Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-03-16
Lovett Announces Inability to
Suit California Railroad
Commission.
TO MAKE THIRD TRIAL
TO BREAK S. P. MERGER
Railroad Expected to Forfeit Mil
lion Dollar Commission to
Banking Syndicate.

ST LOUIS. March 15.-The Union Pa
cifc and Southern Pacific dissolution
plan which contemplated a traffic agree
ment between the two roads for the use
of the Benicia short line between Oak
land and Sacramento. Cal. was abandon
ed i'm the federal court today by the raTf<
road officers; and it now devolves on the
railway attorneys to devise a new ar
rangement to carry into effect the disso-
luton decree of the United States Su-
preme Court.
The dissolution decree which was cer-
titled to the district court of Utah Feb
ruary 10, gave the railroads three months
to submit satisfactory plan to the lower
court. This time limit will expire May TO-
Announced by Lovett.
No date was set by the judges of the
eighth federal circuit. sitting as the dis
trict court of Utah. today. for the re-
hearing of the case. but ii Is expected
that a new plan will be laid before the
court some time in April What arrange
ment the railway companies contemplate
was not indicated by Chairman Robert 8.
Lovett of the Union Pacific system who
announced the abandonment of the Sec
ond plan in court today.
Mr.. Lovett and other officers and at
torneys OF the Hartman lines left st.
Louis for the east on special train
this afternoon. United States District
Attorney Houts. who represented the At
torney General in the proceedings to-day.
has no information as to the further
course contemplated by the railway rep
resentatives.
Was the Second Device.
Tho arrapro,,,ant rrb;cb uae oho udou cd
today was the second device drafted by
The first plan. which was submitted to
comply with the dissolution decree Of the
Supreme Court.
The first plan which was submitted to
the circuit judges February "a, was
modified because the California railway
commission objected to clause provld-
ing for q lease of the Southern Pacific
short line. from Oakland to sacramento
to the Central Pacific, which in turn was
TO be taken over by the Union Pacific.
The California commission held that
there should be no exclusive use OF the
short line by the two Hartman roads.
The modified plan, abandoned today.
provided for a traffic agreement between
the Southern Pacific and the Union Pa
cific for the use of the short line instead
of lease.
Came as a Surprise.
a surprise. as Mr.. Lovett and his assist
ants came here expecting to present the
new dissolution arrangement to the cir
cult judges for approval.
After his arrival in st. Louis Chairman
Lovett received a copy of the protest
against the new plan filed by the Cali
fornia railroad commission with the At
torney General.
Asserting that the approval of the Cali
fornia commission was necessary to vail
date the proposed lease Of the Central
Pacific by the Union Pacific. which in
turn was necessary to satisfy certain
French banking interests. Mr.. Lovett an
go on with the plan. He asked the court
to leave the final dissolution decree in
allegiance.
Did Not Mention Guarantee.
Chairman Lovett in his address to the
court did not mention the guarantee
which the Union Pacific had given Kuhn,
Loeb Co.. the banking firm which was
TO handle the stock distribution features
of the dissolution. but it is said that by
the collapse Of the plan the Union Pacific
forfeits more than q million-doilar COM
mission to the banking syndicate.
Silent as to Government.
NEW YORK, March 15.-United States
Attorney General McReynolds declined to
outline the governments attitude on the
Union Pacifc-Southern Pacific situation
when shown Judge Lovetts statement in
st. Louis that the modified plan of dis
solution had been abandoned
The next move is UP to the Union Pa
cific" said Mr.. McReynolds Il cannot
say what procedure they may undertake.
The Union Pacific and Southern Pacific
people understand the attitude of the gov
eminent as pertains to the sale of South
ern Pacific stock. and it's up to them"
kuhn. Loeb & Co. syndicate managers
for the underwriting Of the Southern Pa
cidc stock held by the Union Pacific. is
sued the following bref statement:
The syndicate has not given up hope
that satisfactory dissolution plan may
yet he approved by the government 4
great many things can happen"
Subscription Warrants Void.
Although the Union Pacific under
writing agreement with the information.
al syndicate did not expire until mid.
night tonight, Official notice was given
here this afternoon that the plan had
been abandoned. Frederick w. S. Crosby.
treasurer of the Union Pacific. gave out
this statement, by order OF the board
of directors:
The railroad commission of California
having failed to approve certain pro-
visions OF the plan outlined in the cir
eular to stockholders. dated February 10
1913, in respect of which provisions i'm
the opinion of the company's counsel
the approval of the commission was
necessary or advisable. the plan and the
agreement embodying the same, includ-
ing the offer of stock in the Southern
Pacific Company for subscription to
stockholders, cannot become effective
Accordingly. said offer Of stock for sub
scription of stockholders is wfthdra WIN
and subscription warrants are void and
OF no effect"