The Birmingham age-herald., 1914-03-19

Though suit was brought to break up
 an alleged monopoly, the Attorney Gen.
 eral charges that the Lehigh road | through the formation of coal sales company two years ago, has escaped the commodities clause of the interstate rate | act, which forbids the railroad to trans- port coal belonging to corporation
 whose stock 1t owns and whose affairs | have been commingled" with its own affairs.
 The further charge was made that the | Lehigh Valley has violated the provision | of the Pennsylvania constitutional acts prohibiting common carriers from engas- ing in mining, or other business, other transportation.
 Dissolution Asked
 The usual injunction and decree of dis. solution were asked
 It Is understood that the suit is to h., Followed by others against some of the roads which enter the Pennsylvania an-
 tfracite field
 Among other defendants named were. Lehigh Valley Coal company. Lehigh Valley Coal Sales company, Coxe & Bros. Company, incorporated; Edward T. Stotesbury Daniel G. Reid. Charles oNVi6c r anu tTeO1Se r.
 Baer
 By virtue of it's monopoly. the com plaint declares, the Lehigh has ''pre. Vented the building of any new railroad Into the anthracite region served by if.
 and has kert the independent producers under tue disadvantage of having to shin eSer raiiroa also engaged in the coal tusiness. ''Turtherfl, .. The bill3 de- claras. threugh it's alleged | nopoiy of
 the sale Of coal produced along it's line the fasd completely dominates the5rnat. 1 Eel a1 ali points thereon not reached by any other railroad, and has the power 10 nx, has fixed and does fix without
 'he Check Of competition, the prices al which anthracite is sold at such points. ''
 The bill points out that the Lehigh an- | flally transports about 100000 gross tons of anthracite. Of that total, the government maintains. more than s2 Der cent Gin 1913) was shipped for the account of the Lehigh Coal company or affiliated companies. The relations between the railroad and the Lehgh Coal company
 are set forth at length in the complaint. Which declares that the latter has never , been bona fde corporation" but "a
 mere adjunct, department or instrument tality of the Lehigh railroad"
 Alter referring to the supreme court decision in 1911 against the Lehigh
 road prohibiting transportation of coal belonging to a company it controlled.
 the Dill recites the means the attor- ney general declares were employed to evade that decision. On advise of
 consel, 1t was pointed out, the Lehigh Valley railroad directors Recommended to evade that decision. On advice of the organization of a coal sales com
 pany and the making of a contract by the coal company with the sales com pany. Al the same meeting s6, 060. 800 let, ,,i ht,f, T 1... T out of the surplus Of the Lehigh Val
 ley railroad. A few minutes later on the same day, the bill declares. the di-
 rcctors of the coal company met and resolved to authorize the incorpora- at'on of the Lehigh Coal sales com pany, granting Lehigh railroad stock
 holders the right of subscribing to the
 new stock to 10 per cent of their hold ings. It was provided that each rail-
 road stocl-holder, through power of at torney granted to fiscal gents. might
 turn the special dividend referred to,
 toward paying for sales company stock.
 Incorporated In 1912
 In January, 1912. the sales company was incorporated in New Jersey with capitol stock of s10. 1000, ,0OO, of which the complaint says. "$6,060,s000 was i issued immediately. being equal to 10 per cent of the capital stock of the Lehigh rsilroad." The 10 per cent div l idend declared in advance by Lehigh was paid and lover 5000 of its stock holders, being majority in interest
 availed themselves of the privilege of | subscribing to the stock of the Lehigh | Coal sales company.
 "Thereupon." the bill continues. "the
 two corporations with all their busi- ness and assets came into and have since remained under the immediate
 control of substantially the same groun
 of persons. At present over 80 per
 cent of the shares of Lehigh Coal Sales
 company are owned by the majority stockholders of Lehlgh railroad" l The contract between the Lehigh
 Coal comrany and the sales company
 the complaint sets forth gave the sales company unreasonah1y low rates for
 mined coal; fixed prices for coal to be
 mined under the then existing scales
 of prices paid other producers. and
 made other con ncessions, which led it to 1 be classed by the government as not
 "a bona fide transaction between sep
 arate corporations"
 | The sales company's profitv. the bill ayers have been enormous. and it shows that the company hos paid regular div 1 jdends quarterly of 2h per cent and that in November. 1918. after 21 months
 of business it paid an extra cash divi-
 dend of a5 per cent and declared at i the same time what amounted to 25
 per cent stock dividend. On December | 31. last. it had a surplus of s1.134.S4T.53 i The contract between the two com :
 panies. the bill argues. is barrier ! against any reduction in the Lehigh's
 freight rates to New York. and an in- l ducement to even higher rates. because ] the Lehlgh Coal company, under 1t. receives from the sales company per centage of the price for coal at New York harbor, a price largely deter mined by the freight rates.