Appendixc — United States v. Pullman Co.

Supreme Court brief1947

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SUPREME COURT OF THE UNITED STATES

Ocroser TeRM, 1946 ~

No. 253

THE UNITED STATES OF AMERICA, APPELLANT

vs.

THE PULLMAN COMPANY, PULLMAN-STANDARD CAR

MANUFACTURING COMPANY, PULLMAN INCORPO-

RATED, ET AL.

No. 254

OTIS & CO., APPELLANT

vs.

THE UNITED STATES OF AMERICA, THE PULLMAN

COMPANY, PULLMAN-STANDARD CAR MANUFAC-

TURING COMPANY, ET AL.

No. 255

THE CHESAPEAKE & OHIO RAILROAD COMPANY,

THE NEW YORK, CHICAGO AND ST. LOUIS RAILROAD

COMPANY, AND PERE MARQUETTE RAILWAY COM-

PANY, APPELLANTS

vs.

THE UNITED STATES OF AMERICA, THE PULLMAN

COMPANY, PULLMAN-STANDARD CAR MANUFAC-

TURING COMPANY, ET AL.

No. 256

GLORE, FORGAN & CO., APPELLANT

va.

| THE UNITED STATES OF AMERICA, THE PULLMAN

COMPANY, PULLMAN-STANDARD CAR MANUFAC-

TURING COMPANY, ET AL.

APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE BASTERN DISTRICT OF PENNSYLVANIA

- ”

INDEX

Record from D. C. U. a, Eastern District of Pennsylvania. .

and Central R. R. of N. J., effec-

tive Jam. 1, 196B.n0- 2224600000. 195

Record from D. ©. U. 8., Eastern District of Pennsylvania—

Continued

Docket entries—Continued

Complaint—Continued

Appendices to complaint—Continued

4. Appendix D—Exhibits—Continued

Exhibit No.—Oontinued

8—Agreement between Pullman Co.

and C. sie * mela

ver & Salt Lake R. R., Denver,

Colo., dated June 25, 1924 (and

INDEX

from D. C. U. S, astern District of Pennaylyania—

iy

il!

Lr

nA

uf i

356

367 }

375 (315

26—Agreement between Pullman Co.

and Trustee Intern’!. Gr. North’n.

R. B., effective Nov. 1, 1939..

27—Agreement between Pullman Co.

and K. C. So. R. R., effective

SI 8 SiR sccnscccccecce

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+ pe ii : adAE beh Tie

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afnelish seed apap

— ah iil L Pail 2

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Co.

Jan.

598

682 598

743 «= 689

802 6679

879 726

Pacific Co., effecti

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5

-

Pintdeddeimaddlbesccass

and St. >

and Trustees, b

Divebenlidtbtecacsecscceos

is

making certain findings of fact and con-

law

Order of Court designating Circuit Judges to hear the cause. 681

a amended to conform to Court’s order of July

Detewesetthtodsaddenadraniiadidboasapconimeoce

Goodrich, ©. J., granting judgment in favor of

Expediting certificate. ................--..----.---..-

RR ci tho cnccntwtctennimidiestincacccce

oy i lett th ceabatlindinncttl bnbocncaccesocbous

Record from D, ©. U. 8, Hastern District of Pennaylvania—_

‘

Record from D. ©. U. S., Eastern District of Pennaylvania—

the Repair Shope for leave to intervene.

Petition of the Pullman Cer Employes Association of

the Repair Shops for leave to intervene...

Order of Court granting motion of the Pullman Car Em-

ployes Association of the Repair Shops for leave to

Car Business from the Manufacturing Business” sub-

mitted by defendant Pullman, Ine._....-.-...

Motion of the Independent Pullman Workers Federation

ers Federation for leave to intervene

Objections of the Pullman Clerks’ Association, the Pull-

man Car Employes Association of the Repair Shops and

the Independent Pullman Workers Federation to the

plan submitted by Pullman, Incorporated, and sugges-

Motion of Pullman Porters Union for leave to intervene. -

Petition of the Puliman Porters Union for leave to inter-

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INDEX m

Record from D. ©. U. 8&., Eastern District of Pennaylvania—

pendent Pullman Workers Federation................ 1130 1102

to intervene... .. qeevesnadendedemeccoccosceses ccs 1146 «1112

1944, and the interim order of March 22, 1945........ 1147 1113

Order of Court granting motion of Standard Steel Spring.

Company for leave to intervene. .................... 1194 1141

opeka and Santa Fe Railway Company and others... 1196 1141

Railway Company to intervene...................... 1237 1170

Supplemental Petition on behalf of the state of Colorado.. 1238 1170

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Fe Railway Company and others.................... 1243 1173

of Pullman, Inc., of ite selection of purchaser, ete.. 1250 1177

Chesapeake and Ohio Railway Company............. 1253 1178

Ohio Railway Company... ................ 1257 1181

puSerenne® 1258 1181

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Exhibit VII accompanying stipulation of facts._.....

Index to Vol. I of Exhibit VII

Government's trial exhibits—Continued

No. 110—Letter, Richard K. Mellon to D. A. Crawford, Origipal Print

1955

No, 115—Memorandum, D. A. Crawford to L. 8. Hunger-

ford and L. 8. Taylor, Feb. 3, 1956

No. 146—Telegram, D. A. Crawford to D. R. McLennan,

No. 329—Notice of special and annual meetings of stock-

holders of Pullman Inc., with annexed proxy state-

ment, March 17, 1000... ......2--00000-00---00-

No. 416—Telegram, Henry Sturgis to D. A. Crawford...

No. 418—Memorandum for General Contract Committee

by

No. 419—Letter, Champ Carry to D. A. Crawford, March

31, 1938.

No. 422—Letter, Hale Holden, Jr., to D. A. Crawford,

Discus tanitiasin tele aie ane. tn

Pullman Company, Nov. 5th and 6th, 1945.......... 2559-A

Caption and

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Car and Foundry Co., to Robert R. Young...

Exhibit 14—Paper entitled “Statement by Carl

E. Newton, President of Chesapeake and Ohio

Railway to AAR Board, October 26, 1945, on

behalf of smaller passenger-carrying roads”...

3151

3152

Government's trial exhibits—Continued °

Transcript of hearings on four offers té purchase—Con.

Otis and Company Exhibitse—Continued

Company

Exhibit 16—Letter dated October 25, 1945, from

J. W. Davin, President, the New York,

Chicago and St. Louis Railroad Company, to

Mr. C, E. Newton, President, the Chesapeake

and Ohio Railway Company................

exhibits: m

gram, bomb production and gear and axle

program of Standard Steel Spring Company - .

Exhibit 2—Offer of Standard Steel Spring

Company to Pullman Incorporated, dated

October 25, 1945, with attached memorandum

Exhibit 6—Document entitled “Thirtieth An-

nual Report to Shareholders of the Standard

Steel Spring Company”................-..-

Spring Company and Subsidiary— Consolidated

Balance Sheet as of August 31, 1945’’........

Exhibit 8—Document entitled “Standard Steel

Spring Company and Subsidiary—Consoli-

dated Profit and Loss Statement for the Eight

Months ended August 31, 1945”_............

Exhibit 9—Paper headed “Net Sales by Years

for the 10% years ended June 30, 1945’... __-

Exhibit 10—Paper, the first line of which says

“Total Number of Shareholders’”’.........._.

Exhibit 11—Paper headed “Shares of Common

Owning One Thousand Shares or More of One

Dollar Par Value Common Stock as of October

Exhibit 18—Document dated October 24, 1945.

Railroad exhibits: .

Exhibit 1—Paper headed “The Nation’s Stream-

DOD” « vavcccerercocereiitbiants dhadiwen

3163 2311

os

Government's trial exhibite—Continued

Transcript of hearings on four offers to purchase—Oon.

Transcript of argument on four. offers to purchase The

Pullman Company, December 10th, 11th, and 12th,

Print

2367

2389

2390

2391

2393

2402

2404

2404

2404

2409

2431

2437

2445

2447

2449

24€2

2464

2507

2539

2541

2564

2581

2584

2594

2603

2610

2616

2620

2621

2625

2631

2631

2633

2635

2638

2639

2639

THE UNITED STATES V8. THE PULLMAN COMPANY 1265

1432 Tue Potuman Company

Pullman Building, 79 East Adams Street

CHICAGO

D. A. Crawford, President.

Mr. Gur A. THomrson,

Trustee, Missouri Pacific Railroad Company, Missouri Pacific

Building, St. Lowis, Missouri.

Dear Sm: As the present operating agreement between The

Pullman Company and the Trustees of Missouri Pacific Railroad.

Company, Dr., terminates on April 19, 1940, and there may be

some delay in the execution of a new term agreement to be effec-

tive following the termination of the present agreement, it is pro-

posed that during the interim subject to cancellation on

_ 80 days notice, Pullman operations over the Missouri Pacific Rail-

road shall continue as heretofore. Distribution of the obligations

and liabilities of the parties thereto shall be in accordance with

the terms of the above mentioned expiring agreement unless and

until new agreement is executed, with provision for retroactive

effective date.

A new agreement in form which we believe should be mutually

acceptable to our respective companies is in preparation and will

be forwarded to you promptly.

I would appreciate proper execution of this letter agreement,

which is written in duplicate, with return of one executed copy

to us to indicate acceptance of the above understanding.

Very truly yours,

D. A. Crawrorp.

Accepted :

Guy A. THompson,

Trustee, Missouri Pacific Railroad Company. .

Tue Portman Company

Pullman Building, 79 East Adams Street

CHICAGO

D. A. Crawford, President.

President, The Nashwille, Chattanooga & St. Louis

Railway, Nashville, Tennesses.

Dear Sm: As the present operating agveement between The

Pullman Company and The Nashville, Chattanooga & St. Louis

Aram 15, 1940.

Apri 15, 1940.

1266 THE UNITED STATES VS. THE PULLMAN COMPANY

Railway terminates on April 30, 1940, and there may be some delay

in the execution of a new term agreement to be effective following

the termination of the present agreement, namely May 1, 1940,

it-is proposed that 1 nigra sn to cancella-

tion on 30 days notice, Pullman operations over The Nashville,

Chattanooga & St. Louis Railway shall continue as heretofore.

Distribution of the obligations and liabilities of the parties hereto

shall be in accordance with the terms of the above mentioned

expiring agreement unless and until new agreement is executed,

with provision for retroactive effective date.

A new agreement in form which we believe should be aon

- acceptable to our respective companies is in preparation and

be forwarded to you promptly.

T would a iate proper execution of this letter agreement,

which is rng re rfl errr nartenllnr Prevygedhn be spam

to us to indicate acceptance of the above understanding.

Very truly yours,

D. A. Crawrorp.

Accepted :

Frrzcrrato Ha,

President, The Nashville, Chattanooga & St. Louis Railway.

1434 Tue Portman Company

Pullman Building, 79 East Adams Street

' CHICAGO

D. A. Crawford, President.

Mr. C. E. Denney,

President, Northern Pacific Railway Uompany,

St. Paul, Minnesota,

Dear Sm: As the present operating agreement between The

Pullman Company and the Northern Pacific Railway Company

terminates on March 31, 1940, and there may be some delay in the

execution of a new term agreement to be effective April 1, 1940,

it is proposed that during the interim period, subject to cancella-

tion on 30 days notice, Pullman operations over the Northern

Pacific Railway Pope continue as heretofore. Distribution of the

obligations and liabilities of the parties thereto shall be in accord-

ance with the terms of the above mentioned expiring agreement

unless and until new agreement is executed, with provision for

retroactive effective date.

Marcu 16, 1940.

THE UNITED STATES VS. THE PULLMAN COMPANY 1267

I would appreciate proper execution of this letter agreement,

which is written in duplicate, with return of one executed copy

to us to indicate acceptance of the above understanding.

_ Very truly yours,

Accepted :

D. A. Crawrorp.

C. E. Denney,

President, Northern Pacific Railway Company.

Tae Pouiman Company

Pullman Building, 79 East Adams Street

CHICAGO

D. A. Crawford, President.

June 21, 1939.

Mr. Norman Can,

President, Richmond, Fredericksburg and Potomac

Railroad Company, Richmond, Virginia.

Dear Sm: As the present operating agreement between The

Pullman Company and the Richmond, Fredericksburg and Po-

tomac Railroad Company expires on June 30, 1939 and there may

be some delay in the execution of a new term agreement to be

effective following the expiration of the present agreement, namely

July 1, 1939, it is proposed that during the interim period, subject

to cancellation on 30 days notice, Pullman operations over the

Richmond, Fredericksburg and Potomac Railroad shall continue

as heretofore. Distribution of the obligations and liabilities of

the parties thereto shall be in accordance with the terms of the

above mentioned expiring agreement unless and until new agree-

ment is executed, with provision for retroactive effective date.

I would appreciate proper execution of this letter agreement,

which is written in duplicate, with return of one executed copy

to us to indicate acceptance of the above understanding.

Very truly yours,

D. A. Crawrorp.

Accepted :

Norman Catt,

President.

’

Richmond, Fredericksburg and Potomac Railroad Company.

7248084780

1268 THE UNITED STATES VS. THE PULLMAN COMPANY

1436 ‘Tae Putman Company

Pullman Building, 79 East Adams Street

. CHICAGO

D. A. Crawford, President.

Mr. Eannsr E, Nous,

President, Beatie ieiioen Company, The Alabama

Great Southern Railroad Company, The Cincinnati,

New Orleans and Texas Pacific Railway Company,

Georgia Southern and Florida Railway Company,

New Orleans and Northeastern Railroad Company,

Washington, D.C.

Dear Sm: As the present operating agreements between The

Pullman Company and the Southern Railway System roads above

mentioned expire on June 30, 1939 and there may be some delay in

the execution of a new term agreement to be effective following

the expiration of the present agreements, namely July 1, 1939, it

is proposed that during the interim period, subject to cancellation

on 30 days notice, Pullman operations over the Southern Railway

System shall continue as heretofore. Distribution of the obliga-

tions and liabilities of the parties thereto shall be in accordance

with the terms of the expiring agreements unless and until new

agreement is executed, with provision for retroactive effective

date.

I would appreciate proper execution of this letter agreement,

which is written in duplicate, with return of one executed copy

to us to indicate acceptance of the above understanding.

Very truly yours,

D. A. Crawrorp.

Accepted :

Ernest E. Nouns,

Southern Railway Company, The Alabama Great

Southern Railroad Company, The Cincinnati, New

Orleans and Texas Pacific Railway Company, Geor-

gia Southern and Florida Railway Company, New

Orleans and Northeastern Railroad Company.

June 26, 1939.

THE UNITED STATES VS. THE PULLMAN COMPANY 1269

1437 Tue Portman Company

Pullman Building, 79 East Adams Street

eHICAGo

D. A. Crawford, President.

Mr. J. L. Lancaster,

President, The Tewas and Pacific Railway Compny,

Dallas, T ewas.

