The Savannah morning news. (Savannah, Ga.) 1900-current, 1903-01-16
RIGHT FROM The TOP
CAME EVIDENCE ON THE COAST
LINE DEAL.
MORGAN AND HIS MAGNATES
TALKED TO THE INTERSTATE COM
MERGE COMMISSION.


World Told How and why the
Louisville and Nashville Control
Was Secured by the Atlantic
Coast Line-InterestinG Side Lights
Are Thrown ON the DeaI-Mcn of
Millions Talked Freely About Ii
and other Deals.
| New York, Jan. 15.--The Interstate
! Commerce Commission met here to-
| day to take testimony in regard to the
| complaint of the Kentucky Railroad
| Commission that the interstate COM
merce law was being violated in Ken
lucky by the alleged merger of the
| Louisville and Nashville and the At
| lantic Coast Line. The complaint
against the Illinois Central was dis
missed at the request of Attorney
! General Pratt of Kentucky. The COM
panies denied all allegations of violat-
| ing the law, and counsel said the books
and traffic agreements were open to
the public.
President Spencer of the Southern
| Railway identified a copy of the agree
ment under which the Southern Rail-
| way, through the Louisville and Nash
vile, got the stock of the Chicago, In
dianapolis and Louisville, and the doc
ument was admitted as evidence. Mr..
Spencer said the purchase was to
"benefit the lines running out of Chi
| cago." He said he could not remem-
| Der whether the Monon purchase
| agreement provides for referring all
| ~
pire The rates of the Southern had
not been affected by any agreements
and business was not done with
view to pooling.
MIR. Spencer said that while the joint
control of the Monon did not affect
rates, 1t did affect the volume OF busl-
ness In reply to question as 10
why the Louisville and Nashville and
the Southern had bought the Monon
| he said. TT was for sale, and we did
not want other interests to control 1t.
! Erwin Talks of the Deal.
President Erwin of the Atlantic
Coast Line said the Atlantic Coast Line
| Railroad was owned by the stockhold-
! ers of the Atlantic Coast Line Compa-
NY He explained the difference be-
| tween the Atlantic Coast Line Company
| and the Atlantic Coast Line Railroad
| Company. He understood that BOG, 900
| shares of Louisville and Nashville were
| delivered by J. p. Morgan & Co., to
the Atlantic Coast Line Railroad Com
pany. Later $35, 100000 of bonds were
| issued to pay for those shares and
| handed over to Morgan & Co., in adj
dition to $1O,00O,0OO cash.
Henry Walters, chairman of the
| board of the Atlantic Coast Line Com
| pany, said the company owned a con-
| trolling interest in six or more small
tho tod I,A ntfo CT
| Line Railroad Company Five direc-
| tors of the Atlantic Coast Line Com
| pany were also directors of the Louis
| vile and Nashville The witness said:
I'VE offered to buy the Louisville
and Nashville, having heard that Nor
gan & Co. had got control of it and
knowing the bankers could not oper-
| ate it."
The witness and Mr.. Morgan reach
ed an agreement to buy the 100000
shares of stock.
Owners of the Coast Line.
1--WE paid" said the witness, 1910, 000,-
900 cash, $35, 900, 900 bonds and 600
stock. The $10.000,000 was raised by
the SADIE of stock, every dollar of
which was taken by our own stock
holders. Practically three holders own
the stock of the Atlantic Coast Line
Company, Michael Jenkins and his
IdHllly, waiter newcomer ana MS
lily and myself. / do not think Mr..
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 TO
agreement conditioned on securing con-
troll of the Louisville and Nashville
and no understanding or contract by
which the Atlantic Coast Line, Louis
Vile and Nashville and Southern are
operating in harmony or under one
control
President Elliott of the Atlantic
Coast Line Company, and counsel for
the Atlantic Coast Line Railroad Com
pany, testified, corroborating Mr. Wal
ter's testimony and said. 1--WE bought
the controlling stock of the Louisville
and Nashville just as you would buy
box of candy. 1t was wrapped up
and delivered to us, and we paid $780,
100000 for it. A 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"
Doesn't Know His Partners.
]. Pierpont Morgan began his testi-
mnny by saying he was the head of
his firm, and that the firm had ten or
twelve members, he was not sure how
many. He had nothing to do with
cept to approve the contract when
made. The deal was explained 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 preliminaPies
of the Monon purchase, though he
might have known all about them at
the time.
A sentence in a circular sent out by
Morgan & Co., Aug. q. 1902, was men,
toned to the witness. 1t advised
stockholders of the Southern to make