Omaha daily bee., 1903-03-17
HARTMAN OUTWITS KEENE
Battle Between Wall Street Giants for
Control Of Southern Pacific.
FORMATION OF POOL AND ITS RESULT
Effort TO Send stock of Late Hunting.
ton Road 20 Par only Fixes Its
Control by Union PacIac
More Firmly.

! call for proxies to be voted at the annual
| meeting Of the Southern Pacific on April S.
! Union Pacific has also sent out a call for
similar proxies The meaning OF these
/ two events is very plain. II Ia that the
! speculative forces OF Wall streets greatest
| speculator are arrayed for battle against
| the corporate powers at the command OF
Wall streets greatest railroad king.
The origin OF the struggle dates back
more than a year. At that time james II.
Keene began 20 ask various capitalists in
Wall street certain questions relative to
| the possibility OF getting up a pool in
| Southern Pacific stock As week followed
week moro and more Of Wall streets spec
ulative fraternity professed a willingness
| to enlist under the banner Of Mr.. Keene in
a campaign to put this stock thirty OF forty
! points higher than ruling quotations. All
1 last spring Mr.. Keene and his lieutenant
| Talbot J. Taylor worked increasingly in
the completion OF this pool. They tried
| the market thoroughly They put the stock
| through its PAGES and discovered just how
much II could be moved by the buying OF a
certain amount; how easily It broke under
| selling. how strong a bear party had to be
| met and defeated on each move Of the
game, how much capital 1t was necessary
to have behind the manipulation and, in
/ IdCts lutg kdlneu III luOct inDuNHh VI bhliHl-
ishing all the knowledge that it was deemed
necessary to possess II the undertaking OF
the pool was to be carried through to a
successful termination.
Keene's Plan Well Laid.
On Mr.. Keene's return from Europe last
summer the real campaign began. The
great leader told his friends that It would
be short and sharp, and that by the end
| OF September Southern Pacific would be
selling at par. The pool at the beginning
OF this short campaign consisted Of about
! 100000 shares Of the stock OF Southern Pa
cifc and was composed Of about eighty
members. 1t was the biggest speculative
pool. and the richest. that Wall street has
| ever seen 1t had behind II an aggregate
capital Of nearly 800, 900, 900. The mem
| bers Of II were strong and confident.
amongst them were numbered some OF Wall
streets oldest and wisest brokers' at least
| two railroad presidents. two chairmen OF
| railroad boards. and FIVE independently
wealthy capitalists Hardly a man in 1t
but was a director OF one or more corpor-
ations whose stock is listed on the Stock
| exchange.
The Wall street public knew vaguely Of
the pool and to a MAJ believed that II
would be carried through to a successful
/
wonders They knew him as a man who
had tasted Of both victory and defeat in
the war Of Wall street. The older rUnes re-
| membered how once he had gone down in
| failure, and with what wonderful resource
| he had risen again to power and wealth
The, younger ones knew him as the great
| bear" the man whose onslaughts on the
market had many a time put to route the
strongest bull forces Of the street. OF more
! recent years they knew him as the man who
had scattered 10 the fsrthest corners OF
the earth the stocks of the United States
! Steel corporation. For two years he Lad
been the most consistent bull. He had been
the right hand man Of ]. p. Morgan. He
| had accomplished in two years what no
syndicate had dared to undertake, namely.
the distribution Of the billion dollar capital
| OF United States Steel. He had accom-
plished this distribution at high prices by
| the most remarkable bull campaign In all
| the varied history OF the street. What diff
fculty then, they argued. would this man
have in distributing to the public 100000
shares OF such a stock as Southern Pacific?
Confident of His Position.
At the outset Mr.. Keene assured the
members Of the pool that Mr.. E. II. Har-
riman would not in any way oppose the
across the continent to tell the public that
the Southern Pacific pool was going to put
the stock up partly in order that the 10000
shares held by Union Pacific and Mr.. Har-
riman might be of greater value TO those
two interests. They stated hatly that
Union Pacific and Mr.. Hartman would In
no wise object to this increase in the value
Of their assets. At a cost Of $4,000 they
issued a magnificent clothbound circular
telling of the greatness Of the Southern
Pacific railroad, its marvellous resources,
It's wonderful territory, its growing indus
tries, its thriving towns, its rich mineral
prospects, its splendid record Of earnings.
They stated In this circular that before
the end of 1902 Mr.. Hartman and Union
Pacific would decide to pay a dividend
of 4 per cent on Southern Pacific stock.
They gave to the world the impression that
Mr. Hartman and Union Pacific had
pledged themselves t. the declaration of
| this dividend They left to the world not
! single doubt as to the fact that Southern
Pacific by the end of 1902 would be divi-
dend stock. paying its shareholders rich
return on their investment.
Southern Pacific went up. II went from
60 to 20 ia a week. II went from 10 TO 10
in three weeks. There IT checked. Some
body was selling. Market sharps in the
the ticker and conhded 10 one another the
secret; "Keene is selling the POOL stock" !"
Harriman's Hour to strike.
That was the crucial moment in the his
tory OF this great pool. II II had been true
that Keene was doing what his admirers
| thought he was doing all would have been
we'll II is true that Mr.. Keene denied
fatty at that time that he was selling
| Southern Pacific. but OF course no one be-
Iieved him. No one ever believes the leader
/ OF a pool in Wall street. so the public
winked and made remarks complimentary
TO the genius but not to the veracity OF
\ James r. Keene. Meantime the selling
continued. Southern Pacific was traded in
/ TO a tremendous extent. Some days as
much as 100 900 shares crossed the board.
People began TO wonder who was doing the
] buying. The stock seemed to be peggvd
around so. Then, as suddenly as Il had
/ become active, the stock became dull. PeO-
| pie said that Keene had got out OF South
ern Pacific.
Meanwhile Mr.. Keene Was having troubles
/ OF his own. II can be stated now in the light
| OF subsequent events that Mr.. Keene had
sold no stock Of Southern Pacific. On the