Omaha daily bee., 1903-01-16
MORGAN TELLS OF MERGER
Claims he Engineered Sale of Louisville ts
Stop Speculation.
foRGETS NUMBER OF HIS PARTNERS
Details Escape Memory, Trust Nag
nate Not Even Re%coIlectins How
Many Constitute Banking
Firm He Heads.

Firm He Heads.
NEW YORK, Jan. Isl. Plerpont Nor
gan was the principal witness before the
Interstate Commerce commission today.
The inquiry was relative to the alleged
merger of the Louisville & Nashville aud
Atlantic Coast lines. Mr.. Morgan, how
ever, did not aid the investigation much,
as the alleged deal had taken place so long
ago that all details had escaped his
memory. He could not even r~ecollect how
many partners he had.
Kentucky Makes Complaint.
The inquiry is the result of the complaint
Of the Kentucky Railroad commission that
the interstate law was being vto-
lated in Kentucky by the alleged merger.
Henry Walters. chairman Of the board OF
the Atlantic Coast line, said that company
owned a controlling interest in six or more
small lines. Five directors of the Atlantic
were also directors Of the Louisville &
Nashville. They offered to buy the Louis
Vile & Nashville, having heard that Nor
gan had got control of 1t, and knowing
bankers could not operate it.\
There was no agreement conditional on
securing control, and no understanding by
which the Atlantic Coast, Louisville &
Nashville and southern were operated IN
harmony or under one control.
Mr.. Elliott, president OF the Atlantic
Coast line, eorroborated Mr.. Walters
testimony and said:
I'VE bought the controlling stock Of the
Louisville & Nashville just as you would
buy a box of candy. 1t was wrapped up
and delivered to us, and we paid $50,oOO,-
600 for it. A portion of the shares was
controlled by MIR. Hawley and Mr.. Gates
and the acceptance OF our offer was sub
ject to the approval of Hawley and Gates"
Details Escape Morgan.
]. Pierpont Morgan began his testimony
by saying he was the head Of his firm and
had ten to twelve partners. he was not
sure how many. He had nothing to do
with the purchase Of the shares. except to
approve the contract when made. TIL
deal was explained to to him by Messrs.
Perkins and Steele, when he returned from
Europe last spring, and presumably a con-
ference was held with Mr.. Gates about the
Louisville & Nashville stock sale, but he
was not present at it.
He was never a director in the Southern,
but thought his partner, Steele, was. He
could not remember the preliminaries of
the Monon purchase, though he might have
known all about them at the time./
A sentence in a circular sent out by Nor
gan & Co., advising stockholders Of the
Southern to make no change in the man
agement until after the settlement of GER
tain matters which might affect their lines,
was read. and Mr.. Morgan was asked to
explain 1t.
1--WE were trying" said he, ito prevent
anyone getting hold OF the stock as they
got hold OF the Louisville & Nashville, and
knocking It into a cooked hat"
Witness considered 1t important TO the
Southern to hold the louisville & Nash
willie together. The option OF the Gates
stock was obtained on April Is. and he did
pot know in August who would buy it.
"Mr. Gates had the stock" said Mr., Nor
gan, land operated a pool which controlled
1t. No one knew what he was doing. /
took the stock away from Gates and put 1t
where IL would not hurt the Southern. AT
the time we sold it we held 1t for others.
Let me tell you the story: We found that
Mr.. Gates and his associates had control Of
the Louisville & Nashville. The Northern
Pacific experience OF the year before made
us aware Of the danger to the Southern
stock and so we made arrangements with
Gates. I knew the sale to the Atlantic
Coast railroad would not be disturbing to
the railroads of the south"
Only Interested as Banker.
Continuing, the witness said his interest
in the whole transaction was merely as a
banker. He denied that the Southern had
anything to do will the purchase or sale
Of the Louisville & Nashville. His desire
was for the maintenance Of the general
business situation in the south and he
deemed it unwise that the stock of the
7 o,g,ygIIa q NfaahvtIla xuhfoh MN for oo1a
should be Eat the mercy Of stock speculat-
ing firms"
ibid you recommend the Southern rail-
road to secure the Louisville & Nashville
stock? ?" asked Commissioner Prouty.
why. no, sir" Mr.. Morgan said. ''They
could not hold 1t. They are parallel and
competing lines
Charles Steele, one of Mr.. Morgan's part
ners, was the next witness.
Questioned by Mr.. Young, Mr.. Steele said
there was great anxiety about the situation
early in April and it was feared that a
corner in Louisville & Nashville stock was
planned, He learned that Mr.. Gates had
control of a large amount Of the stock and
sent for him. Mr.. Steele said there was a
conference and II was thought wise that
the road should be in conservative hands.
As a result an agreement was entered into
with him and his associates that a certain
amount Of stock was to be secured and
held.
Mr.. Steele said that Morgan & Co. were
anxious that no interests detrimental to
the Southern should control in Louisville
& Nashville.
"What profit did J. P. Morgan & Co. make
on the transaction ?" asked Mr.. Young.
ut has not been worked out YET" re-
piled Mr., Steele with a laugh. There may
be a loss"
Nc other witnesses being present the
commission adjourned until tomorrow
morning.