The Montgomery advertiser., 1903-04-02
HARRIMAN'S AFFIDAVIIS Says Keene Tried to
 Scare Him. MILLIONAIRES AT OUTS In Sworn Statements They Contradict Each Other. Contest for the Control of the South ern Pacific Grows Greatly in
 Interest-Judge Lurton
 Hears Argument.

New York. April 1.-The af1idavit in the answer of the Southern Pacific Railway Company to the suit of Talbot J. Taylor, and Company against the Southern and Union Pacitc, deny that the Southern Pacific is operated in the interest or the Union Pacific. It is madetby E. H. liar riman. In it ne sets forth that mutual friend of himself and Edward Lauter- bach told him Harriman) that James K. Keene represented pool holding lO,Voo or 175,0O0 shares of Southern Pacific and that Mr. Keene himself held about 7O.Ooo shares; that they contemplated action which, says the affidavit, would make us a great deal of troubfe-unless we purchased said shares fl om them; that he would sell the pool shares at about |" and his own shares at about fs.
 MT. Hartman declared he repled that he would not be forced by fear into any thing that would be adverse to the in- terests of the general body of stockhoio- CTS of the Southern Pacihc.
 H T. Kuhn, of Kuhn. Loeb 6, Co.,, director of the Southern Pacific. says Tn a sworn statement that Edward Lau'el bach told him there were only two ways +n avo,d hostile proceedings. either to buy the holdings of the keene pooi a' tNe nrice of about TO- or to start the pay ment of dividends on the stock at rats of not less than per cent. per annuni: Other afidavts by J. Kruttschnitt' Fourth Vice President ald General Man aser: ]. c. Stubbs, Third Vice-Presideht, and other officials, represented to snow that tbe Southern Pacific is operated in inc interest of it's stockholders and not for the benefit of the Union Pacinc.
 Harriman's Affidavit.
 IT uarriman's affidavit denies that any of the expenditures for improsehiensss es for the Southern Pacific complained ol were prompted by considerauon oi .me Union Pacific. but asserts that they WI demanded by the interests Of the Sou.h- s-' paoiec alone and wholly irrespective cf any relations between the two sys- +sns. that they were planned before tne I,nion Pacific became interested, ana that thsv were authorized by MT. Hartman onlv after a thorough personal exam nation of the lines whereoy ne oecoH convinced of the absolute necessity oA sSn ,rnnrovements He denies the allega- tjons that the Union Pacific interests were manning to take over the Centrai pacihc line from the Southern Facihe' and asserted that no such step mas oee'i contemplated or even discussed.
 MT. Hartman then relates that III tne autumn of 1901 Edward LauterpaIn ,., +roduced David Lamar to him taarri- manl and that Lamar said he had triehu- lv relations with James K. heene' Iorge stockholder in Southern Pacihc, ana .hnt Mr Keene was contemplating some action against the management or the Southern Pacific.
 .'Ia Gamar stated that he would like +o work with me-" continued MT. Harri- man "and if I would make an alliance 1,,bich would be of some advantage to him that he had such influence over MT Keene that could induce him not to ln- stH,ate adverse action against mysen ana alEed interests" , This proposition MT. Hartman did not accept Several interviews wltn MT Keene followed on this point The aiii- davit has the following:
 The Scheme of Keene.
 MT Keene stated to me that he had large holding in Southern Pacific stock; that he would like to join with me in purchasing the shares in the market; that he believed there could be great deal of money made thereby, and that he would act for me either in purchasing for our joint account or for myself If wished it; that 1t would be advantageous for the Union Pacific to take all South ern Pacific stocks and issue its per cent. bonds therefor. and he stated that he was an adept in carrying out sue cessfully large stock market operations; that he had shown this capacity espe- cially in the manipulation of United States Steel stocks.
 To this MT. Hartman Tepheu thdt ne believed "it would be a mistake to create a speculation in the shares of stock and advance their price to a basis that would Justify the buyers in expecting dlVi- dend in the near future; that It was also necessary to make such repairs ana ln- provements' for surplus earnings, so Tar as they would go in order to estabnsn TOT the company a basis Of credit upon which 1t could refund the bonded ln- debtedness of its subsidiary companies large portion of which would mature in a few years"
 MT. Keene then gave assurances that he did not want to act In any way an- tagonistic to Mir. Hartman.
 In the autumn of 1S9, Mir. Hartman says, he was informed that Edward Lauterbach anu Talbot J. Taylor would make trouble for us unless we settled in some way with them.'
 Meant to Cause Trouble.
 Mir Hartman says he had an inter view with mutual friend of his and MT. Lauterbach and this friend, who is not named. explained to me that MT Iauterbach had said to him that MT Keene represented a pool holding abou 17o NOo or 175O0O shares, and that Mir Keene himself held about lo,0N shares: that they contemplated actior which would make a great deal o trouble. especially laying stress upor the large expenditures we were making upon the Central Pacific portion of tn, Southern Pacific properties, unless W, purchased said shares from them; tha he would sell the pool shares at about z and his own shares at about 7s. ex plained to this friend that there Wal nothing in the situation which We had t, fear from those people. nor had the man aRement of the company done augh which would justify any criticism or ob Jecton on the part of any stockholder and that I certainly would not be forced by fear into anything they might d by recommending a course which would be adverse to the interests of the gen eral body of stockholders of the South ern Pacific.
 J. Kruttschnitt, the Fourth v1ce-Presi