The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-01-17
The A. c. L. and [. and N.
Roads in Kentucky.
THE INQUIRY is OPENED
Violation Of Kentucky Law Denied---,rwin and
Walters OF The Coast Line, Spencer Of
the Southern, and J. P. MOT
gan Testify.
gan Testify.
(By% the Associated Press.

to take testimony in regard to the COM
plants of the Kentucky Railroad Com
mission that the Inter- State Commerce
the alleged merger of the Louisville and
Nashville and the Atlantic Coast Line.
The complaint against the Illinois Cen
trail was dismissed at the request of At
torney General Pratt, of Kentucky. The
companies denied all allegations of vio-
lating the law and counsel said the
books and traffic agreements were open
to the public.
President Spencer of the Southern Rail-
way, identified copy of the agreement
under which the Southern Railway,
through the Louisville and Nashville, got
the stock of the Chicago, Indianapolis
and Louisville, and the document was
admitted as evidence. Mr.. Spencer said
the purchase was ito benefit the lines
running out of Chicago" Witness said
he could not remember whether the
Monon purchase agreement provides for
referring all disputes to j. P. Morgan
as umpire. The rates of the Southern
had not been affected by any agreement,
and business was not done with view
to pooling.
Mr.. Spencer said that while the joint
control of the Monon did not affect rates
it did affect the volume of business.
In reply to a question as to why the
Louisville and Nashville and the South
ern had bought the Monon, he said:
1T was for sale and we did not want
other interests to control it,
President Irwin of the Atlantic Coast
Line, said the Atlantic Coast Line Rail-
road was owned by the stockholders of
the Atlantic Coast Line Company. He
explained the difference between the At
lantic Coast Line Company and the At
lantic Coast Line Railroad Company. He
understood that SOC 600 shares of the
Louisville and Nashville were delivered
by j. P. Morgan & Company to the At
lantic Coast Line Railroad Company.
Later $35. coo 900 bonds were issued to
pay for these shares and handed over to
Morgan G. Company in addition to $780,,
coo, 600 capital.
Henry Walters chairman of the Board
of Atlantic Coast Line Company, said
the company owned a controlling inter-
est in six or more small lines operated
as the Atlantic Coast Line Railroad
Company Five directors of the Atlantic
Coast Lire Company were also directors
of the Louisville and Nashville. Wit
ness said:
1--WE offered to buy the Louisville and
Nashville, having heard that Morgan &
Company had got control of it and know
ing that the bankers could not OPP
crate it,
The witness and Mr.. Morgan reached
an agreement to buy the 100000 shares
of stock. I'VE paid" said the witness,
0G0 cash and S35, coo bonds
and 100000 stock. The 900 was
raised by sale of stock, every dollar of
which was taken by our own stock
holders. Practically three holders own
the stock of the Atlantic Coast Line
Contrary: Michael jenkins and his
family Walter Newcomer and his fam
lily. and myself. l do not think Mr..
Morgan OWES any of the stock" The
witness said that in certain circum-
stances he might vote for a rate war
with the Southern There is no agree
ment conditioned on securing control of
the Louisville and Nashville, and no
understanding or contract by which the
Atlantic Coast Line. Louisville and
Nashville and Southern are operating in
harmony or under one control.
President Elliott, of the Atlantic Coast
Line Company and counsel for the At
Iantic Coast Line Railroad Company,
testified, corroborating Mr.. Walters
testimony and said:
eve bought the controlling stock of
the Louisville and Nashville just as you
would buy box of candy. 1t was wrap
ped up ard delivered to us and we paid
$50 600 COO for it. portion of the shares
was controlled by Mr.. Hawley and Mr.
Gates, and the acceptance of our offer
was subject to the approval of Hawley
and Gates"
j. p Morgan began his testimony by
saying he was the head of the firm, and
that the firm had ten or twelve mem
bers he was not sure how many He
had nothing to do with the purchase OF
the 100000 shares, except to approve the
contract when made. The deal was eX-
planned to him by Messrs. Perkins and
Steele when he returned from Europe
last spring. Mr.. Morgan presumed a
conference was held with Mr.. Gates
about the Louisville and Nashville stock
sale, but he was not present at it. He
was never a director of the Southern,
but thought his partner. Steele, was.
Mr.. Morgan could not remember the
prelminaries of the Monon purchase,
though he might have known all about
them at the time sentence in cir
GUAR sent out Dy Morgan q OolhpdHy >
August 81. 1902 was mentioned to the
witness. 1t advised stockholders of the
Southern to make no change in the
management until after the settlement
of certain matters pending. which might
affect the development of their lines.
1--WE were trying" said Mr.. Morgan, in
explanation, Ito prevent any one getting
hold of the stock like they got hold of
the Isussisyille and Nashville and knock
ZIG il into. cooked hat" Witness con-
siderod it important to the Southern to
hold together the Louisville and Nash
WILLIE The option, the Gates stock.
was got April To- and he did not know
i'm August who would buy it. Mr.. Gates
had the stock said Mr.. Morgan land
operated j pool which controlled it.
No one knew what he was doing. | took
the stock away from Gates and put it
where it would not hurt the Southern.