $29, ,160, coo
of the s5S,117,9S3 capital stock.
The court lays down the dictum that
it does not make any difference
whether stock control is acquired by
resort to a holding company, as in
the Northern Securities case, or
through direct transfer of the stock
in one corporation to another. What
ever from is adopted "the domination
and control and the power TO suppress
competition" are acquired in one case
no less than in the other, the court
holds. and "the resulting mischief, at
which the statute is aimed, is equally
effective whichever form is adopted"
And the court makes the sweeping
assertion that "the statute in its terms
embraces every contract or combina-
tion in form of trust or otherwise, or
conspiracy in restraint of trade or
commerce"