The evening world., 1905-11-30
MORGAN HAS
BIC RAILROAD
i ON HIS HANDS
Erie Dissatisfied, He Takes
Over C., H. & D. Pur-
chase Himself.
n OF A FLIM-FLAM.
Astute Financier Admits He
Was WorSted in Deal
of s12, 100000
HINTS OF A FLIM-FLAM.

J. Pierpont Morgan has a rairoer
1855 miles IN his hands for which h,
has no particular use. Thus far ii has
o;st him a trife Of sl2,OOo.OOO or so,
The road is the Cincinnati, Hamilton &
Dayton, which Mr.. Morgan purchased
about three months ago and turned
over - the Erie, President Frederick
r. Underwood. Of the Erie, after a per,
sonal inspection Of the c., II. & u
lines and terminals, concluded that he
did not want the road and told Mr..
Morgan so. Then Mr.. M;rgan assumed
all obligations, took the road on his own
shoulders and proclaimed that he had
been persuaded to purchase II In the
first place by false representation.
There was.H report current IN Cincin.
natl to-day that representatives Of J.
Pierpont Morgan were securing the city
for a Judge to whom they desired to
mske application for receiver for the
Cincinnati, Hamilton and Dayton.
A Financial Sensation.
Not since John W. Gates and hi. as.
soclates extracted millions from August
Belmont by forcing him to buy the
Louisville and Nashville has there been
a financial sensation Of such magnitude
as this Cincinnati, Hamilton and Day.
ton deal. Mr.. Morgan's voluntary act
In taking over the road and his state.
ment that misrepresentation were
made to him concentrate attention upon
the identity Of the mar who was smart
enough TO sell j. Pierpont Morgan some
thing that YVES not worth the money.
Eugene l." Zimmerman, OF Cincinnati,
fabher OF the Duchess Of Manchester,
built mp the c. Il 4 y. and mace a
big, powerful property OF II, but what
part he played in selling # to Mr.
Morgan is not known in Wal. street.
III. b, Hollihs a Co. acted as the brOk-
ers In the transaction and will not
talk
The first announcement OF the ac-
Qufrement Of the C., II. & -. Dy tbs
Erie was mad three months ago. The
property included in the purchase was
a consolidation Of the C., Il. 4 D.,
proper, the Pere Marquette Railroad
and the Chicago, Cincinnati ana Louis,
VILE, uhis last a new and as yet un-
profitable system, The consolida ted
roads were known as tine Great Cen.
tral route and apparently gave The Erie
entrance to sections OF territory that
the road had never been able T. touch.
Tue G. II. and ID. IS a well-esta0llsned
sysIcn, an is the Pere Marquette,
Glowing word pictures Of the adyan-
tages that would accrue TO the Erie
from the new purchase were spread
broadcast. J. Pierpont Morgan con.
Quoted all the negotiations and the
Erie directors authorized an issue OF
S2,00,ooc in bonds TO complete the pur-
-chase. Less t1an a month ago the
Erie stockholders ratified the deal and
elected Erie directors on the BOARD OF
the new Company.
Then came a careful tour OF inspection
by President Underwood and his eH-
perts. He had understood that with the
purchase OF one Great Central route he
had secured valuable terminals at De-
tToit, Toledo n lronton, o., n he
had so Informed the directors and the
s~tockholders. He had also understood
that the roads acquired by the purchase
cago and render unnecessary the heavy
payments the Pere Marquette had been
making to tho Chicago Terminal Trans
fer Railroad.
lie discovered that the important
terminals we're all owned by n cor
poration known as the Detroit, Toledo
and Ironton &C, haying teen trans
ferred, by the, c. u and D., a short
time before the Erie purchase, Eu-
Zimmerman, FORMER president OF
the c.. H. and d., is president Of the
Detroit, Toledo and Ironton Co. Mr..
Underwood was unable 10 ascertain
what consideration had been given In
tho transfer OF these terminal rights.
He found that the Pere Marquette
absolutely tied up In a long con-
tract with the Chicago Terminal Rail
road, and that II the deal held the
Titles in a city where II owned extern
live terminals OF Its own,
The special car was rushed back 10
New York, u meeting Of the Erie d.
-ectors was called and the new facts
we're uncovered, Mr. Morgan was no.
ihed, and, II Is said, conducted an
@ an expressed desire on his part that
here should be a meeting between him. |
ELF and the Erie directors. This meet
M was held Yesterday
From what has leaked out II appears
hat Mr.. Morgan made a speech In
iim-nammeds or words 10 that eject.
that ne would not allow the Erie
Railroad to shave In the loss, All or
ne men present who will talk agree
hat Mr., Morgan insisted upon taking
he c., II & d. as q personal purchase. =
After the meeting President Under G
vood issued n statsment to the effect
nat the Erie Railroad had accepted .
In Morgan'E offer and was thereby y,
elleved of all costs, charges and con- J.
racts IN the matter. The Board voted c
o proceed with the sale OF the $1,000 s
% bond Issue authorized a month ago =
ia USE the money for improvements '
.nA extensions OF the Erie system as ]
1 stands to-day. There Il q proviso b
a the resolution that subscribers who :
ook the bonds on the faith OF The g. u
T. a D. stock being pledged there h