The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-02-28
TURNING ALTON
DEAL INSIDE OUT
Interstate Commerce Commits
sion Unearths Some Very
interesting Facts.
LESSONS IN HIGH FINANCE
TESTIMONY OF CONTROLLER OF
THE ROAD.

New York, Feb 27.-Counsel for the
government renewed their attack on the
! financial methods of the Hartman group
IN the Chicago & Alton railroad before
! the interstate commerce commission this
afternoon, when they called Charles w.
billiard, cont oller of the road, as 4
witness.
billiard testified that he became cor
troller in October last, when. under the
Joint arrangement for the management
! OF the property, the Rock Island took Us
turn billiard said his first task was to
ma money TO carry on the improve
ments under way. There was money in
tne treasury for current expenses. but
I9t enough to carry on the improvements.
Whlch included a cutoff of thirty-four
ana a halt miles of road from a Doint
near Murrayvilie TO Springfield. There
was not enough money to comDlete the
building of this line. said the witness
4 looked into the question of raising
money by mortgage" he continued, and
discovered that it had already been
mortgaged-'
Mortgaeed Before Built.
DO ! understand that this road had
been mOrtgaged before it was built 9p
asked Commissioner Lane.
Yes; | was told that It was covered
by the mortgage of 1890, and there was
nothing that could be done except to
IL.
would have been poor security said
Hilliard.
Mr.. Kellogg then read the mortgage 10
show the line had been covered by it,
and the witness said:
All the Bonds Gone.
'AIl the bonds were gone found
from the books that the Sl3OOeOO0 had
never been paid to Stanton for the stock:
that the 100000 had never been paid 20
Stanton for the road. but that the s22,
10000 in bonds had been turned over TO
the syndicate. who delivered the stock
and the road through the intermediary.
Mr.. Stanton"
The commission wanted to know what
the books showed had been actually eX-
pended in connection with the handling
Of the property, but while the witness
was searching for the records the session
was adjourned until tomorrow. Mr.. Hill
lard viii De recalled tomorrow morning.
Some Large Commissions.
Edward II. Hartman concluded his tes-
tnnony at the morning session, and his
examination brought forth nothing Of
special Importance. He was succeeded
on the stand by Otto H Kahn. one of the
leading members of the firm of Kahn,
Loeb & Co. which has financed many
of the important deals of the Hartman
party. and a former director of the Union
Pacific Mr. Kahn remained upon the
animation of c. A. Severance of counsel
for the government told of the reorgan-
ization of the Union Pacific There was
a special inquiry as to the commissions
raid TO Kahn. Loeb & Co. and the inter
relations of the firm. the witness and
Jacob Schiff with the Union Pacific The
witness said the firm had received a COM
mission equal to per cent on the pur-
chase of Southern Pacific. a commission
of per cent divided with other under
writer's on the issue of Union Pacific
convertible bonds at a reduction of per
cent. The witness spiritedly defended the
acts of his firm and cited instances where
il has sold stocks 10 the Union Pacific
at a figure below the current market.
Mr. Kahn made an extended defense of
the Alton transaction based on the meth
DDS and conditions of the time.
Harriman's Private Business.
Mr. Hartman during his testimony
again invoked the question of private
business as against interstate commerce
and refused TO answer interrogations as
to his individual stock deals. and Mr..
Kahn refused to divulge anything spe-
cific as to the business transactions I'M
dertaken by his firm on behalf of clients
or outside of the Union Pacific director
ate. He and his counsel Paul D. Cra-
vath urged the same objection made by
Attorney c. Milburn in behalf of Mr..
Hartman. and added the special plea of
the confidential privilege between a
banker and his clients
The commission ruled against all OBJ
stance properly completed for reference
to the courts
No Benefits ACQUIRED
William H. Moore and Daniel G. Reid.
directors of the Rock Island. testified as
to the contracts with Mr.. Hartman and
his associates for joint control of the
Alton, and that there was no other writ
ten or verbal agreement Mr.. Moore said
that while the contract was still being
fully observed. its effect was nominal.
He and his associates had expected bene-
fits from the arrangement thai mad not
materialized and their earlier plans IN
connection with the project had not been
carried out
COMING TO UTAH.