Dear Sm: As the present operating agreement between The

Pullman Company and The Texas and Pacific Railway Company

expires on June 30, 1940, and there may be some delay in the

execution of a new term agreement, to be effective following the

expiration of the present agreement, namely July 1, 1940, it is

proposed that during the interim period, subject to cancellation

on 30 days notice, Pullman operations over The Texas and Pacific

Railway shall continue as heretofore. Except that all matters

relating to the division of revenue during this interim period shall

be suspended, distribution of the obligations and liabilities of the

parties thereto shall be in accordance with the terms of the above

mentioned expiring agreement unless and until new agreement is

executed, with provision for retroactive effective date.

I would appreciate proper execution of this letter agreement,

which ie written in duplicate, with return of one executed copy to

us to indicate acceptance of the above understanding.

Very truly yours, D. A. Cxawronn.

Accepted :

J. L. Lancaster, -

President, The Texas and Pacific Railway Company.

1438 Tue Portman Company

Pullman Building, 79 East Adams Street

CHICAGO

June 29, 1940.

D. A. Crawford, President. Comm 96, 1008.

Mr. Cuas. A. Wi

President and Géneral Manager, Atlanta and West

Point Rail Road Company, The Western Railway

_ of Alabama, Atlanta, Georgia.

Dear Sm: As the present operating agreement between The

Pullman Company and the Atlanta and West Point Rail Road

Company and The Western Railway of Alabama expires on June

30, 1939, and there may be some delay in the execution of a new

term agreement to be effective following the expiration of the

present agreement, namely July 1, 1939, it is proposed that during

1270 THE UNITED STATES V8. THE PULLMAN COMPANY

the interim period, subject to cancellation on 30 days notice, Pull-

Distribution of the and liabilities of the parties thereto

shall be in accordance with the terms of the above mentioned ex-

ae ees eee fer ae ee eee Ss ee

for retroactive effective date.

D. A. Crawrorp.

Cuas. A. WickersHam,

Atlanta and West Point Rail Road Company, The West-

ern Railway of Alabama,

1439 On the same date sleeping car service was being provided

by Pullman Company on the following railroads during

negotiations without interim

had

all revenue the negotiation of a new contract.

Atlanta, & Coast Railroad Company; Chicago,

Barlingten & Ouinty BB. Oo. The Colored ond’ Gothen nat”

way Company, and Fort Worth and Denver City Com-

=; ay sei head as ; Louisiana & Arkansas Ry. Co. ;

Railway Company

On December 2, 1940 the Pennsylvania Railroad served notice

of the termination of its agreement on December 31,

1941 in accordance with the terms of such agreement. On Decem-

ber 16, 1940 the New York Central Railroad Company served a.

similar notice.

Every operating agreement between Pullman Company and the

Railroad contains a provision substantially as follows:

“The Railroad Company shall have the right to cooperate with

other. railroad companies in forming through or continuous lines

of sleeping and parlor-car service, and The Pullman Company

pear phe tas, occharsnptboces yond oak se hela

and mana wich tbgmipen? ch or continuous lines

pon the mileage of the Railroad y in said lines,

ond diaslt too nagiad Yo receive Wit Bes!’ Siete Ser tha uno of eo”

commodations therein upon the lines of the Railroad Company,

and its mileage proportion of through and intermediate fares.”

Joint routes over railroads having Pullman service, and those

operating their own sleeping car service during the past forty

years are shown on Exhibit IV, attached hereto.

THE UNITED STATES VS. THE PULLMAN ComPANY 1271

COPY BOUND VERTICALLY

1272 THE UNITED STATES VS. THE PULLMAN COMPANY

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THE UNITED STATES VS. THE PULLMAN COMPANY 1273 .

_ 1274 THE UNITED STATES VS. THE PULLMAN COMPANY

THE UNITED STATES VG. THE PULLMAN ComPANY 1275

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THE UNITED STATES VS. THE PULLMAN COMPANY 1277

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1278 THE UNITED STATES VS. THE PULLMAN COMPANY

THE UNITED STATES VS. THE PULLMAN GOMPANY 1279

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THE UNITED STATES VS. THE PULLMAN COMPANY 1291

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1292 THE UNITED STATES VS. THE PULLMAN COMPANY

1465 <i 8 teaging oe & © tayo of pemmnaee oor ond ony

; equipped to manufacture passenger cars could

‘ieee ping cars. There are no basic patents covering

the construction of sleeping cars nor is there any legal restriction

SE ene ee ee ee The Amer-

ican Car & Foundry og ey epee cargtee foe Ed-

ward G. Odi Oeneane ie Car Company, and the Beth-

lehem Steel Company are all equipped to manufacture such cars.

All these manufacturers are ready and willing to manufacture

sleeping cars.

Pullman Company, in accordance with its charter powers, has

always held itself out as a company furnishing complete sleeping

car and parlor car service for the railroads over whose lines it

operates and to the passengers of such railroads. This service as

offered and rendered has at all times consisted of furnishing the

necessary facilities, supplies, equipment and other tools, as well

as supervision and the personal service of attendants. The Pull-

man Company has never held itself out to perform service in sleep-

ing cars owned by others and is not and never has been engaged in

such business. The Pullman Company is not a public utility or

“common carrier” in its dealings with railroads, but as an inde-

pendent contractor enters into separate and individual agreements

with railroads for the furnishing of sleeping and parlor car serv-

ice on the lines and to the passengers of the contracting railroad.

In doing so it relieves the railroad of the necessity of providing

such service.

As heretofore stated, Pullman Company has always supplied

the equipment with which it performs the service that it offers. °

The Pullman Company has stated upon inquiries from railroads

that its responsibilities in the performance of its sleeping and

parlor car services will be discharged only with equipment and

organization of its own choice.

1466 20. With respect to lightweight equipment the railroads

instead of preparing their own specifications have in the

main looked to the manufacturer to prepare and submit to them

in the first instance detailed plans for the construction of light-

weight cars.

30. The principal acquisitions by Pullman Company of other

sleeping car companies together with companies previously ac-

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1294 THE UNITED STATES VS. THE PULLMAN COMPANY

1468 31. Although the dates of acquisition of some of the

other sleeping car companies mentioned above are set as

subsequent to 1900, actually the control of such companies, except

bie my! Company, had i acquired by Pullman prior to 1890.

circumstances surrounding the acquisitions of these com-

paniec are as follows:

ie yey tts stebae. ee oe eee nS

sleeping car company organized wen M. Pullman in the

State of Tennessee on ~ ag 10, 1866. It furnished sleeping car

service under contract on railroads then known as the Atlantic &

Gulf, Atlanta & West Point, Charlotte, Columbia & Augusta, East

Tennessee & Georgia, Georgia Railroad, Macon & Augusta, Nash-

ville & Northwestern. In 1872 this corporation had eleven sleep-

ing cars and no manufacturing facilities. On October 10, 1872,

the Pullman Southern Car Company acquired the assets of the

Pullman-Kimball & Ramsey Sleeping Car Company, which con-

sisted of eleven cars and equipments, together with all contract

rights and franchises.

About the year 1870 there were four partnerships generally

known as the Paine Lines, which furnished sleeping car service

on the Louisville & Nashville, the New Orleans, Jackson & Great

Northern, and the Southern Railroad Corporation. On October

10, 1872, the Pullman Southern Car Company acquired the assets

of the Paine Lines, which consisted of eighteen cars and equip-

ments, together with all contract rights and franchises.

The organization of the Cresent City Sleeping Car Company

as a corporation was authorized by a special aét of the State of

Kentucky on March 16, 1870. name was changed to The

Pullman Southern Car Company on February 13, 1871. The com-

pany accepted its charter on March 11, 1871. The Pullman South-

ern Car Company purchased six cars from the Pullman

1469 Company in 1872. The authorized capital stock of the

company was $1,500,000 par value, divided into shares of

$100 each.

As of July 31, 1887 stock with a par value of $1,309,200 had been

issued and was outstanding on that date. This stock had been

issued for the following considerations :

For property of the Pullman- & "SS he

r

October 10, 1872 ($60,000 of this was re-

served and held in trast by George to secure pay-

ment for work to be done cars) $250, 000

ing cars) 400, 000

THE UNITED STATES V8. THE PULLMAN COMPANY 1295

Par Value

from the Pullman Company in 1872, stock at 70

value of $74,898.37. $107, 000

the Pullman Company patents (7% % of capital stock

1872) 112, 500

to the Louisville & Nashville Railroad Company in 1872

at 70 for cash or cars. be -- 100,000

Issued for cash at 80 and/or other considerations undetermined.. 339, 700

Total issued of par value

Prior to March 16, 1870 a conference was held between Messrs.

E. H. Paine of the Paine Lines and H. I. Kimball of the Pull-

man-Kimball & Ramsey Sleeping Car Company at which there

was a discussion concerning the proposition of effecting a consoli-

dation of their respective sleeping car interests. Paine Lines and

Pullman-Kimball & Ramsey had been served with infringement

notices by the Southern Transportation Company, licensee under

sleeping car patents of the Central Transportation Company.

Similar notices had been served on the railroads on whose

1470 lines Paine Lines and Pullman-Kimball & Ramsey operated

their cars. Some of the railroads over which Paine lines

operated were dissatisfied with the condition of some of the cars

operated and had served notice of their intention to bar the further

use of these cars. omit | the notices of infringement, George

- M. Pullman, as trustee for Pullman’s Palace Car Company, had

acquired control of the Southern Transportation Company and

of the Central Transportation Company with an assignment of

their respective patent licenses and patents so that Mr. Pullman

as trustee had acquired the exclusive use of the Southern Trans-

portation Company and the Central Transportation Company

patents as well as those originally held by him and assigned

to Pullman’s Palace Car Company. Upon Pullman’s acquisi-

tion of control over these patents the Pullman-Kimball & Ram-

sey Sleeping Car Company was enabled to use them. In order

that they might be used by the Paine Lines it was necessary for

Mr. Paine to negotiate with Mr. Pullman. Messrs. Kimball

and Paine thereupon conferred with Mr. Pullman concerning

a consolidation of their respective interests. Meanwhile Paine

and his immediate associates had taken steps looking to the in-

a ap wing of the Pullman Southern Car Company, which orig-

inally they had intended to call Crescent City Sleeping Car Com-

pany. The president of the Louisville & Nashville Railroad, one

of the principal roads over which the Paine Lines operated, upon

being informed of the plan of consolidation, insisted that as the

franchise to operate over that road was valuable to the Paine

lines the road should through a share in ownership receive a

share in the earnings from sleeping car operations conducted over

its lines. After details had been worked out and agreed upon,

the plan for consolidation of the Paine Lines and Pullman-Kimball

1206 THS UNITED STATES VS. THE PULLMAN COMPANY

Southern Car was made effective and stock was issued

as above stated. As of Octoer, 1872, Mr. Pullman became

1471 the owner of a of the stock of the Pullman South-

its capital stock during the years 1873 and 1875. For the years

ending July 31, 1885 to 1891 it paid dividends on the $1,309,200

par value outstanding capital stock. The dividend rate for the

years 1885 to 1890 was 8%, and for the year 1891 was 7%. Dur-

ing the from 1873 to 1891 The Pullman Company received

aggregating $810,037 on the stock of the Pullman South-

ern Car Company held by it. On October 1, 1894 the assets of

the Pullman Southern Car Company were acquired by Pullman

Company which had controlled it from the beginning and owned

more than 90% of its stock.

The Pullman Pacific Car Company was incorporated April 24,

1868 in the State of New York. The authorized capital stock of

of $100 each. Twenty-

roe Sana pt Ames as

it

rs

ae

bas

corporation was organized to perform sleeping car service on

the lines of the Union Pacific Railroad which in 1868 was ap-

its completion .

When the Union Pacific Railroad Company wag completed May

10, 1869, the Pullman Pacific Car Company furnished sleeping

car service on that railroad and continued to do so until 1871.

Almost immediately after the organization of this corporation

Carnegie sold a portion of his stock to C. 8. Bushnell, W. E.

1472 Pigot and Henry Hotchkiss, and the balance of it tu Pull-

man’s Palace Car y on November 15, 1871. On

September 12, 1870 the Union Pacific Railroad Company sold the

stock owned by Ames as trustee for it, to C. S. Bushnell. On

November 14, 1870 Bushnell disposed of his stock to Pullman’s

Palace Car Company.

On November 15, 1871 Pullman’s Palace Car Company had

acquired the assets of the Pullman Pacific Car Company and took

over the contract which that company had with the Union Pacific

Railroad Company for sleeping car service. This company owned

THE UNITED STATES VS. THE PULLMAN COMPANY 1297

- twenty-five sleeping cars at the time of its acquisition by Pullman’s

Coach Com

under laws of the

nem ge Merde one of the Phot mcr hp of. the

Railroed y acquired certain sleeping

cars W

In IO7S the Eric Bailreed sold to the Pollan’ Palace Car

Company two-thirds of the capital stock of the Erie & Atlantic

Coach Company

In 1884 the Railrond Go Company desired to own a 50% interest in

the corporation and thereupon it requested Pullman’s Palace

Car Company to sell, and that company did sell to the railroad

company, enough stock in the Erie & Atlantic Sleeping Coach

Company to give the railroad a 50% interest in the sleeping car

company.

Soon after, the railroad company sold to Pullman’s Palace

Car Company its 50% interest. Thereupon Pullman’s Palace Car

Company acquired the assets, as distinguished from the

1473 stock of the sleeping car company, on February 24, 1888.

At that time the sleeping car company had 51 sleeping

~ —— no manufacturing facilities.

re arlor Coach Company was organized

Bs sar mg ty state of Pennsylvania May 19, 1871, by

‘Jonah Woodruff, J. Hervey Jones and their associates. That

company had no manufacturing facilities but acquired sleeping

ars from various builders thereof and in 1889 had contracts for

furnishing sleeping car service to several small lines as follows:

Long Island Railroad (parlor cars only were operated).

Central phe agence ay | of New ‘haat (local service only ;

Stock of a par value of $100,000

This acquired

Retirement of car-trust certificates, representing unpaid rental on

41 cars under trust agreement, iu which William D. Mann, lessor,

debenture bonds dated July 1, 1885, due

retired by exchange for a like par value of its 6 percent

THE UNITED STATES VS. THE PULLMAN COMPANY 1299

The Union Palace Car Company was incorporated September

= in the state of New Jersey.

Palace Car Company was origi

in 1866 the name of New York Central i

as a joint stock association under the laws of

Rew York. It always remained a t stock association.

name was changed to that of the

in December, 1886. It acquired facilities for

cars at or near the City of Buffalo in the State of New

uth,

1476 R. R.; New York

hore’ & Michignn Secthern Iy.; Hew York, Ontario &

Western Ry.; Wabash R. R. (In part) ; Kansas City, Ft. Seott &

& Louisville tom

R.R.; Bennington & Retiand

R.; Central Vermont Ry.; Torento, Hamilton & Buffalo By ;

Range Be

; Fremont, Elkhorn & Missouri Valley m Sioux One

Ry.; Canada Atlantic Ry. ; Hocking Valley Ry. Toledo,

company. Thereupon magntiotions

The Pullman Company desired to

tation of the Wagner Company, offered to

uu

Hah

ute

ay and the Lake Erie & Detroit

Hid

fi

i

Ht PUN ane

River Railway

36. After the acquisition of the

Flint & Pere Marquette Railw

“THE UNITED STATES V8. THE PULLMAN COMPANY 1301

These roads are now a part of the Pere Marquette Railway

5 car service was established on their

eleeping car service was established on the lines of this

on April 10, 1906. The railroad retained its own cars

all lied Reapsureine but wes ot the right under the contract

This company had in operation in 1909 twenty-six cars,

ing of 2 drawing-room sleeping cars, 8 sleeping cars

1479 and 16 parlor cars. Due to the seasonal character of travel

over its lines, the railroad required additional cars to

handle its winter travel. In summer most of its cars were idle.

