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Show mm FOUND LEGAL United States Circuit Court So Declares Harriman Railroad Purchase. ' DECISION HANDED DOWN IN ST. LOUIS Court Sayt the Government Failed to Substantiate Averments of Bill ST. LOUIS, Juaa 84. The Uaited State, circuit court of tha eighth district dis-trict today banded dowa. aa opinion that the purchase of the Southern Pa cine by the Vpion Pacific "did aot amount to a direct aad aubataatial restraint re-straint of either interstate or latetaa tioaal commerce.' The recent deeisioa of the United States supreme court la tha Standard Oil eaaa waa cited among others by Judge Elmer B. Adams, who wrote the majority opinion which waa mailed here. Supreme Court Juatiee Willie Vandevanter. while a circuit judge of the eighth district, participated partici-pated in the hearing, deliberatioa aad conclusion ia the case and concurred ia the opinion. - Judge Killiam C. Hook filed a dissenting dis-senting opinion In which he expressed the belief that the goverament's petition peti-tion waa well founded and should have bees graated. Baal question at lasaa. "The only question." reads the opinion, opin-ion, "waa whether th Union Pacific company, extending from Omaha to Kanaaa City oa tha seat aad to Ogdes on the west,. was a competing line prior to 1001 for transcontinental baainees with the Southern, Pacific company, whoso line extended from New York oa- the eaat. ever th sea to NeWOr-leaaa NeWOr-leaaa and thence by rail t Saa Francisco Fran-cisco and t ortland oa the weet. "While the Union Pacific waa entirely en-tirely dependent upoa the Southern la-cifle la-cifle for ita connection westward, the Southern Pacific waa aot at ail dependent de-pendent apon the Union Pacific lot its connection eastward,1' read ..th J jority opinion, '--.. i "Out conclusion, " eontlued th opinion, "ia that all the fact nT thia ease considered in their natural. Tea-aonabl Tea-aonabl aad practical aspect aad give their appropriate relative significance, do aot make the Unier Pacific a "h-staatial "h-staatial competitor for traaseantineu- bueityrs with tb Mouthers Pseifio ia.dt prior to th year 1001. . "We therefore, paaa to a eomidera tion of some lees important matters relied oa by the government to establish estab-lish destruction of competition between those companies. Mot Against Antt-Trast Liw. ; "Certainly. the desire to-appropriate tho trifling buaineaa done by the Southern South-ern Paeifie oa the minor line or to suppress a competition ia-teame-erhieb was in fh aggregate oflufh small proportions, pro-portions, could aot have been toe inspiration in-spiration of the vast outlay levolved ia th purchase of the Huntington stock. It did aot amount to a direct and substantial restraint of either Interstate In-terstate or international commerce. Thia-ia aot eoAieient to briag it within the rondemnatioa of the anti trust law. "Tbia eoaeludea consideration of the effect of the transaction chiefly relied on by the government ia this raee. But it ia contended tbat tha purr ha ae by the Union Paeifie of fc controlling interest inter-est in the stork of the Northern Pacific Pa-cific company waa also violative of the anti-truat law. "Without dwelling on the reason for the purchase of thia stock, disclosed in the preceding statement of facta, 'it ia auffirient to say that if any controlling interest waa thereby acquired, it was lost some time before! thia suit was in stituted snd thnt none of that stock is sow keld by or for the Usioa Pas i fie company. "Aa there ia so showing of eny like ambitious project . ia this respect for the future, we fail to discover aay opportunity op-portunity or reason for the injunctive iclief on this uecouat." ; Investment la Santa Fa Lawful ' The court held that the Investment of the Harriman linea in the Sasla Fe waa not for acquiring control, and that if it waa foi obtaining inside information informa-tion concerning the operation of a great competitor they chose a lawful wav for doing it. . "The conclusions of fact dispose a this case," the opinion concluded,' "without the nereaaitv of determiq ing the question much debated in brief nnd argument of whether holding control con-trol of the Southern Pacific compaay by ' purchasing stock of individual owners could in any view of the case have contravened the anti-truat law. On the facta of thia caae, with all their reasonable aad fair inference, we conclude con-clude that the government has failed to substantial the averment of ita bill. "Mr. Justice Vaa Devaater while a circuit judge participated ia the hearing, deliberatioa and reectuaion in thia ease, aad he new concurs ia this opinion. - "The bill muat be diamiaeed and a decree will be entered to that effect." Caused Ho Change tn Bates. The merger, according to the court, did not rnuee a change in rates caused ao complaiota of discrimination and bo eoaepirarv. Concerning these feature th opinion reads: "Tho proof