The Logan Republican. [volume] (Logan, Utah) 1902-1924, 1912-12-28
UNION PACIFIC
MERGER CASE

.i
The supreme court of the United States is the
final authority in this country regarding the mean
ing of the laws. Good citizens accept its interpreta
lions and applications of them without cavil COM
plant. 1t Is in this spirit that its decision holding
illegal the merger of the Union Pacific system and
the Southern Pacific company should be received.
The court says that under the Sherman antitrust
law the combination of these railways is in un-
reasonable restraint of trade and therefore unlaw
full That settles the meaning of the law as it ap-
plies to the Hartman system; but when the su.
preme court settles that the law is this or that, 1t
does not follow that this settles what the law ought
to be. perfectly valid law in the constitutional
sense may be a very bad law in an economic sense
The consequence OF its economic defects will be to
do harm. And this is what will be the result in
this spirit that its decision holding this instance,
says the Railway Age Gazette.
The court holds that prior to the acquisition
of the Southern Pacific by the Union Pacific there
substantial competition between these roads.
Their consolidation eliminated this competition and
in this the illegally of the combination consists
The competition interfered with in the making
of rates and in the rendering Of service. Was the
competition in rate making good thing? Economic
opinion says 1t not. When railways compete
in the making of rates they always compete hard
for the business Of big shippers than of little
shippers, and the result is unfair discrimination in
favor of the big shippers. Competition in price
making of any kind, to be enecve, must ordinarily
be accomplished by secrecy to the prices made;
and the competition is rate making which the
consolidation of these roads tended to reduce often
took the form of the making OF secret rates. Pub
lie opinion concurring with economic opinion, de-
cided that unfair discrimination and secret rates
and rebates which were the direct results and the
principal instruments of competition in rate making
an evil Therefore, congress passed and the
interstate commerce commission is enforcing legis-
lation which prohibits secret rates and unfair dis
elimination. The day that this legislation became
effective competition in railway rates was abolish
ed. It never be revived, except by repeating
the legislation that destroyed it. Nobody favors the
repeal of that legislation It follows that this de-
csion cannot have the slightest tendency to restore
the competition in rate making which 1t is held
the combination of the Union Pacific and the Sou
thern Pacific unlawfully tended to destroy. There
are numerous trans-continental lines including the
Canadian Pacific, the Chicago, Milwaukee st.
Paul the Gould lines, the Great Northern, the Nor
thern Pacific, the Union Pacific system, the South
ern Pacific system and the Santa Fe. There is no
competition now in rate making between the South
ern Pacific and the Union Pacific on the one hand
and the other transcontnental lines on the other.
On what rational grounds can any one think, then
that competition is going to be restored by taking
two of these roads, which are under the same
control and putting them under separate control?
The second kind of competition with which the
combination is held to have interfered is competi-
ton in service Unlike competition in rate making
competition in service still exists throughout the
country. The very destruction Of competition in
making has tended to increase competition in
service, because when two more roads make the
same rates between the same points, the only
means left to them for attracting business from
each other is rivalry in service. There probably is
keener competition in service between the trans
continental lines today than there ever before.
Their service probably is better than it ever was
before Is this decision going to increase that com
petition? 1t is hard to how it can. Even II 1t
does it is questionable If the results will be bene
fetal For the more competition in service there
is the more It costs to render the service and the
more il costs the railway TO render the service the
more in the long the shipper and traveller are
going to have to pay for it.
While the decision probably will have little or
tendency to accomplish the results sought by
the Sherman Act-namely to restore and stimulate
competton-it will, 1t would SEEM make 1t neces-
sary to operate the Union Pacific system and the
Southern Pacific system by different arrangements.
The result must be to destroy the organization for
operating the entire system which was built up by
Mr.. Hartman and has been modified and developed
by Judge Lovett Mr.. Kru,tschntt and their asso-
ciates. This operating organization has achieved re-
markable results. It has developed the physical
properties to high state OF excellence has greatly
improved the service rendered by the associated
lines and has az the same time worked them eco
nomically. No one questions the high efficiency OF
the operating organization OF the Hartman system
The efficiency that has been attained has been due
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