The Birmingham age-herald., 1903-01-16
.L.&N. MERGER CASE
 HEARING BEGINS Case Against Illinois Central Dismissed on Request J. P. MORGAN ONTHE STAND Steele Says the Firm Was Anxious That No Interest lnimical to the
 Southern Should Control
 the L. 6 N.
J. P. MORGAN ONTHE STAND


 New York, January 15.-The interstate commerce commission met today to take testimony in regard to the complaint of the Kentucky railroad commission that the interstate commerce law was being violated in Kentucky by the alleged merger of the Louisville and Nashville and the Atlantic Coast Line. The com plaint against the Illinois Central was dismissed at the request of Attorney Gen. eral Pratt of Kentucky. The companies denied all allegations of violating the law, and counsel said the books an6 traffic agreements were open to the pub lie. J. P. Morgan and others interested would appear If wanted.
 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 ad- purchase was ito benefit the lines run ring out or Chicago.
 As to Pierpont Morgan.
 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 agreements and business was not done with a view to pooling.
 Charles Steele, one of MT. Morgans partners. was the next witness. It was MT. Steele who conducted the negotia- tions by which the Louisville and Nash vile stock was sold to the Atlantic Coast Line. Mir Steele said there was great anxiety about the situation early In April last, and 1t was feared that corner in Louisville and Nashville stock was planned. MT. Steele learned that Mir Gates had control of a large amount of the stock and sent for him. MT. Steele said there was a conference and it was thought wise that the road should be In conservative hands. As a result of this conference an agreement was en- tered into with him and his associates that certain amount of stock was to be secured and held"
 Several Questions Asked.
 The following questions were then asked:
 Ut was confidence in MT. Walters and his associates that led you to seek them to take charge of Louisville?'
 Ut was. We were interested in the commercial situation and we wanted the railroad situation in the south conscrva- lively handled.
 MT. Steele said further that J. P. Nor gan & Co. were anxious that no interest inimical to the Southern road should control the Louisville and Nashville.
 What profit did J. P. Morgan x Co., make on the transaction?" MT. Young asked.
 ''It has not been worked out yet re- piled MT. Steele, with a laugh. There may be a loss"
 There were no other witnesses in at- tendance and the committee adjourned until morning
 Among the witnesses called for tomor- rows session are August Belmont George F. Baker and c. W. Perkins.
 Henry Walters, chairman of the board of Atlantic Coast Line, said the company owned a controlling interest in six or more lines. operating as the Atlantic Coast Line. Five directors of the Atlantic Coast Line were also directors of the Louisville and Nashville Witness said:
 Offered to Buy L. & N.
 We offered to buy the Louisville and Nashville, having heard that Morgan & Co, had control of it, and knowing the bankers could not operate It.
 The witness and MT. Morgan reached an agreement to buy the 3O60OO shares of stock. We paid" said the witness, $10,- GOO, ,000 cash, $25, ,0O0000 bonds, $5,000 0O0 stock. The said s10,Oo0O00 was raised by the sale of stock, every dollar of which was taken by our own stockholders. Prac- tically three owners hold the stock of the Atlantic Coast Line company, Michael Jenkins and his family, walter Newcomer and his family and myself. I do not think MT. Morgan owns any of the stock"
 The witness said that in certain cir cumstances 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 un- derstanding or contract by which the At lantic Coast Line, Louisville and Nash vile and Southern are operating in har- mony or under one control"
 President Elliott of the Atlantic Coast Line company and counsel for the Atlan- tic Coast Line Railroad company testi- fled corroborating Mir. Walters testimony, and said:
 We bought the controlling stock of the Louisville and Nashville just as you would buy a box of candy. It was wrapped up and delivered to us and we paid $50,0O0,000 for It. A portion of the shares was controled by MT. Hawley and MT. Gates and the acceptance of our offer was subject to the approval of flaw ley and Gates"
 J. P. Morgan on Stand.
 J. P. Morgan began his testimony by saying he was the head of his 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 306 900 shares except to approve the contract when made, The deal was ex- plained to him by Messrs. Perkins and Steel when he returned from Europe last spring. MT Morgan presumed a confer ence was held with MT. Gates about the Louisville and Nashville stock sale. but he was not present at It's meeting. He was never director of the Southern but thought his partner, Steele, was. MT Morgan could not remember the prelim- inaries of the Monon purchase. though he might have known all about them at the time sentence in a circular sent out by Morgan & Co.,. August 27. 1902, was mentioned to the witness. It advised stockholders of the Southern to make no change in the management until after mt of hai IinaS