The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-12-02
In an Opinion Handed Down by
the Supreme Court.
CASE WAS STARTED IN 1903
Deal Was Made by Hartman in
1901 and 1909.
The Government Was Defeated
in the Circuit Court.

court today. in opinion announced
by Justice Day. held that the Union
Pacific Railroad company. by the ac-
QUESTION Of stock in the Southern Pa
cific, had effected a combination in
violation Of the Sherman antitrust
law. In announcing the opinion. Justice
Day said:
This court reaches the decision that
the Union Pacific and Southern Pacific
systems, prior to the stock purchase.
were competitors engaged In Interstate
commerce, acting independently as to
large amount Of such carryine trade.
and that since the acquisition OF the
stock in question. the dominating power
Of the Union Pacific has suppressed
competition between the systems and
has effected a combination in restraint
of interstate commerce within the pro-
hibitions of the act.
In order to enforce the statute. the
court is required to forbid the doing in
the future of acts like those which are
found to have been done in violation
thereof and to enter a decree which will
effectually dissolve the combination
found to exist in violation of the
statute.
Points OHt Remedy
The decree should provide an in
junction again the right to vote this
troll of the Union Pacific company OF
any corporation owned by it, or while
held by any corporation or person for
the Union Pacific company and forbid
any transfer or disposition thereof in
such wise as to continue its control.
and should provide an Injunction
against the payment OF dividends upon
such stocks while thus held, except to
a receiver to be appointed by the court
which shall collect and hold such divi-
dends until disposed of by the decree
of the court.
As the court below dismissed the
government bill it was unnecessary
there to consider the disposition OF the
shares of stock acquired BY the Union
Pacific company which acquisition We
held, constituted an unlawful cOmbi-
nation in violation OF the antitrust
act In order to effectuaIly conclude
the operating force of the combination
such disposition should be made sub
ject to the approval and decree OF the
court. and any plan for the disposition
of this stock must be such as to ef-
feCtuaIy dissolve the unlawful combi-
nation thus created. The court shall
proceed, upon the presentation of any
plan, to hear the government and de-
PENDANTS and may bring in any addi-
tiOnal parties whose presence may be
stock in conformity to the views here
in expressed"
History of the Case.
The governments fight against the
Union Pacific merger began in 1905
In that year Attorney General Bona
parte filed in the United States circuit
court for Utah a petition to split the
ira ranscOntinental railroads brought to-
gether by Edward H. Hartman This
powerful combination was alleged TO
be in violation Of the Sherman anti
trust law.
Hartman. Jacob H schif. Otto Fl.
Kahn, James Stillman. Henry H
Rogers, Henry c. Frick and william
A. Clark were named by the govern
ment as the creators of the com bina-
ton and the supporters of its exist
ance- The allegations set forth in the
petition stretched over the develop
ment Of the entire nation and went
far into the years of the past Circuit
Court Judges SanbOrn, Van Devanter.
Hook and Adams were called to pass
1n the suit.
The governments case was built
largely around the purchase by the
Union Pacific Railroad company in
1901 and 1902 of As per cent of the
stock OF the Southern Pacific company.
-eferred to as ordinarily a controlling
interest The main line of the Union
Pacific extended from Kansas City and
Omaha to Ogden By subsidiary COM
1anies. it reached Portland, Oregon.
Ind thence by steamers. San Fran
;iscO and the Orient The Southern
Pacific had a line by sea and land
I tAAA view OEh 10 san EanClSCO and
Portland by way of New Orleans. and
)wned the Central Pacific extending
rom the terminus of the Union Pa
,if1c at ogden to san Francisco
Two Questions Presented.
Two weighty questions were pre-
ented by this phase OF the case. The
irst was a question Of laW-Does the
outright by one railroad
company Of the controlling corporate
tCck of another result in a combfna-
ion in violation of the Sherman anti
rust law2 No case seemingly had
risen which decided the point. Judge
Hook reached the conclusion that
ince it had been decided in the North
m Securities case that the holding Of
he stock Of two companies by a third
vas a violation of the law. therefore
he holding by one OF those two OF
he stock OF the other must likewise
,e q violation But Judges Adams
IAN Devanter and Sanborn did not
ASS on this question because they de-
ided the case against the government
n the second question
The second question was whether
ne Union Pacific and the Southern
'acific were competitors for San Fran
ented Witnesses to show the TIVE
ompanies before the merger main
aimed rival soliciting agents in the
asst and that they were comm ercfaIiy
egarded as competitors for transcon-
mental business The court reached
he conclusion that the question OF
-hether they were competitors was not
o be decided entirely as a matter OF
act governed by testimony, but was
artially a question OF law As
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