To meet this condition the Florida East Coast expressed a desire

to have Pullman Company furnish sleeping car service over its

lines. The road’s sleeping car business was profitable and desirable

to Pullman Company. A contract was negotiated under which

Pullman Company bought the road’s equipment and furnished

sleeping car service over its lines.

Detroit & Mackinaw Ry. Co.

This company established Pullman service on March 1, 1911.

There was no purchase of cars involved.

The New York, New Haven & Hartford Railroad Company

This company operated %52 cars classified as follows: 68 sleep-

ing cars, 150 parlor cars and 34 composite cars. Many were all

wooden cars, and to replace them with steel cars would have re-

ired an investment running into millions of dollars. The New

ven had been unable to use its wooden cars in operating through

lines the New York tunnels and negotiated with Pullman

Company for a number of years before finally reaching an agree-

ment in 1912-under which that company acquired its entire fleet

of cars. The cars were appraised and the amount paid was the

total appraised value of $3,300,000, an average of approximately

$13,095 per car. _Upon the sale of the cars the New Haven gave

Pullman Co. a 20-year contract covering all the sleeping car

service operated on its lines.

1302 THE UNITED STATES VS. THE PULLMAN COMPANY

South Carolina & Georgia Railway

_ Pullman sleeping car service was established on this road some-

time after 1900, when the Southern Railway Company took over

the operation and control of this railroad.

Pecos Valley and Northeastern Railway

This company in 1901 had been for many years operating

1480 three combination and parlor cars. On November 3, 1901,

Pullman service was established on this railroad.

Pecos River Railway and the Pecos & Northern Texas Railway

Company |

The Atchison, Topeka & Santa Fe Railway Company sometime

after 1900 established Pullman sleeping car service on these roads

when it took over the operation and control of them.

Great Falls & Canada Railway Company

This railroad became a part of the Great Northern airy

Company (see that company for record subse yuent to 1900).

Peoria, Decatur & Evansville Railroad and the St. Louis, Peoria

& Northern Railway Company

The Illinois Central Railroad Company shortly after 1900.

established Pullman sleeping car service on these roads when it

took over the operation and control of them.

St. Paul & Duluth Railway Company

This company came under the control and operation of the

Northern Pacific Railway after 1900, and hence under its Pullman-

* Northern Pacific Association operations.

Great Northern Railway

On May 15, 1922 Pullman service was established on trains No.

1 and No. 2 of the Great Northern Railway Company and on June

15, 1922 on trains No. 3 and No. 4 of that road. Since that time

service on the Great Northern has been established on

all lines.

Chicago, Milwaukee & St. Paul Railway

On February 1, 1927 Chicago, Milwaukee, St. Paul and Pacific

established Pullman service on Line 291 from Chicago to Oakland,

California. The following statement shows the progressive dates

on which it established such service on other lines:

THE UNITED STATES VS. THE PULLMAN COMPANY 1303

_

x

-_

:

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SEEESSESSSESSUTTETETTTSSSSSSSESSS

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This railroad is still operating some of its own sleeping cars.

Minneapolis, St. Paul & Soo Ste. Marie

This company continued operating all its own cars until May 1,

1984, when Pullman service was installed on some of its through

ree n gg .

Canadian Pacific Railway Company

This company signed its first Pullman contract June 1, 1936, for

service on some of its through trains, The railroad still operates

the remainder of its sleeping car service.

Duluth, South Shore & Atlantic Railway Company

This company signed a Pullman contract December 14, 1911,

covering operation of standard cars. The service

1482 was discontinued December 31, 1932. road now oper-

ates two of its own sleeping cars. However, Pullman cars

operate in joint service with the Chicago, Milwaukee, St. Paul &

Pacific and the Chicago & North Western Railway.

1304 THE UNITED STATES VS. THE PULLMAN COMPANY

An association was a joint sleeping car enterprise between a raii-

road and the Pullman Company in which the cars operated over

the railroad were jointly owned by the parties, the railroad’s in-

terest was leased to the Pullman Company, and the cars were

operated by the Pullman Company. The profits and losses of this

joint enterprise were shared pro rata.

ec myphesich eg Rgeme oe Newb gag alam taht

ice in substitution for service i by various associations

operating on January 1, 1900, are as follows:

Pull PS ag Ue SCR SP .:

‘This association was really four associations covering sections

. of the Southern Pacific System. All were established in 1883 and

all were terminated April 1, 1900. Of these associations, the Pull-

man-Central Pacific Association, Pullman-Southern Pacific Asso-

ciation, Pillman-Mexican Intefnational Association, were owned

25% by.Pullman Company and 75% by the railroad. The Pull-

man-Uregon & California Association was owned jointly in equal

shares by Pullman and the railroad. In 1900 the railroad sold

its interest to Pullman “.: ‘pany and a contract.was negotiated

undér-which Pullmar. Compaay furnished sleeping car service

over the lines of the railroad.

Pullman-Delaware Lackawanna & Western Association

This association was established April 19, 1884, and terminated

January 1, 1903. It was owned jointly, each party thereto owning

50% of it. At its termination the railroad sold its interest

therein to Pullman Company and a contract was negotiated

1483 under which the Pullman Company furnished sleeping car .

service over the lines of the railroad.

Pullman-Missouri Pacific Association

This association was established November 1, 1866, and ter-

minated July 1, 1907. Pullman Company had a 25% interest in

the joint enterprise. At the expiration of the association agree-

ment, the railroad sold its interest to Pullman Company and .

negotiated a contract for future sleeping car service.

Pullman-Wisconsin Central Association

This association was established July 1, 1887, and terminated

November 1, 1907. It was owned jointly in equal shares by Pull-

man and the railroad. Prior to the beginning of association serv-

THE UNITED STATES VS. THE PULLMAN COMPANY 1305

ice Wisconsin Central was operating sleeping cars owned by the

Central Car Company, which was a subsidiary of the railroad com-

pany. Under the association agreement Pullman Company

acquired these cars by purchase and sold to the railroad a one-half

interest therein. At the termination of the contract the railway

company sold its interest to Pullman Company and a contract was

negotiated under which the Pullman Company furnished sleeping

_car service over the lines of the railroad.

Pullman-Atlantic Coast Line Association

This association was established December 1, 1897, and was ter-

minated June 30, 1909. At the termination of this association

contract, the railroad company sold its interest to Pullman Com-

pany and a contract was negotiated under which Pullman Com-

pany furnishing sleeping car service over the lines of the railroad.

Pullman-Northern Pacific Association

This association was established October 1, 1881, and ter-

1484 minated April 1, 1917. It was owned jointly in equal shares

by the railroad company and Pullman Company. At the

expiration of the contract, the railroad determined to go out of

the sleeping car business. The railroad thereupon sold to the Pull-

man Company its interest in 128 association sleeping cars and

entered into an agreement with the Pullman Company to furnish

car service on its lines.

Pullman-Spokane, Portland & Seattle Association

This was a small association established November 20, 1908,

and terminated August 19, 1922. Only three cars were involved

and these were jointly owned in equal shares by Pullman Com-

pany and the railroad. The railroad was operated jointly with

the Northern Pacific and the Great Northern. Upun termination

of the association agreement the railroad sold its interest in the

association cars to the Pullman Company and thereafter Pullman

sleeping car service over that line was furnished under the Pull-

man-Northern Pacific contract.

yyments

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ssssssesssesssesssssssessssssssss |

RASSURSSESESESSLEESSSESTESESESSES

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Statement of dividends paid by Pullman Company

i

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THE UNITED STATES V8. THE PULLMAN COMPANY 1307

The following tabulation shows the dividends paid by Pullman

from January 1, 1927, to December 31, 1940, and the

source of the dividends for each of the years:

eBE2E88E25

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dividend declared July 12, 1927, A 15, 1927, 94.

aa pata amar ig as Dots

poge 20 of the spa dts The Pulhnan Company and

to Putian Tnearpors p Stl. 4+

1308 THE UNITED STATES VS. THE PULLMAN COMPANY

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1310 THE UNITED STATES VS. THE PULLMAN COMPANY

paid by Pullman for the period May 1, 1927, to December

Pullman, Incorporated, Consolidated, since its creation in 1927

1488 The following sheet shows the dividends

$1, 1940, and the source thereof:

Dividends pai4

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Italics denote red figures.

THE UNITED STATES VS. THE PULLMAN COMPANY 1311

1489 Pullman Company has had no funded debt since 1892.

In May 1919, Pullman Company borrowed $550,000 from

the Merchants Loan & Trust Company of Chicago and $850,000

from The First National Bank of New York. These loans were

short term and were paid at maturity. With those exceptions

. none of the Pullman group of corporations has borrowed any

money from any bank or outside organization since 1892, nor has

Pullman Company since 1893 issued any stock for cash. Neither

Pullman Incorporated nor Standard has ever issued any stock for

38. The Pullman business started about 1858 when George M.

Pullman converted some existing railroad passenger cars of the

Chicago, Alton & St. Louis Railroad Company (now .The Alton

Railroad Company) into sleeping cars. In 1858 Benjamin F. Field

and associates one of whom was George M. Pullman, secured a

contract to operate sleeping cars on the lines of the Galena & Chi-

Union (now the North Western). This contract continued

until 1867 when a new contract was made with the road by Mr.

Pullman.

In 1863-1865 the Pioneer and a similar car were built by Messrs.

Pullman and Field, who, prior to that time, had invented a folding

upper berth upon which a patent was issued to them April 5, 1864.

This invention was incorporated in these cars. These cars were

operated on the Michigan Central and Alton under contracts be-

tween the railroads and Mr. Pullman. Field sold his interest in

these curs and in the sleeping car business to Mr. Pullman in 1866.

Pullman’s Palace Car Company was incorporated under the laws

of Illinois on July 15, 1867 and took over the contracts then held

hy Mr. Pullman. ;

_ The first sleeping cars used by Pullman Company were built

under the supervision of Longstreet, as stated in paragraph 11,

in the shops of various railroads or of car building companies. In

1870 the shops of the Detroit Car & Manufacturing Com-

1490 pany located at Detroit, Michigan, were purchased at a

cost of $200,000 for the purpose of constructing and repair-

ing Pullman cars and other types of railroad cars.

In 1872 the Pullman Gompany purchased a majority of the

capital stock of the Erie & Atlantic Sleeping Coach Company and

thereby acquired repair shops leased by that company from the

Erie Railroad at Elmira, N. Y. These shops were used only for

the purpose of repairing Pullman cars.

In 1886 tne shops of the Bowers Dure Car Manufacturing Com-

pany at Wilmington, Delaware, sD wenemecon -by Pullman

Company end were used in repairing | cars. When Pull-

man Company bought this plant, the work done at the leased

1312 THE UNITED STATES VS. THE PULLMAN COMPANY

plant at Elmira was taken over by the new plant at Wilmington

and in 1888 Pullman Company surrendered its lease on the Elmira

Plant.

In 1881 Pullman Company constructed a plant at St. Louis,

Missouri, for the repair of Pullman cars. A larger plant was

needed and because of a lack of land for expansion purposes a

new repair shop was constructed in 1903 at St. Louis at a different

location.

For the reason, among others, that the requirements for equip-

re dite tin ae my, Loony = Snags alle eee hogan

Pullman Company in 1881, built a large manufacturing plant at

Pullman, Illinois, for the construction 9f Pullman cars and all

types of railroad passenger end freight equipment. Upon com-

pletion of the new plant at Pullman, Illinois, most of the building

of new cars was transferred from the Detroit shops to the new

plant. Thereafter those shops were used mainly for repairing

Pullman cars. They were sold to the Detroit United Railroad in

1902.

eestor ye 8 gn Shep tego 8 of Mann’s Boudour

Car Company which had a repair shop on leased at Ludlow,

Kentucky. eestiies soetnad die eonehioen Ween cen seat

it burned in 1920.

When Pullman Company in 1900 purchased the assets of

1491 the Wagner Palace Car Company it acquired shops at

Buffalo, N. Y. which were leased to it by the New York Cen-

tral. Afterwards Pullman Company purchased these shops and

the ground upon which they were located. These shops of the

Wagner Company were equipped to manufacture sleeping cars

and with few exceptions had done so solely for the Wagner Com-

pany. These facilities were equally useful for repairing cars and

they were thereafter used as repair shops by Pullman Company.

The Pressed Steel Car Company constructed the first all-steel

passenger coach in August, 1906. At that time Pullman Company

had under construction the first all-steel sleeping car, which was

completed on March 15, 1907. Immediately thereafter Pullman

Company began to provide facilities for the construction of such

cars. Tunnels were built under the Hudson River which enabled

the Pennsylvania Railroad Company to operate through-trains

- into New York. The tunnel authorities refused to allow wooden

cars to be hauled through the tunnel and Pullman Company agreed

with the Pennsylvania Railroad Company and the New York

Central Railroad Company to furnish a large number of all-steel

sleeping and parlor cars on these roads. In 1910 Pullman Com-

pany built its last wooden sleeping and parlor cars, and thereafter

all new Pullman cars were constructed entirely of steel. By the

THE UNITED STATES VS. THE PULLMAN COMPANY 1313

end of 1910 it had built for its own use 525 all-steel cars. By July

31, 1914, Pullman had 2,382 ll-steel cars and 4,755 wooden cars,

While wooden Pullman cars were thereafter continued in various

branches of the service for many years, a majority of such cars were

rebuilt to provide them with all-steel under-frames and steel out-

side sheathing. This was done for purposes of increased strength

and greater fire resistance.

The number and types of cars that have been added to and taken

from the supply of cars owned by Pullman and the status of that

supp ed a year from 1900 to July 31, 1940 is set forth below

it

1314 THE UNiTED STATES VS. THE PULLMAN COMPANY

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THE UNITED STATES VS. THE PULLMAN COMPANY 1315

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1316 THE UNITED STATES VS. THE PULLMAN COMPANY

1498 39. In 1921 Pullman Company entered into an agreement

weet 5 Sate te See ie eee eapeny ae

corporate assets of Haskell & Barker Company, Inc., Michi-

gan City, Indiana. The net corporate assets of Haskell & Barker

Car Company, Inc., after deductions of all liabilities, as of Sep-

tember 30, 1921, amounted to $16,908,528.05. This acquisition of

Haskell & Barker Car Company, Inc., was carried out by the

issuance of 165,000 shares of stock of Pullman Company to the

stockholders of Haskell & Barker Car Company, Inc. in full

payment. The facts stated in Appendix C of the complaint are

correct.

