OCR Text |
Show SPROULE GIVES ANSWER Of S. P. Central Pacific Ownership Traced and Action Defended SAN FRANCISCO, June 13. Thnt the Southern Paciflr and the Central Cen-tral Pacific Railroads Have boon under un-der common control for half a century cen-tury and that their growth has been the dcclopment of a single railroad system, separate In name only: fllllnu a demand which a single company could not have filled, la the assertion in a statement Issued Monday by William Wil-liam Sproulc. president of the Southern South-ern Pacific company. The statement was Issued in commenting mi the re- i.nt I'nlf.ed State? supreme court order or-der directing absolute separation ot the two railroads. OWNERSHIP TRACED "The- Central Pacific has been leased leas-ed to tho Southern Pacific for 37 years," President Sproule said. He continued . "The Southern Pa ilflc has been the actual owner of tho entire capital stock of he roorgii nii-d I'entral Pacific Pa-cific for $2 years. The decision ot the supreme court is that these facts I ri In I Eolation of the Sherman act al-t al-t bought the Sherman act was not passed until 1890. "Besides all this, there is sufficient evidence that the Central Pacific and tho Southern Pacific were held in common ownership as early as October 1870. The official records prove that the two have been under common control con-trol and management for 50 years, ur elnce July. 1871'. ' The growth has been of one system sys-tem and not of two The two companies com-panies did what one company could not do under the circumstances of tho time Each has been necessary to the other for effective service, WHY LINE WAS BUILT ' The supremo court now dec ides In effect that the lease of the Central Pacific to the southern Pacific became be-came void when the Sherman act was passed because of the Sunset route through Texas on the south ompetlng with the line through Ogden on the north Tin business fact Is that the line down the San Joaquin valley and over the Tehachapl mountains --o Ix9 Anpeles. was built to meet the public demand for a railroad 'through the San Joaquin valley and on to southern California. The same public demand Was behind the further extension of the iine from Los Angeles eastward th "ugh El Paso and to Sierra Blanca, Texas. Th- Central Pacific carried the extension Into the San Joaquin valley, val-ley, as far as Goshen, the Southern Pacific taking It up there and carrying carry-ing it on southward and eastward. Everything that was done, had behind It the backing of public desire, with the approval of congress, for the development de-velopment of the resources of California, Cali-fornia, Oregon and other Pacific states, resources then dormant, but with their possibilities evident." INCREASED CONTROL After expressing his belief that the only question of present Interest to the public Is whether the public Is hurt by having this development done by a single control under two corporate cor-porate names, instead of by a singl control with a slnglo name, President Sproule points out that transportation transporta-tion act of 1020, "provides that with the consent of the interstatb commerce commission it shall bo lawful for two or more carriers to consolidate their properties or any part thereof under conditions In harmony with tho general gen-eral plan of consolidation of the railroads rail-roads of the Court try In groups. "Phf 1 n t ersit it t p commerce eomml.s- sion thus can take u- the chain of events," the statement of the Southern Pacflc head continued. "The fact Is that government control of the railroads rail-roads has so Increased and the policy of the government so changed since the suit vas begun In 1914. that the situation needs to be dealt with In the light of present conditions and not the conditions that prevailed from 1885 to 189:i Every essential factor In the railroad business Is supervised by the commissions created to protect pro-tect the general public Interest. CONSOLIDATION PLAN The Interstate commerce commission, commis-sion, following the mandate of the transportation act of 1920. alreadj has prepared a tentative plan for consolidating consoli-dating the railroads Into a limited number of systems. In this tentative plan the Central Pacific and tho Southern Pacific remain together. ' As a business question the com mission evidently saw the wisdom of not disturbing the present control and found no reason to believe that there was any undue restriction of competition competi-tion In the situation now existing or if there was any titular restriction that It was mure than balanced by the oth-j e, services It afforded the publb "This single unit can now be separated sep-arated into two units only by a pro-cess pro-cess of distlntegratlon and tearing into confused remnants of railroad, neither of which can function of Itself. Therein There-in would lie a new and real restraint of trade. SUGGESTS NE POWER In concluding President Sproule said . "There seems, therefore, to be proper prop-er motive for direct appeal to the end that th: power lodged In the Interstate j Commerce commission may be cxertfl to maintain the operations of Xhli I transportation system as a unit, justified justi-fied by the general expense of the public pub-lic served If necessary for this purpose, pur-pose, a now power might well bo created by appropriate legislation." oo |