Show c HARRIMAN COMBINE It ORDERED DISSOLVE DI SL VE I nion Pacific's Pacific s Purchase se of Control of Southern Pacific Declared Illegal by Supreme Court of United States 1 CIRCUIT COURT OF UTAH is TO SUPERVISE REORGANIZATION I HV VT ASHINGTON Dec The The great grent Harriman merger meier created when the theW j W vY Union Pacific Railroad company bought 4 46 per cent of the stock of ot If the Southern Pacific system was split asunder to today ay by the court cf f the United tates as a a. a violation of the Sherman antitrust law J j Then with the end of the merger before it the court sent forth its por- por I declaration that thai while the law may not be able to enforce competition compe- compe combinations which render competition impracticable tiHon it can reach Justice Day announced the unanimous unanimous opinion pinion of the court Justice ante f. took no part in th the consideration of the case ease today but his finding when he was a circuit judge jud C to to the effect that the two o ds were ere not competitors and anel therefore no violation of the law lav had resulted reversed and annulled from rom the purchase was Instead f of following tho the re reasoning of Justice Vande anter and Judges r an n and Adams the court iu iii substance approved ed the minority holding cf Judge f Jt age Hook that the roads were competitors and that it was just as much 4 f. f violation of the law for one road rend to buy the thc controlling stock of a corn com competitor inthe in the N Northern Securities case to toT as is it was for a holding company as s in buy T the controlling took stock of two o competing companies i A As 5 the Northern Securities g company ny r failed nearly ten years year ago so ao the 1 plan ten fell today L mo 11 circuit court for the district o of h was directed to supervise the thc I. I of or the two roads after af er hearings hear hear- ings and In Ia emergency to appoint a 3 re re- I to sell the stock The Union Pa- Pa y If the circuit court seems eem proper I retain control of ot tho the old Central Contral i Pacific t line Une from Ogden Ogdon to San Fran- Fran Franto 1 Vise o. o A to io Salt Lake Route t d decision of ot tho the lOW iJ tt that I iw was no violation of ot w In the z Pt to acquire th the Northern EPt k Jc and the st at stock ck o of tiC y peka eka eka and aud Santa V nan com coro- I I pany afterwards abandoned and ana a s. certain tain tam interest In tho the San Pedro Los An- An seles eJes Salt Lake Railroad company compan was allowed to stand It Is Ls the general belief belic here that the tho application of the tile decision t to the railroad rail raU- road situation of or the th country will be widespread placing a powerful precedent precedent prece prece- dent In the hands hanl of or the attorney gonI gen gon- oral cral to prevent the consolidation o of 01 competing roads Department of ot Justice Jus jus- us- us tice officials however wore were not ot pro pro- pared tonight to discuss the full tull ef effect effect ef- ef feet of ot the decision upon other railroad rail rail- roads road Attorney General issued Issue a statement In which he declared that the opinion extended the principles of ot otI I Continued Co on Pa Pao ere 3 2 Column olumn 1 LINES MUST IE 1 D ion Southern Pacific Southe n Pacific Merger Declared Illegal I. I by Supreme Court SALE EE OF STOCK ORDERED luit Court for District of ol Utah tah to 10 Supervise the Reorganization 1 4 Continued from tram Page ge 1 i. thern Securities case and reaf- reaf art ar- ar t thO those of at the tho Stan Standard ard Oil on and ItH Terminal association Ju if In Jubilee JulIce D Da Day T Opinion rH Uce Day Doy In his hll opinion of or ofard ard Oil on and Tobacco cases of or ofas 11 car as the final authority on tho the of or tho the Sherman Ho pointed to the decisions f r re tho Standard Oil on and tobacco tobaccos being approved In those cases canes Co aeS as se s proceeded to apply appl to this erger the tho principles discussed in all alles' alles i es' es decisions sue I We Wc take It In this connection conne Uon he iM ld that tha t It ma may be regarded as S set- set k l ed d that ft combination which places threads Olds engaged In Interstate cornin com com- c in such relation as ns to create creato a angle dominating control In one cor- cor nilion whereby na natural and existing petition In interstate commerce Is ip dib r restricted or 01 suppressed 13 Is 13 