The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-03-19
McReynolds Brings Suit
Against Lehigh Valley
Railroad Company.
ACTION IS UNDER
ANTITRUST LAW
Attorney General Points Out
Means Employed to Evade Dc
cision Rendered in 1911 Pro-
hibiting Transportation Of
Coal Belonging to Com.
pany 1t Controls.

W" ork, -harcn 1S.--l nc l-chlgh
VALLEY Railroad Company was sued
here to-day by Attorney 6 General Nc
Reynolds under the Sherman antitrust
Law. as being the dominant factor in
combination alleged TO control the
output of anthracite from Pennsylvania
fields it touches.
Among the defendants named were:
Lchish VALLEY Coal Company. I.ehigh
VALLEY Coal Sales Company, Coke K
Bros. Company. Inc, Edward 7. Stotcs
bury. Daniel 6. Eeid. Charles steele.
George /. Baker and George l.. Bacr.
BY virtue of Its monopoly, the COM
plant declares. the Lehirh has pre-
vented the building of any new railroad
into the anthracite region served by IT,
and has kept tho independent pro-
ducers under the disadvantage o. hav-
ing TO ship over = railroad also engaged
in the coal business" Furthermore
the bill declares the road completely
dom,nates tho maI>c at all points
thereon not reached by any other rail
road. and has the power to nx, has
fixed, and does tix, without the check
OF competition. the prices at which an
thracite is sold at such points"
Relations Set Forth.
me bill points out that the I.chirh
annually transports about II 100000
gross tons of anthracite or that
than So per cent Gn 1919 was shipped
Tor the account OF the Lehirh coal
Company, or affiliated companies The
relations between the railroad and the
LehiEh Coal Company are set forth at
length In III" complaint, which de-
clares that the latter has never been
bona hde' corporation. but mere
adjunct. department or instrumcntality
OF the Lehigh Railroad"
After referring TO the Supreme Court
decision IN 1911, against the Lchigh
Ioau' prohibiting transportation of Goa |
nelonEins TO company It controlled,
inc biii recites the means tile httor-
ney-GeneEal declares were employed
TO evadc that decision
On advice OF counsel IL was nointc1
out. the LehiGh VALLEY Railroad di-
rectcTs recommended to III. Lehich
iiieE oai Company the organization
oi coai sales company and the ma k
ing OF contract by the coal company
win the sales company. At the same
meeting, fG.o6o,s0C, was ordered dig
tiibGt"d as dividend out of the sur
pius OF the LehiCh Valley Railroad. A
@ @,!w minutes later on the same day, tho
p'ii declares, the directors of In. coal
pan% met and resolved to au.horlg.
INC incorporation OF the l-c!lich Coal
safes Company, granting Lch:gn Rail
rVi': stockholders the right Of sub
, scr'ping 10 the new stock of 10 per com
80 !ioi"'lSS. II vas provided that
cacH railroad stockhoidar throucli now,
er of attorney nted TO fiscal rent.
IniEht turn the special dividend re-
! lefrcd 10, toward paying for sales
company stock.
sales company Incorporated,
III January, 1912, The Sales companv
WAS Incorporated in New Jcr:eI. win
= capital stock OF $4,000. 600. of ,ynici,
me complaint SAYS "S6,06o,Soo was Is
sued immediately. De:ng equal 20 10
per cent Of the capital stock of the
ithiGh isniiroad." The 10 per cont
DIVIDEND declared in advance by I.ehiyh
Railroad was paid and over ooO n'
80, 800 noiuers being a majority in in
.ereSt' awaited themselves OF the priv
ileGe OF subscribing 10 the stock of Ie
h'Sh Coal Sales COMPANY"
'hereupon,' the bill continues, the
TWO corporations. with all their bust.
ness ana assets. came into and have
Hihce remained under the Immediate
coiitroi OF substantially the same rroun
of persons. Al present over so per cent
or the shares OF Lchigh Coai Sales Com
pany are owned by the majority stock
Aciders Of Lehigh Railroad"
me sales company's profits, the bill
AYERS have been enormous. ON De
cemher IL, last it had a surplus of 81
l34.Si753. The contract between the
TWO companies. the bill argues. is Il
Darrier against any reduction in the
Lehishs freight rates TO New York, ana
an inducement to even higher rates
In 4 statement issued Tonight. Ed
gar II. Boles, general solicitor OF the
I-ehlsn valley railroad Company, de-
mes that the sales company. by whose
existence and activity the acts alleged
by the government are said to have
been made possible, is in any Way
ahlliated with or controlled by the
railroad, though 1t is conceded as nos
sible that the railroad and the sales
company may havo stockholders in
Dealing with the railroads. owner
ship Of the Lehigh Valley Coal Com
pany and subsidiaries Mr. Boles SAWS
| THIS matter had been Investigated by
me government FOR more than II gem
Grafton and that if there had been
violations of law the government
should have identified them by this
| time and made them clear to the courts.
| -, Extends With COn1 RcgIons.
ne LchlEh road operates IL railroad
approximately l.40o miles in length,
ana extending from New York and
| Perth Amboy. y. J., through the States
OF New York, New Jersey and Penn
SylVania, into the anthracite coal re-
Eions; and from there to Rochester and
also controls Il line OF steamships plv
| ing upon the Great Lakes, connectin g
with the Lehigh road at Bnffalo
According to the brief, the road has
outstanding SG0:501,5Oo Of common
value;--and slOs.a00 of preferPed :n red
sthck-2.2l6 shares OF $50 each par
| value, It's funded debt is about SAX
| $4,000 and it's assets are about $iS2.-
| 100000.
Baer Quits Lchigh Valley Hoard.
ISnprinl Irnn t,i,