At the time Haskell & Barker Car Company, Inc. was acquired

y both were engaged in the business of manu-

ing freight cars to railroads. There were also

located in this same terri and engaged in this same business the

following manufacturers of freight cars:

“General American Car Company with a plant at East Chicago,

Indiana; Mt. Vernon Car Company with a plant at Mt. Vernon,

Illinois; Pressed Steel Car Company with a plant at Hegewisch,

Illinois; North American Car Company with a plant at Blue

Island, Illinois; Bettendorf Car Company with a plant at Betten-

dorf, Iowa; Ryan Car Company with a plant at cn Ihli-

nois; American Car & Foundry Company with plants at Chicago,

St. Louis, Terre Haute, Madison, Ill., and Detroit, Mich. ; Illinois

Car and Mfg. Company with plants at Chics,o, Illinois, and Ham-

miond, Indiana.”

All of these companies were in competition in the manufacture

and sale of freight cars.

Because of an aging personnel, and because of failure

1494 to keep up with the times as to methods in the manufacture

of freight cars, Pullman Company was unable at that time

to compete successfull with such other manufacturers. Its manu-

facturing costs were hi and its sales force was demoralized.

In 1921 it did not secure a single order for freight cars. On the

other hand, Haskell & Barker had a very efficient plant at Michigan

City for the manufacture of freight cars, and had an able and

adequately the duties of his office. Directors of the Pullman

believed that the j

pany. The position was tendered to him. Shortly before, Carry

THE UNITED STATES VS. THE PULLMAN COMPANY 1317

had left American Car & Foundry Company of which he was an

executive officer to become president of H: & Barker because

a group of his acquaintances at his suggestion had acquired control

of the latter company. He declined to take the presidency of

Pullman Company unless Pullman Company would acquire the

assets of Haskell & Barker. This Pullman Company did, and not

only secured the efficient plant at Michigan City but also the serv-

ices of its president and various other

40. Standard in 1927 acquired the Dickson Car Wheel Company

of Houston, Texas, and during the same year a new subsidi

corporation, the New Orleans Car Wheel Company, Inc., was

formed. Only car wheels were manufactured at both plants,

41. Since July 25, 1929 Pullman Company has owned 40,000

shares of no par value common stock of General Steel Castings

ration. This constitutes 7.19 percent of the total out-

1495 standing stock of that company, which has twelve directors.

Charles A. Liddle, president and a director of Standard is

also a director of General Steel Castings Co: ion. There are

no other common directors and common The General

Steel Castings Corporation has never manufactured any product

manufactured at any plant of any of the corporate defendants.

42. In December, 1928 Pullman Car and Manufacturing Cor-

i the freight car manufacturing business and

.

t of Tennessee Coal, Iron and Railroad Company of

i Alabama.

assets of these corporations was completed on March 1, 1930.

46. Prior to 1924 the corporate structure of Pullman Company

was a simple one consisting of a single corporate entity first in-

in 1867 under the laws of the State of Illinois at Pull-

man’s Palace Car Company. That name was changed to The

Pullman Company in 1899, All acquisitions of property and

assets by Pullman Company, prior to 1924, were in the name

of that Company or in the name of individuals as trustees for it.

49, In 1927 the Pullman Company caused to be incorporated,

as hereinabove stated, a corporation known as Pullman Incor-

porated. The accompanying corporate transactions were in fact

as described in the following excerpts submitted by Pullman

to the Securities and Exchange Commission in Pullman’s annual

report for the year ended December 31, 1935, in which it is stated :

Pullman the registrant, was organized under the

laws of the State of Delaware on June 21, 1927, with authorized

capital stock of 3,375,000 shares, without nominal or par value,

Hille

i

ih Pian a

proposed

next

pret rn tier Te oe

stockholders in assets of

On the basis of such appraisals, and as the

> Pallinan Ce

’

The

to the

pro rata interests

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by

THE UNITED STATES V8. THE PULLMAN COMPANY 1319

facturing Corporation by issuing in exchange 675,000 shares of its

stock, the directors set a value thereon, being the net worth

raked cack of Tas Webmenr Otieier, aectioons eo on

appraisal of the assets of The Pullman Company as at April 30,

1927, which represented a valuation in excess of its book value or

net worth of $56,117,366.56. This appraisal and the write-up of

its assets are not given effect to or recorded on the books of The

Pullman Company as its books are kept in accordance with ac-

counting requirements of the Interstate Commerce Commission

which do not permit a carrier to give effect on its books to a write-

up of its assets.”

50. In 1927, Pullman Incorporated, became a holding company

Corporation became a wholly

subsidiary of Pullman. Pursuant to the reorganization

plan, set forth above, holders of the stock of Pullman Company

turned in their stock from time to time in exchange for stock of

Pullman, as described above, so that at the present time ital

stock of Pullman Company is more than 99.99% owned by

man.

1498 Since that time Pullman Incorporated, has

1320 THE UNITED STATES VS. THE PULLMAN COMPANY

Payments made by Pullman-Standard Car Manufacturing Company

pti siccce| HE] tee] Nee

70, 761. 03

cars to Plan 4084—6 Section, 6 Double Bedroom, pair by the

Car Company and its subsidiaries as descri

original complaint. These assets were transferred to a newly

created corporation organized under the laws of the State of

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i buildings, and real estate in Hammond, Indiana,

and Butler, Pennsylvania.” :

THE UNITED STATES VS. THE PULLMAN COMPANY 1321

Starting in 1934, a series of transactions occurred whereby title

to the domestic properties owned by Pullman Car & Manufactur-

ing Corporation and Standard Steel Car Corporation of Penn-

Sai: Seine: tenants: to tha evemnliip ot ‘tee doleadant

Standard. These transactions were accurately described by Pull-

man in its annual report for the year ended: December 31, 1935,

to the Securities and Exchange Commission as follows:

' “On February 18, 1930, Pullman Incorporated entered into

agreements with Standard Steel Car Company and Osgood Brad-

ley Car Company, whereby it acquired substantially all of the

fixed properties and net current assets of these companies in ex-

change for shares of stock of Pullman Incorporated and cash.

The value of the property so acquired, for which shares, in part,

were issued therefor at a value per share predicated on an appraisal

made of these properties at the time. By authority of the Board

of Directors February 19, 1930, a new corporation was formed

. for the purpose of acquiring and operating said properties. The

Standard Steel Car Corporation of Pennsylvania was then or-

ganized, with an authorized capital stock of $1,000,000 (par value),

_ which was issued to Pullman Incorporated in exchange for the

ies. The books of this company then reflected the value

of its assets based on the said appraisal, with a net worth of

$57 332,338.88. Subsequently various moves were made in segre-

ing and/or merging the properties carried by the Pullman

& Manufacturing Corporation and Standard Steel Car Cor-

— of Pennsylvania without any change in property values.

md now consists of the following companies: ‘

€ -Standard Car Manufacturing Company; Pullman

Standard Car Export Corporation; Pullman Car & Manufactur-

4, eNO of Alabama.”

consolidation in 1934 of the domestic manufacturing

subsidiaries of Pullman into Pullman-Standard Car Man-

uf. ing Company of Delaware was for the purposes, among

others, of effecting economies in operation, reducing taxes, and

simplifying the corporate structure.

52. By the various corporate moves and transfers described

above all the Pullman assets were consolidated into a unified

corporate structure headed by Pullman Incorporated as the hold-

ing and management company, and consisting primarily of Pull-

man Company as operating subsidiary and Pullman-Standard

-Car Manufacturing Company as the manufacturing subsidiary.

54. In all instances where Pullman Company took over sleeping

car operations conducted by railroads and other sleeping car com-

panies, the rates charged the para: K pmny were continued in

effect, notwithstanding increases in cost of operation, until

changed as described in paragraph 75 of this stipulation.

1501

1322 THE UNITED STATES V8. THE PULLMAN COMPANY

55-56. The Pullman Company, since the beginning of its opera-

tion, has negotiated individual operating agreements with the

.

0 operating agreement

& St. Paul Railroad Company in 1889,

operated its own i i

THE UNITED STATES V8. THE PULLMAN COMPANY 1323

1503 Exhibit VI

In the District Court of The United States for the Northern

District of Illinois, Eastern Division

Guaranty Trust Company or New York &f Al., COMPLAINANTS

v.

Curcaco, Mirwavuxer anv Sr. Pavt Ramway Company,

DEFENDANTS

In Equity—Consolidated Cause No. 4931.

PETITION OF RECEIVERS FOR AUTHORITY TO MAKE AND PERFORM THE

_ WORK OF, REPAIRS, RENEWALS, REPLACEMENTS, IMPROVEMENTS,

ADDITIONS, ETC., AND TO INCUR AND PAY THE COST THEREOF

Now come H. E. Byram, Mark W. Potter and Edward J.

Brundage, Receivers of Chicago, Milwaukee and St. Paul Railway

Company (hereinafter called “Railway Company”), and respect-

fully show to the court :

I

They refer to the original Order of this court appointing them

Receivers, dated March 18, 1925, in which they were directed

preserve, manage, maintain and operate the railroads and property

of the defendant Railway Company, including such railroads and

' property as it held, controlled or operated under lease,

agreements, stock ownership or otherwise ; to discharge

duties obligatory upon it; to preserve its rail

1504 property in proper condition and repair,

. efer to their Application No. 15 filed herein

No. 15 entered thereon, June 25, 1925 (Printed Record, pages 11

to 1202 inclusive), for a description of the cha r of the re-

pairs, renewals, replacements, improvements,

ments, etc., which the Receivers are required

to carry out the terms and requirements of

Appointment, dated March 18, 1925, as above

receivers have continued such operation since their appointment ;

that among other trains upon which said sleeping cars have been

;

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Company and the Receivers, respectively,

constructed some years ago and are not

y

oys a similar reputation; that

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cars; which include twenty percent

in actual operation under normal

in order to take care of the idle time for shop repairs,

Olympian thirty-six, bear

more cars than are

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and two drawing rooms;

room and one compartment car, and two,

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THE UNITED STATES VS. THE PULLMAN COMPANY 1325

Company. The average earnings

said two trains for 1924 and 1925, were $11,176 and upon

net earnings than they

1326 THE UNITED STATES VS. THE PULLMAN COMPANY

ments, improvement, additions, betterments, etc., and enter into

the agreements, as set forth in this application and to pay the cost

or expense thereby incurred.

In the District Court of the United States, for the Northern

District of Illinois, Eastern Division

Goarnanty Trust Company or New Yoru, er al., COMPLAINANTS

v

Cu1caco, Mipwatxer anv Sr. Pauw Ramwar Company, er au,

DEFENDANTS

In equity—consolidated cause No. 4931

ORDER IN RESPECT OF REPAIRS, RENEWALS, REPLACEMENTS,

IMPROVEMENTS, ADDITIONS, ETC.

Mark W. Potter and Edward J.

interested, and counsel having been heard, and it appearing

that the proposed work, projects, repairs, renewals, replacements,

THE UNITED STATES VS. THE PULLMAN COMPANY 1327

improvements, additions, etc., described in said petition are neces-

sary for the economical and efficient operation of the railroad in

the possession and management of the Receivers, for the best inter-

ests of the public in the transaction of the business of the Receivers

as a common carrier of freight and passengers, and for the

1509 maintenance, preservation and improvements of the prop-

erty, and the Court being advised in the premisés, it is

therefore,

Ordered, Adjudged and Decreed that the Receivers be and they

are authorized :

1. To do and perform the work in respect of the projects of

repairs, renewals, replacements, improvements, additions and bet-

terments set forth and described in Paragraph II of said petition.

ee ee ee

their

2. To expend the sum of not exceeding Forty Thousand Dollars

($40,000.00) out of the funds now or hereafter in their hands, for

the ts and additions to the stockyards at the city of

Milwaukee, Wisconsin, in accordance with the plan more particu-

larly set forth in Paragraph ITI of said petition.

3. To enter into an t with the Pullman Company for

the building and ing of eighteen sleeping-cars for the

“Pioneer Limited” and thirty-six -cars for the “Olympian”

and for the operation thereof by the ivers upon substantial!

the terms and conditions and set forth in Paragraph I

of said petition.

uae an wo their expenditures Fl 16 rree ein it and

set forth and descri n Paragraphs and

TV of enld petition in such a way that all of, and sal such expendi-

tures an are made to property covered by the Firat Mortgage dated

rere , 1909, of efendant, Chicago, Milwaukee and Puget

Sound Railway Company shal! be paid out of the income from the

property subject to the lien of said Mortgage, and heretofore

Dated, July 26, 1926. .

Enter ; James H. Wrixerson,

U.S. District Judge.

1510 In the District Court of the United States of America for

the Northern District of Illinois, Eastern Division

I, Charles M. Bates, Clerk of the District Court of the United

States of America for the Northern District of Illinois, do hereby

the above and foregoing to be a true and correct of

an made and entered in said Court on the 26th day of July,

A. D. 1926 as fully as the same appears of record in my office.

1328 THE UNITED STATES VS. THE PULLMAN COMPANY

In testimony whereof, I have hereunto set my hand and affixed

the seal of said Court at my office in Chicago,in said District, this

13th day of January, A. D. 1927,

Cranes M. Bates, Clerk.

1511 _In 1982 The Duluth, South Shore and Atlantic, on whose

however, on joint i

July 12, 1940, the following agreements between Pull-

man Company andthe railroads wore in fl

1. Agreement between The Pullman Company and The

Atchison, Topeka and Santa Fe Railway Company, effective

ar gs ovens

between The Pullman Company and The Balti-

rt Agreanent between The Pullman Company and Boston snd

Maine Deiiventh erent ee aa

5. Agreement between Pullman Compan Canadian

Pacific Railway Maras effective June 1, 1936.

6. Agreement between The Pullman Company and H. D, Pol-

lard, Receiver, Central of Georgia Railway Company, effective

eras 1940.

7. Agreement between The Pullman Company and The Central

Railroad Company of New Jersey, effective January 1, 1940.

8. Agreement between between The Puliman Com pany and The Chesa-

psi sod Onl ally Company, oferta Jy 1939.

9. Agreement between The Pullman

bare effective January 1, 1939. -

18. Agreement between The Pullman Company and Frank O.

Lowden, James E. Gorman and J: B. Fleming, Trustees of

the Property of the Chicago, Rock and Pacific Railway

Company, effective May 1, 1939.

THE UNITED STATES VS. THE PULLMAN COMPANY 1329

14. Agreement between The Pullman Company and The Dela-

ware and Hudson Railroad Corporation, effective January 1,

1941.

15. Agreement between The Pullman Company and Wilson

McCarthy and Henry Swan, as Trustees for The Denver and

Rio Grande Railroad Company, effective July 1, 1938.

16. Agreement between The Pullman Company and The Dela-

ware Lackawanna and Western Railroad Company, effective

December 1, 1937.

17. Agreement between The Pullman Company and John A.

Hadden and Robert E. Woodruff, Trustees, Erie Railroad Com-

gy rng are 1939.

between The Pullman Company and The Grand

Trunk y Company of Canada, dated June 7, 1916.

between The Pullman Company and

Sibheten omnes, Internationa] Great Northern Railroad

pany, effective November 1, 1939.

20. Agreement between The Pullman Company and The Kansas

~ Southern Railway Company, effective March 1, 1938,

between The Pullman Company and Berryman

i masons between The Pullman

Centtal Railroad Company, effective July 1, 1939.

