Evening star., 1915-07-04
NOT IN VIOLATION
i. OF ANTETRUSTLAW
U. S. Courts Ruling in Federal
Suit Against Reading Group
of Corporations.


PHILADELPHIA, Pa, July 3.-The
nited StatesC court for the eastern
district of Pennsylvania decided today
that the Reading group of corporations,
the Central Railroad Company of New
Jersey. the Lehigh Coal and Navigation
Company and subsidiary and allied
companies are not leagued together in
an unlawful combination. and therefore
do not unduly restrain commerce in
the production, sale or transportation
Of anthracite coal.
The federal government, which
brought the suit nearly two years ago
TO dismember the alleged combination
unto separate units and to nullify GER
tam agreements and leases wins a
point. in that the court suggested that
the Lehigh and Wikesbarre Coal Com
pany be divorced from the JERSEY Cen
Iral railroad. As the subject of
this particular separation was not
argued in the trial of the case, the
court suggested it for the considera
tlon of counsel when the scope of the
decree comes to be determined. The
Reading ownership of the Jersey Cen
tral railroad is not disturbed The
court called attention to certain other
objections of minor nature, which
however. did not affect the general de-
cision
The court decided that there was no
violation by the Reading companies of
the commodities clause of the Hepburn
railroad act. which prohibits railroad
from transporting any commodity in
winch II has an interest.
OF Far-Reaching Effect.
The suit is one of the most fmpor-
tant the government has brought to
break up what it declares to be an il
legal combination in the anthracite Goa
business. Three years ago the United
States Supreme Court decided there
was no general combination among the
anthracite coal carriers and producing
companies in violation of the anti
trust law. In that case the government
aVerred that number of smaller COM
binations working together constituted
general combination. While dismiss
ing the complaint regarding the gen
erai combination the Supreme Court
TOOK no action on the alleged smaller
com b1nations This left the govern
inent free to proceed against smaller
combines. and of these the Reading
the government alleged. was the larg-
est and virtually dominated the hard
coal trade.
The decision handed down TODAY re-
FUSED to declare that the Reading COM
pany' holding concern; the Philadel-
phia and Reading Railway Company
and the Philadelphia and Reading Coal
and Iron Company. either separately or
individually. were a combination in
violation of the antitrust law
The court also decided that the rail-
way company and the coal and iron
company were legally separate corpo-
ratons and that the railway did not
Sloiate the commodities clause in
transporting the anthracite of the Goa
and iron company.
Finding on Commodity Clause.
As to its finding with regard to the
commodities clause. the court stated
That the law has been consciously
and deliberately violated we do not
believe, and decline to find. But as
the commodities clause does not make
the carriers state of mind an essential
eiSment IN the onense. the question is
stlli open whether the Reading railway
and the coal and iron company what
ever their intention may have been,
nave in fact. so conducted their affairs
as to violate the law
On the ownership of the Jersev CEN
tral railroad by the Reading company,
the court said that so far as the car
rage of coal is concerned the Jersey
se. Sentrai and the Reading railway are
tion in marketing the coal. The court
said: The holding company, already
the owner of the capital stock of the
Reading railway and of the coal and
iron company. became the majority
stockholders in the Central Railroad
Company. which owns nearly all the
stock Of the Wilkes-B Barre Coal Com
pany. The two railroads have been
carrying the coal OF these two large
producers to many Of the same mar
kets. where the coal has been sold in
competition. These carriers transport
about one-third of the total tonnage of
anthracite carried by all the railroads
that reach the anthracite field and the
two coal companies dispose OF more
than 20 per cent of all the coal taken
by the market . Upon the
facts tnus stated we think the union
of these interests in the bolding com
rany is condemned by the rules laid
down in the Northern Securities case
Object of Suit Cited.
TT must not be overlooked that the
sole object of the present suit is the
interstate and foreign trade in an
rhracite coal. while the Reading rail-
way and Central railroad interchange
vast amount of other traffic, which
- Of very great value to both systems
This traffic is not complained of in any
particular. Unless the friendly and
mutually advantageous alliance of the
two railroads in this particular must
be destroyed in order to reach an un-
lawful combination in another particu
lar that would otherwise escape, we
are not disposed TO disturb the owner
ship Of the holding company In the
Central railroads stock.
The two coal companies must be
taken into account. and In our opin
ion IL is their union that lends most
force TO the governments complaint.
AS we understand the facts, II the Cen
trai railroad were divorced from the
wilkes Barre Coal Company. the object
OF the bill would in this respect be
substantially attained and las this par
ticular matter not argued by
counseD we suggest IL for their con-
sideration when the scope of the de-
cree comes to be determined.
The court, in dismissing the govern
ment's complaint against the Lehigh
Coal and Navigation Company and af-
filiated railroad and coal companies.
says that II the corporations embraced
in the group have otherwise offended
against the federal statutes the suit
viii be dismissed without prejudice to
the governments right to take such
other action may appear desirable.
Refuses to Annul Lease.
The court refused to annul the lease
OF the Lehigh and Susquehanna rail-
road by the Lehigh Coal and Naviga-
tion Company to the Jersey Central
railroad as II did not violate the law.
The court goes into some of the
detailed business transactions between
the Reading holding company and the