THE HARRIMAN PACIFICS
J. P. Morgan & Co., in urging the “need of large banks and the coöperation of bankers,” said:
“The Attorney-General’s recent approval of the Union Pacific settlement calls for a single commitment on the part of bankers of $126,000,000.”
This $126,000,000 “commitment” was not made to enable the Union Pacific to secure capital. On the contrary it was a guaranty that it would succeed in disposing of its Southern Pacific stock to that amount. And when it had disposed of that stock, it was confronted with the serious problem—what to do with the proceeds? This huge underwriting became necessary solely because the Union Pacific had violated the Sherman Law. It had acquired that amount of Southern Pacific stock illegally; and the Supreme Court of the United States finally decreed that the illegality cease. This same illegal purchase had been the occasion, twelve years earlier, of another “great transaction,”—the issue of a $100,000,000 of Union Pacific bonds, which were sold to provide funds for acquiring this Southern Pacific and other stocks in violation of law. Bankers “coöperated” also to accomplish that.