24. Agreement between The Pullman Compan y and G. W.

Webster and Joseph Chapman, Trustess of The Mineepolis, St.

Paul and Sault Ste. Marie Railway Company, effective May 1,

1939.

25. Agreement between The Pullman Company and Guy A.

Thompson, Trustee of Missouri Pacific Railroad , effec-

tive May 1, 1940.

26. Agreement between The Pullman Company and C. E.

Erwin and T. M. Stevens, Receivers, Mobile and Ohio Railroad

ee effective November 1, 1934.

27. Agreement between The Pullman Company and Guy A.

Thompson, Trustee of New Orleans, Texas & Mexico Railway

Company, The Beaumont, Sour Lake & Western Railway Com-

pany, The St. Louis, Brownsville and Mexico Railway Company

and San Antonio, Uvalde & Gulf Railroad Compa.y, effective

January 1, 1939.

28. Agreement between The New York Central Railroad Com-

pany The Pittsburgh and Lake Erie Railroad Company, Rut-

Railroad Company and The Pullman Company, effective

January 1, 1936.

1330 THE UNITED STATES VS. THE PULLMAN COMPANY

29. Agreement between The Pullman Company and The New

York, Chicago and St. Louis Railroad Company, effective May 1,

1939

80. Agreement between The New York, New Haven and Hart-

ford Railroad Company and The Pullman Company, effective

January 1, 1935.

81. Agreement between The Pullman rca Ah and Norfolk

and Western Railway Company, effective July 1, 1927

Pennsylvania Railroad Company,

January 1, 1936.

33. 6 ree ety tei” te nan: a plan ermal

bem a Railway Company, effective J 1, 1939.

between The Pullman pany and Reading

Company eiltive Jy 1, 1939.

between The Pullman Company and Leigh R.

Powell, Jr., sornee da Anderson, as Receivers of Seaboard

Air Line Railway Comp , effective July 1, 1938.

36. Agreement between Pullman Company and Southern

ee ene 1, 1940,

37. Agreement between The Pullman Company and St. Louis-

San Francisco Railway Company, J. M. Kurn and John G. Lons-

dale, Trustees, effective November 1, 1934.

38. Agreement between The Pullman Company and The

Toronto, Hamilton and Buffalo Railway Company, dated January

1, ae

39. Agreement between The Pullman Company and Union

Pacific Railroad Company, effective January 1, 1940. :

40. Agreement between The Pullman Company and Norman Bi

Pitcairn and Frank C. Nicodemus, Jr., Receivers of The Wabash

Railway Company, effective May 1, 1934.

41. Agreement between The Pullman Company and T. M. Schu-

macher and Sidney M. Ehrman, Trustees, The Western Pacific

— Company, effective May 1, 1939.

42. Agreement between The Pullman Company and’ E. A. Whit-

man, as Reeciver of Wisconsin Central Railway Company, effec-

"2 oda i Com

58. 12, 1940 Pullman had with

the following railroads covering air condition Teter,

"aaa a eae and Santa Fe Railway , hah a

1515 Atlantis, Co Coast Line Railroad Company—Electrically

Driven Compression System.

The Baltimore and Ohio Railroad Company— York System.

THE UNITED STATES VS. THE PULLMAN COMPANY 1331

Boston and Maine Railroad Company—Ice-activated.

Canadian National Railway Company—Ice-activated or

Canadian Pacific Railway Company—Mechanically Driven

Compression System with brine tank auxiliary.

Central of Georgia Railway Company—Electrically Driven

Compression System

The Central "Railvond Company of New Jersey—Electrically

Driven Compression System.

The Chesapeake and Ohio Railway Company—Mechanically

Driven Compression System.

Bi cage Burlington and Quincy Railroad Company—Mechani-

Driven Compression System.

po Poona & Eastern Illinois Railway Company—Mechanically

Driven Compression System with brine tank auxiliary.

Chicago Great Western Railroad—Mechanically Driven Com-

pression System, brine tank.

MQaleneo, Milwaukee, St. Paul and Pacific Railroad Company—

Carrier Safety Steam System.

Chicago and North Western Railway Company—Ice-activated.

Chicago, Rock Island and Pacific Railway Company—Mechani-

cally Driven Compression System, brine tank auxiliary.

Colorado and Southern Railway Company—Mechanically

Driven Compression System, brine tank auxiliary.

Delaware, Lackawanna and Western Railroad Company—lIce-

activated.

The Denver & Rio Grande Western Railroad Company—Ice-

activated.

Erie Railroad Company—Safety Carrier Steam Jet Sys-

tem.

1516 ‘Florida East Coast Railway Company—Electrically

Driven Compression System.

es cope Fort Worth and col tees City Railway Company—Mechani-

Great Northern Railway Company—Ice-activated.

Illinois Central Rai Company—Mechanically Driven Com-

pression System, brine tank auxiliary.

ae Northern Railroad Company—Ice-acti-

v

Kansas City vases Railw ee a Driven

Compression System

Lehigh Valk Re fallsoet Cotapenietia-edttvaed:

Louisville & Nashville Railroad Company—Mechanically

Driven Compression System, brine tank auxiliary.

Maine Central Railroad Company—Ice-activated.

724808—47-——_84

1332 THE UNITED STATES VS. THE PULLMAN COMPANY

St. Paul & Sault Ste. Marie Railway Company—

iven Compression System, brine tank auxiliary.

The Nashville, Chattanooga & St. Louis Railway Company—

Driven System.

New York Central Railroad Company—Mechanically Driven

Compression System.

The New York, Chicago and St. Louis Railroad—Mechanically

Driven Compression System.

New York, New Haven and Hartford Railway Company—Ice-

activated.

Norfolk and Western Railway Company—Mechanitally Driven

Compression S: brine tank auxiliary

1517 += Northern Railway Companty—Mechanically

Driven “ma System.

Pennsylvania Railroad Company—Mechanically Driven Com-

pression System, brine tank auxiliary.

‘Pere Marquette Railway Company—Mechanically Driven Com-

Reading Company—Electrically Driven Compression System.

Richmond, Fredericksburg and Potomac Railroad Company—

Ice-activated.

Richmond, i and Potomac Railroad Company—

Electrically Driven

System.

St. Louis-San Francisco Railway Company—Mechanically

Driven Compression System, brine tank

St. Louis Southwestern Railway Company—Ice-activated.

Seaboard Air Line Railway Company—Mechanically Driven

Compression System.

Southern Railway Company—Mecharically Driven Com-

pression System, brine tank

Southern Pacific Company—Mechanicaliy Driven Compression

System, brine tank auxiliary.

The Texas and Pacific Railway Company—Mechanically

Driven Compression System, brine tank auxiliary.

Union Pacific: Railroad Company—Mechanically Driven Com-

pression System, brine tank

Wabash Railwa Company—lIce-activated.

Western Pacific fic Railroed Company—Mechanically Driven Com-

pression System, with brine tank added.

Wisconsin Central Railway Company—Ice-activated.

THE UNITED STATES V8. THE PULLMAN COMPANY 1333

61. Copies of all the operating agreements, including letter

between Pullman Company and the railroads which

were in effect on July 12, 1940, are contained in separate volumes

and will constitute Exhibit VIL.

1518 63. There are two types of sleeper equipment which are

referred to as coach sleepers or sleeper coaches. One of

these, which will be referred to as new-type coach sleeper, is a

car of new interior design developed as the result of research

by Pullman Company and Standard for the purpose of providing

coach passengers with sleeping accommodations at night. These

cars are divided into compartments in which three tiers of beds

may be made up at night. They furnish seating and sleeping ac-

commodations for more than forty people. A pamphlet prepared

by Pullman Company and relating to such cars is attached hereto

as Exhibit VIII. [illustrations and specifications of the interior

of said cars, applicable rates for sleeping-car service therein and

proposed methods of operation are set forth in said pamphlet.

THE UNITED STATES VS. THE PULLA(AN COMPANY

Exhibit VIII

COPY BOUND VERTICALLY

{THE UNITED STATES VS. THE PULLMAN COMPANY 1335

COPY BOUND VERTICALLY

:

=

8

:

Es

THE UNITED STATES VS. THE PULLMAN COMPANY

COPY BOUND VERTICALLY

THE UNITED STATES V8. THE PULLMAN COMPANY 1339

1340 THE UNITED STATES V8. THE PULLMAN COMPANY

COPY BOUND VERTICALLY

THE UNITED STATES VS. THE PULLMAN CoMPANY 1341

THE UNITED STATES V8. THE PULLMAN COMPANY

44 THE UNITED STATES V8. THE PULLMAN COMPANY .

COPY BOUND VERTICALLY

{HE UNITED STATES VS. THE PULLMAN COMPANY 1345

Four of such cars have been prepared by Pullman Com-

a ly $43,000 each as shown

been used experimentally on

in June

experimen

, the Great Northern, the Northern

the Chi & North Western, the Union Pacific, the

Pacific, the Santa Fe, and the Denver & Rio Grande

i completed by De-

service as of

regular

tions. The

es traffic that usually m

the service in the opinion of Pul

of developing much new business from

pay the higher rail and Pullman fare for the

Pullman i

service.

Another type of equipment referred to herein as a combination

coach-sleeping consists of old cars the interiors of which have been

semorieled to contain seats for coach passengers at one end and a

number of sleeping car sections at the other end. The operation

ne these cars is an arrangement which has been put into effect

on some lines where there is not passenger i to

f both coaches and sleeping cars.

Company put

the use of train

. N. D.,

1346 THE UNITED STATES VS. THE PULLMAN COMPANY

As of April 21, 1936 Pullman Company entered into a special

for five years with the St. Louis-Southwestern Rail-

(then being reorganized under Section 77 of the

In the District Court of the United States, Eastern Division,

Eastern Judicial District of Missouri

In Tue Marrer or Sr. Louis Sovurmwestern Rauway Company,

DEBTOR

In Proceedings for Reorganization of a Railroad; No. 8497

PETITION OF TRUSTEE FOR AUTHORITY TO ENTER INTO AGREEMENT WITH

THE PULLMAN COMPANY COVERING TWO COMBINATION CAFE-COACH-

SLEEPING CARS OPERATED ON LINES OF THE DEBTORS

The peti of Berryman Henwood, Trustee of the property

of the St. Louis Southwestern Railway Company, respect-

virtue of the ownership by said Southern Pacific Company

majority of the capital stock of the St. Louis

THE UNITED STATES VS. THE PULLMAN COMPANY 1347

Southwestern Railway Lines,” and after January 29, 1936, the

ion of cars of The Pullman Company continued over lines

of the Debtors under an informal arrangement pending negotia-

tion of a new agreement.

3. That as of January 29, 1936, The Pullman Company and

your Trustee propose to enter into a new principal agreement cov-

erifig the operation of Pullman cars over lines of the principal

Debtor and its subsidiaries (as defined therein), including the

Debtor St. Louis Southwestern Railway Company of Texas, and

that as of June 12, 1936, The Pullman Company and your Trustee

to enter into an agreement supplemental thereto, known

as the “Air Conditioning Agreement,” covering the air-condi-

tioning of the Pullman cars covered by said principal agreement.

Both of said agreements may be terminated at the time of the

adoption of a plan of reorganization herein, and for that reason

and for the reason that said agreements are operating agreements

executed in the regular course of operation of the said Debtors’

properties, he is not requesting specific authority of this Court to

enter into said agreements.

4. That, in addition to the standard Pullman cars operated

over said Debtors’ lines of railway under said agreements, there

are operated over said lines two combination cafe-coach-sleeping

cars built and owned by The Pullman Company. The operation

of said cars over said lines began on April 21, 1936. The

1524 operation of such cars over the lines of railway operated

by your Trustee has been and now is desirable and necessary

in furnishing adequate and efficient passenger transportation

service over said lines.

5. That The Pullman Company and your Trustee have nego-

tiated a proposed agreement covering the operation of said com-

bination cafe-coach-sleeping cars over the lines of railway of said

Debtors, that a copy of said agreement is attached hereto, marked

Exhibit “A,” and made a part hereof, and that in view of the

fact that said proposed principal agreement is referred to in said

agreement marked Exhibit “A,” a copy of said proposed principal

agreement is attached hereto, marked Exhibit “B” and made a

part hereof.

6. That said proposed agreement provides, inter alia, that The

Pullman Company shall receive $16.24 per car per day; that The

Pullman Company shall furnish cafe service in said cars, subject

to the right of your Trustee to take over the operation of such

cafe service; that said cars shall be equipped with mechanically

driven compression system of air-conditioning apparatus; that

The Pullman Company shall operate, inspect and maintain said

apparatus; that your Trustee shall pay the Pullman Company

7248084785

1348 THE UNITED STATES VS. THE PULLMAN COMPANY

wd wth day for o ion of said apparatus, and that

meng * mie 7 it euaieues.oa tas teak Uneaten ex

panes gmt ma "The roposed contract sets forth mutual

and liabilities of the parties covering the operation

of the cars furnished in similar form to provisions in con-

tracts between The Pullman Company and other railroad com-

panies.

7. That it is proposed that said agreement shall remain in effect

for a period of approximately five years, or from April 21, 1936,

to April 30, 1941, and that said agreement shall be binding upon

any successor trustee or trustees of the said Debtors’ property

hereafter appointed in this proceeding, and, after reorganization,

upon said ors or any company which may succeed said

Debtors in the ownership or operation of the said Debtors’ lines

of railway.

1525 8. That your Trustee believes that the rental and other

terms of the proposed agreement are fair, and that it is

in the best interest of the trust estate that he be authorized to

enter into said agreement.

Wherefore, your Trustee prays that an order be entered herein

authorizing him to enter into an agreement with The Pullman

Company substantially in the form of Exhibit “A” hereto

attached.

BerryMan Henwoon,

Trustee, St. Louis Southwestern Railway Company,

Debtor.

A. H. Kisxappon,

General Counsel,

Carteton S. Haptey,

Assistant General Counsel, Cotton Belt Building,

St. Louis, Missouri.

Dated January 29, 1937.

Unrrep Srates or AMERICA,

Eastern Judicial District of Missouri,

Eastern Division, City of St. Louis, Missouri, 8s:

Berryman Henwood, being duly sworn, upon his oath says that

he has read the above and foregoing petition and that the facts

therein stated are true, as he verily believes.

BerryMan Henwoon.

Subscribed and sworn to before me this 28 day of January 1937.

[smau] Tuo. R, Scunemer,

Notary Public,

My Commission expires August 2, 1937.

THE UNITED STATES VS. THE PULLMAN COMPANY 1349

(Exhibits A and B filed but not printed.)

Filed Jan. 29, 1937. Jas. J. O’Connor, Clerk.

