The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1907-04-08
STATE ATTORNEY
GENERAL FLAYS
HARTMAN DEAL
Illinois Prosecutor Gives
Caustic Report to
the Governor
TELLS OF WRECKERS
Fears That Revocation of
Charter Would Harm
Stockholders
CHIEFS SHOULD ACT
Suggests That Magnates
Seek a Remedy for
the Situation

SPRINGFIELD. Ill. April AT
torney General Stead, in an opinion
submitted 10 Governor Deneen today,
expresses doubt as to whittier it is in
the province Of the State OF Illinois
TO proceed against E. H. Hartman and
his associates for the alleged manipula-
tion of the Chicago and Alton Railroad
properties # the State should revoke
the company's charter the loss would
fall on the stockholders, the Hartman
people already having disposed of a
large portion Of their holdings. The
Attorney General concludes therefore
that the best plan would be for the
company itself to seek 4 remedy for
the situation, or even for one or more
stockholders to act. At the same time
stead assures the Governor that should
he become convinced on further in
vestigation that the State can relieve
the road conditions he, Stead. will make
the necessary moves.
Notwithstanding his convictions as to
the wisdom Of immediate action, Stead
insists there is not the least doubt but
that a civil remedy exists against the
~hnanciers who have wrecked this
prosperous railroad company and. at
the expense Of innocent stockholders
and bondholders. have gathered to
lemselves a harvest of millions Of
collars"
stead reviews the testimony given by
Hartman recently before the Inter
state Commerce Commission at New
York From the records OF the Illinois
Railroad and Warehouse Commission
stead obtained the various resolutions.
certificates and documents pertaining
to the Chicago and Alton Railroad
Company and the Consolidated COM
pany, alI OF which figure in the manip-
ulations.
The profits made out of the Alton
deals by Hartman and his associates
are placed by Stead at s24,64s,eOo.
AS a result Of this enormous profit
10 themselves" he declares, the rail
road companies are thrown into hope
less bankruptcy"
The Indebtedness OF the companies,
as shown by the figures in the opinion.
have been increased a total Of $685.
2ls since they fell into Harriman's
hands. OF this amount only s22. 500, 600,
according to Harriman's own testi
n1ony, says Stead, was incurred for i'm
provements. betterments or extension
OF the roads.
over s57.ooo.0oo of this indebted
ness" he declares, "or more than -
per cent Of the entire indebtedness
created by this syndicate upon the
properties OF these companies. was not
created in furtherance of any legiti-
mate purpose for which a railroad com
pany is or can be operated legally un-
der the statutes of the State Of Illi-
aois"
stead discusses the Alton deal In de-
tail, bringing out the fact that in 1898
the company paid all its operating ex-
penses and a per cent dividend on
it's common and preferred stock and
had 100000 left The compsny's credit
was good, and then the syndicate took
hold, purchasing S4,722 shares of pre-
ferred and 1sS.2z4 shares OF common
stock, distributed as follows: George J.
Gould. 5s.534 shares; James Stillman.
54,5S5 shares; Mortimer l. Schin, 54,-
5S5 shares. including smaller numbers
OF shares taken by others.
Whether or not the members OF this
syndicate are criminally liable under
the statutes OF the State of Illinois. 1
express no opinion at this tim.." says
stead in the conclusion of his written
opinion.