The Birmingham age-herald., 1907-02-26

respecting the sale of the Chicago and Alton stock and Union Pacific stock.
 Not Speculative.
 Throughout the examination, Mir Har- rman insisted that none of these trans actions were speculative.
 "I do. not wish to give the impression that we have been speculating," he re- marked as Mir Kellogg pressed him for replies concerning the purpose of the acquisition of stock of the Illinois Gen. tral, the Baltimore and Oho the Chi cago and Alton and other roads,
 ''They are for income renvestment of the proceeds of the Great Northern and Northern Pacific" said the witness.
 Are they for permanent investment or do you expect to sell them?' asked MT. Kellogg
 T have no expectation about it. said Mr. Hartman. "I never thought of that. It never crossed my mind. It is for the purpose of receiving six millions and q half of dollars a year instead of three million and hals," declared MT. uar- rman.
 Alton Story.
 After the announcement of the chair man that the commissioners would pri- yately discuss the challenge of their power to inquire into the identity of the vendors of the Alton stock, Attorney kellogg resumed the development of the Alton story, which he characterized as the most conspicuous modern example Of imitation. He tried to show by the wit ness that Hartman, George Gould, James stillman and Mortimer Schff had pur- chased the road for $40,O00O00 and had rapidly expanded it's capital and out standing indebtedness to $12l 2lS12,32S. This he tried to show had been done by first placing a mortgage on the road for $4O- ud md to h1 the syndicate had sold the bonds to them selves for 65 cents on the dollar and had Immediately sold ten million of them to the New York Life Insurance company at 96
 He further tended to show that the syndicate holding a majority of the stock had declared a dividend of 30 per cent, which was paid of the. proceeds from the sale of bonds. He also tried to show that S12,000,OOO expanded in betterm ents and Improvements by the old manage ment and charged against operating ex- penses was capitalized by the Hartman management.
 Not Much Progress.
 Mr Kellogg had not made much pro- gross with this line of questioning before the noon recess came. MT. Hartman said that he and the three men named were the only stockholders of record
  dicate in which there were many others The witness denied that he had anything to do with the sales of bonds to the New York Life Insurance company; he had forgotten most of the facts connected with the sale of the bonds and had no record of them. Hartman said the bonds were issued to refund the old issue, which was at a higher rate of interest and 10 put the road in better condi- ton.
 He said the books of the Alton were in- correct when they showed that there was a surplus of less than $20O0O0 when his syndicate took charge. The witness re- ferred Kellogg to the records of the company and said they were in his pos session. All the facts in connection with the Alton transaction had been published for years and that the records were much safer than his memory on transac tions that occurred several years ago. D Hartman was in excellent humor throughout the examination and engaged with Kellogg in several good humored rallies. As he left the stand he said T ought to be good natured, it's my birthday"
 Alton Accounts.
 At the resumption of the hearing in the afternoon MT Hartman was recalled and first examined as to the circum- stances under which the accounts of the Alton were re-cast to show the previous expenditure of twelve million dollars on betterments and Improvements. Mr. Kel- logs endeavored to show that the liar riman group had really capitalized the losses of stockholders who had preceded them In the property by many years. MT Hartman would not admit that such was the case, and declared that no distnc ton should be made between stockholders of different times.
 The witness was next examined as to the acquisition of the Chicago and Adton railroad by the Chicago and Alton Rail road company Mr. Kellog endeavoring to show that the transfer vas made through a dummy. MT. Hartman could not recall the details and circumsta and frequently referred his questioner to the records. The witness twice asked for an opportunity to malsa his full explan- aton of the Alton deal. The chairman said he would be given every chance to be heard at the conclusion of MT. Kel- logg's examination.
 Financial Statement.
 NJ. Kellogg led the witness over the financial statement of the Chicago and Alton, showing an increase in capital and indebtedness from $39. .935, ,SS7 to S122, ,S72, - 32S less $S, ,000, ,O00 Mir. Kellogg asked what proportion of the increased capital had ac- tually gone into the railroad. and MT Hartman replied over $22. 900 900.
 MT. Kellogg wanted to know what had become of the remaining sixty million. MT. Hartman replied that 36 per cent bon6 could not be sold at par: that com mon stock could not be sold at par and that preferred stock limited to 1 per cent could not be sold at par.
 The witness denied participation in a sale of bonds at 96 to the New York Life Insurance company. Thirty-two millions of the bonds were sold and the remaining eight millions were pledged collateral against q loan of five millions. MT. Kel- logg asserted that the bonds had been continuously quoted in Wall street at from S3 to 96, but the witness said that he could not remember what they were had no record as to his bonds and could not tell where one could be found. He also denied knowledge of the whereabouts of the record of the syndicate which handled them.
 MT. Milburn objected to what he called an effort to create the impression that MT. Hartman and the other trustees for the syndicate owned all the stock pur- chased, and controlled the transaction.
 Willing to Help.
 why not jump to what you want to prove?" said the witness, I'll help you do it.''
 "All right, sir, thank you very much" said MT. Kellogg. "I want to prove that after you bought those bonds for 65, you sold them for some other price,"
 But the witness could not remember for what they were sold and who were the