1526 [Order No. 162.]}

In the District Court of the United States Eastern Division,

Eastern Judicial District of Missouri

Iw Tue Marrer or Sr. Louis Sournwestern Rar-way Company,

DEBTOR

In Proceedings for Reorganization of a Railroad; No. 8497

ORDER AUTHORIZING TRUSTEE TO ENTER INTO AGREEMENT WITH THE

PULLMAN COMPANY COVERING TWO COMBINATION CAFE-COACH-

SLEEPING CARS OPERATED ON LINES OF THE DEBTORS

The petition of Berryman Henwood, Trustee, for authority to

enter into an agreement with The Pullman Company covering two

combination cafe-coach-sleeping cars for a period of approxi-

mately five years being this day presented to the Court, and it

appearing to the Court that notice of the filing of said petition has

been served upon the mortgage trustees of the Debtor’s property

and interveners herein, and the Court being fully advised in the

premises, it is ordered :

1. That the Trustee be and he hereby is authorized to enter into

said proposed agreement with The Pullman Company covering

two combination cafe-coach-sleeping cars, for a period of

terms stated by the “Trustee in his said petition and set

1527 approximately five years, embodying substantially the

forth in Exhibit “A” attached thereto, and

2. That said agreement, if and when it becomes effective, shall

be binding upon any successor trustee or trustees of said Debtor's

property hereafter appointed by this Court in this proceeding;

that, in accordance with the terms and conditions of the agreement

to be executed substantially in the form of Exhibit “A” attached

to the Trustee’s petition, as a condition to the final confirmation

by this Court of any plan of reorganization of said Debtor, said

Plan shall provide that said Debtor or any person or corporation

acquiring substantially all of said Debtor's railways and properties

shall be or become bound by all of the terms and provisions of said

agreement ; that upon dismissal or termination of the trusteeship

or upon any sale, lease, transfer or assignment of said railways

and properties shall, as a condition to such acquisition, be or be-

come bound by all of the terms and provisions of said agreement ;

1350 THE UNITED STATES VS. THE PULLMAN COMPANY

and that thereupon the Trustee, or any successor trustee or trus-

tees of said Debtor’s property, shall be di and relieved

come bound by all of the terms and provisions of said agreement ;

Cuarzes B. Davis,

District Judge.

1528 At the present time this operation is being continued pend-

ing the making of a new agreement.

In 1936 as a result of negotiations between Pullman Company

and the Chicago & North Western Railway Company, the Chicago,

Burlington & Quincy Railroad Company, the Illinois Central

Railroad Company, the Northern Pacific Railroad Company, and

the Great Northern Railway Company (commonly known as the

Granger Roads) , the provision in the operating agreements which

gave Pullman Company the exclusive right to operate sleeping car

service on the lines “| those railroads was modified by supple-

mental agreements to exclude from its scope the operation by the

railroad companies of combination coach sleepers on lines where

there was no Pullman service, and on existing sleeping car lines

where the earnings were less than $4,000 per car per year. Sim-

ilarly, the operation of combination coach sleepers by these rail-

roads which had been begun on November 1, 1935 was removed

from the scope of this provision of the operating agreements. In

these supplemental agreements it was also provided that at the

option of the railroad company, Pullman Company would furnish

such service under special arrangements to be mutually agreed

upon. The only railroads in this group which ever established

their own service under the provisions of these supplemental

agreements were the Illinois Central and the Northern Pacific.

In 1939 the Illinois Central, because of the insistence of the

people of Natchez, Mississippi that they be given sleeping car

service, remodeled some old business cars into combination lounge,

dining and sleeping cars, and placed them in operation between

Memphis, Tennessee, and Natchez, and between New Orleans and

Natchez.

In 1938 the Northern Pacific Railway Company remod-

1529 eled two old coaches into coach-sleepers and put them in

operation between Seattle and Yakima, Washington. This

operation was discontinued on April 3, 1941.

68. The results of operations by the Pullman Company on

various railroads and the financial settlements with such railroads,

as shown by the records of Pullman Company, for the last ten

years, are shown in the following table designated Exhibit X.

‘

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1530 Exuisrr X.—-The Pullman Company, results of

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Operation included under C. B. & Q. R. R. Co.

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Contract effective July 1

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contract.

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1360 THE UNITED STATES VS. THE PULLMAN COMPANY

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Exxetair X.—The Pullman Company, results of operations

COPY BOUND VERTICALLY

THE UNITED STATES VS. THE PULLMAN COMPANY 1369

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THE UNITED STATES VS. THE PULLMAN COMPANY 1375

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1376 THE UNITED STATES V8. THE PULLMAN COMPANY

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THE UNITED STATES VS. THE PULLMAN COMPANY 1377

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1380 THE UNITED STATES VS. THE PULLMAN COMPANY

1 to 1940, inclusive—Contioued

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THE UNITED STATES VS. THE PULLMAN COMPANY 1383

1565 Be es ee nes doe tes that

Pullman Company ma. and collect fares from the

traveling ic for the use of seats, berths and other service ren-

dered by it. The of the Pullman Company are

contained in the of that company.

75. The Pullman Company is the only defendant subject to the

of the Interstate Commerce Act. Aside from changes

a few individual rates, the only changes made in Pullman

since 1890 are as follows:

(a) In 1911 many reductions were made in charges for lower

berths and all upper berth rates were reduced to 80% of the lower

berth rate; |

b) In 1920 there was an increase of 20% in all Pullman rates;

(c) In 1938 there was an increase of 5% in all Pullman rates,

except for upper berths.

Subsequent to 1900 operating expenses of the Pullman Com-

y gradually increased and during the first World War the

was greatly accelerated. The railroads, as well as the

Pullman Company, were under Federal control from January 1,

1918, to March 1,1920, and during that period substantial increases

were made in railroad passenger fares, but no increases were mace

in ing or parlor car charges. On May 1, 1920, in order to meet

in part increased cost of operation, the Pullman Company

filed with the Interstate Commerce Commission tariffs increasing

its rates 20%. These rates became effective without suspension.

In November 1937, the Interstate Commerce Commission, upon

application of the Pullman Compeny for the approval of an in-

crease of 10% in all of its charges instituted a investiga -

tion, in a proceeding entitled “Increased Pullman Fares and

Charges, 1937, Ex Parte 125, 227 I. C. C. 644.”

1566 = After a hearing, the commission authorized an increase

of five percent in all of the rates of the Pullman Company,

which was the authority das Gs vate seamen ations tn eb

paragraph (c) of this paragraph. Aside from this increase no

change was made in the subnormal rates referred to in the report of

the commission.

76. For years Pullman Company has carried on research in its

own shops and laboratories and has studied and tested certain

improvements suggested or made available by others. It has

invited suggestions as to improvements from its employes and

from others and has rewarded employes whose suggestions have

been adopted by it.

Following is a list of some of the innovations made in their

sleeping cars either by George M. Pullman or by the Pullman

1384 THE UNITED STATES VS. THE PULLMAN COMPANY

Company c*:r the years shown. No stipulation is made as to the

wuthap af Palen seas to whichaneh tanavetiens wenn iastalled

or the time or manner of such installation. In case no witness is

made available to the government either for examination or cross

examination as to these innovations dated after 1910, this portion

of the sti is to be stricken.

1858—The remodeling of a Chicago & Alton coach into the first

Pullman sleeping car was begun.

1859—No, 9, the first Pullman sleeper, made its first trip from

ee ee eee ee

Candles furnished light.

A wood-burning stove

1865—The Pioneer, the first io constructed by modern

methods of the day, was put into service. Six wheel trucks were

applied to the Pioneer. Wooden panels were used on the exterior

ofthecar. A hand pump maintained the water supply.

1867—The first Pullman “hotel” car was built.

1868—The first Pullman dining car was constructed.

1873—Oil lamps replaced candles.

1875—Plain automatic brakes were adopted in place of straight

air brakes.

Parlor cars were introduced into Pullman service.

1878—A hot-water heating system replaced the hot-water

1879—Paper-center, steel-rim wheels replaced iron wheels.

1886—Electric call bells were added.

1887—The narrow vestibule was invented and applied.

Electric lights were used for the first time. Steam, in conjunc-

tion with hot-water circulation was applied to the heating appa-

ratus instead of hot water alone.

1889—Quickacting automatic brakes were installed in lieu of

plain automatic.

1890—The swinging berth curtain rod was developed.

Wooden sheathing was used on the exterior of cars instead of

wooden

1891—Pintsch gas burners replaced oil lamps after previous

experiments.

Anti-telescoping construction was developed.

1893—An air-pressure water system replaced overhead tanks.

The wide vestibule was developed.

1895—The high-speed brake was developed and first applied to

six-wheel trucks.

THE UNITED STATES VS. THE PULLMAN COMPANY 1385

“The use of paper center wheels was abandoned. '

1900—Cast-iron hub, steel-rim wheels replaced the paper-center

1906—The automatic exhaust type ventilator was applied to

the deck of the car.

The fumigation of cars became standard practice.

1908—The vacuum steam-heat system supplanted the hot-water

system. >t

The dental lavatory was first applied.

1909—The first steel sleeper was placed in service.

iding window screens replaced folding screens.

“First Aid” kits were added.

+ Pn sg air brakes were adopted.

Steel sheathing was applied to the exterior of cars.

Improved anti-telescoping construction was adopted.

1913—Electric exhaust fans were added to sleeping cars and toc

club cars and rooms where smoking is permitted.

Solid steel wheels were tried out in place of steel-tired wheels.

Water and ice were separated, a tank for each being used.

1914—The vacuum cleaning of cars was begun.

1915—Mirrors were placed in upper berths.

1916—Divided berth curtains replaced old type. .

The safety ladder replaced the step-ladder.

Universal control brakes

er aha petra ade pay hapleme

ae ange the safety cord used to support the upper berth.

1917— lights were installed.

The clasp brake was adopted (two brake shoes being applied to

each wheel).

1919—Draft gears were improved.

A buffer mechanism was added.

Window sash ventilators were added.

Safety locking center pins were added to hold the truck to the

Split front toilet seats replaced solid seats.

. 1920—The use of heavier couplers was begun.

1569 1921—Various improvements in electric lighting gen-

erator suspensions and regulators were adopted.

A new style truck was placed in service.

1386 THE UNITED STATES V8. THE PULLMAN COMPANY

“Quiet” signs were installed. , ;

-1922—Luminous berth numbers and “quiet” signs were installed.

1928—Permanent headboards were added.

A larger stepping box supplanted a smaller surfaced one.

The upper berth shelf replaced the hammock.

Rubber battery jars replaced lead-lined tanks.

Passenger and platform men were uniformed.

Carpet padding was applied.

1924—A safety-razor- receptacle was added.

An anti-pinch device for doors was installed.

End-door car numbers became standard.

A dressing shelf was installed in the men’s washroom.

“Watch Your Step” signs were applied to steps and vestibules.

Improved valves and were added to the water system.

A new three-position rest for sleeping-car sections was

developed.

New toilet indicator locks were added.

Porcelain wash bowls adopted.

1925—Shoe receptacles were added for rooms and compart-

ments.

An improved and more attractive design of seat end was

adopted.

' Porcelain wash bowls and stands were installed.

Women’s lounge rooms with baths were added.

Water coolers arranged so they can be iced from hallways

were placed in women’s dressifig rooms.

The four-tread step was adopted, thereby shortening the dist-

ance between the lower step and the step box.

Larger fans were provided in smoking rooms.

The general application of variable interior designs with plain

colors instead of graining, new decorative schemes and improved

lighting fixtures were

1570 Observation rooms were provided with lounges and tables.

Semi-enclosed section partitions with narrow sliding

headboards were installed.

The amount of insulating material in car frames was increased

and im

The lighting of toilet rooms was improved for shaving purposes

ep ane bracket lamps over mirrors.

Cars were introduced.

tek deen id tae Calle eases Called thaeneioch Goals!

to improve the general] illumination.

Berth curtains were changed in color scheme.

fixtures

ae

THE UNITED STATES VS. THE PULLMAN COMPANY 1387

Adjustable reading lamps were ‘added for the drawing-room

sofa.

1926—Lower-berth reading lamps were changed from the recess

to the bracket-and-shade type.

Additional racks were provided in drawing rooms and com-

1927—Brass window sash was employed.

A new truck was adopted to accommodate the various types of

roller-bearing applications.

The two-part vestibule door became standard.

Car flooring was improved by a change in the materials

1927—The electric generator drive was changed and new

driving pulleys with belt guards were provided.

1928—Movable revolving chairs were provided for the women’s

Two-inch metal steam connections were provided between cars

in of rubber hose.

curtain arrangement in the women’s lavatory was improved

t entangling when entering women’s room with baggage.

smoking-room sofa was improved.

An automatic locking device for the train connector was applied.

The design of jéurnal boxes was changed, the single guide

Larger steam pipes were applied.

1571 A wardrobe was provided for compartments.

ing mattresses for lower berths were developed and

generally applied.

1929—Water coolers were redesigned to overcome overflow.

A new washstand faucet with an overhanging spout was adopted

in place of the concealed spout.

‘ric exhaust fans were added generally to improve venti-

lation when cars are standing.

A section seat with a slanting top and with a second stop pro-

vided on the seat slide to permit pulling the seat cushion out, |

to make a wider and more comfortable seat, was adopted.

The journal-box design was improved to prevent the ingress of

water,

_ A special upper-berth spring mattress was adopted.

' A non-slip shoe was provided for the upper berth ladder.

A larger rack was provided for the drawing room. ,

The vitrolite shelf was adopted for the smoking room in place

of enameled steel. .

' 1980—Mechanically refrigerated air-conditioned car placed in

test service.

to

1388 THE UNITED STATES V8. THE PULLMAN COMPANY

Improvements in brake cylinder protectors and Universal

valves adopted.

Test application made of individual heat control for rooms,

concealed heat and thermostatic heat control applied to parlor and

lounge cars.

Spring cushions for chzirs, settees and couches adopted.

Tiluminated display lockers added to buffet cars.

Folding upper berth step ladders developed for bedrooms.

Exten supplementary coat hangers for single occupancy

sections.

Toilet cabinets applied to drawing rooms and compartments,

Extensive use made of chromium plating on observation railings

and gates.

More legible “Men” and “Women” bulkhead signs

1572 Bottle holders installed in drawing-room annexes and

compartments.

Mattress roll and shelf installed in cars having spring mat-

tresses.

Experiments made with rubber buffer mechanism and draft

gears.

New design sunroom end, known as the “Clipper” type,

developed and applied.

Automobile type windows and regulators applied to some ob-

servation sun rooms.

New window curtain fixture adopted.

Upper berths developed and adopted for bedrooms having

convertible sofas.

Adjustable mirror lights applied as test to washstand mirrors

in bedrooms.

Convertible sofa bed devised for bedrooms.

Double pan hoppers applied to prevent spraying.

Improved drawing room sofa adopted.

1931—Adjustable four-position section seat developed and

placed in service.

Travel accessories sale cabinets installed.

New inner spring construction developed for upper berths.

Types of positive generator drives applied for test purposes.

Cars with private sections with adjbining toilets placed in

service.

Cars with enclosed section placed in service.

Test application of permanent ladders for upper berths.

New ice-cooled air-conditioned car

in service.

THE UNITED STATES VS. THE PULLMAN COMPANY 1389

One private and five sleeping cars equipped for air-conditioning

by means of mechanical refrigeration.

Chaise lounge section cars placed in service.

Two cars equipped with double deck bedrooms.

Air-conditioning applied in nineteen cars.

1932—Cars equipped with dressing platforms in upper

berths.

