New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-05-01
SOUTHERN PACIFIC
DENIES MERGER
Replies to Charge of Violat-
ing Sherman Anti Trust
Measure.

The answer OF the Southern Pacific
Company 10 the governments suit asking
for the divorce Of the Central Pacific was
filed in tho United States District Court
at Salt Lake city late yesterday. 4 brief
Of the reply was issued from the New
York Offices a 1G5 Broadway.
Specific denials OF all the allegations OF
violation Of the Sherman antitrust act
are made, as well as OF infrlngements
upon the Pacific railroads acts. which
were designed by Congress TO secure a
continuous connected line from tho Mis-
souri, River TO tho Pacific Coast with
equal advantages 10 all other roads. The
answer reviews the history Of the Central
Pacific and the Southern Pacific Railroad
Company and states that they were built
under one ownership and control They
were thus developed as one property and
little heed was given as to which cor
poration should hold the title 10 terminal
properties and branch lines.
ANY separation Of the Central Pacific
lines from the Southern Pacific lines" the
brief adds, cannot now DO had except
with great detliment and injury 10 each
OF these companies. and in order that
these lines should now DO operated as
separate properties there must be ex-
pended very large sums OF money 10 Sc
cure separate terminals to complete these
properties for operation on a basis i'm
dependent Of each other. Besides. such
separation would necessarily impair the
public service. as through direct routes
could not he used as efficiently or eco
company as under present conditions"
The Southern Pacifcs answer further
sets forth tho granting by The government
OF q subsidy 10 the Central Pacific by
which that company became indebted for
a sum exceeding $4,000 Citing the
act passed by Congress on July z 1898.
providing that the Secretary OF tho
Treasury. the Secretary OF the Interior
and the Attorney General should consti-
tute a commission TO settle this indebted
ness. the answer asserts Il was the intent
OF the act that the Central Pacific should
pay 10 the government $4,000 per an
nun for the ten years from 1895 TO 1908
That the Central Pacific could not make
these payments without the aid OF the
Southern Pacific Company was held 10 be
understood nv the government. the brief
says. This assistance was rendered only
on the understanding that there should
be no change I'm the relations then exist
ing between the two properties.
In consequence Of the act OF 1873 the
Southern Pacific Company guaranteed the
sl0j.O0oO00 OF the first -efunding per cent
bonds OF the Central Pacific which are
now outstanding; and in acquiring the
$1,000. 600 preferred stock. subsequently in
creased To- $4,000. and the $4,000
common stock. the Southern Pacific ex-
pended the full par value OF the preferred
stock and issued I'm exchange for the COM
mon an equal amount OF Southern Pacific
stock and N6.Sl90o0 per cent bonds
In addition the United States govern
meut received the debt OF the Central
Pacific which otherwise would not have
been paid
The defendants allege that the govern
ment is estopped from asserting or claim
ins that the lease OF the Central Pacific