The Federal Reporter with Key-Number Annotations, Volume 188: Cases Argued and Determined in the Circuit Courts of Appeals and Circuit and District Courts of the United States, August-October, 1911. Page: 108
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188 FEDERAL REPORTER
later in 1906 the Union Pacific Company invested $10,000,000 of its idle
money in the preferred stock of that company. The individuals who pur-
chased and owned the common stock secured the election of two of their
syndicate, the defendants Frick and Rogers, as members of the board of di-
rectors of the Santa F6 Company. They were at that time also members of
the board of directors of the Union Pacific Company. The holding of the
last-mentioned company of $10,000,000 in the preferred stock of the Santa
F6 Company was about 5 per cent. of the total outstanding stock of the lat-
ter company. This was all disposed of in 1909.
Some time after the acquisition by the Union Pacific Company of the
Southern Pacific stock, the latter company became involved in a controversy
with the Phoenix & Eastern Railroad Company, the owners of a short line
of road in Arizona. Litigation ensued, and resulted in the sale of the Phce-
nix & Eastern Railroad to the Southern Pacific Company. About that time
there was a consolidation of a short line of road (about 90 miles) in the north-
western part of California with the Southern Railway Company. This con-
solidation was made pursuant to the laws of the state of California.
Prior to 1890 the Union Pacific Company through its subsidiary company,
the Oregon Short Line, constructed a line of railroad extending from Salt
Lake City in a southwesterly direction to Milford, a point near the state line
between Utah and Nevada, a distance of about 206 miles, and plans were
made for an extension of the road further southwestwardly and ultimately
to Los Angeles. Grading had been done at a heavy cost on this extension for
a further distance of 117 miles, a part of the way being through a rugged
and narrow defile in the mountain, when, on account of financial embarrass-
ments culminating in the receivership of the Union Pacific and Oregon Short
Line Companies, work had to be abandoned. In the meantime a tax deed
purporting to convey title to the graded road had been secured by defendant
Clark and his associates, who sought to construct a part of a line of railway
projected by them between Salt Lake City and Los Angeles over it. This
provoked proceedings in the Land Department and courts by the Oregon
Short Line to assert its rights, which resulted favorably to its contention.
Utah N. & C. R. Co. v. Utah & C. Ry. Co. (C. C.) 110 Fed. 879.
Pending subsequent controversies between the parties, an adiustmefft was
reached whereby the two promoters, the Oregon Short Line and the Clark
interests, proceeded jointly to construct and operate a single line, each taking
one-half interest in the stock of the San Pedro, Los Angeles & Salt Lake
Company, which owned and operated it. It was not completed, and no com-
merce passed over it, until 1905. In the further adjustment of their differ-
ences, certain permanent provisions relating to joint, through, and local rates
were made, favorable to the interests of the Union Pacific Company and its
allied roads as a system.
Prior to 1901 agents of the Union Pacific, Southern Pacific, and Santa Fd
roads were actively engaged in New York and elsewhere in securing busi-
ness between New York, Pittsburg, and interior points to the Pacific Coast.
The Union Pacific Company, having no through route, had to depend upon
connections with other roads at either end of its line, and to share with them
the revenue resulting from the traffic secured in such proportions that out
of the through rate it received but a minor part; for instance:
On traffic from New York to San Francisco, via Omaha and Og-
den, it received of the through rate only...................... 34.4%
Its connections east of Omaha received ........................ 35.5%
And the Southern Pacific, from Ogden to destination, received.... 30.1%
On traffic from New York to San Francisco, via Kansas City and
Ogden, it received of the through rate only .................. 30.5%
Its connections east of Kansas City received .................... 38.6%
And the Southern Pacific, from Ogden to destination, received.... 80.9%
On traffic from Cincinnati to San Francisco, via Omaha and Og-
den, it received ............................................ 40.4%
Its connections east of Omaha received......................... 24.4%
And the Southern Pacific, from Ogden to destination, received... 35.2%
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The Federal Reporter with Key-Number Annotations, Volume 188: Cases Argued and Determined in the Circuit Courts of Appeals and Circuit and District Courts of the United States, August-October, 1911., legislative document, 1911; Saint Paul, Minnesota. (https://digital.library.unt.edu/ark:/67531/metadc38234/m1/147/: accessed March 24, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.