ahows that, after 1B0I aa well aa before-, the re tee for traee-centinaatal traee-centinaatal traffic were the aame ever both the Union Pacific sad. Southern pacific liaee, "There haa aiBe then bees. With (Continued oa page 7.) MERGER (Continued from psgo 1) retpeet to either of these liaet. no impairment of service, ao discoatinu-sure discoatinu-sure of efforts to satisfy tha nubile and no complaints of ahippera of any inferior or inadequate servica "A rubstantial majority of the stock of the Southern Pacific company com-pany hat been held by parties other than the Votou Pacific company, but we faii to find any romplaint by such holders of any diseriminatioa against their roaj or of anv failure to properly prop-erly promote ita welfare. None of the minor points charged to have been deprived de-prived of competitive opportunities by Jhe Huntington purchase are ahown to have suffered from tha result of that purchase. ' "On the contrary, hundred of millions mil-lions of dollars have since 101 been expended on theae roads. Their pby sical. oonditinn has been vastly improved im-proved and their efficiency for public service, as well aa for private profit, has bees greatlv enhanced. The whole proof, taken together, we think, fails to disclose any contpiracy to restrain interstate or foreign commerce in t lation of the Brat section of the Sherman Sher-man act. No Evidence of Conspiracy. ' "The tame eontideratiens lead to tha conclusion that no combination-or conspiracy to monopolize or attempt to monopolise trade or commerce amdng the states, or with foreign aa-tiont, aa-tiont, wat entered into. Moreover, the fact that the Union Pacific company did not seenre the control of the banta Ke road, a thoroughly sufficient, well equipped and powerful rival for transcontinental trans-continental business, or the Denver a Bio Grande road, a potential and titter iv actual and weweWul pivnl at the same road, affords additional and conclusive evidence of no such combination combi-nation or conspiracy. "Tha purchase by the Union Pa-cifie Pa-cifie companv soon after acquiring the Huntington stock of a majority of the capital stock of the Northern Pacific companv tends to the opposite conclusion, conclu-sion, but in view of the main reastfn for its acquisition and of the other facts just rei erred to, as well as to the total cessation of any relations between be-tween that road and the Union P-ciflc P-ciflc company, we are indisposed to give to that purchase alone any considerable con-siderable significance." Salt Begun In Salt Lake. The government 'a suit in equitv sgainst the Houthern Pacific Railroad company and the Union Pacific .Rail-road .Rail-road companv to enioin the continued control of the former by the letter was tiled in Halt Lake City, Utah, February judicial circuit of the VnittA Btates roort had tb ease asder advisement since the arguments. The suit was tried in the eireolt eeart under the expedition act of congrese. An appeal will be made directly ta the United Htatea snprems oourt. 2, lfi. "The bin ehargvM conspiracy and the formation of a eomhinatioa in violation vio-lation of the Sherman anti trust act parsed hv congress to protect trade and commerce against unlawful monopolies. monop-olies. - - The . defendants named in the case were the Union PaciHr, Oregon Short Line, Southern Purine. Oregon Railroad k Navigation company, San Pedro, Loo AngHes Salt Lake Railroad company, Atrhison. Topeka Santa Fe. Nortbero Psciflc. Oreat Northern Railway, the Farmers' Losn snd Trust company. Edward Ed-ward H. Hsrriman, .Iscoh H. Schiff. Otto II Kshn. .lame Stillman, Henry H. Rogers, Henry C. Frick nnd William A. 'lark. The government e petition was signed hy Attorney General Bonaparte and his special assistants. It sets forth in detsil the agreements by which the defendants at timea since 1IKI1 were alleged to have secured for themselves snd others the mansgement and control of the various defendant roads, their branches and ateanwhip lines and to have ever since operated them in restraint re-straint of commerce. Two Defendant Hay Died. Since the suit wss filed Mr. Hsrri man and Mr. Rogers have died. Judgr R. S. Lovett, successor of Mr. Hsrri man in the railroad system, waa made, by stipulation, a defendant. Attorney General Rnnnpart and Assistant At tornev General Purdy retired from offfre while the suit was pending. Hear ings were held in many eitiee of the country. Arguments were made In the case be fore Judges Hanborn, Hook. Adams and Vsndevanter, now a member of the United States supreme court, Octcber IS, 10141. in St. Petit, r. A. Severance nnd Krank 8. Kellogg argued for the government. Judge P. Y. Dunne of California spoke for the Southern Pacific, former Senator John '. "Kpooner appeared for Henry ('. Frick. N. II. Loomis of Omaha for the Union Pacific and Psvid T. ' Wstson of Pittsburg submitted a special brief and argued for all of the defendants. The ytdges of the eighth |