The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1915-12-02
PLEA FOR ROADS
(Continued from Page one.l

Continued from Page one.)
the lines have been operated under
ninety-nine year leases, executed five
years before the Sherman antitrust
law passd.
1T would seem that if the govern
ment wins in this case, it will estab-
lish precedent which will justify
the brea king up of all the railroad
systems of the country that have been
built up by the acquisition OF lines,
often competing, and by leases, own
ership of stock, etc, prior to the
passage of the Sherman law
Counsel for the railroad rely upon
the contention that the lease of the
Central Pacific to the Southern Pa
cific, and the ownership of the stock
of the Central Pacific by the South
ern Pacific were expressly confirmed
by congress IN the proceedings by
which the Indebtedness of the Central
Pacific TO the United States govern
ment was settled in 1899.
AT that time the Central Pacific
was indebted to the United States
government in the sum of SOS. 200, 900.
This indebtedness was a second lien
upon the main Central Pacific line
from Ogden west. The Central Pacific
was. practically bankrupt, and, rs the
government required the payment Of
this entire indebtedness within ten
years, it was obvious that the Central
Pacific, relying upon its own re
sources, would have failed to meet
these payments.
S. p. to the Rescue.
Therefore, the Southern Pacific
company which has the ninety-nine
year lease of the Central Pacific lines
also a like lease of the Southern Pa
cific lines, and was the owner of the
ca pital stock of the Southern Pacific
lines and was in a prosperous financial
condition Joined in the plan of ad-
Central Pacific by subordinating its
lease of the Central Pacific . the
first lier bonds to be given to the
United States as collateral security.
1.-The plan provided that the old
stock of the Central Pacific should be
to the S them Pacific
which should become the owner there
of and the stock of the new company
representing the same, upon paying
the full value therefor.
This plan of read5ustment by
means of which the government in
debtedness was paid, provided that
the Southern Pacific company should
become the owner of the entire capi-
tai stock of the Central Pacific.
Government EstoppcI.
THE government after receiving its
$5S,000,00O in full by his plan. is
estopped from questioning the validity
ment, and also the ownership of the
Central Pacific stock by the Southern
Pacific which was expressly author
lied by them. The government also
is estopped by the final decree in the
Union Pacific merger case. In that
case the allegations of the government
set forth the ownership of the Cen
trail Pacific by the Southern Pacific
and we contend that the government
was bound to present in that case its
claim that this lease and stock own
ership are invalid.
LAS the government failed to do this.
the final decree of the court which
dismissed the bill in that case so far
as il rested uDOn the Central Pacific
transaction. is a final and conclusive
against the government
here.
I'm other words the government
cannot bring its litigation by piece
meal but was bound to present its
whole case in the Union Pacific suit
which it undoubtedly could have
done"
McCIennen Closes Case.
Edward F. McClennen closed the
argument for the government in an
address of a little more than an hour.
He laid down the principles under the
Sherman law under which the govern
ment is proceeding.
1.-The Sherman antitrust act" he
said, ''is not limited in its prohibition
on monopolies; it is not necessary to
show an humiliation of competition.
If there is a direct. substantial re-
straint of competition. that is suffi-
,ient for decision under this law.
THE effect of the competition Of
he Atchison, Topeka & Santa Fe on
he California traffic is inconsiderable.
compared with the effect of Southern
Pacific and the Central Pacific now
lnder one control The most powerful
of the Southern Pacific Is
suppressed as long as the
Southern Pacific holds the Central
Pacific,
"A similar defense-the presence
If the Santa Fe-was urged in the
ut Do hf1f he 1tfnr