New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-01-18
Government Files Brief in
Suit-Wants Separation
To Be Real.
ACTION is CALLED
LAWYERS DEVICE
Old Facts ClOaked in New FictionS
to ThWart the Law,
attorneys Assert.
(By Telegraph to The Tribune. !

By Telegraph 10 Inc i'i''"''
Philadelphia, Jan. r.-The clerk OF the
United States Circuit Court received 10
day the governments brief In us caSo
against the Delaware Lacka"ahfa Z"
Western Railroad 10 compel that ROAD ana
the coal company Of the same name 10
separate not only in name, put III iao''
The suit will be argued here before tie
three Circuit judges on January ~ uh-
der q special "expediting certillc@e iieo
by the Attorney General or the oh''eu
States. Its outcome will seriously anect'
IL is supposed, the administrations atu-
tude toward new legislation designed 10
strengthen the Sherman law.
The government has brought the SUIT
both under the commodities clause or the
Hepburn act and under the Sherman law
The commodities clause provided that
after May /, 1905. It should be unia"iul
for any railroad company to transport IN
interstate commerce any article or COM
modify manufactured. mined or produced
by it. or under Its authority, or which
IL NAV own in whole or In part, or IN
which ii may have any interest. direct or
Indirect"
After the Supreme Court had upheld
the constitutionality Of this clause the
governments brief recites, the railroad
company, to comply with Its PROVISIONS
created the Delaware. Lackawanna ana
Western Coal Company 10 take over the
merchandising Of the railroads coal. In
creating this company the railroad de-
clared an extra dividend OF 90 per cent,
payable In cash, half Of which the stock
holders of the road were permitted to SUBJ
scribe pro rata for the stock OF the new
coal company. As result, the brief
saws. o. per cent OF the stock of the coal
company is held by stockholders of the
railroad owning s. per cent of the stock
of that company. IT continues:
THE actual control oil poth companies
is still more closely held. A majority OF
the stock OF the railroad company is held
by thirty-five stockholders: a majority or
the stock OF the coal company is held by
twenty-nine. OF these twenty-nine all
but one are included among the thirty
five who hold the majority of & stock
Of the railroad company. All Of the larg-
est individual holdings are common to
both companies and are quite suff1clent
The drectorates of the two companies
also are closely allied. The directors OF
the coal company are: Edward H.
LOOMS. vice-president of the railroau
company. president; William ii. Trues-
dale, president OF the railroad company
Percy r. Pyne, I'd, son OF Nj. Taylor
Pyne, of the board of managers OF me
railroad George +. Baker, Jr, son OF
George +. Baker, Of the board of man.
ayers and executive committee of the
railroad; Henry r. Taylor, son of Henry
A. c. TAYLOR. one OF the board of man
ayers OF the railroad company; James
4. Stillman, son of James Stillman, one
of the board of managers of the railroad;
George II. Gardiner, associate Of Francis
I.ynde Stetson, who was retained by the
railroad company to attend to the legal
end of the incorporation of the coal COM
pany.
THE appropriateness OF regarding the
railroad company as the parent or the
coal company" the brief points out, Is
thus evident" 1t was by means or this
mere lawyers device, cloaking old facts
under new fictions, that the policy of the
natlOn, INV StdeN'S ~ ~~'
gress. was to be effectively thwarted. In
stead of completely dlvorcing the coal
mines from the railroad business. as the
law intended should be done, the railroad
merely arranged that it's coal selling de-
partment be clothed with juristic person
alitv. which new personality in the do
main Of fiction affected nothing in the
domain Of fact"
The government therefore holds that:
"(a) The existing agreements between
the defendants should be cancelled and
their further performance enjoined.
"(b) The court should enjoin the de-
PENDANT railroad company from trans
porting in interstate or foreign commerce
any coal produced or purchased by il and
transferred by 1t before transportation to
the defendant coal company, and also
any and all coal belonging to the defend
ant coal company at the time of such
transportation, and also any and all coal
purchased BY the defendant railroad
company from others and transferred by
the railroad company 10 any other party
"(c) The court should grant such FUR
Their relief as may be necessary to make
its adjudication effectual."
The brief is signed by Frederic r. Cou-
dert and Howard Thayer Kingsbury, spe-
clal assistants to the Attorney General