Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-02-23
CONTROL OF RAILROADS
Conference of Attorneys for the Inter
state Commerce Commission.
UNION PACIFIC STOCK DEALS
Investigation to Begin Monday-Con-
troller Of the Chicago and Alton
Summoned az q Witness.

NEW YORK, February 3.-W. b. KEEL.
logg and C.. A. Severance Of st. Paul, at
torneys for the interstate commerce COM
mission, which meets here on Monday, in
the course of long conference at the
Waldorf yesterday made additional prepare
lions for a second excursion to that upper
world of finance where, so William Nelson
Cromwell said, E. H. Hartman dwells and
which the ordinary stakeholder may not en-
ter. There participated in the conference a
number of men well informed regarding
various financial transactions Of the Harri-
man party.
Neither of the attorneys would impart
any Information regarding the matters dis
cussed at the conference, taking the posi-
ton that any outline Of their Investigations
would obviously forewarn those about to
be investigated.
There are excellent reasons for believing
however that the commissioners and their
attorneys consider that they have gone as
far as Is necessary into questions of traffic
competition. and that the investigation to
be begun on Monday will for the most part
consist Of delving into the financial opera
tons of Mr.. Hartman and his associates
In connection with Union Pacific finances.
Power Of the Commission.
Just how much power the commission has
in the way Of inquiring into stock market
transactions has been one Of the perplexing
questions since the investigation began. 1t
has been granted that the commissions in
quisitorial powers are very broad. but there
has been a difference of opinion as to
whether or not the commission could look
into, for instance, such instances of stock
jobbing as the reported market opera
tons Of the directors in the Union and
Southern Pacific dividend scandals of last
August.
1.-The commission can investigate any
thing at all which in any way affects inter-
state commerce." said a man we'll informed
on the subject yesterday. In the case of
Mr.. Hartman 1t would not, of course, at
tempt to learn anything regarding his pri-
vate speculations in stocks not connected
with the Union Pacific in any way, but If
there Is any connection, however indirect
between his market speculations and the
management of the railroads he controls
the commission has a perfect right to find
out about them. 1t has a right to know
whether money has been loaned by the
Union Pacific to any of the directors or
persons acting in their behalf; whether they
have used money of the Union Pacific or
any Of its subsidiaries to purchase stocks
which later they sold to the Union Pacific
at higher price. and generally whether the
heavy stock operations of the Hartman
party have been conducted for the purpose
of railroad development or Of stock market
manipulation"
Rock Island and Union Pacific.
1t became known yesterday that c. W.
Hilliard, controller of the Chicago and
Alton, had been subpoenaed to testify be-
fore the commission. This was taken
as indicating that there would be a rgor-
Gus investigation of the management of the
Alton by the Union Pacific. Mr.. Hilliard
is l unicial OF tHe X - lanT ii tle
into control of the Alton last fall under the
well-known agreement for successive man.
agement of that road by the Union Pacific
and Rock Island. Mr.. Hilliard succeeded,
tl> a.. ..anl,
IN one OF the early sessions of COM
mission Mr.. Mahl testified to the fact of
the agreement between the Union Pacific
and Rock Island, but answered further
questions regarding the relations between
had passed out of his hands and he could
not reply without reference to them. Mr..
Hilliard is expected to produce the books
and show for the first time in just what
shape the Union Pacific turned over the
road to the Rock Island.
For many weeks there have been per-
sistent rumors of sensational develop
ments regarding the Alton, and recently
these rumOrs have gained greater credence
despite an extreme taciturnity regarding
them on the part of the Rock Island party.
one of the prominent members of the Rock
Island group said last week. Whatever
comes out will have to come out through
the commission
Atoms Increase of Capital.
1t has been assumed in some quarters
that the principal matter of investigation
regarding the Alton would be the increase
of capitalization from $21. 600, 900 to 1892
100000, with no increase of mileage, and
the Old charge that syndicate formed by
E. H. Hartman and Kuhn, Loeb & Co.
pocketed some 100000 by buying bonds
at 65 which they sold to the New York
Life Insurance Company and others at 90
or Whereabouts. This was in 1890 and as
certainment of the truth or falsity of the
charge is. no doubt, considered 4 pertinent
matter by the commission.
But If reports regarding the arrangement
of the Alton by the Hartman party are
to be believed there are many other things
which Mr.. Hartman and his associates
it Is said. has the road been harmed by
of bonds. but especially since the Rock
Island acquired an equal interest in it the
policy of the Union Pacific party has been
detrimental to the Alton. This policy, it is
said, has been manifest in traffic arrange
ments between the Alton and other Harri-
man lines, to the great advantage of the
latter. in failure to keep up the equipment
and general maintenance of ne road and in
letting it run down in various ways despite
the large sums received from the sale of
securities.