Evening star., 1902-01-25
He Tells of the Big Northern Securi-
ties Deal.
CAUSE OF PANIC In WALL STREET
Not the Result of Contest Over
Northern Pacific.
RELATIONS WITH Hill l.


days inquiry by the interstate commerce
commission into the community of inter-
est combination of the great railways of
the northwest opened today the United
States court room, where the investigation
was held was crowded with well-known
railway men from all over the country. all
eager TO learn more of the details Of the
inner workings of the gigantic Northern
Securities Company. Possibly as much IN
terest centered around E. Fl. Hartman,
who organized the Southern Pacific-Union
Pacific combination. and who was Mr. Hills
opponent in the struggle for the Northern
Pacific-B Burlington control Mr. Hartman
was the first witness called Other promi-
uent railway men present who were to COM
plete the investigation were W. s. Mellen,
president of the Northern Pacific, and
George B. Harris, president Of the Bur-
lington.
Anent the Wall Street Panic.
When Mr.. Hartman went on the stand
the line of questioning by W. A. Day.
counsel for the commission. led up to
statement of the great Wall street panic
last May, when Northern Pacific stock
went up to 81, 900 share Mr.. Hartman
had testified that the Oregon Short Line,
aided by the Union Pacific. had purcha sed
some S7S.0OO0OO of Northern Pacific stock.
voice of its directors, controlled the South
ern Pacific. 1t was developed that all this
Northern Pacific stock which was held In
the names of z. II. Hartman and WinslOw
Pierce was sold last summer An effort
made to learn why the purchase had
3d. been made only to sell again, and this
brought from Mr. Hartman the statement
that he was glad to explain the so-called
contest in the New York stock exchange
which resulted in the famous ''black Thurs
day
al
said Mr.. Hartman. Some of us-the Ore
sun Short Line people-thought 1t would be
advantageous to have an interest in North
prn Pacific and purchase stock that was
wing loose all over this country and Eu-
rope-held by five to seven thousand per-
sons We made no contest for the control
nf the Northern Pacifc-we made pur-
IhaseS of capital stock. We purchased prior
to the supposed contest, and no stock was
acquired in May"
MIR. Days Line of Questioning.
Mr. Day tried to show that the contest
for Northern Pacific stock was the fore
runner Of the panic on the change. but Mr..
Hartman insisted that such was not the
case.
Some of the stock" he continued, I'VE
had bought in markets all over the world.
Some of this was on the way from these
various markets to be delivered. In the
meantime the sellers borrowed"
Questions were then put that indicated
'.tobbing'' had been resorted to in the pur-
chase. and which brought the reply: The
stock was purchased in New York from
persons who bought from owners. Then
when the so-called contest came and the
stock was demanded, the sellers found 1t
difficult to fulfill the contracts. Our inter-
ests in every case gave these persons all
the time they wanted"
An attempt was made by the commission
to draw out statements to the effect-th that
the final sale of Northern Pacific stock by
the Oregon Short Line (as controlled by the
Union Pacific-Unien Pacific syndicate) was
only after an understanding. or truce,
with Mr.. Hill and the supposed interests
that combatted for Northern Pacific in the
panic
chase made he and his colleagues
thought the matter over again. and they
thought better to sell again. He implied
that ii made no difference really who own
cd Northern Pacific. Commissioner Prouty
asked. If you had secured few more mil
lion Of Northern Pacific it would nave made
. b difference, would it not?"
We could have had it, was the reply
Natural Conditions Controlled.
The questions as to just why Mr. Harri-
had disposed of his Northern Pacific
holding. what was lost or made by the
transaction. and whether Mr.. Hill had
made some agreement In case the holdings
Were sold. brought from Mr. Hartman the
response that natural conditions controlled.
He said he did not know of any gain made
except that his interests found out that
they were strong enough to hold their own
In Pacific traffic. He said his impression
was that the Oregon Short Line had not
lost by the transfer. He said Mr.. Hill had
given no assurances of any division of traf-
fic, and that the motive Of the original DUR
chase had been that OF preserving to the
I MON Pacific system the avenues of traf-
fic open to 1t.
You wish to represent that no one of the
other half OF the Northern Pacific interests
made any promise in control?"
Mr.. Hartman replied: There Is a COM
mon interest among all and We believe
that common interest will be served re-
gardless OF holdings. That common inter-
est can be served by natural conditions
Our interests are so in common that We
cannot injure others without injuring our
selves.
j. j. HilIs Testimony
Mr.. Hill testified for three and one-auar-
ter hours yesterday afternoon. In answer
to the questions tending TO show the effect
of the community of interest plan on rates.
the veteran railroader declared that COM
petition does not lower rates. but, on the
contrary he believed that it advanced
them. He declared that in the northwest.
where for twenty years the Northern Pa
cifc and the Great Northern have been at
peace. where one road has agreed with the
other on rates and maintained the agree
ments. rates were lower than in any other
part OF the country
In regard to the purchase Of the Burlins-
ton by the Northern Pacific and the Great
Northern, Mr.. Hill declared that the pur-
chase was a matter of necessity and was
not due TO "a movement in line with the
trust idea" He testified to the formation
OF the Northern Securities Company and
In doing so gave a reason far more simple
than has generally been conjectured.
There are some old men-some very old
men-interested in the management Of the
Great Northern" said he. 1.-TWO Of them
are over eighty, and several over seventy
years. They wanted to form a close cor
poration into which they could confde
their interests with the assurance that the
road would be managed along the lines
which have made 1t a success II was to
nave taken over one-third OF the stock of
the road The plan seemed a good one
and then 1t was proposed to let all the
NJ In ole