New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-03-19
government Charges Le-
high Valley and Subsidia-
ries with Conspiracy.
SIJES TO UPHOLD
COMMODITIES CLAUSE
Coal Company a Mere Subter-
fuee to Evade the Law,
If Is Alleged.

The governments war on the nara
.oal combine was continued yesterday
:, suit filed by the Department OF
T,st,ce in the United States Circuit
co,,rt here against the Lehigh Valley
n.u-oed the Lehigh Valley Coal Com
,orv the Lehigh Valley Coal Sales
ror,nanv and other subsidiaries or the
system.
su,+ was brought under the Sherman
,,w and the commodities clause OF the
,,,srstate commerce acts. The Dill
osks that the acquisitions OF the coal
,o,ds made through the Lehigh valley
Coal Company be dissolved so as to re-
establish competitive conditions; that
tho railroads leases with the coal COM
,.ries be cancelled, and that trans
rortstion by the Lehigh Valley Rail-
rosd of the coal owned by the Lehigh
Valley Coal Company be prohibited
More than a dozen other corporations
and the following individuals were
named as defendants in a conspiracy to
monopolize trade:
Conspiracy Alleged.
ceorre T. Baer. George f. Baker,
Charles Steele, Edward r. Stotesbury,
Daniel f. Reid, Lyman ID. Smith and
william H. Moore all Of whom are
directors, and others.
The complaint cites that the Lehigh
Valley Railroad has prevented new
railroads from entering the anthracite
region served by the road and has COM
oelled independent producers to ship
,oal over a road already engaged in
selling coal 1t also cites that the Le-
high fixes the prices Of anthracite in
all markets not reached by other roads.
The Lehigh and other anthracite
roads. 10 meet a comparatively recent
decision Of the Supreme Court prohibit
ing railroads from transporting coal be-
longing 10 a corporation the stock OF
which IS owned by the road, reorgan-
ized their relations with their coal pro-
ducing companies. The Lehigh or
ganized the Lehigh Coal Sales Com
pany. which was to buy all the coal
put out by the Lehigh Coal Company.
The stockholders Of the sales company
were 10 be identical with those OF the
railroad
The relations between the Lehigh
road and the Lehigh Coal Company are
set forth at length in the complaint,
which contends that the latter has
never been a bona fide. corporation, but
was a mere subterfuge TO evade the
law.
Concerning the Lehigh Coal Sales
Company. the bill cites that it was in
corporated in New Jersey in January,
1912, with a capital stock Of $lO,OVOOOO'
Il which $1,000, 800, or one-tenth Of the
capital stock Of the Lehigh Valley
Railroad. was issued Immediately, after
which a 10 per cent dividend was de-
clared in advance by the Lehigh rail-
road and more than 1900 Of its stock
holders subscribed to the stock Of the
sdleS company,
Big Profits Of Sales Company.
The profits Of the sales company, the
complaint alleges, have been enormous,
showing regular quarterly dividends
Of 2la per cent. while in November,
1913, after twenty-one months Of busi-
ness, the company paid an extra cash
dividend Of - per cent, and at the same
time declared what amounted to %
per cent stock dividend.
On December 81, 1918, the complaint
charges, the sales company had sur
plus OF S1.134, s47 53. In the face of
these facts, the bill AYERS the contract
between the two companies not only
forms a barrier against any reduction
in the Lehigh's freight rates to New
York, but induces even higher rates,
because the Lehigh Valley Coal Com
pany under It receives from the sales
Continued on fifth page. fourth column.