New Britain herald., 1914-05-01
J. s. SUIT ANSWERED
 BY SOUTHERN PACIFIC
Road Cams Government ReGogn z5s
 Its Control Of Central PaC flC.

salt Lake City, Utah, May 1.-The Southern Pacific company filed here yesterday it's answer to the suit brought by the United States govern ment to compel the separation of the Central Pacific from the Southern Paclhc. The answer sets up the novel defense that the government itself, both through an act of congress and through the decision of the supreme court in the Union Pacific-Southern Pacific merger case, has tacitly recog- nized the Central Pacific line as an essential part of the Southern Pacific system.
 The defendants will be represented by J. F. Blair, general counsel of the Southern Pacific system, and by William F. Herrin, chief counsel on the Pacific coast, who will be as- sisted by P. F. Dunne and Garrett w. McEnerney of the San Francisco bar as special counsel.
 Specific DeniaIs Made.
 The defendants make specific de- nials of the governments allegations tending to show violation of the Sher- man antitrust law of 1890, and of the Pacific Railroad acts. The company recites the history of the lines owned
 
 Pacific to show that all of these lines were constructed under one owner ship, and that the lines of the for- mer were built as extensions and con- nections for the Central Pacific. The lines of the two companies always have been operated by one company, it is contended, and the Central Pa- cific was the operating company up f0 vyI1 io11 Ioto he Southern Pacific company took pos- session of all the lines under ninety nine-year lease.
 It is pointed out that because these lines were under common ownership Branch lines from the Central Pa cific were built by Southern Pacific, although they had no connection with the main line of the latter. In the joint operation through trains have been run by the most direct line, without reference to ownership. The answer asserts that separation can- not now be had without great injury to each company and without involv ing both in the expenditure of great sums for separate terminals.
 Legal Point Established.
 In connection with the government grant of subsidy to Central Pacific, by which it became indebted for $5S,OOO,000, attention is called to the passage in 1898 of an act providing that the secretary of the treasury. secretary of the interior, and attorney general should constitute a commis- sion to obtain settlement. Congress had stipulated that the Central Pa cific should be made to pay $5,SO0, 900 a. year for ten years to extinguish this debt
 This sum exceeded many times over any possible, net earnings Of the Central Pacific that could be applied to the payment of this debt,' says the answer, ."and it cannot be ques- toned that congress intended and understood that this debt could only be paid by the employment of the credit and resources of the Southern Pacific company.
 Participation Was Expected.
 'The defendants therefore allege that congress, at the time it enacted the law of July [, 1898, contemplated and expected such participation by Southern Pacific in the settlement provided for. By reason of the afore said transaction with the United States government the Southern Pa cif1c had the right to believe and re- ly upon the fact that it's relations with Central Pacific, it's leases and it's acquisition of the stock of said company, were not, nor were any of them, in violation of the law.''
 It is further said that in the belief that the government sanctioned the Southern Pacidc's control of Central Pacific the former has incurred heavy financial obligations for the benefit of the Central Pacific which 1t would not otherwise have incurred.