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Show f ARR1AN MERGER 8011 DECIDED . mil ' IBJnion Pacific and Southern Pacific, Operated! Operat-ed! ,nS Bfller 0ne Control, Are Not in Con j flict With the Sherman Anti-Trust Act J and Are Not in a Conspiracy-11 Conspiracy-11 Sweeping r Victory For the Harriman System ; 3 P 1 ,01 h St. Louis, June 24. The merger of 'ill! Ie Southern Pacific and Union Pa-iTciv Pa-iTciv lc'c railroads is legal, according to ,jjl Ian opinion handed down by the United re- KStates circuit court of the eighth dis- n J f'tr,Ct- Ilgi Judge Hook filed a dissenting opln- vi? I rcn n w'ch no expressed the belief fthat the government's petition was j iwell founded and should have been "',$ I granted. -J1 I While tho Union Pacllfc was de-S de-S (Pendent on the Southern Pacific for J r its connection westward, the South-jrm'jj South-jrm'jj 'ern Pacific was not at all dependent 'ja iupon the Union Pacific for its con-tljts con-tljts inectlon eastward, read tho majority )?! decision oj:1 t "Our conclusion," continued the jljp Joplnion Is that all the facts of this jiaii case considered in their natural, rea-ItSji rea-ItSji leonable and practical aspoct and given c5j tbeir appropriate relative significance fttj ;do not mako tho Union Pacific a sub-iitoftBlantlal sub-iitoftBlantlal competitor for transcontln-rjl transcontln-rjl ental business with tho Southern Pn-eS Pn-eS clfic In or prior to the year 1901. csift I "We' therefore, pass to a decision 553s- iof some less important matters relied i4ft 'on by tho government to establish rijat 'destruction of competition between 'pt lithose companies tfjj "Certainly the desire to appropn-cxm appropn-cxm ate the trifling business done by the 'jj Southern Pnciflc lines or to suppress 3J3J ;'a competition in traffic, which was ,38 An. the aggregate of such small pro-alnl pro-alnl iportlona, could not have been the In-fiJ5 In-fiJ5 ;spIration of the vast outlay involved 39 !u the purchase of the Huntington gB 'stock 5? "lt d,d not amount to a direct and KMrf substantial restraint of either tote-Mr tote-Mr state or international commerce. This P 'flu not sufficient to bring it within j?j ; 'the condemnation of tho anti-trust jj j "This concludes consideration of JS the anti-trust law, ohiofly relied upon 2 i by tho government In this case. But Is contended that tho purchases by the Union Pacific of a controlling In- KUercst In the stock of tho Northern (Pacilfi company was also violative rOf teh anti-trust law 'Without dwelling on the reason for I the purchase of this stock, disclosed slu the preceding statement of facts, Jit is sufficient to say that if any con-strolling con-strolling interest was thereby acquired .lit was lost some time before this suit ''was Instituted and tliat none ot that 4s,tock is now held by or for the Union j Pacific company. ' "As there is no showing of any like ambitious project in this respect for 'the future, we fail to discover any op-portunlty op-portunlty for tho Injunctive relief on this account. " , The court held that the Investment - ,cf the Harriman lines In tho Santa tIFe was not for acquiring control, and that If It was for obtaining outside Information concerning tho operation of a great competitor, they chose a llawful way for doing it. t "Tho conclusions of fact dispose ' of this case," the opinion concluded, "without the necessity of determining determin-ing the question much debated In "brief and argument of whether hold-' hold-' lng control of tho Southern Paciifc company by purchasing stock of Indl-; Indl-; vldual owners could In any vlow of ,the case have contravened the antitrust anti-trust law On tho facts of tho case, VJvlth all their reasonable and fair Inference, we conclude that the government gov-ernment has failed to substantiate tbe averments of Its bill. j "Mr. Justice Vandovonter, while a circuit Judge, participated In the hcar-i hcar-i lng, deliberation and conclusions in this cose and he now concurs in this opinion. "The bill must be dismissed and a decree will bo ontered to that ef- feet. ,j No Conspiracy Shown. 'i Tho merger, according to the court, I dl-i not cauFO a change in rates, no rj comrblnts of discrimination and no f conspiracy. Concurring In these fca- ! turos the opinion roads: j "Tho proof shows that after 1901, I as well as before, the rates for trans continental traffic were the same over Vcth the Union Pacific and Southern i Pnr Iflc lines There has 6'.nco then, with respect to either of these lines, hnen no Impairment of servlc0. no discontinuance ot efforts to satisfy the public and no complaints of shippers 1 of any Inferior or Inadequate service "A substantial majority of the stock iof the 8outhorn Paclfls has been held bv the parties othor than the Union t Pacific company, but we fall to find ?any complaint by such holders of anv discrimination acalnst their road or of .'nv failure to properly promote Its 'welfare. Nono of tho minor points charged to have boon deprive-! of competitive opportunities by the Hunt-Jncton Hunt-Jncton purchase are shown to havo Fiiffprod as a result of that purchase. "On the contrary, hundreds of millions mil-lions of dollars have, sine 1901, bepn .exoended on these roads. Their physl- c-l condition has been vastly lmprov-rBed lmprov-rBed and the efficiency for public sr- 5jvcc aj, wc)j a8 for j)rvnto prontF iIBI letl CTcatIv enhanced. The whole ljMrrroof. taken locethor. falls to dls-JBj9lose dls-JBj9lose any consnlracv to restrain in-5Bw!rrftato in-5Bw!rrftato or foreign commercft In viola-aBot-on of tho first section of the act. IIP The Bamc considerations lead to MM tho conclusion mat thoro was no combination com-bination or conspiracy to monopolize-or monopolize-or attempt to monopolize trade or commerce among the states, or with foreign nations. Moreover, the