The age-herald. [volume] (Birmingham, Ala.) 1897-1902, 1902-04-17
New Phase Has Developed in
|. & n, Situation
SPENCER AGAIN EXPLAINS
Informs S. M. Inman That Southern
Railway Had No Interest In the
Purchase of L. & N. Stock,
Directly or Indirectly.

New York April 16.-One of the latest
versions of the Louisville and Nashville
situation is as follows:
The Gates holdings have been divided
into three parts, j. p Morgan & Co. TAX
ing one-third and Messrs Gates and Haw-
ley the remainder. Morgan & Co. take
this interest on the understanding that
the Louisville and Nashville is to be
operated in harmony with Morgan inter-
ests In the same section of the country.
Yesterdays move of the Southern Rail-
way is attributed to Mr. Gates desire to
secure an interest In that property. He
is reported to have been informed that
the best way to get 1t was to go into the
open market which he and his followers
are reported to have done to the extent
of ABOUT 100000 shares. The substance
of these reports was outlined to Samuel
Spencer, president of the Southern. He
appeared to be interested but made no
comment Mr.. Spencer and Mr.. Stetson,
attorney for J. P. Morgan g. Co., spent
considerable time at Mr. Morgan & Co.'S
this afternoon comforting with MIR. Perlk-
ms. All interests refused to disclose the
terms of the agreement between Mr..
Gates and Mr.. Belmont nor could 1t be
learned when the terms are likely to be
made public,
Mr.. Belmont made this statement re-
bpecting the reported meeting of the
Louisville and Nashville road tomorrow:
This meeting is only one of the regular
monthly meetings of the board. No
quorum is likely, owing to the absence of
some of the directors. In any event
there will be no change in the personnel
of the board of officers"
Spencer Explains to Inman.
Atlanta, Ga. April 16.-President Sam
uel Spencer of the Southern Railway to-
day sent the following telegram to S. M.
Inman one of the directors of the South
ern, and a member of the executive COM
mittee of the board:
1.-The Louisville and Nashville situation
is simply this: Mr. Gates and his asso-
ciates apparently without any consulta-
tion with any railroad interest in the
South or elsewhere, and entirely on their
account, bought in on the open m arket
large blocks of Louisville and Nashville
stock claimed now to be clear majority
"By reason of a large short interest,
growing partially out of the sale by the
Louisville and Nashville company of $780,
900 shares-an authorized additional issue
of treasury stock-which was not listed,
and therefore, not a good delivery on
the exchange, a serious corner was immi-
nent. J. p. Morgan & Co. were appealed
to to use their influence to prevent such
q disastrous condition. After two days
negotiations this has resulted in an agree
Inent by which the Gates stock will be
deposited with and placed under the con-
troll of j. p Morgan & Co., as bankers,
and not as representing any railway in
terest and with no purpose except to
conserve in the best possible way the
general financial and business situation
and avoid the serious complications which
have threatened.
1.-The Southern Railway Company has
had and has interest directly or in
directly, present or prospective, in the
purchase of the stock or in it's deposit as
above with j. P. Morgan & Co. There Is
no contest for the control of the Louis
vile and Nashville by any railroad COM
pany, and not likely to be any-certainly
not by the Southern.
(signed) SAMUEL SPENCER"
L. G. N. and Seaboard Friendly.
Baltimore, April 16.-It was learned to-
day from a semi-official source that the
Seaboard Air Line Railroad figures in the
general understanding reached In New
York In connection with the Louisville
and Nashville sale. This it is stated, as
sures the continuance of the friendly re-
lauons existing between the Seaboard and
the Louisville and Nashville.
1t is understood that conferences have
been held between the Morgan interests
and representatives of the Seaboard.
President John Skelton Williams of the
latter road and President Sampel Spen-
Ger of the Southern Railway were pres
ent at these conferences. 1t has been ex-
pected that some understanding would
be reached with the Seaboard with the
idea of securing it's cooperation in
community of interest plan.
There is a disposition In local circles
close to the Seaboard to think that the
Gates party contemplated making bid
for the Seaboard and that the Morgan
plan to secure a general understanding
interyened and stopped the movement.
Tennessee Law Forbids Acquisition.
Knoxville Tenn. April 16.-The Tennes-
see law absolutely forbids the acquisition
nv any one road of parallel and compet-
ing lines Of railways, and Is fully as
strict if not stricter in this regard than
the laws of either Kentucky or Georgia.
II would be impossible for the Southern
road TO secure possession of the Louis
vile and Nashville and operate 1t as
mart of it's system 1t could only be ope-
rated as separate and distinct road.
E. H. Russell On Situation.
Mobile, April 16.-Attorney- General e.
T. Russell of the Mobile and Ohio road
recently purchased by the Southern,
makes the following statement concern
ing Mr.. Samuel Spencer's explanation of
The last two days negotiations as tele-
eraphed by Mr.. Spencer today:
"Mr. Gates and his associates. apparent
lv without any consultation with any rail-
road interest in the south or elsewhere,
and entirely on their own account, bought
in the open market large blocks of Louis
vile and Nashville stock. claimed to be a
majority. In accomplishing this a large
short interest was created, which was es-
nacjallv accentuated by reason of the
Fact that an authorized issue of $4,000
shares of Louisville and Nashville stock,
which had not been listed, and which was,
on this account, not good delivery or ex-
change, had been sold. This made ser-
ous corner imminent. Under these condi-
tions J. P Morgan & Co were appealed to
use their influence. Recalling the alarm
caused by the state of affairs resulting
from the corner in the Northern Pacific
last May and seeing the alarm aroused by
the present dealings, Morgan Co. as
bankers and not representing any rail-
road interest, ntervened to protect the
public against apprehended trouble. The
Southern has no interest in the purchase