The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1912-03-13
union and S. P.
MERGER APPEAL
CASE IS OPENED
Attorney General Files Brief of
Argument Against Judgment
for Railroads
Common Control Attacked and
Court Asked to Order
Dissolution


ernment's fight to split the merger of
the Union Pacific and Southern Pacific
systems opened today in the supreme
court of the United States. Attorney
General Wickersham and his special
assistants. Frank B. Kellogg and Cor
denio A. Severance, filed a comprehen-
sive brief of their argument to be made
orally in court soon after April |.
| In addition to the brief of arguments,
a second brief of 500 pages was re-
quired to set forth the facts in the
case.
| The court was told in the second
brief that the railway combination now
sought to be dissolved originated with
| Edward H. Hartman, Jacob II. Schif
and associates. 1t brought under a
common control the government said.
| the Union Pacific, the Southern Pacific,
the San Pedro, Los Angeles and Salt
Lake, with various ocean steamship
lines. among which was the Pacific
Mail Steamship company, which forms
a part of the Panama route from New
York to San Francisco; in addition it
secured an influential voice III the
manag cement of the Atchison, Topeka
and Santa Fe railway.
Criticism for Court
The government criticised severely
the circuit court of appeals of the ninth
circuit, which dismissed the petition for
dissolution of the merger. Judge Hook
alone dissented.
The brief says that the government
can not understand how the court
below got the impression that the gov
ernment did not aIiege that the Union
Pacific was a competitor of the South
ern Pacific for any business originating
nearer than 1000 miles or more away
from its lines.
This statement is contrary to the
claim in the petition and in argument"
says the brief, .'and is contrary to the
evidence of scores of witnesses"
Question of Competition
The decision is attacked because the
court held the Union Pacific could not
! pc d tOnipCAfloi VI tiC >-ohtitSIn uNlIils
| by reason of the fact that its traff7c
moved to California points over the
Southern Pacific from Ogden.
"Is 1t possible?" asks the brief, that
the Union Pacific, with its thousands of
miles Of railway and steamship lines,
Portland and San Francisco, has no
appreciab1e effect on commerce in it's
competition with another complete sys-
tenn reaching the same general terri
toryT'
The government maintains that the
two railroads could not be competitors
unless the competitive business could
be handled by them wholly over their
| own rails. Instead of there being no
| impairment of service, the government
says that the merger resulted In gross
increase of rates. prevention of con-
struction of new lines into competitive
territory and sensible deterioration
of service.
Rule of Reason Opposed
The government attorneys contend
that the rule of reason" applied by the
court in the Standard Oil and Tobacco
cases was not to be applied in passing
upon this merger.
The court did not decide that where
| IT appears It is a restraint upon two
great systems OF competing roads," said
the government, 1T is proper for 1t to
| substitute its Judgment as to whether
such restraint is reasonable or un-
reasonable. Such restraints were de-
clared illegal in these cases"