Show J r CENTRAL GOES TO ESPEE I b Jill A lilt A A L JIL lONG DISPUTE OVER RAilWAY I SEEMS AT END ED ENDI Roads Ordered Divorced By Supreme Court Joined By I C C SUBJECT TO REVIEW Traffic Agreement With U P Makes Settlement Satisfactory l I Settlement of ot the control over the control of or the Central la In Ia chic railroad recalls the lie promie made le by Julius I on till the s land tand nt at the tho hearing lii III IIII recently Mr 11 Knitt I schmitt who tho Is chairman of th hO board of ot the Southern Pacific coni pan corn Om I pan Imn told the commerce that If It the 1 company was Ih gh Riven lJ en nub ol oJ olof o of the ii Pacific the in Pacific company c upend thousand thousand- In I Inze th the hc line lino from Ogden to II u r V IT l A AW 1 W ASHI Feb JO cb JO rho of ot the tha South Southern rn om pany to retain retain- Its present tnt control o of the Central PacifIc 0 ship of ot its stock and lInd lease of ot Its aas as granted today In full tull b by a de- de de decision citon of o the Interstate commerce corn com commissIon 1 mission Although the supreme court In 19 Although lit at the thc end of ot 11 scars lears of ot litigation over the existing merger of ot the oad i-oad held them to be a combination In restraint of competition and ordel ed them separated the commission with aith but one ono member dissenting declared their maintained union s s necessary necessary in the tho Interests of ot the wet west western ern states they traverse erse and tho the coun coun- country coun- coun country try ry as 03 a whole Further the majority a In Further former policy polley of the nation In demand demanding log ing maintenance of ot competition aboe abo I all other things In transportation service had been reversed by the congressional enactment of ot the tran tran- tran trani net let of 1920 ao permitting gen eral con consolidation of railroads un under lN supervision On thIs I ground tho the maintenance ot of thus merger of ot the t two tao 0 roads not Ith- Ith standing the courts court's decree was dc- dc de dared de-dared cia dared red to be bo legally authorized and and In of ot public necessities ties SUBJECT TO REVIEW RI The Tho opinion pointed out however that the conclusions of ot the commis slon commis-slon ion slon would be subject to review re bY bYthe bythe bythe I the courts before they could effective I Commissioner McChord in dIssent from the v lew few ol ot his associates of ot the majority declared the- the findings to the situ will 1 of ot congress as ex cx expressed Ires pressed ed in toe legislative art a t t conferred the po powers ers Invoked In n cae With Commissioner Campbell a ho entered a partially concul ring opinion he concluded that the Central Pacific I Compan by its nature as a corporation could not legally lease to the Southern Pacific withoUt tt federal deral legislation WV T v tvis CU OFF GUI OrF BUILT I Chairman Mevel Ie el and CommIssioner Aitchison and Campbell also suggested that in of ot receiving Ing th authority to hold the Central I thc Southern Pacific should be spec spec- required to n the tho Na Nil Igo 10 Two To l t I C C G VES C PI P CONTROL TO T S P Traffic Arrangement Makes Action Satisfactory To Union Pacific I Con Continued tinned from rage pago One I j I I tron cut a contemplated new line ot of railroad t In Oregon Orccon TraffiC agreements reached between the tho Union Pacific and ond Southern Pacific steins and between the tho Western estern allowing PacifIc and the tho Southern Pacific al- al n al lowing lowing- reciprocal rights righta for tor main main- maintenance maintenance of ot traffic service over the Central Pacific lines the majority or of orthe the commissIon held hae h ve v eliminated nearly all nil tho the objections which the western estern shippers states communities hitherto have advanced to the merger of ot the t two 0 roads I INTERESTS S I The Th agreements In question all nil ot of which are alme timed aimed l at tt full transcontinental service over the tho Central Pacific route which runs via Ogden and competes with the South South- Southern ern em Pacific's Pacific ow ov oTin n transcontinental route running via ila la El EI Paso Puso ha hae have e satis satis- satis satisfied fied tie l all nil Interests Interest In the territory con con- concerned con concerned the decision said that the present unity of If the tho Southern Central Central combinatIOn should not be disturbed The Tho court In or the ro tda disassociated the lon con con- continued con tinned directed the tho In Installation of a as s 51 stem ot of joint use of ot tracks ter- ter ter terminals and facilities by the two cor- cor corporations corporations cor corporations after arter their separation We Yo are com convinced con that e even eien en it If ever thins thing of ot this nature which cui be done ilono were ere done don tho the hold held In discussing discussing- this point the the re- re result re result sult stilt woul would be more moro expensive pensive and efficient and nd satisfactory ser serico Ice than can be b rendered under unified untried control The t two 0 systems system would be bo weakened both financially and from tho stand stand- standpoint standpoint standpoint point ot of service In the tha course ot of time this mIght aught find a par par- partial partial par partial remedy but hut In many respects no remedy 0 be bo possible MEANS MORE I EXPENSE The Th record record justified the tho conclusion that separate operation of ot the Central PacIfic lines will disrupt existing routes routes and sen service serice Ice In CalifornIa and between that state and adjacent states and except to the tho extent that the tho rupture may be bo mitigated will will Ill tender lender Impossible the continuance once ance ot of o much valuable transportation service now conducted over the th Cen Cen- Central Cen- Cen Central Pacific and Southern pacific lines without regard to 10 corporate owner owner- ownership ownership ownership ship Such separation will result to toan toan toan an Indeterminate extent In the th In- In increased In Increased creased cost of ot operation and d duplication duplication cation cotlon ot of capital Investment In rail rail- railroad railroad rail railroad road facilities and Increased cost ot of operation Moreover It Is doubtful whether I for a time at least the Central Pacific It if operated as an independent carrier would have hav the th earning arning en- en ca capacity credit and financial stability to sustain the tho th heavy burden of ot Its fixed charges chartes and provide the tho new capital for tor Its equipment and I Im Improvement provement necessary In the future to meet the th requirements of ol public son son- sonico service senI I ice ico Indeed there thero are ar reasons for forgrave forgrave grave doubt whether hether the Interests ot of the country as a whole would not be adversely affected by the financial problems and results consequent upon such a s separation fn EXPLAINED From the legal egal standpoint the tha de- de decision de dc decision explained the th supreme cour court decision tho the mergEr was legally In effect and to be considered the final authority But the th commis commis- commission sion itself viewing Ing the th two railroads ns as In effect separated under PO powers ers conferred upon It by the transportation transportation tion act authorized the th Southern Pacific company to own the tho th capital stock ot of the tho Central Pacific and to lease until December II 81 1984 UK the lines which the th latter company owns The authority thus granted the th order said may be b terminated at any time by b the th commission and Is I contingent upon the th maintenance of the traffic agreements ments mentioned Further the unification ot of the t two 0 lines contemplated contemplated plated will become becom null and void either It if the he Southern Pacific company dis- dis disposes die dis disposes poses of ot the Central Pacific stock or tr it the commission Itself Itsell before the consummation ot of general plans for tor consolidation of ot railroads declared that the th merger m of ol the two railroads Is an obstacle to such consolidation |