The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-08-06
Government Expects to Add
Millions to Rail Revenue by
Abrogating Contracts.


opera ton Of the yards. and in addition
10 have been placed by mere possession
OF the facilities they afforded In posi-
tIon OF advantage over other packers.
In exchange for the possession OF the
Harsimus yards on exceedingly favor
able terms. the packers are alleged to
have shipped all their live stock sent
from Chicago. Omaha. East st. Louis
and othe.. places to New York over the
Pennsylvania lines to the loss OF the
New York Central and Lehigh Valley
Railroads, which had previously had this
business
One of the indictments fixes the saw
ing to the packers through their posses
sion Of the Harsimus yards at s3oo,Ooo
in the three years preceding the finding
OF the Indictment. The Government
figures indicate that the packers have
saved $4,000 in this manner in the
six years In which the alleged conspiracy
has been effective.
Fines Would He sl2O,OOO Each.
The six counts of two indictments
make the defendants liable. upon con-
viction, to fines aggregating sl2O,0Oo
each.
1t was said by a Federal official yes
terday that the real object of the prose-
cution OF the railroad and packers was
desire on the part OF the Railroad Ad-
ADMINISTRATION TO set aside contracts that
have become numerous throughout the
country because of a practice among
railroads OF leasing terminal facilities
such as yards, piers and elevators to
big shippers II was said that the rail-
roads will give the Government an ad-
ditional revenue of many million dollars
a year II these leases can be cancelled
1t was said by one Federal official
that the Information which led to the in
>pestigation was presented to the Depart
ment OF Justice by the Interstate Com
merce Commission. w. S. Thompson.
special Assistant United States Attor-
ney, who presented the case to the Grand
Jury, began his work six weeks ago
The indictments allege that to cover
the transfer by the Pennsylvania Rail-
road to Armour & Co. and Swift & Co.
of its Harsmus yards. the Jersey city
Stock Yards Company was Incorporated
November s. 1912, in Delaware. The
Jersey City Stock Yards Company Is a
fourth defendant named in the indict-
ments Stock control of the Jersey City
Stock Yards Company has been at all
times in the hands of Armour d co. ana
Swift & Co. 1t Is alleged.
The HarsImus property was leased to
the Jersey City Stock Yards Copany for
$3.50 a year. The indictments char
acterize this rental as wholly and to-
tally inadequate" 1t Is asserted that
the property. consisting of twenty acres
occupied by valuable structures has n
market value of 81 $50, 900, and that its
rental should have been at least $780,
900 wear 1t is asserted that the ack-
ers could have sold the leasehold they
obtained under such advantageous terms
for 81 900. 900. The lease was for term
of ten years, with a renewal privilege
for ten years more.
LighteraRe Service Given Up.
In giving up the Harsimus yards the
Pennsylvania Railroad also surrendered
the operation of a lghterage service be-
tween the yards and the piers at Thirty
ninth and Fortieth streets, Manhattan.
(which served the New York Dressed
Beef Company of Eleventh avenue and
Thirty ninth street. an Armour sub
sidiary. This is alleged as further I'M
fair advantage given TO the Armour
Company over its competitors.
The Government charges that Armour
& Co and Swift & Co. In possession OF
the only facility of the Pennsylvania
Railroad for the handling of live stock
shipped to New York at the Jersey City
freight terminal took toll from their
competitors who shipped to this city over
the Pennsylvania lines. Possession OF
the Harsimus yards by the Jersey City
Stock Yards Company also placed Ar
mour and Swift in position to acquire
accurate information concerning the
shipments Of their rivals. 1t IL charged.
A copy OF letter, dated February :,
1919. from George ID. Dixon, vice-presi-
dent and manager of the traffic depart
ment OF the Pennsylvania Railroad, TO
Samuel Rea. president of that company,
is included In one of the indictments.
Mr. Dixon informed Mr.. Rea that II
had been deemed advisable to permit
the Armour company to acquire, IL they
could. the Halstead property at Seven
teenth and Cole streets, Jersey City, as
well as the Harsimus yards. He advised
Mr. Rea to submit this suggestion to the
board of directors because II changed an
earlier understanding. The remainder OF
the letter follows:
In making this recommendation. II Is
felt that our company will. no doubt
benefit TO the extent that we will carry
considerably more live stock over our
rails to Jersey City, which live stock
will be slaughtered at the Jersey City
Stock Yards property and transferred 10
the Halstead property of Armour & Co,
at which point It will be dressed, cured
and packed for shipment.
Would Control All shipments.
1T Is further understood that the Jer-
sey City Stock Yards Company, as well
as Armour Il Co, agree that all live
stock which they can in any way control
shall be shipped over the rails OF the
Pennsylvania Railroad system to the
Jersey City stock yards for sale or
slaughtering
I'm addition TO the above. we have ar.
ranged to make an agreement with Ar.
mour & CO.. who will be the owners OF
the Halstead property. that any and az
of their traffic shipped in or out Of this
property Will be routed and forwarded
via the Pennsylvania system, eXcent
where 1t is impracticable to do so. This
We feel. will tie to our lines TIE traff1C
to and from this plant. and II Is the
purpose of our operating officer to take
up with the lines which already reach
this property the question OF running
rights or else arrange to get into the
property with our own rails. Under the
present management we can reach the
property by the payment OF switch.
ing charge or a pro-rate OF the freigh,
rate"
For the purpose OF concealing the
! possession OF the Harsimus yards by
| Armour & Co and Swift & Co. IL is
| charged that they procured the election
Of j. g. McFaSyen William M WIZ