The Washington times., 1922-08-06

cific system did not consist Of con-
solicitation OF previously competitive
lines.
Had . sse.Year Lease.
The District Court found that in
1883 the joint ownership Of the two
roads found expression in ss9-year
lease of Central to Southern Pa
cific. This occurred seven years be-
fore the Sherman law Of 1890. never
designed to split ZIP unified systems
that were already In existence.
The trial proved that in 1899 the
Central Pacific was forced intoN ne
gotiations with the Government re-
garding the repayment Of $4,000. 900
advanced to the railroad in it's early
construction period.
The Government finally took the
Central Pacific's notes, successfully
payable over q ten-year period. How
ever, II considered the security be.
hind these notes insufficient until
the guarantee. OF the Southern Pa
cific was added.
The District Court held that the
Governments acceptance Of this
guarantee was q recognition Of the
southern Pacific's proprietary inter.
est IN the Centra faCltlc.
Block Bonds Sold.
SO in 1899 the Central Pacific sold
s125, ZOO. 900 of bonds which--so
bankers estified-would have had no
market save for the Southern Pa
cific guarantee. The Government
got back its SIS 900, 900.
As part Of the financial plan
which provided the guarantee the
Southern Pacific acquired the stock
Of the Central and 20 formally COM
pleted the merger that had really
existed, without protest, since the
ss9.year lesae dated 1888.
The District Court. dismissing
the Governments petition, ruled
that the stock purchase had
created no new situation.
The action OF the United States
Supreme Court, reversing the Dis
trict Court. IL not tustifiable in
any terms that are comprehensive
to Californians.
II the routes competed actively
before the Hartman merger. why
were they not competing actively
after the merger was dissolved7
Has Its Own Agencies.
As . matter Of fact the Ogden
route has It's own soliciting agencies
separate and distinct from the South
ern Pacific offices which solicit for
the Sunset. There are forty-six such
agencies Of the Ogden route on the
Pacific coast and fifty-nine on the
Atlantic seaboard. Better evidence
Of thorough competition could hardly
be found.
- 1t IL strange that II the present
arrangement IL monopolistic and sub
people OF California DO not realize Il.
fhs Supreme Court has previously
interpreted the Sherman law ss
forhiddinE undue and unreasonable"
restraint Of trade.
II Californians IN this case feel
no such restraint, how can the Su-
prsme Court consider 1t undue or
unreasonable?
The decision Of the Supreme Court
Ia the more astonishing because II
conflicts directly with a decision of
the Interstate Commerce Commission
which in another case declared that
Southern Pacific ownership Of both
Sunset Gulf route and Central Pa
cific did not tend TO prevent or re-
duce competition.
Order Made IN 1v1Z.
In 1919 Congress ordered all rail-
roads to divorce their water lines
which did or might compete with
the rail lines, unless the Interstate
Commerce Commission should decide
that such continued ownership of
water lines would not tend to prevent
or reduce competition and unless II
worked to the advantage and con.
80 - ~
people.
The Southern Pacific realised that
its Atlantic steamship lines from
Gulf to New York were part Of the
Sunset route which did or might
compete With the Ogden route, Of
which the Central Pacific was . part.
So the raiiroad had to apply to che
commission for permission to retain
it's water lines.
The commission granted the ap..
plication after full hearing, Az
which all shipping interests Of both
Atlantic and Pacific begged that
the Sunset route be not broken In
two.
That is, the Interstate Commerce
Commission, the greatest public
body Of railroad experts In the
country, decided that the Southern
F-hChiU CCutinucn OwDttrulp Ok
both Central Pacific and through
Sunset route did not tend to re-
duce competition between the two
and was for the advantage and
convenience OF the commerce of
the people. The Supreme Court
says It knows better.
Conflicts with Policy.
The Supreme Courts decision is
likewise In conflict with national
policy as expressed in the 1880
transportation act. That net or
dered the Interstate Commerce
Commission to prepare a plan of
consolidating the railroads into q
limited number Of regional sys-
TENS.
Fortunately there In way to
prevent the unfortunate dissolu-
tion which the Supreme Court has
ordered.
The 1920 transportation act
apart from the provision regarding
consolidation plsls--empowers the
Interstate Commerce Commission
to authorize the control OF one car.
rier over another by either lease
OF stock purchase, provided only
that such control 10 In the public