Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1913-07-25
ASK DISSOLUTION
TELEPHONE TRUST
GOVERNMENT FILES \ Suli
AGAINST BELL COMPANY
ON PACIFIC COAST,
The first OF ITS kind
Question of Forcing Competition in
Telephone Business Has Never
Been Brought up Before,

pollution OF the alleged telephone
monopoly on the Pacific coast by the
American Telephone X Telegraph
company-the so-called Bell tele-
phone trusts sought by Attorney
General McReynolas in a civil anti
trust suit filed here today. The gov
ernmcnt charges the giant corpora
ton ana its subsidiaries with absorb
ing independent telephone companies
to destroy competition and create
monopoly in oregon, Washington
Montana and Idaho in violation of
the S'hvlnGu law,
This is the first attempt ever made
to apply the federal antitrust statute
to the telephone situation. Telephone
companies have claimed that the tele-
phone like the railroad, Is
natural monopoly and that a single
system is conductive to the best inter-
ests of the public The department
OF justice contends that it is ques-
ton of public policy for congress TO
determine.
Wont Interfere With Probe
1t is declared that the suit filed to-
day will not interfere with the sweep
ing investigation proposed by the in
terstate commerce commission into
the general telephone situation to de-
ltl itiil.t W IL Allfi All' toIl'l illtAI law
should be invoked generally with the
purpose Of enforcing competition or
whether monopoly should be permit
ted or encouraged under regulation
similar to that of railroads. This
step was taken in the west because
the attorney general believed there
existed a peculiar situation demand
ing immediate attention to cure evils
said to have been brought about by
unfair practices and Illegal combna
tiCns.
The attorney general asks the court
to compel the Bell companies to re-
linquish control Of the Independent
TIL phone company of Seattle, the
Home company of Puget Sound, the
Northwestern Long Distance Tele-
phone company, the Interstate Con-
solidated Telephone company and the
Independent Long Distance Tele-
phone company, If necessary to ac-
complish the dissolution the court is
asked to appoint receiver for the
properties.
Attorney General McReynolds' we'll
known views that the pro rate dis
tributon of the stocks Of the Stand
ard oil and Tobacco trusts did not
bring about a real dissolution or these
combinations are strongly reflected
in todays suit in which he specifically
requests the court to require the al
legged telephone trust to dispose Of
the stocks. bonds and physical prop
critics Of the Independents ito persons
not connected with the Bell companies
as stockholders or otherwise"
To Restore Competition.
He asks for the restoration as far
as practicable Of mpetitive condi-
tions existing prior to the consolida-
tons and that the Bell companies,
their officers and agents be enjoined
from acquiring interest In or control
of the companies relInquished.
Aside from the American Telephone
and Telegram company. with n capt
tai of $393,2O9,925 par value and
assets Of 24.260.S1S, sixteen corpo-
rations and twenty-five individuals,
headed by Theodore \. Vail, are nam
ed as defendants.
The suit filed by United States
Attorney Clarence l.. Reames, was
prepared by Constantine J. Smythe,
special assistant to the attorney
general, under the direction of At
torncy General McReynolds. James A.
Fowler. assistant to the attorney gem
eral and G.. Carroll Todd, special
assistant.
An immediate Injunction or re-
straining order is asked by the gov
ernment to prevent any further stops
In pending foreclosure suits to trans
Ger the physical properties Of the
Northwestern Long Distance Tele-
phone company to the Bell company.
Unfair Methods
Bell companies by reducing rates
below a paying basis, by giving free
service ard by threats. 1t is alleged,
have forced several Independent
companies. forming links in the long
distance system of the northwestern
company to violate their contracts
for connections with the northwest
ern company and to give their busi-
ness exclusively to the Bell con-
Germs. In encouraging independents
to violate their contracts with the
Northwestern, iii charged that Bell
companies In some instances agreed
to pay attorneys fees and other ex-
penses incurred through possible
litigation.
Acquisition by Bell interests of the
Independent Telephone company Of
Seattle. a link In the Northwestern
system. It Is added. destroyed compe-
tition In that city.
The bill rectes the sale to the Bell
interests for s550.O00 for the Home
company of Puget Sound. although
the company was appraised at S2.-
927132. This concern. 1t is allegeS.
was acquired at a foreclosure sale
through contract with VIM. Mead
controlling the majority Of the stock
Of the Home. Mead, who organized
the Home with himself at the head
to represent holders of t1.317.s00, Is
alleged to have contracted with the
Eel interests not to bid at the sale
on behalN of the bondholders and
suffered the property to go 10 the
combination. receiving for his ser
vices, It Is declared, $4,000 and other
advantages
How II Was Done.
Mead. as treasurer of the North
western company. is alleged to have
entered into an agreement with the
Bell companies to procure for them
control OF at least two-thirds Of the
stocks and bonds and the physical
properties Of the Northwestern. "To
this end and in order To afford ground
for foreclosure sale. Mead" the bill