, 1922-07-10

preme court hid that the Southern
Pacific line fresn San Francisco hay
via Fl Paso 10 Galveston M New
Orleans. thenee connecting with the
Southern Pacific steamship lines to
New York city. In or should be com
petitlve with the Central Pacific lines
from San Francisco to Ogden. and
that the holding Of both these lines
by the Southern Pacific ec-r<$-y-
constituted a monopoly in violation Of
the Sherman antitrust act-
A coroilary OF this decision obvi-
ously Is tha the Central Pacific Is
part and parcel OF another tnnscon-
t~inenta1 system running from San
Francisco eastward via Ogden. Chey.
enne and Omaha
In order that the question at issue
may be fully understood IL is worth
while 10 quote from the decision as
follows
The Central Pacific with It's east
ern connection at Ogden forms one
great system Of transportation be-
" the east and the west. and the
Southern Pacific with Its roads and
connections. and steamboat lines.
forms another great transcontinentai
system for transportation from coast
TO coast Tho Central Pacific con.
~stitutes some soo miles or the trans
continental line Of which IL is q part"
And also such combinations. no the
result OF normal and natural growth
and development. but sprinsiny from
the formation OF holding companies,
or stock purchases. resulting In the
unified control of different reads or
systems. naturally competitive, eonsti.
tutes "A menace and a restraint upon
tina. freedom OF commerce which CON
areas intended TO recognize and pro
tcct md which the public is entitled
to have protested"
And also. "These cases. collectively.
establish that one system OF railroad
transportation n acquire another,
nor a substantial and vital part there
Of. when the effect of such acquisi-
ton is to suppress. or materially re-
duce tho FREE and normal f1ow of COM
petition in the channels Of interstate
trade.
In the instant case we are not deal
ing with the principle In the abstract.
The proof is ample that the policy of
the southern Pacific system. has been
TO favor transportation on it's line by
securing Ger !.-eis. whenever practic.
able. the carriage of freight which
would normally nov eastward or
westward over tho shorter line Of the
Central Pacific railroad and its con-
nections, for It's own much longer and
wholly owned southern route. This
course was limited by an arbitrary
rule during the time the Union Pa
cific dominated the Southern Pacific
from the stock purchase in 1911 until
the so-calied 'unmerger' in 1913, as a
result of the decision of this e5,,rt IN
the Union Pacific case. The com
peliing motive of this course Of con.
duct is obvious. The Southern Pa
oific owns and controls the southerly
route. and receives 100 per cent of the
compensation for freight transported
by its road and water lines. Over the
Central Pacific route it receives but
a fraction of the freight because the
union Pacific with its eastern con
nections takes up the carrying from
Ogden to the east. Self-interest die.
tates the solicitation and procurement
OF freight for the longer haul by the
Southern Pacific lines. While many
practices. formerly in vogue. are elm
mated by tho legislation of congress-
regulating interstate commerce, and
through rates and transportation may
be had under public supervision. there
are elements Of competition In the
granting of special facilities, the
prompt carrying and delivery of
freight. the ready and agreeable ad-
justment and settlement of claims.
and other elements whic hthst lcgis-
iation does not control.
at is conceded in the brief Of coun-
sci for, the defendants that it is true
Of all such systems that. other things
being equal. freight Is p~refercntially
solicited for the 100 per cent haul"
In the concluding part of the opin-
ion the supreme court states:
I'VE direct that a decree be entered
severing the control by the Southern
Pacific of the Central Pacific by stock
ownership or by lease"
The question therefore naturally
arises in the mind Of the reader. If
the supreme court has directed a sew
GRANGE OF these lines. why is that not
final? That question may be an
swered briefly by stating that the
UTie1ndi SUIT was luCQ oh Fcbt dd3y
II. 1914, under the then existing in
commerce. law in the United
States district court Of Utah and was
determined on appeal May 90 1922.
Meantime. there had interviewed the
transportation act of 1920, which in
addition to providing for the terni-
nation of federal control, instituted
during the war. and providing for the
settlement of disputes between carr
riers and employees, amended the
Sherman Act of February 4. 1887,
known as the interstate commerce
law. in a number of particulars. The
transportation act in its amendment
under section 4o7. provided Is follows:
whenever the commission is of the
opinion, after hearing upon applica-
ton of any carrier or carriers in the
transportation Of passengers or prop
ETY. subject to this act, that the acqui-
sition. to the extent indicated by the
commission, by one of such carriers Of