The New York herald., 1922-08-01
SOUTHERN PACIFIC
WANTS REHEARING
Asks Supreme Court to Apply
Rule Of Reason in Central
Pacific Case. -
INJUSTICE IS ALLEGED
Declares Sherman Act Should
Not Subvert Titles Vested
Before It's Passage.

WASH INGToN, July 31.-The Southern
Pacific Company filed to-day in the Su-
r,reme Court an application for rehear-
ing of the famous Southern Pacific case
ir which the court recently handed down
an opinion directing the company to
divorce itself of ownership and control
OF the Central Pacific Railroad.
The company in its petition grouped
the grounds advanced for the rehear-
ing under five heads and among other
things urged an application of the Sher-
man act lin the light of the rule oil
reason" insisting that under the laws
Of California there was authority for the
lease made by the Central Pacific IN
1885, which, IL valid. constitutes the
Southern Pacific proprietor Of the Cen
trail Pacific for ninety-nine years. Ihe
petition asserted that it was not the IN
tenticn of the Sherman act to "supVert
titles vested before~its passage" and
that Congress in considering the re-
funding OF the Central Pacific debt
always looked for a guaranty OF It's
,rayment by the Southern Pacific"
No action will be taken upon the
petition until the court meets Tor It's
next term In October.
The opinion of the court. the petition
said fails to do justice to the moral or
legal aspects of our case under the set
tlement." in that II leaves out OF con-
sideration governmental action from
1885 to 1898 indispensable TO sound
Interpretation Of the powers conferred
upon the (refunding) commission anu
the settlement made by It," The OPINION
also Ignores the lease as the predicate
upon which the guaranty was requested
and given" the petition asserted. claim
;t go
sion did not request but merely unre-
sistingly appointed the Guaranty.
The decision of the court Is further
criticized in the petition on the ground
that lit ignores the fact that without
the guaranty the Government could not
have obtained payment of the debt ! also
that "it takes no account of the fact that
without the concurrence of he Southern
Pacific the Central Pacific could not
have complied with the terms OF the
agreement of settlement which required
the lease of the Southern Pacific 10 De
subordinated to the bonds issued by the
reorganized company" and that IT ig-
nores the fact that 1t was the first
duty of the commission to familiarize
itself with the plan Of reorganization
and 10 satisfy itself that 1t was ade-
uuate to insure the payment of the Gov
ernrnent debt within ten years."
The court. II asserted. treats the
question Of the legality of the acquisi-
ton Of the stock as determinative OF the
case. thus overlooking that 1t was the
intention OF Congress to authorizes the
commission to deal with the matter un-
der circumstances which would confirm
the Southern Pacific in it's position as
lessee then the ownership Of the stock
would not present a practical question
under the Sherman law until the lease
expired"
The company asked an opportunity for
counsel to present an argument on that
part of the orinion relating to the APP
portionment or use of certain properties
CONSTRUCTED or acquired during the uni
fed control of the two systems con-
tending that propositions upon which
they may be thought TO rest were never
presented by any pleading. never men
toned in the taking or evidence. at no
time argued and are not TO be
supported by any rule heretofore an
nounced or applied" by the Supreme
Court.
The petition further stated that the
Sherman law should not be interpreted
as requiring the disintegration of rail-