The San Francisco call., 1896-03-07
FRANCISCO, SATURDAY MORNING,

when he bought bonds he paid for them.
That was the only way money could be put
into the construction of a railroad.
"How much of this stock did you have?"
~ had, I think, about 1000 shares"
"Did you pay mp your subscription on
the stocK?"
81 should probably say that did,"
"Did your"
81 didn't pay for it personally, for was
not there. I was in New York. l sup
pose, though, that the stock was paid for
in installments.''
When asked if he got back the money
he paid in Huntington said he did not,
but that the contract company got some
property in the end, when everything was
cleared up.
Huntington entered an emphatic denial
to Morgan's question whether the Con-
tract and Finance Company was not capi-
talized with the Central Pacific shares
Huntington held. That company he said,
organized with money. Its capital stock
was S., 900, but the organizers put in
more than that Much of this money was
borrowed on the bonds of the Central Pa
cific.
In response to further questions Hunt
ington admitted that the money, or a por-
ton of it at least, was borrowed on the
Government bonds until the company
could sell them.
"The General Government, then, and
not you," said Morgan, put up the money.
You stocked the Finance and Contract
Company on the credit Of the United
States. l am trying to find out how much
of your individual funds you or all of you
put in the construction OF the Central Pa
ciic road"
I'VE put in what could not be bought to-
day for $4,000, ,OOO," said Huntington, "our
money and our time.'
But" urged Morgan, "how much in
money ot your private means did you put
in?"
81 don't remember, but always enough
to pay its debts" was Huntington's reply;
"but we could not have built the road with
out the aid of the frst-mortgage bonds"
Huntington again took issue with the
report of the Pacific Railway Commits
sioners and declared that their conclu-
sions were wrong. He. did not know
where the Commissioners got their alleged
information, but wherever it was found
the conclusions were erroneous.
Reverting to the financial condition of
the road again Huntington said that no
dividends were declared until the road was
out of debt. The yearly dividends OF the
| road amounted to about 10 per cent.
! Morgan asked Huntington why the COM
pany did not take the 10 per cent divi-
| dends for period of ten years and by
funding them in this way pay off the first
mortgage bonds.
| Huntington denied that the 10 per cent
dividends extended over period OF ten
years. Later conditions caused reduc-
| tion in the dividends.
"Why did you not?' Morgan asked,
''put any dividends that were declared into
a sinking fund to pay off the Government
de ebt 2"
Huntington replied that the stockhold-
ers were entitled to lhe dividends. The
company wanted to fund enough of it in
this way so it could have paid the debt
when it fell due, but Congress would not
let them do that.
Morgan, pursuing ais line of examina-
ton. asked if there ere not enough divi-
dends declared to aggregate least two
thirds of the first mortgage on the Gov.
ernment debt had they been funded.
Huntington replied that that would not
have been wise; the shareholders were en-
| titled to their dividends. Huntington was
proceeding with an argument on this line
when Senator Morgan called halt, saying
he did not care to hear review of wit
ness life
II am not reviewing my life's history, !"
retorted Huntington. ~ am perfectly sat-
lsfied with that, Senator Morgan. l have
| been trying to tell you all l know. We
have just doae what the law required
through all this business"
''i should hate to state that if l were
you,', retorted Senator Morgan.
The Finance and Contract Company
only sold its Central Pacific stock, Hunt
ington SAID, when it began to appreciate
and for the purpose of paying its debts,
which amounted to between $9.000,000 and
81, ,OOO, 600. Huntington was proceeding
to describe the prices that Central Pacific
stock had brought at various times when
| Senator Morgan suggested that the stock
might have been manipulated.
THAT stock has never been manipulated
and that is not a proper word to use,"
retorted Huntington, with some warmth.
'I'll use it just the same," replied Nor
gan.
Huntington stated that he now held
probably something less than 5000 shares.
He had sold Central Pacific at 19 cents on
the dollar when it was paying a small
dividend.
In answer to further questions be de.
clared that he had not done so to break the
market. nor had he given instructions to
his broker to sell it as low as possible.
Upon repetition of the question whether
he did not sell it in order to break the
market Huntington emphatically said he
never tried to bear the market.
'Then why did you sell dividend-paying
stock at 10 cents2' asked Morgan.
ITO pay my debts.
"To whom were you in debtf's
"To those from whom I had borrowed
money"
"And who were they?"
"Those who had let me have the money"
Morgan expressed his surprise at this
answer and Huntington said it was impos-
sible for him at this day to say who might
have been creditors at that time.
The committee then took a recess until
tomorrow morning at 10 80 o'clock.
|