New-York tribune., 1903-03-28
GATES TELLS HIS STORY.
HIS PART IN L. 8 N. DEAL.
Those Who Expected a Sensation
Disappointed-Ofer to Morgan.

CoYnplatnt Of the Kentucky Railroad Commis-
sion that the law Of that State prohibiting 'he
combination Of parallel and competing railway
lines had been violated by the Louisville ana
Nashville and other railroads of the South
Several witnesses had been summoned for yes
terday. among them John w. Gates, ana tnSre
vas much curiosity to learn whether or not MF'
Gates would in his testimony refer to MI Mor
Ean's frankly unconplmentary Characterization
of him as a possible controller OF the destinies
Of an important railway property: but MT
CIates's testimony proved devoid Of sensation.
Colonel Young of counsel for the Kentucky
Railroad Commission, examined Mr.. Gates WHO
was suffering from extreme hoarseness. ASKED
as to what his part had been in the acquisition
of the Louisville and Nashville control, he an
swesed that he had been q member of the syndi-
cate organized to acquire 1t. The e1an1iha''o"
continued:
o.-How many shares did you buy, your firm?
Al don't know We had .qe.Ot0, and we con-
frolied the 10000 held by HawIey Davis
c.-%hen did you first confer with j. +. MOI
gan q %. about selling the control? A-MeH
Nr Schwab came to me from ]: P Morgan q
Co He knocked me up at about : o'clock IN the
morning Of April II. and asked what was
koing TO do. The market had been little ner-
vous The day before / told him would see
Mr.. Perkins in the morning. .,
Q.-what next? A.-My son notified the gov
erficrs OF the Exchange OF our attitude, ana
-That did he say to you? Ale wanted
q third of the stock at cost. ,,
Q.-What did you tell him? -A-WeH C"lth
q srlile), told him couldn't think Of it.
Q.-Did ne make any other oneT? a A;EHe ,,f1e
asked for a price for half the stock told MN
! would have to consult my colleagues.
Q.-When did you zee Mr. Perkins AGAIN! a;
II think it was the next day at ABOUT S''o
e-was anything said about the property
then? Al said the @ pr9peT1y .o 5,d was
6-DId he say anything about you being a
dangerous man to handle such property? A
No. I've usually found hackers where 1 saw
q profit.
THE OFFER TO Mr.. PERKINS
Mr. Gates then told of several conferences
with his associates and Of talk lasting TWO
hours with Mr.. Perkins at the Waldorf-Astoria-
What offer did you make to Mr.. Perkins,"
Colonel Young asked.
Il told him would recommend my associates
TO accent l20 for one-thfrd, 100 for one-third
and 10 for the balance of the 100000 shares We
controlled. if all were taken. Mr.. Perkins said
the price was too high
To other questions Mr. Gates said his exami-
nation of the accounts of the Louisville and
Nashville roads workings induced him to be-
Neve that il was more valuable property than
it was generally held TO be. He spoke Of sew
er6I later conferences with the Morgan people
Was anything said at those conferences as to
where She control Of the Louisville and Nash
willie should go?" asked Colonel Young.
Nothing" replied Mr.. Gates.
Did you know Of any reason why you could
not manage the property well as the August
Belmont board had managed it?'
No. but IT seemed wise to take the profit
without any trouble risk
At this point Mr.. Gates told Of making the
contract giving j. P. Morgan & Co. an option
on the property, and said he was asked for six
months extension of time.
Did Mr.. Morgan say anything about the for
nation OF Southern Securities Company TO
control various roads and increase profits with
the Louisville and Nashville stock taken at
17o?' vas asked.
Several arguments were advanced as a rea-
son for q reduction. 7 think that was one Of
them-that it would he to our mutual interests,
and that It might be done If the Northern Sc
curities Company went through
That ended the examination Of Mr. Gates
None Of the lawyers on the other side had any
questions for him.
John Shelton Williams. president OF the Sea-
hoard Air Line Railway. was examined by At
1orney General Pratt of Kentucky The first
question put to him was whether or not he hal
taken any part in the sale of the Louisville and
Nashville to !. P. Morgan Co. Mr.. Williams
answered: NO. After Morgan & Co. had the
option on the controlling interest, friend sug-
see il our line could get some of the stock. I
ssw Mr.. Perkins Of ]. F. Morgan & Co. but we
did no business"
Q.-WaS anything said there about the effect
OF the purchase of the Louisville and Nashville
road by any particular interests? Al asked
a Ferslhs ,1s u u, u vas Likely that J. P Morgan
The SeabOard Air Line at any price that might
he considered reasonable. He replied that it
was not likely that J. T. Morgan &, Co. would
Tart with the control of the road to any inter
ests J. P. Morgan & CO. could not control
control the sas6oar5 linz 90 n.tSs ~ ty
definite figure on the Louisville and Nashville.
.Q,-Mr. Perkins gave you a figure? A.-Eo.
and asked him if he Inesnt that he would pre-
FER to sell TO that company rather than to ue.
buy the Seaboard Air Line. l told him it was
not for sale at any price.
THE MORGAN IDEA"
Q.-You understood from that talk that the
Morgan idea was 10 sell the Louisville and
Nashville to interests that would not let II con-
fict with the Morgan interests in the Southern
Railroad? A.-That was what understood.
Mr.. Williams added that he suggested the for
NATION Of q voting trust to run the Louisville
and Nashville. composed OF the Atlantic Coast
Line. the seabosrd Air Line, and J. P Morgan
& Co. Neither the Atlantic Coast Line nor the
Sea board he said, was really competitor of
THE Louisville and Nashville; railroad men con-
sidered them as connecting links
Charles G. Gates the son OF John W. Gates
wss the next witness.
What had you TO DO with the purchase OF the
Louisville and Nashville stock?" Colonel Young
asked.
"As a member of the firm OF Harris, Gates &
Co" was the answer, II gave orders to have the
stock purchased. and 1 bought some myself on
the exchange"