Omaha daily bee., 1903-03-17
HARTMAN OUTWlTS EEENE
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where the stock was coming from. He
thought that some person was selling short,
and he thought that it would be interest
ing to squeeze that person. 1t was tho
mistake Of Mr.. Keene's lifetime. The per-
son in the question was E. H. Hartman,
a man who had in his treasury more South
ern Pacific stock than even Mr.. Keene and
his powerful pool would care to buy, and a
person moreover who n control of Southern
Pacific once passed out Of his hands could
turn around and make Southern Pacific
worth less than S25 per share.
Keene's weak Point.
1t was never a part OF Mr.. Harriman's
plan to let Southern Pacific pass out Of
his hands. He knew, what Mr.. Keene did
not know, namely that there was coming
on the street a period Of money stringency.
He knew that during such a period thou
sands Of shares of Southern Pacific would
be thrown into the street and the buyers
for this stock would be few and far be-
tween. He knew that he could stay short
Of the market until this time came and
buy at bargain prices the stock that he
had already sold to Mr.. Keene and his
friends. Therefore he sold and sold heavily.
Mr.. Keene did not take the members of
the pool fully into his confidence. They
had surrendered all discretion in the matter
Of the pool stock into Mr.. Keene's hands.
They we're absolutely guided by his word.
He told them to wait, and they waited-and
are waiting still.
Tight money came. 1t swept upon the
street suddenly. Prices crumbled. Stock
values dwindled rapidly. All the work Of
Mr.. Gates six months campaign was I'M
done in three short weeks. Thousands
Of men and women all over England. Ger
many, United States and Canada lost in
those three weeks every cent that they
had been induced to put into the Wall
street market. Southern Pacific was as bad
as any other stock on the list. 1t tumbled
rapidly. From 81 it dropped to below 60.
There It steadied. Mr.. e. H. Hartman
covered his shorts. He took his time about
it. He knew perfectly well that the pool
stock cost Mr.. Keene and his friends about
$40 per share, and that they would not
sell 1t below that price. He was careful
to see hat his buying did not bring it
up to that price. 1t is believed that he
covered his shorts below So. When he had
them covered the stock still looked SO
cheap that he considered 1t a bargain and
he kept on buying, so that before the stock
reached 65 he had added $50, 900 to the stock
already in the treasury of Union Pacific
and had made the control of the road safe
beyond a doubt.
Hartman in Control.
Mr.. Hartman then announced through
his bankers that he had made this purchase
of Southern Pacific stock, and that anyone
who wanted control Of Southern Pacific
would have to buy it from e. H. Hartman.
1t wa1 a bad day for the pool. Wall street
began to realize that Hartman had sold
Keene. to g standstill. The stock went
down again Rumors began to spread that
the Southern Pacific pool had gone to
pieces. Mr.. Keene vigorously denied 1t.
The street took this as a good reason
for believing that 1t was SO and kept on
believing that II was so until a couple of
weeks ago.
Since then events have crowded on one
another in the history OF Southern Pacific
pool. On March 5 1t leaked out that Ed
ward LRuterbach had served papers on
Alexander Millar, secretary Of the Union
Pacific, and then Immediately withdrawn
the papers. Those papers were an %injunc-
tion to restrain Union Pacific from voting
the 900, 900 shares of Southern Pacific stock
which were held in its treasury at the an
nual meeting on April 8. Rumors flew
thick ana fast. II was stated, and IL has
since been corroborated that Messrs. Keene
and Hartman had, fguratively speaking,
come to blows. Mr.. Keene had accused Mr..
Hartman of bad faith in selling stock to
the pool, and in refusing to help the pool
out by declaring the dividend. Mr.. Har-
riman promptly told Mr.. Keene that South
ern Pacific belonged to Union Pacific and TO
Mr.. Hartman, and that those two interests
would do with 1t whatever they thought fit.
On March IL Mr.. Keene sent out his call
for proxies. In it he declared that Mr..
Hartman and the Union Pacific manage
ment were practically robbing the stock
holders Of Southern Pacific. He declared
that Union Pacific Intended to use the earn
ings of the other road to build up the
Central Pacific branch, and then finally tc
take over Central Pacific and make it q
part of Union Pacific, leaving the rest oil
the Southern Pacific system out in the cold
The call for proxies was a mass of figures
and IL II is true that figures never lie
Union Pacific is a convicted thief.
May Come Ont in Court.
The sequel to this remarkaSNn nght will
be found in the report of the annual meet
ing of April 8, and probably in the records
OF the law courts AFTER that date. Tn
Southern Pacific pool will stand together
They do not hope, even in their widest
moments, to wrest control Of Southern Pa,
cihc from the Hartman grasp. They d.
hope TO make such a protest that UnioI
Pacific and Mr.. Hartman will be shameC
into the payment OF a dividend on South.
ern Pacific. II all else fails they are un
doubtedly willing to carry the matter int
the courts on the ground that the earn
ings of Southern Pacific are being diverted
to the benefit Of an alien road, namely
Union Pacific. Meantime, Mr.. Hartman
is cool and confident. He waived asIdI
all questions relative to Southern Pacific
His bankers say the matter is a joke. Mr.
Hartman and Union Pacific can afford I
laugh. On the selling short Of 100, 90
shares at so and the covering Of II at 8
Mr.. Hartman cleared $2,OOt 900. Inciden
tally, he bought $50 900 shares 70, %. 900,
900 which he can make worth SIS ,OO0, 900 b
simply calling the directors together an
telling them to declare a dividend. II is
joke. Everyone in Wall street says so, ex
cept the members OF the Southern Pacih
pool.