Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-05-01

pay during each of the 10 years allowed
So, 100000 per annum.
This sum exceeded many times over
any possible net earnings of the Gen.
trail Pacific Railroad Company that
could be applied to the payment of this
debt, and 1t cannot be questioned that
the congress intended and understood
that this debt could only be paid by the
employment of the credit and resources
of the Southern Paciffce Company and
THAT compliance with the prescribed
terms of the settlement, necessarily in
volved participation therein by the
Southern Pacific Company and the only
motive or consideration which could in
siuce the said Southern Pacific Company
to participate In the payment of the
Central Pacific Railroad Companys debt
TO the government was the existence of
ahe aforesaid relations between 1t and
that company, and is desire to continue
such relations and to make permanent
its control of that part of its system.
THE defendants, tiher9re, allege that
the congress at the time Il enacted the
law of July I. 1898. contemplated and
expected such participation by the
Southern Pacific Company in the settle
ment provided for and had full power to
arrange for such security for the pay
ment of said Indebtedness as the said
commission might seem expedient.
The commission created by congress
under the authority Of this act made an
agreement with the Central Pacific Rail-
road Company for the payment OF this
debt in 20 semi-annual instalments.
Copies of the agreement and memoran-
da were given the widest publicity, SO
that not only the private parties inter-
ested but the president of the United
States and all government officials, in
GLIDING members of congress, knew that
by the terms of the readjustment the
Southern Pacific Company was to &C.
uuire the ownership of the entire capt.
tai stock of the Central Pacific Railway
Company, and knew also of the lease
and operation of the Central Pacific
lines as a part of the Southern Pacihc
system, the things now complained of
as being in violation Of the Sherman
antitrust law.
1t is recited that they knew also at
the time that the Central Pacific could
not, without the aid of the Southern
Pacific, comply with the terms of the
agreement, and they based on the par
ticipation of the latter their assurance
that the agreement would be carried
out financially.
In consequence, 1t is recited, the
Southern Pacific Company incurred the
obligation of guaranteeing the s10o,0 900
of the first refunding four per cent.
mortgage bonds of the Central Pacific
Railway Company. which are now out
standing, and of acquiring the 1000 900
preferred stock and the s67,275,0Oo COM
mon stock of the Central Pacific Rail-
way Company. For this stock the
Southern Pacific Railway Company
gave either cash or its equivalent in It's
own capital stock. Furthermore, the
United States government received $751;
S12, 7154s in payment of the Central Pa
cific debt, which 1t would not otherwise
have been paid
In like manner, relying on the expec-
tation and belief created and induced
by the government as above, the South
ern Pacific Company has since incurred
heavy financial obligations, details of
these being given in the answer.