l thin condemnation of the thc act While law e ma may not be able to enforce It can roach combinations hI blob h rend rendered red competition ble l. l I Nor or do dowe o we think It can cnn make nn any that instead of or reporting to I Terence crenCo rence done clone In the holding company as asas was as Securities case the controls control's control control- s 's interest In tho the stock of or one cor- cor corm m ration lon Is transferred to the UtO other 10 e domination and control and the tho ther r r to suppress competition are nci ac- ac Ired i ed In the tho ono one case cae no less than In the resulting mischief other and which tho statute was aimed Is luaU ally lally effective whichever form is Jo- Jo r added that a more effectual form combination to secure the thc control la a a competing railroad than for one on id d to acquire a dominating stock In In- In rest fest et in the tho other could hardly be De Ji i hc I V Argument r On Oc One b by one Justice Da Day took up th the 19 upon which the thc railways op bpd P d to defeat the governments government's suit I l considered the argument that h st ms were not competitors but l miners rs I To compete said the Justice e. e Is to tri trl trl for or something which another is I dr seeking ln arid and wishes to gain IH quoted tho testimony of ot railroad m this was what the Union Pa- Pa cm and nd Southern Pacific were doln doing at tte te time of or tho the purchase o l t to rates was not the only aim of he e explained but there was as to tho the character of or sen and the accommodations ed H fie He said aid that It made no dif dlf- c. c that rates r. were not 1 for forts forI I l ts bc being nb after tho combination Il itIs Is the scope ot or such combinations power to suppress nn and stifle petition or create monopoly which l tho the applicability of or the th thet et t. t Justice Da Day declared Toe rhe argument that tho the competitive was Infinitesimal ho dismissed the st statement that It amounted to millions of f dollars fc r Defendant tM Theory Rejected he hc took ui 11 the thc argument t that bi 13 Union Pacific was only a connect connect- Iii Tg g Fond foad and null really had no line Unc to San r but was dependent ent upon tho th I Pacific for such ucb terms at It t I ud ud make malic over o the old Central Pacific n Ogden to San an Francisco He lie 1 Il 1 that that was going too far that lie he e Pacific's Portland route was L and it would have o been detrimental detri detri- r mental to tho the Southern Pacific to have hae ha 3 an arrangement to carr carry tha j business from Crom Ogden to toAn An Francisco But tills case is not to be e decided docI cd on ont t he ho continued that only onh o much nuch of or the tue Southern Pacific 8 St S 'S t as as u operates between Ogden and has been acquired The i r may be Judged by what In f act t tIt It haw accomplished and the nat nat- ura iral and nn an probable consequences con of ot that th h wa wag vas done Because It would live hive Axe been lawful rul to gain b by purchase or if ti otherwise an entrance Into Call Call- ornia a. a over o the old Central Pacific os not r render it legal to acquire tho the tUre stem largely largel engaged tl In Int In- In t commerce in competition with road justice hay Day replied to tho the argument I It t st a Ii majority of ot the stock had not notten I b ten een n purchased an and therefore no con con- conI I been acquired lie He quoted Mr Ir I as saying that a a. compact ownership of or per cent of or a lg L corporation was sufficient to con- con reT It 41 r Com Competition t c tin the opinion Justice Day ra d IJ J court reaches the decision that the lie he Union Pacific anti ami Southern Pacific Ic stems prior to tho the stock istock purchase Verc e competitors g II l in Interstate t merce acting Independently as to toL 11 L arge amount mount of or such carrying trade wl d that since tho the acquisition of ot the Uio tock In question the dominating power t tho the Union Pacific has hug suppressed competition between th the system system- and s effected n a combination li In It restraint ff ct commerce within the prou pro- pro u ot or the act In In order to enforce enforce- the tho statute the thet wrt t I la Is required to forbid tho the doln doing I In 11 the future futuro of or acts like those tho o which are I found round to have been In violation thereof an and enter a decree which will effectually effect