The Logan Republican. [volume] (Logan, Utah) 1902-1924, 1914-05-05

that could be applied to the payment |
Of this debt, and It cannot be ques-
toned that the congress intended and
understood this debt could only be
paid by the employment Of the cred |
1t and resources of the Southern Pa
cific company, and that compliance
with the prescribed terms Of the set
Element necessarily involved partic-
ipation therein by the Southern Pa
cifc company, and the only motive
or consideration which could induce
the said Southern Pacific company to
participate in the payment Of the
Central Pacific Railroad company's
debt to the government was the ex.
istence Of the aforesaid relations be-
tween 1t and that company and its
desire to continue such relations and
to make permanent its control OF
that part of its system.
The defendants, therefore, allege
that the congress at the time 1t en-
acted the said law Of July Z, 1898,
contemplated and expected such par
ticipation by the Southern Pacific
company in the settlement provided
for and had full power to arrange for
such security for the payment Of
said indebtedness Ms to said commits
sion might seem expedient.
The commission created by con-
gress under the authority Of this act
made an agreement with the Central
Pacific Railroad company for the pay
ment OF this debt in twenty semi
annual installments.
Copies IT the agreement and mem
oranda we're given the widest pub
licity, SO that not only the private
parties interested, but the president
Of the Unied States and all govern.
ment officials. including members OF
congress knew that by the terms Of
the readjustment. the Southern Pa.
: cific company was to acquire the own.
ership of the entire capital stock CT
:. the Central Pacific Railway company
and knew also Of the lease and oper-
alton Of the Central Pacific lines as
part of the Southern Pacific sys-
TEN, the things now complained OF as
being in violation of the Sherman an
thrust law.
It Is recited that they knew also
at the time that the Central Pacific
could not, without the aid OF tie
Southern Pacific. comply with che
terms of the agreement and they bas'
ed on the participation 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
D 500, 100000 of the first refunding A
per cent mortgage bonds OF Inc Cen
trail Pacific Railway company, which
are now outstanding and Of acquiring
the $12,OOO,O00 preferred stock end
the $67,275,5OO common stock Of the
Central Pacific Railway company. For
this stock the Southern Pacific com
pany gave either cash or its equiVa
lent in its own capital stock. Furth
ermore, the United States governme''
received S5S,S12,715.4 As in payment o
the Central Pacific debt, which II
would not otherwise have been pa q
In like manner, relying on the eN
N pectation and Deilef createu anu ~
duced by the government as above
l. the Southern Pacific company ha
since incurred heavy financial obi
cations, details of this being givri
n in the answer.
n The answer further relies upon IN
decree of the United States supreme
court in the suit which resulted II
the separation of the Union Pacific
Railway company from the Sontheri
Pacific company as a bar to the Tres
ent suit.
The answer was filed by all thu
defendants other than the Cnioi
r,... oo,,nop, ~ Naw York ihrIugl