The Indianapolis journal., 1904-04-02
EDWIN HAWLEY EXAMINED
AS TO SULLYS FAILURE
Relations Of the Railroad Official
and the Ex-Cotton King Brought
Out by Elihu Root.
PROFITS WERE IMMENSE
Sum of $4,000 Melted by Two
DAYS Transactions-First. Loss
lust Before the Crash.

NEW YORK, April 1.-The examination,
in which Edwin Hawley, the president OF
the Iowa Central Railroad and the Mime
apols & ST. Louis Railway. and Frank III.
Ray, head OF several large tobacco COM
panies, the alleged partners of Daniel }.
Sully In his cotton operations, are to be
questioned, began to-day before United
States Commissioner Alexander, who was
appointed by Judge Holt TO act as a special
commissioner in the case Receivers Henry
w. Taft and David Miller procured the or
der from Judge Holt, of the United States
District Court, requiring Hawley and Ray
not only TO appear to-day before the special
examiner. but TO take to the examination
room all their books and papers that would
disclose exactly what were their relations
to Mr.. Sully. Former Secretary of War
Elihu Root was retained TO question Mr..
Hawley and Mr.. Ray.
Mr.. Hawley was called and his examina-
ton was begun by Mr.. Root. Just at this
time Mr.. Sully entered the room and took
seat near the lawyers table. Mr.. Root
read from statements bearing February
dates. In these transactions many pur-
chases or sales ran from a few hundred
bales of cotton up to almost 10000 bales
Mr.. Root next read from long slip OF pa
bearing the names of Messrs Hawley, Sully
and Ray. He wanted to know or not if this
paper represented the joint transactions or
the persons named. but Mr.. Hawley said he
did not know. Mr.. Sully, IL was brought
out, would take his own share of the prof.
Its before sending Mr.. Hawley his share
A number of Joint three accounts
Hawley. Sully and Ray). for the latter
part of February, nearly all representing
heavy sales, were next read off by Mr..
Root
HayIa,,S lauv,,or, baa l., oo,r+ .orna half
dozen packages containing the memo
randa of the transactions between Sully *
Co. and Messrs. Hawley and Ray. Another
package was reported 10 be missing. Mr..
Hawley said there were other transactions
for Joint three accounts dated Feb. "a
and "a, and something over 10000 bales,
which netted a profit of $4,000. Mr.. Haw-
ley said he did not take his profit in these
transactions. They were credited to his
account"
Next came another "joint three account
g. 1900 bales; March 4. Il, 400; March Z, H.
600, and March 8, 700 bales.
1t developed during the examination that
the first transaction Mr.. Hawley had with
Mr.. Sully was in September, 1903. when he
ties.
Mr.. Hawley gave his occupation as that
of railroad officer. and on further question
ing stated that he is now president of the
Iowa Central and Minneapolis & st. Louis
railroads and a partner in the Stock Ex-
change firm of Hawley 81 Davis. He testi-
fed that his business relations with Sully
q co. began in December last and ended
on March Is.
Mr.. Hawley said he kept no special rec
ord OF his cotton operations, relying chiefly
on the statements he received from Sully
& Co. following purchase or sale.
At the request of Mr.. Root, Hawley' s
lawyers produced batch of these state
ments They showed that Dec. 4, 1903,
10000 bales of cotton were bought and sold
for account of h. Hawley and ID. j. Sully
Jointly; on Dec. %, 49, 100 bales bought and
sold for same account.
There were also similar transactions on a
smaller scale for Dec "A and q, and then
came number of statements of various
dates in January, all representing heavy
transactions on cotton for Hawley's ac-
count Mr.. Root read from a statement
showing that in one particular transaction
Messrs. Hawley and Sully had divided a
profit of 800, ,440.
Mr.. Root read from the seventh and last
batch of statements and other memoranda,
all OF which referred to pool operations.
Hawleys checkbook was asked for, but
was not produced. His counsel promised 10
submit IL at the next examination. 1t was
then decided to adjourn until next Thurs
day at IL o clock
Roughly estimated Mr.. Hawley's profits
in the numerous Joint two and Joint
three" accounts, as brought out by Mr..
Root approximated S250000. Apparently, his
first serious loss was just before the sus-
pension of Sully & Co, as shown by his let
ter of March IS. inclosing a check for $751;
420 to that firm.