fact that the Union Paolflc compuny did not secure tho control of the Santa Fe road, a thoroughly sufficient, well equipped and powerful rival for transcontinental trans-continental business or the Denver & Rio Grande road, a potential and later an actual powerful rival of the same business, affords additional and conclusive con-clusive evidence of no such combination combina-tion or conspiracy. , "Tho purchase by the Union Pacific, soon after acquiring tho Huntington stock, of a majority of the capital stock of the Northern Pacific, tends to the opposite conclusion, l)ut In view of tho main reason for Kb acquisition ac-quisition and of the other facts just referred to, as well as to the total cessation ces-sation of any relations between thnt road and the Union Pnciflc company, we are Indisposed to give to that purchase pur-chase alone any considerable significance" History of the Case. The government's mjt in equity against the Southern Pacific Railroad company apd the Union -Pacific Railroad Rail-road company, to enjoy the continued control of the former by the latter, was filed in Salt Lake City, Utah, February Feb-ruary 2. 190S. The bill charged conspiracy and the formation of a combination in violation viola-tion of the anti-Sherman act, passed by congress to protoct trade and commerce com-merce against unlawful monopolies. The defendants namedLJn "the-enso were the Union Paclllflc, Oregon Short Line. Southern Pnciflc, Oregon Railroad Rail-road and Navigation compnnv, San Pedro, Los Angeles and Siilt Lake Railroad company, Atchison. To-jcka and Santa Fe. Northern Pnciflc, Great Northern railway, the Farmers' Loun and Trust company. Edward H Harriman, Harri-man, Jacob H Schiff, Otto H Kahn, James StJIlman, Henry H Rogers, Henry C Frlck and w'illiam A. Clark. The government's petition was signed by Attorney General Bonaparte and his special assistants. It sets forth in detail the agreements agree-ments by which the defendants at times, since 1901, wcro alleged to have secured for themselves and others, the management and control ot the Aarl-ous Aarl-ous defendant roads, their branches and steamship lines, and to have ever since operated them in restraint of commerce. Slncctho suit was filed, Mr. Harriman Harri-man and Mrs. Rogers havo died, Judge R. S Lovctt, successor of Mr. Harriman Harri-man In the railroad system was named nam-ed bj stipulation, nnd Attorney General Gen-eral BonaDartc and Assistant "Attorney "Attor-ney General Purdy have retired from office, while the suit was pending. Hearings wore held in many cities. Arguments wero made In the case before Judges Sanborn, Hook, Adams and Vandevanter, now a member of the United States supreme court October Octo-ber 15, 1910, In St Paul. C A. Severance Sev-erance and Frank B Kellogg argued for the government, Judge P. F Dunne of California, spoko for the Southern Pacific, former Senator John C Spooner appeared for Henry C Frlck. N H Loomls of Omaha, agent of Union Pacific, and David Watson of Pittsburg submitted a special brief and argued for all of the defendants defend-ants The judges of the eighth judicial ju-dicial circuit of the United Statos circuit cir-cuit court had the caso under advisement ad-visement since the arguments. The suit was tried In the circuit court under tho expedition act of congress. con-gress. An appeal will bo made dl- (Contlnued on Pago Sevon.) HARRMAN MERGER SUIT DECIDED (Continued from Pago One ) roctly to the United States supreme court Dissenting Opinion. Judge Hook, in his dissenting opinion, opin-ion, refers to the governments complaint com-plaint of unlawful contract in restraint of trade betwoen tho Southern Pacific and the Union Pacific rallronds, thus destroying or suppressing competition competi-tion lie says the combination was effected by the purchase by the Union Pacific of part of the stock of the Southern Pacific road Judge Hook says there Is no suhBLintlnl difference differ-ence between the holding of tho corporate cor-porate stocks of two companies by a third, such as was condemned In tho Northern Securities case and the holding hold-ing by one of those two in tho stock of another He says It would bo idle to hold that while two competing railroad companies cannot can-not lawfully submit to a common control con-trol through a separato stock holding organisation, they may do fio by dispensing dis-pensing with that medium That would be regarding shadows and letting let-ting the substance go The language of tho Sherman act In this particular is broad. Judge Hook coincides with the ma- jbrity of' the court In regard to the-Joint the-Joint ownorfthip of the Lor Angeles Sc San Pedro road. JudKoHbok holds that th.e question as ta whether th,e Union' PaoJIlc and the! Southern Papifi roada were com petltors, which the majority opinion held to bo against the.governmcnt, was a question of fact to bo decided by the testimony of many expert witi ne8sos and theso -witnesses, Judge Hook holds, gave conclusive testimony, that "thoro was active, vigorous com petition." . The dissontlng opluion says the opinion of tho court was on two main grounds: "First, that the combination of com potitive traffic of the two systems was not a substantial percentage of the total traffic, and, "Second, that trade was not restrained re-strained by the combination, because the Union Pacific was an Intermediate Intermed-iate through route and depended for compolltlve traffic on connecting carriers, car-riers, which, unaided, could not maKO I a through Joint rate "This decision so greatly narrows the act of congress that very little Is left of it when appllod to railroads." Tha opinion states' ' "Under one, or both, of these tests the Union Pacific could piobably have lawfullr purchased control of nil tho groat railroad svstcms in the -United States." |