effect- naIl dissolve the combination I round found to violation of the statute Enjoined From Voting TotIng Stock The Thu decree should provide providen an ut in injunction injunction in- in junction against the r right ht to vote oto this 1 stock while in the ownership or control control control con con- o of or tho the Union Pacific company compan or oran an any corporation owned by It it or while held b by any corporation or person for forthe forthe or I the Union Pacific company compan and forbid any nn transfer or disposition thereof In 1 such stich wise vIso as to continue its control and should provide an Injunction against the pa payment ment of ot dividends upon such stock stoel while thus hold except to toa toa a n. receiver to be by tho court wItch shall collect and hold such Ruch dividends divi d until disposed of b by tho the decree of or the tho court As As tho court below dismissed the governments government's hill 1111 it was necessary to consider disposition of ot the tho shares of nf stock acquired b by tho the Union Pacific company which acquisition wo we hold constituted an unlawful combination In violation of or the antitrust act To effectually et- et ef effectually conclude the operating force torce of or the combination such a disposition should be made subject to the approval al and decree of or tho the court and an any plan for the disposition of ot this stock must bo be such as to effectually dissolve the unlawful combination thus cre created Th The court shall proceed upon the presentation presenta presenta- tion of or any plan to hear the government govern govern- mont ment and defendants and may ma bring In hi any additional parties whoso whose presence ma may be necessary to final division of or ortho the views tho the In conformity to herein expressed May a- a Retain Central Pu Pacific As to the suggestion made at the oral argument b by tho the attorney general gen on- on oral eral as to the nature of or orlIe the lIe decree that alone alono must be entered which while tic tic- destroying de de- strying the unlawful combination In Inso inSI In so SI far as the Union Pacific secured control of or the competing lino of or road extending from Now w Orleans and Galveston Gal- Gal Galeston Galeston GalI I eston veston to San Francisco and Portland would permit the Union Pacific to re ro retain rotam 10 tam tain th the tho Central Pacific from Og Ogden en ento to San Francisco and thereby control that line to the coast thus effecting a a. continuity of or the Union Pacific and anil Central Pacific from tho the Missouri n r to San Francisco as was contemplated by tho acts of or Congress un under er which the they were wele constructed it would bo he said 1 that nothing herein shall be considered considered considered consid consid- ered as preventing tho the government g or any part party In interest if so desiring desirIng- from pre presenting to the thc court a plan for accomplishing this result or pro- pro venting the tho court from adopting and giving effect of or an any such plan so pre pre- Three Thre th to Reorganize Any An plan or plans shall be presented to tho the court within three months from the receipt of the mandate of ot this court falling which or r upon the rejection by bythe the the- court of plans submitted within t such time times the thc court shall proceed by b receivership and sale salo If Ir necess necessary T to dispose o of ot such stock In such wise as asto asto asto to dissolve such unlawful combination The Tue government o has appealed from the tile decree which is a general ono one dismissing dismissIng dis die missing the tho bill So far as concerns the attempt to acquire the Northern Pacific stock and the stock of or tho Atchison Topeka Santa Fe ful Hallway t ta a. a afterwards arter abandoned and company compan a certain Interest in the San Pedro Los I Angeles ng Salt alt Lake L alc Railroad R company and unu other features of or tho the caso case dealt with and disposed b by the decree and of ot th the court below It Is sufficient clont without going into these theBo matters In iii detail to sa say as to them we wc find no nor r reason ason to disturb the action of or the court below but for the reasons stated the HlO decree shall bo reversed and ono one entered In conformity to tho the vows herein herein here here- in Iii expressed so far as concerns the thea acquisition a ot the s Southern P Pacific |