The Savannah morning news. (Savannah, Ga.) 1900-current, 1903-01-25
THE L. & N. DEAL.
Gates Tells How Much Morgan Made
Out of 1t.

Gates Tells How Much Morgan Made
Out of 1t.
From the Chicago Record-Herald.
New York, Jan. 21.-John w. Gates
has appealed to the Interstate Com
MERGE Commission for an opportunity
to answer the testimony given by Pier
pont Morgan during the investigation
of the Louisville and Nashville trans
fer here the other day. Mr.. Morgan
represented that he had bought the
road from patriotic motives because
John w. Gates was a dangerous man
to handle a valuable property; that it
was unsafe to trust him with the great
interests involved in the Louisville
and Nashville system, and because he
was anxious to promote the prosperity
and the welfare of the South. The as
scciates of Mr.. Gates are very indig-
nant at this assumption of superior
morality on the part of Mr.. Morgan,
and declare that the latter was actual
ed by purely selfish motives, which he
is now trying to conceal. They say that
it was nothing more than an ordinary
stock jobbing operation which Mr..
Morgan went into to make money for
himself, to secure the Louisville and
Nashville Railroad for the Atlantic
Coast Line System and to prevent
Gates from selling it to the Seaboard
Air Line Company, with which the lat
ter was in negotiation. Mr.. Morgan
represented in his testimony that he
had nothing whatever to do with the
original negotiations which were ini-
tiated by some of the boys" in his Of
flee, and that he knew nothing of them
until they were very nearly con-
cluded, when he learned the situation
over in England and took the matter
UP himself. The facts of the case as
stated by some of the Chicago asso-
ciates of Mr.. Gates are entirely diff
ferent from those related to the Inter
state Commerce Commission in Mr..
Morgan's testimony, and Mr.. Gates,
who is spending a few weeks down on
the Gulf coast, near Galveston, has tel
egraphed that he will come North and
demand a hearing.
In the early spring of 1901 Mr.. Gates,
associated with Isaac L. Ellwood, John
Lambert, Charles A. Dupee of Chicago
and several other friends, commenced
to buy Louisville and Nashville stock,
which was then quoted at los on the
market. Six hundred thousand shares
were outstanding, and of these Har-
ris, Gates & Co.. the Chicago brokers,
obtained by purchase 204000 shares.
Edwin Hawley of the Southern Pacific
System had 100000 shares. By COM
bining their interests the Gates party
and Hawley controlled a majority of
the stock and entered into negotiations
with John Shelton Williams and w. A.
Reed of the banking house of Vermilye
& Co., to sell the road to the Seaboard
Air Line upon a guarantee of Z per
Rnr1f n ix-iA dc fnT n 6nfi a
term of years.
The negotiations were discovered by
George w. Perkins of Morgon & Co.,
who, knowing that Mr. Morgan wanted
the Louisville and Nashville road for
consolidation with the Southern sys-
tenn, and was very much opposed to
the interests of it's competitors, the
Seaboard Air Line, cabled that gentle
man the facts at his London address
and requested Mr.. Gates not to close
with Williams and Reed until he had
received a reply. Mr.. Morgan cabled
Perkins authority to buy, and the lat
ter paid $130 a share cash for Hawley's
102, 900 shares and secured from Har-
ris, Gates & Co. an option upon their
204 900 shares at $3.50 a share. The con-
tract covering this option was drawn
by Mr.. Stetson, who is Mr. Morgan's
attorney, and it provided that Mr..
Morgan should have an opportunity
to formulate a plan for the reorgani-
cation of the Louisville and Nashville
road. If he succeeded in doing so to
his satisfaction he was to buy the
Gates stock. If he did not succeed he
agreed TO sell Gates the 10000 shares
ne had already bought from Hawley at
$3.50 q share. the price he gave for It.
This contract was made in the name
of Mr. Morgan, and the Gates party
say that he was advised by cable of
every step of the negotiations, and
that on several occasions they were