The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-05-12
Big ROADS FEAR
NEW TRUST LAW
LOvett Believes Measure
Would Break Up Trunk
Systems.
PREDICTS HEAVY LOSS
Dangers of Retroactive In
terlocking Section
Pointed Out.
REA CAN SEE TROUBLES
Trumbull Tells Senators Chaos
Would Result in Trans
portation Circles.
REA CAN SEE TROUBLES

WAsrrSoroN, May il.--Judsc Robert $.
iovett OF the Union Pacific Railroad sys- !
TEN told the Senate Committee on Inter- !
atate Commerce to-day that II the pending
Senate antitrust bill IL enacted into law
Il viii result in the dislntcgration of every
big railroad system in the United states.
He was addressing himself to the pro-
visions of the bill prohibiting interlocking
directorates.
Judge Iovett appeared in opposition TO
the Senate hill, In company with railway
men representing other large systems. He
urged that the new law should not be
applied to existing combinations and that
In legislatlng for corporations Congress
should deal with railroads in independent
billa
The railroads of this country are going
to be pxralyzed unless the State and Fed
ersi governments give us more elbow room
in which to grow and expand. said
Judge Lovett
The Union Pacific executive appeared
before the Senate committee AS the repre-
sentative of an organization of railway
of3cials He was accompanied by Samuel
'Rea. president of tho Pennsylvania
Frank Trumbull chairman OF the boards
Of the Chesapeake and Ono and the Mis-
souri,. Kansas and Texas 4. VI. Harris,
general counsel of the New York Cen
tral: George r. Brownell. general counsel
Of the Erie: 4. u. Thorn, general counsel
Of the Southern +. !. Gowen. general
counsel of the Pennsylvania. and a. J.
u County assistant TO tn" president OF the
Pennsylvania.
Soy Railroads Are GrOund.
Messrs Lovett. Trumbull and Thorn oc-
cupled all of to-day's session. The bur-
den of their testimony was that the rail-
roads are being ground between state and
Federal regulations and that the provi-
sions of the pending bill relating to inter-
locking directorates. extensions and capt.
talisation would force process OF reor-
ganisation that would result in tremendous
losses and endless confusion in the world
OF transportation.
you are trying TO burn down n big
barn 20 get al few rats exclaimed
Mr.. Trumbull
''The enactment of this law with the
understanding that it Is TO be retroactive
would give the railroads of the United
States the greatest shock they have ever
exper;enced" assorted Judge Lovett
graveIy.
telerafle," said Mr.. Thorn. ''rhe remedy
10 Federal incorporation In no other
way can the problem be solved with the
present conflict between state annd Fed
eral control.
= The three witnesses argued that mis-
take had been made in laying down the
same rules for the regulation of railroad
and industrial corporations. they III.
sisted that conditions in the railroad
business differed from those that obtain
ia, toll and h4f IA
should be made the subject OF lawfui
restraints in an independent measure.
Judge IIovett expressed the opinion that
the bill as he read II was Intended to be
retroactive and members OF the Senate
committee said that he correctly inter-
preted the measure.
Section provides that no corporation
shall engage In interstate commerce u
upon it's managing board or among It's
ofacers there Is any person who Is serving
in 4 like capacity with competing cor
poration
Take. Execution 10 Method.
How is a railway To eXclud" from 'ts
board director elected hy stocNhoideFs'
asked Judge Lovett. ut seems 10 me
that the election of person tn more
than one directorate should be made uri
Lawful! instead of Furnishing the railway
50 severely for an act over which 1t may
not exercise CONTROL.
faction 10 of the Senate Dill prohlOts
a railway from entering into interstate
commerce II IL controls a competition
through stocltholdings or otherwise. See
tion II makes such control unlawful and
punishable by fine and Imprisonment
whether or not either prohibition Is Vio
lated is left to be determined by th'
Interstate Commerce Commission.
Mr. Trumbull and Mr. Thorn insisted
that the enforcement of these sections
would absolutely prevent legitimate exten
sion and expansion and seriously retarc
healthy growth in the railway business
Mr.. Trumbull denounced section ~
which makes IL unlawful for any railway
to enter into contract for the disposa
NJ ACQUISITION OF bonds or stocks or Il
sell or lease any property from anothe
railroad If at tn" time there Is any per
son serving as oft,c-g or director of boti
corpora lions This prohibition. he AS
serted would seriously cripple the road
in their endeavors to obtain capital 70
expansion.
IL can sec objections to common direc
torates In industrial corporations" sai'
Judge Lovett. but as to railroads, con
ditions are somewhat different. We hay
no secrets any more Our business !
transacted In the open All our AFFAIR
are open to the observation OF the public,
Far R.nching Eject Of Law.
Judgc Love,t said that the prohlbitio
against inicrlocking directorates NIGH
compel the NV York Central tn ge
rid 81 the West Shore road. and lkews
afYect other systems that Were made
of n number of subsidiaries, lie urge
that the intent OF the law on this por
should be cleared.
"You should not make relations here
tofore established unlawful" said Jude
Lovett "Let existing combinations h
dealt with under the sherman ant-tru'
act, n they are unlawful the Feder'
Government should break them up, Bl
vou should not Impose additional reguls
lions ou combinations ALREADY made
"Wh,reln would the practical cmbal
rassn.uts com" .u TIA" enforcement
tho prullb' lion against iutcrluclNng Il
Iectdrnics'. asked senator N.Wlhuds
Nevada, chairman Of the committee.
- do not brll.N" that there ~
system in tho country that has not ~
common mortgages" replied Judge Love,
"rhcy also have stock that - held
\ common, II these securities are lawf