1573 Improved spring construction for mattress support for

convertible sofas in bedrooms.

Improved vestibule trap door lock.

Improved buttoning arrangement devised for berth curtains.

vement in three-position headrest locking plates to pre-

vent ing.

Use of sound-deadening metal and improved platform mecha-

nism.

Improved shades applied to reading lamps and bracket fixtures.

Improved fastening arrangement for hopper casings in bed-

rooms to prevent rattling.

Design of coat hangers changed to provide more space for hang-

ing trousers, and hooks provided at each end so trousers can be

suspended from the belt straps.

New hinge construction applied to drop tables in bedrooms.

Improvement in water tank filling valve by using a weighted

cover.

Catch developed for the upper ¢=rt of vestibule doors in order

to hold them in partly open posiicn to increase air circulation.

Aid-conditioning applied to 100 «ars.

19833—Cars equipped with eight apper and eight lower rooms,

air-conditioned, placed in service.

First lightweight (all aluminum) sleeping car, George M. Pull-

man, constructed and put on exhibition at A Century of Progress.

New type rigid ladder devised for drawing rooms and compart-

ments.

New type adjustable seat arrangement adopted.

Several types of wearing plates applied to truck center plates

to reduce noise.

Air-conditioning applied to 155 cars.

1934—Installation of double pan hoppers.

New type automatic coupler appli

Standard use of metal hose.

Light excluder for single gccupancy section used in open section

cars.

1574 er: Sone pene empire a Sandee fe

place of hairfelt previously

Air-conditioning applied to 1,018 cars.

1390 THE UNITED STATES VS. THE PULLMAN COMPANY

First streamlined train “City of Salina” designed and built at

Pullman.

Second streamlined train with Pullman sleepers “City of Port-

land.”

1935—Soldered joint fittings adopted as standard for air-con-

ditioned cars.

Synthetic varnish (quick four-hour dry) adopted as standard.

oe rds for drawing room sofas for protection of children,

ore a keys of improved design.

Secoane steel liners for center plates.

Magazine and eyeglass case pocket for bedrooms.

Use of enamel for exterior of wood sash.

New design antirattle diaphragm suspension arrangement.

Various modern developments in cushions and mattresses, such

as rubberized hair of various kinds and sponge rubber cushions.

Development of “streamline” car.

Individual control of air-conditioning in sections.

Air-conditioning applied to 1,947 cars.

1936—Safety guards adopted for single occupancy sections.

rubber mattresses adopted for bedrooms.

ppers (enclosed) for bedrooms, lowered to present a better

appearance as a daytime chair.

facial tissues and paper towels adopted as auxiliary service for

men’s and women’s rooms.

Armrest for convertible sofa backs in bedroom, adopted as

standard.

Air-conditioning applied to 875 cars.

Third streamline train “City of Los Angeles.”

Fourth streamlined train “City of San Francisco.” ,

Sixth and seventh streamline trains “City of Denver.”

Two-car unit, lightweight, streamlined cars “Advance” and

“

Alloy steel truss-frame sleeping car “Forward.”

1575 1937—Developed new standard for Pullman equipment

for lightweight cars for high speed service, including:

New and improved type of trucks for 4 and 6 wheels.

New truck brakes.

New air brakes for high speed service.

Entire new car — structures; (a) Girder type of welded high

ae steel; (b) Welded truss frame type with stainless steel

siding.

New draft gears and coupler attachments.

New platform and end construction with complete enclosure

between cars for single unit cars.

THE UNITED STATES VS. THE PULLMAN COMPANY 1391

‘New materials for inside finish and bright and striking color

schmes for interior paint and upholstery.

Greatly increased illumination.

Improvement in air-conditioning with full thermostatic control

for each individual room and space in cars.

Introduction of porter’s call connections between cars.

Development of converter transformers for converting 32 volt

direct current to 110 volt alternative for electric shavers, etc.

Provided new Pullman accommodations as follows :

(a) New type drawing-rooms with folding bed, sofa, upper berth

and lounging chairs.

(b) New type compartment with sofa, upper berth and lounging

chairs.

(c) Improved type of, connected bedrooms, fully open folding

partition between rooms.

(d) Roomette accommodation, single room with folding bed.

Disappearing type of swivel and folding hoppers for bedrooms.

Telephone communication between cars. :

Latex rubber cushions for all seats and chairs and for all mat-

tresses.

New and modern design for all hardware trimmings and light-

ing fixtures.

New color scheme for car exteriors.

_ Duplex car developed and put into service. _

1576 1938—Developed DeLuxe Drawing Room accommoda-

tion.

Special lightweight stainless steel exterior truss frame cars de-

veloped for service in, Santa Fe “Super-Chief.”

Guard ropes for Single Occupancy Sections.

Lightweight. full-vitreous washstands.

Synthetic interior enamels adopted standard for lightweight

cars.

Developed new four-wheel truck with helical bolster springs

and one-way shock absorber (extensively applied in 1939).

“1939—Propane gas engines for driving air-conditioning com-

pressors and electric generators. Nonbreakable rubber buttons

versus hard rubber buttons for berth curtains.

Metal end door name plates, lightweight cars.

sangpes steel hoppers.

ew underframe construction developed incorporating in-

creased antitelescoping. a

. 1940—Development of fluorescent lighting.

Coach-Sleeper developed.

New shaving mirrors developed for washstand cabinets for

Roomettes, Bedrooms, Drawing-Room Annexes.

1392 THE UNITED STATES VS. THE PULLMAN COMPANY

New ‘Zone’ heating system adopted.

New air brake with Decelostat brake pressure control on each

car provided.”

Following the construction of the first steel passenger cars, the

pregee cteeDed s Nen tne ec tamim, gt Bt, Armee

were greatly accelerated. To this end, among other things,

Gas Geeetled'tetsiine Gf ta Pian cand weee whale mak

stronger and their weight increased accordingly. This increase in

weight continued gradually until the advent of lightweight equip-

ment. Railroad passenger cars went through a similar evolution.

During this period emphasis was also placed upon the standard-

ization of passenger equipment. Standardization reduced

1577 the costs of construction and lessened the investment in

inventory for the of wornout part or parts

destroyed in accidents. Pu Company had a committee on

standards that met frequently and considered improvements de-

SE her ee

others.

There were no substantial changes during this period in the

structural members of cars except that they were made stronger;

most of the consisted of improvements in trucks, brakes,

couplers and draft gears and in the heating and lighting and other

functions of the cars. Aside from miscellaneous improvements

thereof, the accommodations remained generally the same. Com-

partments and drawing rooms were available to those who cared

y the higher price necessary to use them.

1925, Pullman Company built and placed in operation

bedroom cars with fixed beds on the trains which departed at a late

hour. In addition to the types of accommodation, conventional

in America—sections, drawing rooms and com

Scllowiag ortuianndations have been dovdieped by Pelinty Com.

pany and Standard:

The Bedroom

The double bedroom of today is an enclosed private room, and

contains a sofa. For night-time use, this sofa forins a bed 6 feet

and 5 inches long. Above the sofa is an upper berth which

similarly makes down into a bed. The bedroom has toilet facil-

ities and a folding wash basin. A hinged desk provides a writ-

pr Be are tare nab wg tenn omc Each room is pro-

in the door, and exhaust fans, to regulate room temperature and

ighting. Each room is completely air-conditioned.

On July 12, 1940, 745 cars containing 3,484 bedrooms were in

service and on August 31, 1941, 889 cars containing 4,521 bedrooms

were in serv’

THE UNITED STATES VS. THE PULLMAN COMPANY 1393

Pullman charge for one adult, or one adult and a child under

five years of age, is approximately 14 of the lower

1578 berth fare, or for two adults is approximately twice the

lower berth fare. The Pullman charge for two bedrooms

en suite is the price of two bedrooms not to exceed the cost of a

drawing room.

An illustration of this type of room is attached hereto as Ex-

hibit XI.

1579

1394 THE UNITED STATES VS. THE PULLMAN COMPANY ©

1580 ‘Du Room

is a new accommodation consisting of upper and

lower interlocking rooms. The method of construction makes

possible twelve duplex rooms in each car together with five double

bedrooms. In the “Du Kiww ng cng anthranilate pedro

i words, the rooms are arranged on two

there is a sofa, convertible into a bed.

In each room there are individual toilet facilities, fans, and appli-

ances to regulate lighting and heating. Each “Duplex” is air

conditioned.

The upper room has a locker above the sofa for luggage. In

the lower room luggage space is under the sofa and in an overnight

rack. The upper and lower rooms are equipped with small

ee Se eee tr ee ee noes of

There al tht fd agin be wal which may be vd

Arm rests fold

sofa. Some of ‘ae aoe downstairs “Duplex”

rooms are en suite, and a sliding ition can transform two or

more of them into large rooms. of the upper rooms have

communicating doors. The “Duplex” room affords accommoda-

tions for one passenger.

The duplex car was first developed in May, 1983. On July 12,

en oceans aoe veers ane

on ee 1941, 24 cars containing 405 duplex bedrooms were

The Pullman charge for a Duplex Room is approximately 1%

th Nn ena | ge ge tllell peace» flrs ogy

5 years of age two approximately 14,

lower berth fare.

An illustration of this type of room is attached hereto as Ex-

hibit XI (a).

THE UNITED STATES VS. THE PULLMAN COMPANY 1395

1582 The Roomette

The “Roomette” is a small completely enclosed private

room containing one bed. In daytime the bed folds into the

wall at one end of the room, and the passenger has a sofa seat,

with space for undressing before the bed is lowered. For dress-

ing the passenger can make the whole room space and its com-

piste toilet facilities available by returning the bed to its niche in

the wall. The bed can be raised or lowered without assistance

from the porter. When the bed is made down for the night it is

fastened at the foot by a lock. This may be released when the

passenger desires to raise the bed, and the lock then reverses and

holds the bedding in place. The bed is 6 feet 5 inches in length.

724808—47—-88

1396 THE UNITED STATES VS. THE PULLMAN COMPANY

The door of the “Roomette” can be locked at night, or left

open and a zipper curtain drawn across the opening. Ventila-

tion, heat and light may be separately regulated. Toilet facilities

and the washstand fold into one wall. Above the washstand iss

mirrored cabinet for toilet articles, with tubular lights on each

side. There is a locker in which to hang clothes; a large rack

for luggage; a vacuum water bottle in cabinet, and box from’

which the porter can remove shoes at night.

The roomette was first developed in August, 1937. On July 12,

’ 1940, 116 cars containing 1,608 roomettes were in service and on

August 31, 1941, 166 cars containing 2,156 roomettes were in

service.

The Pullman charge for a Roomette for occupancy by one adult,

or one adult and child under 5 years of age, is approximately 1%

lower berth fare.

Illustrations of the roomette are attached hereto as Exhibit

XI (b).

1583-84

THE UNITED STATES VS. THE PULLMAN COMPANY 1397

1585 The New Compartment

A new compartment has heeri evolved which, through

re-arrangement of the fixtures, has made more space available to

the passengers than was found in conventional type of compart-

ment. Section seats by the windows have been replaced by «

transverse sofa which affords lounging space. The upper berth

remains above the windows, and is at right angles to the convertible

sofa-bed. There is space between the sofa and the opposite wall

for the lounge chair. At night the chair is placed under the upper

berth where it is still available for lounging and reading. Both

beds are 6 feet 5 inches in length and of standard berth width.

The New Compartment also has an electric fan, individual regu-

lation of the lighting and ventilation, and thermostatic heat con-

trol. Each Compartment is provided with complete toilet facili-

ties, a locker for clothes and a shoebox. Space is provided for

luggage and each compartment is air-conditioned. For daytime

travel there is room to seat four passengers. At night there is

a bed and upper berth.

The new compartment was first developed in November, 1933.

On July 12, 1940, 99 cars containing 310 compartments were in

1398 THE UNITED STATES VS. THE PULLMAN COMPANY

service and on August 31, 1941, 137 cars containing 456 compart-

ments were in service.

Illustrations of this type of room are attached herete as Ex-

hibit XI (c).

1586-87

THE UNITED STATES V8. THE PULLMAN COMPANY 1399

1588 The New Drawing Room

In the new drawing room there is more space available

to the passenger than is found in the conventional type. A longi-

tudinal bed folding into one cross wall has been substituted for

the fixed couch; the section seats by the windows have been re-

moved, and transverse sofa, convertible into a bed along one of

the cross walls of the room has been substituted. All three beds

are 6 feet 5 inches in length and of standard berth width. The

lavatory and toilet are enclosed in a separate annex. - When the

room is prepared for three persons, with the two-full-sized lower

beds in place and the upper also made down, there is still dressing

space and easy, unobstructed access to the annex, clothes closet

and to the doors to the passageway and adjacent rooms.

For day travel the wall bed d:sappears, the upper is put away

and the third bed becomes a sofa. This leaves space for the two

comfortable folding lounge chairs.

The new drawing room has:an electric fan, is provided with in-

dividual regulation of lighting and ventilation, and is air-condi-

tioned. There is a wardrobe; storage space above the annex and

under the sofa for luggage, and a shoebox on the passageway.

1400 THE UNITED STATES VS. THE PULLMAN COMPANY

The aew drawing room was first developed in November, 1933.

On July 12, 1940, 89 cars containing 178 drawing rooms were in

service and on August 31, 1941, 127 cars containing 252 drawing

rooms were in service.

Illustrations of this type of room are atiached hereto as Ex-

hibit XI (d).

1589-90

THE UNITED STATES VS. THE PULLMAN COMPANY 140]

1591 The Master Room

The Master Room is entirely new and is the most spacious

accommodation afforded. The room has two folding beds that

can be returned to their place in the wall during the daytime, thus

affording the occupants complete use of the entire floor space of ,

the room. One of the beds oceupies the space next to the windows.

The other bed takes the place of the couch and folds up against

the aisle wall, permitting the installation of a folding partition

between the Master Room and the adjoining Double Bedroom

These accommodations can be had en suite and the two rooms can

be made into one large room. The Master Room is provided

with four large comfortable folding chairs for daytime use. These

are placed beneath the folding beds at night.

bathroom, which is separate but adjoining and connects

‘ with the Master Room, contains toilet facilities, wash basin, mir-

1402 THE UNITED STATES YS. THE PULLMAN COMPANY

rored cabinet, for toilet accessories and a shower bath with pas-

senger-control of the water temperature.

The room has an electric fan, individual control of lighting and

ventilation and thermostatic control of the heating facilities.

There is a shoebox opening on the aisle. Each room is air-

conditioned.

The Pullman charge for one person is three times the lower

berth fare; for two or more persons it is approximately 41% times

the lower berth fare. The master room was first developed in

August 1936. On July 12, 1940, and on August 31, 1941, 8 cars

containing 12 master rooms were in service.

Illustrations of this type of room are attached hereto as Ex-

hibit XI (e).

1592-8

THE UNITED STATES VS. THE PULLMAN COMPANY 1403

1594 New Coach Sleeper

This type of car is described in paragraph 63 of this

stipulation.

The Duplex Roomette

This is an entirely new sinmiantesiad which the Pullman Com-

pany intends to eventually replace the lower and upper berths.

