The New York herald., 1922-05-30

ciple. Justice Day asserted. the only diff
ference being that in the Central Pacific
the Southern Pacific acquired a compet-
itive system of 500 miles in length,
whereas in the Union Pacific the COM
peting system absorbed was 1000 miles
in length.
Reviewing previous railroad merger
decisions, Justice Day asserted the
court had collectively established. IN
these That zone system of railroad trans
portation cannot acquire another nor
substantial and vital part thereof whei
the effect of such acquisition is to sup
press or materially reduce the free and
normal flow of competition in the chan
nels Of interstate trade"
Ample proof had been furnished. he
added to show 1t had been the policy OF
the Southern Pacific to favor transpor-
tation on it's line by securing for itself
whenever practicable the carriage OF
freight which normally would move
eastward or westward over the shorter
line of the Central Pacific and its con
nections. for it's own much longer and
wholly owned Southern route"
The court refused TO accept the theory
of prior practical consolidation as jus
tification for q violation of the Sherman
act. The bearing of the ninetynine year
lease of the Central Pacific made in 1855
was reviewed. the court reaching the
conclusion that II could not have been
legally made without authorization by
Federal legislation. which was never
given.
Authority of Congress.
Congress has the authority "to regu-
late interstate commerce" Justice Day
said. and under its legislation conduct
becomes illegal which has the effect of
contracts. conspiracles or combinations
to restrain the freedom of interstate
trade or 10 monopoliZe the same in
whole or in part"
1--WE find nothing in these leases to
the Southern Pacific Company" the
Justice said which justifies the con-
tinued control of the Centrai Pacific by
the Southern Pacific after the Sherman
act became effective"
Other decisions were:
That it is not necessary for the Presi-
dent to review and approve personally
each individual case to make effective
the work of the retirement board in re-
moving officers of the army from tie
active list under the national defense
act.
Affirmed the decision OF the District
Court for the Southern District of Texas
in he appeal OF the city of Houston
against the Southwestern Bell Telephone
Company. The telephone company went
to court and proved that rates fixed by
the city in 1909 were confiscatory. The
court permitted the charging OF higher
rates and the city appealed
Held that life insurance companies
making loans In Missouri on policies
taken out In that State are bound by
the laws of Missouri. The Mutual Life
Insurance Company OF New York had
ttt IN cpt n al "a
of S107.542 awarded TO Mrs. Mary s.
.iebing on policy issued to her former
husband. Violation of contract unde'
the laws of New York was alleged.
Decision on Coal Losses.
Held that the Federal Government
was not responsible for losses suffered
oy coal companies during the war when
shey were compelled to sell coal at prices
sixed by the Government The Pine Hill
Coal Company instituted the suit seek
ing to recover seas, ,26f from the Govern
ment.
Affirmed the decision of Maryland
court that rights" on stock are not sub
ject to tax under the income tax law OF
1918. The Collector OF Internal Revenue
Of Maryland had sued the Safe Deposit
and Trust Company, as guardian for
Frank r. Brown. Rights 1t was held
and affirmed. consist of the sale OF
part of the stockholders original capital.
Only the gain over original cost Is held
taxable as income.
Held that collection of taxes under the
war revenue act of 1898 on the capital
and undivided profits of banks was
valid. even though the capital and un-
divided profits were invested. The FL
deity Title and Trust Company of Pitts
purgh had appealed n case from the
Court of Claims. 1t was test case for
1870 similar actions.