The Minneapolis journal., 1902-03-25
SCHIFF ON THE i STAND. Nd.
Purchase Of Burlington and North
ern Pacific Stock.
DECLINES TO ANSWER QUERIES
Steele, of Morgan s. Co., Also Testt-
fes-Adjournment of Power
Case TIL To-mOrrow.

New York, March 25.-The hearing in
the suit commenced by Peter Power in
the United States court for the district or
Minnesota, for the purpose OF determln-
ing the standing OF the purchase and
holding of Northern Pacific and Great
Northern stocks by the Northern Seeurl-
ties company was continued yesterday ar
ternoon before Richard A. Mabey, a spec
ial examiner. 81
Jacob II. Schiff OF the Arm of Kuehn,
Loeb & Co. was the first witness. He was
questioned by A. NJ. Boutelle of Mime
apolis, of counsel for Power, Mr.. Schif
said he was a member OF the board or
direct ors Of the Northern Pacific since the
latter part of 1897, and had been elected
a director of the Chicago, Burlington &
Quincy road during 1891. He is also di-
rector of the Northern Securities COM
pany. Up to 1891 he was a director OF the
Great Northern.
"Forgets" and Declines to Answer.
He did not remember how much
stock he had in the Great Northern;
he had not held any of it since the sum-
mer Of last year. He was one Of a
number of fnanciers who, in 1885, pur-
chased $26,000,O00 worth Of Northern Pa
cif1c common at the time OF the reOrgani-
"a alton of that road.
WAS Mr.. Hill in that deal?" was
asked ~ -.r 10
''Mr. Hill can tell you," replied Mr..
Schiff. 1- -.
The witness said he had purchased
| 10000 shares of Burlington stock in
! 1901. .a
For whom did you act in purchasing
! that stock?'
81 decline to answer" .-,..'. '.>-s ....s
no Har ar,,ir, irto
ests? ?' -.
II decline to answer. I decline to an
| swer any questions regarding the busi-
ness of Kuehn, Loeb & Co. unless COM
PEELED to do so,' was the reply of Mr.
Schiff. -.-
He said that the stock was not pur-
chased for the purpose of securing the
| control OF the Burlington for the Union
Pacific. He said he had no previous
knowledge of the efforts of the Northern
| Pacific and the Great Northern to get
| hold OF the Burlington. AS far as he
could recollect the purchases made by his
firm OF Northern Pacific before May 9
last year amounted to $4,000 000 A few
weeks later this stock was transferred
! part to the Union Pacific and part to the
1Oregon Short Line. The witness had no
conference with J. P. Morgan concerning
! these purchases. but there was a confer
ence between himself and Mr.. Harrima n
on one side and James J. Hill and Mr..
Steele. of J. P. Morgan & Co., on the
other, Mr.. Schiff said he did not learn OF
the fact that the Union Pacific was dis
posing OF it's Northern Pacific holdings
until the matter came before the board of
directors of which he was member.
Inc stock was, sold to J. P Morgan E.
Co., and payment was made in s9, 900 900
or $lO 900, 600 cash and $50. 900, 900 or eO.-
ooo,ooo IN stock Of the Northern Securities
company. -. -. ,..y ..,.. .-. . - - :
By Request Of MFR. Hill. "
The witness said Mr. Hill asked him to
| take place on the Northern Securities
! Doard. Mr. Schtf said he first learned OF
| the retirement Of the Northern Pacific pre-.
! ferred stock at the time Of its actual re-
tlrement. Mr.: Schiff said the Union Pa
enc and the Oregon Short Line sold theii
! Northern Pacific because they thought ii
would be a good thing to get profit on
their stock The stock was originally
purchased because Kuehn, Loeb &, Co
| thought 1t was a good thing to do. The
first information the witness had of the
| organization of the Northern Securities
company was when he read about It in
| the newspapers. ...r , ..--
| Steele, of Morgan & Co, Testffies.
Charles Steele of J. P Morgan & Co.
was called. He said Mr. Bacon of that
firm had conducted the purchases of Bur-
| lington stock made last year. The firm
| organized syndicate to raise 500 900, 900
| cash, which was necessary in order to buy
control Of the Burlington. The object of
| the purchase, he said, was to reap the
profits that would result from getting
| eastern and southeastern connections for
| the Burlington. Mr.. Steele said that there
| had never been any iron-bound agree
1nents between Mr.. Hill and Mr. Morgan,
but that they would hold on to their
Northern Pacific stock. The plan of re-
tiring Northern Pacific preferred had come
up before 1901, he said. :. -.
| On May l, 1901, j. P. Morgan & Co. had
about $5,Q00,000 worth of Northern Pacific
| common, and between May 1 and May Is
| they bought about $15,000,0 worth In
! the middle Of the summer they sold $10,-
900, 900 worth Of it to the Northern securi
! ties company, receiving stock of the
| Northern Securities company in return.
| The purpose Of conference Immediately
after the disturbance of May 9, Mr.. Steele
| said was to allay public apprehension, and
| to that end Hartman interests consented
| to give Mr.. Morgan their Northern Pacific
| proxies at the next election. This was
done, he said, because the public had con-
1 fidence In Mr.. Morgan: '' 81,
Why Hartman Was Put on Board.
| Mr.. Hartman was placed on the North
ern Pacific and Burlington boards to quiet
| any apprehension that might exist as to
| The intention Of those in control Of the
| Burlington. Next followed some testimony
as to the sale of the $3.50 900 worth Of
Northern Pacific common to the Northern
! Securities company. Mr.. Steele said the
( Northern Securities company paid 5000
600 for the stock. He said the idea o.
| turning the stock of the. Great Northern
lover to holding company was frs
brought to his attention as long as yea
iago, and as to the Northern Pacific com
pany, the plan was brought to his atten
tion in the latter part of the summer 0
1901.
At this point the witness was turne,
over to Mr.. Stetson, counsel for the flrn
Of j. P Morgan & Co. The early part Q
Mr.. Stetson's examination was for tn
purpose of disproving the claim of tn
athor sida that the neentiatiQnS for North