New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-06-22
Supreme Court Declares
D., L. & w. Railroads
Contract Illegal
MUST NOT DICTATE
TO COAL COMPANY
Agreement of 1909 for Exclu-
sive Purchase and Sale Held
Unlawful Monopoly.

tFrom The Tribune Bureau
Washington, June 2l.-The contract
of 1909 between the Delaware, Lacka-
wanna & Western Railroad Company
and the coal company of the same
name was declared by the Supreme
Court to-day TO be In violation of the
commodities clause of the interstate
commerce law. Under this contract all
coal mined by the railroad company
except such as il used for operation,
was sold at the mouth OF the mines
10 the coal company, which sold it TO
consumers, transporting il when pos
sible over the lines Of the railroad COM
pany.
The government contended that the
contract by which the coal company
alone purchased the railroads coal
was monopolistic and an evasion OF
the commodities clause, which was in
tended TO divorce railroads from the
coal business.
In the United States Distric. Court
for New Jersey the governments suit
was dismissed. 1t was this decision
which was reversed to-day by the Su-
preme Court. In reading mis- opinion,
which was concurred in b. a., of the
justices, Justice Lamar pointed out
that the stockholders. officers and d.
rectors of the railroad and coal ccm-
panies were Identical TO all practical
purposes and that the railroad dictat-
ed coal prices TO the customers of the
coal company.
Right TO Start New Suit.
The courts unanimous decision di-
rected the lowe. court 70 enjoin the
railroad from Transporting coal under
the provisions Of the contract. The
court specifically preserved to the gov
ernment a right 10 proceed il. a rev
suit against the railroad to test the
lGtter's right to purchase coal for sale.
The decision was hailed by govern
ment officials rs a great victory, likely
to have an important ,earing on the
fight which has been waged for years
to break up the so-called "hard coal
trust" Attorneys conversant with in
tcrstate commerce affairs wondered,
too, whether the decision would affect
the Interstate Commerce Commission's s
ruling on various phases of the anthra-
cite coal business under investigation
for months by that BODY.
The mere organization of the coal
company by the railroad was not dis
approved by the court. Justice Lamar
saying that it was natural, if not nee
essary, after the passage of the COM
modtes clause for the road TO organ
ize a corporation to supply coal which
the public demanded.
The court said it was not Illegal for
the stockholders of the rairoal TO take
stock in the coal company, but added
that where two companies, one of which
was organized by another, with COM
mon stockh olders as a rule and officers
of one TO a large degree officers of .he
other, made contracts which affected
the interest of minority stockholders
or of third persons or of the public,
the fact of their unity Of management
had to be considered in testing the
good faith of the transaction.
Sherman Law Violated.
Considering the nature of the con-
tract made, together with this unity
of management, the court held that
the commodities clause and the Sher-
man law had been violated.
The contract of 1909, Justice Lamar
pointed out, provided that the railroad
company would sell and the coal COM
pany buy all the coal mined during
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