Business boomed throughout the 1800's, but in the early years of the 20th century the Delaware & Hudson's competitive advantages caught the attention of the U.S. Government. This was the era when Teddy Roosevelt and his "trust busters" attempted to put a stop to price-fixing, business monopolies, and other practices that were considered bad for competition. The Hepburn Act of 1906 was the initial shot across the bows of the railroads and coal mining companies. Essentially the Act banned shipments of coal across state lines by railroads if that coal had been produced in railroad-owned mines. Since such shipments were the reason for the Delaware & Hudson's original existence, the Hepburn Act was a serious threat to the company. However, a 1909 Supreme Court decision created a legal loophole whereby a subsidiary -- even if wholly owned by the railroad -- could buy the coal from a railroad-owned mine and still ship it on that railroad.
Thus, the Delaware & Hudson Company created the Hudson Coal Company as a subsidiary that became the "owner" of coal from its mines. Of course the Hudson Coal Company shipped its product on the Delaware & Hudson Company's railroad. The porcelain sign shown at upper right illustrates this corporate lineage. The famous "script logo" of the Delaware & Hudson Company is incorporated into the Hudson Coal Company's logo.
Source:
http://railroadiana.org/lanterns/pgLanterns_hc.php
The DL& W RR did the same thing as the D&H, " Created" is the key word. Hope this helps with the confusion.