Each room has complete privacy, individual control of heating

and air conditioning, modern lighting, wash and toilet facilities

and a bed and seat. As in the duplex car described above, the

Duplex Roomettes are built on two levels. Twenty-four roomettes

are provided in each car, These roomette cars have not yet been

placed in operation.

Sketches illustrating the new duplex roomette are attached here-

to as Exhibit XI (f).

1404 THE UNITED STATES VS. THE PULLMAN COMPANY

1595-96

Tre Pv. an

——s = ee

vue. ix ROOMETTE

WON? OC CUPANEY

COPY BOUND VERTICALLY

agawar27e Ave

pesanwood X27AING

1406 THE UNITED STATES VS. THE PULLMAN COMPANY

1597 Improvements in Pullman sections have been made:

Study was made to determine the most comfortable contour

for the seat and back to accommodate the average individual.

Seats and backs were made adjustable and sponge rubber seat and

back cushions adopted as the most comfortable construction avail-

able. Sponge rubber mattresses of comfortable design were

developed and placed in use. An arrangement has been developed

which permits the raising by the passenger of the bed after it has

been made up in order to provide seating and standing space

within the section while the passenger is dressing and undressing.

This arrangement was developed in January, 1938, and has been

applied to over 7,000 sections.

A study was also made by Pullman in the lighting of its cars.

New types of lighting fixtures were introduced, increasing the

amount of illumination to the reading planes without glare. Pull-

man Company, as soon as fluorescent lighting became available,

after research, developed several devices to ‘accommodate the use

of this type of lighting to the power conditions available on Pull-

man cars, and installed such lighting on some cars.

Pullman Company and Standard over a period of seven years

devoted considerable time to research and experimentation on air-

conditioning equipment for passenger cars. As a result of an

application filed in November, 1927 it obtained a patent in 1935

relating to the air-conditioned equipment. It was the first to use

freon, a non-inflammable and non-toxic refrigerant.

In 1932, Pullman Company built the first air-conditioned train

for the Chesapeake & Ohio Railroad. Thereafter, the air con-

ditioning of equipment progressed so that by the summer of 1935

thete were almost 6,000 passenger cars so equipped, of which more

than one half were Pullman cars.

1598 Theair conditioning of railroad passenger equipment was

an important step in improving the comfort of railroad

passengers. It made possible the maintenance of comfortable

temperatures, fresh air and proper humidity during both hot and

cold weather.

In air-conditioned cars, the double window sash has replaced

the old single-glass sliding window. In order to prevent the view

of passengers from being obscured, a method of dehydrating the

air space between the two panes of glass to prevent the condensa-

tion and frosting of the interior of the panes was worked out. ~

Pullman Company participated with glass and sash manufacturers

in working this out.

In 1923, Pullman Company used aluminum extensively for non-

structural parts in the construction of surburban cars for the

Illinois Central and the Chicago & North Western. In 1934

THE UNITED STATES VS. THE PULLMAN COMPANY 1407

Standard built 21 lightweight interurban coaches of aluminum

alley throughout for the Indiana Service Corporation. These

cars are still in operation.

Standard built and Pullman Company placed on exhibition at

the Chicago World’s Fair in 1933 the George M. Pullman, the first

all-aluminum sleeping car, It constructed and delivered to the

Union Pacific in February, 1934 the first operable lightweight

streamlined train. This was built of aluminum alloy.

Neither Pullman Company nor Standard has ever built a stain-

less steel car, although Standard has used stainless steel as exterior

sheathing on some cars.

The cost of aluminum alloy, as well as the cost of stainless steel,

is high, and the steel companies at the request of Standard and

other car manufacturers developed a low-ailloy, high-tensile steel

which. since then has sold at lower prices than aluminum or stain-

less steel. In 1934 Standard built a sample car of this material for

the President’s conference committee and also built fifty

1599 passenger coaches for the New Haven Railroad and thirty-

one passenger coaches for the Boston & Maine Railroad of

this material. Standard also began the construction of lightweight

sleeping cars built of this steel for the use of Pullman Company.

Since that time the low-alloy, high-tensile steel has been used

extensively in the construction of lightweight railroad equipment.

Following is a list of patents granted to Standard and Pullman

Company in recent years:

1,712,811 of May 14, 1929, bedroom car with sleeping and twilet

facilities.

1,755,239 of April 22, 1980, vestibule Dutch door arrangement.

1,783,480 of December 2, 1930, covering slidable partition

arrangement for oper.-section Pullman cars.

1,804,428 of May 12, 1931, covering skeleton underframe of light

weight used quite extensively under New Haven and other passen-

ger train cars.

1,828,063 of October 20, 1931, showing the first rubber-and-

metal spring shock-absorbing mechanism and used on early lets

of Canadian Pacific cars.

2,000,477 of May 7, 1935, covering air conditioning system

utilizing recirculation of air and almost universally used on the

railroads of the country.

2,035,113 of March 24, 1936, showing side sill construction used

in early Union Paciic cars for attaining the streamlining contour

of the first three or four Union Pacific trains.

Design 100,000 of June 16, 1936, for first articulated, stream-

lined Union Pacific train.

2,056,218 of October 6, 1936, for the Railplane car having stream-

lined contour and of light weight with a framing covered by a

1408 THE UNITED STATES VS. THE PULLMAN COMPANY

relatively thin metal skin which supplemented the framing in

support of the car, and built for high-speed service.

2,056,225 of October 6, 1936, for streamlined steps with

1600 covered underside forming sheathing of the car when steps

are raised to preserve streamline contour of the car side.

2,056,227 of October 6, 1936, for articulated car with streamlined

contour diaphragm as used on first Union Pacific trains in connec-

tion with cylindrical vestibule units.

of September 21, 1937, covering streamlined construc-

tion of the trailer car of the early Union Pacific trains having a

substantially ovate rotundate, 3. en pecaer foto form with bottom

chute continuously curved from side wall to side wall with lowest

of the curve at car center line.

2,083,971 of June 15, 1937, covering early refrigerant —

Suna ad tame speed control means means including electric utch.

September 21, 1937, covering lightweight, high-

genes ation anmered gravity with nose and tail portions

constructed with curves sloped to offer relatively small resistance

to head winds as in our Railplane car.

Fe of October 26, 1937, covering passageway diaphragm

plate supporting rods fitted with cushioned hinges to reduce

and maintain face plate against movement

sauce teaastioeeeahs aitettay tein ta eae Gal

2,101,557 of December 7, 1937, covering the coach and the George

M. Pullman Pullman car built of aluminum and utilizing extruded

shapes in the stress longitudinal members of the cars. These cars

were exhibited at Century of Progress Exposition in Chicago in

1933.

2,122,159 of June 28, 1938, for welded draft sill used, generally,

oe Se eee

“9,184,082 of October 25, 1938, for the closed section sleeping cars

used on trains to California—City of Portland and City of San

Francisco.

- 2,147,011 of February 14, 1939, for roomette cars having its

rooms arranged u pon opposite sides of a single aisle.

1601 2,149,840 of March 7, 1939, covering our tightlock coupler

arrangement for reducing slack between the cars.

2,152,596 of March 28, 1939, for roof welding machine forming

part of our Pullman installation.

2,154,769 of April 18, 1939, for ice-activated air conditioning

pene emetic y Pullman and contract cars.

2,177,881 of Qetober 31, 1989, covering the welding carriage

forming part of our welding installation at Pullman.

2,193,836 of March 19, 1940, covering our holdover system of

air conditioning.

THE UNITED STATES VS. THE PULLMAN COMPANY 1409

2,198,839 of March 19, 1940, covering controls for our holdover

air conditi system.

rrr of 1, 1940, covering flexible footplate for wide

cars as used on Union, Pacific and Southern Pacific

trains.

of October 29, 1940, for trap door and step arrange-

ment utilizing ice breaker equipment as now used on Pullman

and other passenger train cars.

2,290,704 of November 5, 1940, covering welding carriage form-

Spaniel thn welding installation at Pullman.

Serie of November 12, 1940, covering welding jig and track

arrangement for shifting welding carriage from one side of the

jig frame to the other to alternately work upon assembled side

frame mounted upon the jig and forming part of welding installa-

‘tion at Pullman.

2,225,951 of December 24, 1940, covering dual passageway

insulated for wide platforms, as used on Union Pacific

Southern Pacific articulated cars.

’ of December 24, 1940, covering the truss side construc-

tion with sheathing flexibly mounted thereon with floating window

frames, as used on Southern Pacific cars and other trains.

2,229,047 of January 21, 1941, for rocker type, rigid

1602 footplate arrangement for narrow passageway cars,

as used on Union Pacific and Southern Pacific articu-

lated cars.

2,230,580 of F 4, 1941, covering the power units used on

the early Union Pacific trains and covering the body having a

raised cab at the front above the air passage inlet leading to the

engine room and including a trough-like depression in the roof

with perforated sides forming outlets for cooling sir after the

air had swept across the radiator in the engine room.

2,239,634 of April 22, 1941, for un center sill which

forms no part of the structure used in supporting the floor so that

vibrations from the sill are not communicated to the floor.

2,243,854 of June 3, 1941, for hinged face plate arrangement

having diaphragms conforming to the contour of the car.

There are now pending applications of Standard Jase fourteen

patents relating to devices to be used in

77-80. Materiais suitable for lightweight train cminiiion

have become available in recent years and new designs for the

use of lightweight materials for passenger car construction have

been perfected, with the object of preserving in lightweight cars

safety features present in the heavier steel cars. A Diesel two-

cycle engine practical for high speed service was developed. This

type of locomotive, now made by Electro-Motive Company and

Sa tronmrennty baieg ened on a number of railroads.

1410 THE UNITED STATES VS. THE PULLMAN COMPANY

original trains have been replaced

1608 pre eres glacrwme ny epee caver. ag

operated during the daylight hours. This obviates the

oni A ae ee

cars.

PULLMAN CoMPANY 1411

Normal consist

Omak Otte Pees C. B. & Q.-Alton.

Leale Kane Tey. C. 0.0. &

wigs, i

6 care—1 baggage-ciub; | refreshment; 3 chair; 1 diner.

4 care—1 mail-Deggngs; | mail-baggage-chair; 1 deluxe chatr;

1 diner-tounge. .

i 7 ; 4 coaches. fs

i : 1 baggage; 8 coaches, 2 diners; 1

i - | combination coach; | diner; | roomette-

: betas 1

i

i

f

HT

1412 THE UNITED STATES VS. THE PULLMAN COMPANY

List of exiting modern high-«peed trains|

a gt A Rel N. ¥. ©.

trains). Penna. New

York Chien

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THE UNITED STATES VS. THE PULLMAN COMPANY 1413

110 Silver bs res 3 trains). Sea-

board. tote Oe iiiemiee.

Petersburg

Vuleans g trains). Southern.

. Southern. Birming-

. Southern. Oakdale-

The (2 trains). Southern,

of U.P. Kansas-

y, i City-

and return. Kansas Oity-

of Portland. U. P. O Port-

._ jomcralaialnamee

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psig tee tetess?

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ee). Kansas City

ity-New Orleans.

wil City of Miami, Il). Cent. Chi-

a lil, Cent. Chicago-

The} (¢ trains) Sou. Pac.

.

A

1414 THE UNITED STATES VS. THE PULLMAN COMPANY

List of existing modern high-speed trains Normal consist

OC EN: W. Oblengo tan Prancios. By

;1

cars; 2 bedroom

eee cc, —t 1 ior f dtnstte-coach; 1

we 8 “eta Se Se fe Sees | ee

mg nee (eS ETERS) * eos

=e ger

1 baggage; 1 coach; 1 sleeper; |

yr-Silver Streak. C. B. & consist: ag traffic conditions)

i onne 5 Kansas City. ° oe om railway post office-bag-

reacTan tna | es a = coset Lowes

ph ae ~~ — Eh

The cost to Pullman Com Pilg. soi mpeanngch yoda

twice the cost to Pullman heavier cars and

for depreciation

Af ileal aa an pet

pony en oth pe Miegare Beet elle Fo § hem Arafiecge team

- to the railroads on w cars regular o are wn

in Exhibit XIII. 7

1613 Exhibit XITI

The Pullman Company, New-Type Lightweight Cars as of March 31, 1941

Investment as

of Mar. 31, 1941

Union Pacific-Southern Pacific-Chicago & North-Western (Streamliners) .

Southern Pacific.

=| Sxeeess

THE UNITED STATES VS. THE PULLMAN COMPANY 1415

1614 81. In Pullman Company’s operating contracts with the

railroads the term “present-type heavyweight” car is now

used to distinguish cars of riveted carbon steel construction from

the lightweight cars of welded alloy steel. Passenger cars of the

riveted carbon steel type of construction constitute more than

90% of the railroad cars in the United States.

85. It has always the general practice in ing contracts

between sleeping car companies and railroads to ide that the

sleeping car company should have the exclusive right to operate

over the lines of the railroad except as to joint arrangements for

through line service.

87. On December 16, 1935, the Chicago, Burlington & Quincy

Railroad Company ordered from the Budd Company two 10-car

trains containing a total of eight sleeping cars for service between

Chicago and Denver. At that time the Burlington was negotiating

for a new principal operating contract with Pullman Company.

An operating agreement between Pullman Company and the Bur-

lington had expired January 31, 1935, and at that time the parties

entered into negotiations for a new operating contract, which was

not signed until March 24, 1936. In the intervening period Pull-

man Company furnished its service on all lines of the Burlington.

In the course of negotiations questions arose as to the furnish-

ing of sleeping car service by Pullman Company in the Budd-built

cars. An agreement was finally reached with respect to such cars

which was embodied in a principal operating agreement and a

tal agreement, both dated March 24, 1936. By the terms

of the supplemental agreement Pullman Company agreed to lease

from the Burlington certain lightweight cars owned by that rail-

road and built by the Budd Company, for a period of twelve and

one-half years, upon the condition among others that the railroad

og pian staan os Lange aly To any tual cg do

death of passengers therein. Pullman Company agreed to make

Shs seemsaole bo Che wilivend cetenty Su Ue wn ef maak

cars.

1615 The amount of rental paid by Pullman Company to the

Burlington for the use of these Budd-built cars is as follows:

1416 THE UNITED STATES VS. THE PULLMAN COMPANY

The Pullman Company—Chicago, Burlington and Quincy Railroad Company

(Fupmente pemting tenet Gs Pullinen Consnag an8 tie muibeal cunpeny with respect to open,

—

ME

68, 872. 61

2, 182. 80

2, 182. 80

66, 055. 41

Nors.— Payments to railroad under supplemental agreement dated 3-24-36.

May 21, 1941. ‘

1616 The Pullman Company has during the past few years

added 424 lightweight sleeping cars to the Pullman pool,

and there were on order 199 additional lightweight sleeping cars

as of May 31, 1941. This represents 11.42% of the total number of

standard sleeping cars in the pool as of May 31, 1941, and 23.07%

of the investment of Pullman therein. The railroad-owned light-

bi cars, including those on order, aggregate 4%

of 454 cars owned by the railroads as of Decem-

ber 31, 1940. Since February 2, 1931, no standard hea

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Appendixc — United States v. Pullman Co. · 331 U.S. 865 | Frix