Los Angeles herald., 1907-11-14
BIG RAIL WA n
DEAL UNL1ER
SUSPICION
GOVERNMENT WOULD Pro
TECT PUBLIC
FEDERAL COURT DELAYS REM-
DERINe DECISION.
Attorneys for Magnate and Interstate
Commerce Board Argue for Hours.
AIton-Union Pacific Transac-
tions Attacked
By Associated Press.

NEW YORK, Nov. 13-After seven
hours and half of argument on both
sides of the question Judge Hough in
the United States circuit court announced
tonight that he would not be ready TO
render a decision on the petition of the
interstate commerce commission to COM
pei E. H. Hartman to answer certain
question propounded to him last spring
in the course of the commissions inquiry
into the So-called Hartman lines until
| December
The opposing counsel were given the
privilege of filing additional briefs during
the next two weeks.
The arguments, which were not con-
cluded until $50 p. m. took wide range
and the privileges and powers of the
interstate commerce commission were
thoroughly gone into.
Former Senator John C. Spooner of
Wisconsin appeared for the first time
in the case and argued in defense of the
position maintained by Mr.. Hartman
that he is not required to tell the COM
mission what individual profit he made
In selling the stock of other railroads
held by him to the Union Pacific COM
pany, or to detail the manner in which
the famous 10 per cent Union Pacific
dividend was declared in August, 1906.
and it's announcement deferred for two
days.
Argues Against Petition
John G.. Milburn was also heard in
defense of Mr.. Hartman and in opposi-
ton to the petition filed by the COM
mission.
On behalf of the government. repre-
sented by the interstate commerce COM
mission, the arguments were conducted
| by United States District Ottorney Henry
L. Stimson and Frank B. Kellogg, special
counsel to the commission.
Counsel for Mr.. Hartman stated to
Judge Hough that the stock purchases
of the Union Pacific railroad, amounting
| to $50, 900 during one period and about
| $Io2, 100000 in the aggregate, were made
on the recommendation of the executive
committee, approved by the board of
directors and ratified by the stockholders.
All that Mr.. Hartman had done, Mr..
Milburn declared, had met with the full
est approval of the stockholders of the
Union Pacific company. He further stated
that allowing for losses sustained in the
recent heavy slump of prices the Union
Pacific company had profited no less
than $4,000, 900 by it's stock purchases
Mr.. Milburn said this fact should silence
the claim of the commission that the
stock purchase tended to impair the
effectiveness of the railroads engaged in
interstate commerce
Mr.. Kellogg in reply to this stated that
the so-called market value of the stocks
sold to the Union Pacific was nothing
more or less than Wall street quota
ton, probably fixed by the very pool of
men who it is claimed were behind the
stock deals.
AS to the impairment of the usefulness
of the railroads Mr.. Kellogg asserted that
the roads of inflated values were today
unable to borrow money to build the cars
needed by them to carry out their obli-
cations to the public.
JUDGE Interrupts
Judge Hough interrupted the attorneys
on both sides with many pointed ques-
tions He said among other things. that
he did not exactly see what the deferred
announcement of the Union Pacific divi-
dend had to do with interstate traffic He
also asked If, after all, the commission
was not only seeking by the unanswered
questions to prove from whom Hartman,
the Individual. purchased the stocks sub
seouently sold to the company of which
he is president, and what profit he In
dividually made by the transaction.
Mr. Kellogg said the commission sought
to get at the bona fide OF the stock deals.
In general he declared the commission
was making an inquiry which involved
the question of whether or not the great
western territory Of the United States
shall be dependent upon one man for It's
Observation-Disclosures or not there shall
be railroad competition between the Mis-
Mr.. Kellogg in concluding his argument
said the commission questioned the pro-
priety of Mr.. Hartman sitting upon
committee to fix the price OF stocks ne
held and was about to sell to the Union
Pacific.
.I know" interjected Mr.. Milburn. 'but
what are you going to>do about itT'
What He Refused to Tell
The question that Hartman refused to
answer related to the purchase of stock
of other railroads in the interest OF the
Union Pacific and to Union Pacific divi-
dend In regard to the s2S000,00O of lllt-
nois Central stock purchased at S175 a
share, the questions which Mr.. Hartman
declined to answer were as follows:
'sWere the $4,000 shares sold by your
SELF Mr. Rogers and Mr.. Stillman
pooled?'
ing it to the Union Pacifc?"
sfWas the stock purchased by you at
much lower price than S175 with the In
tention of turning 1t over to the Union
Pacifc?"
''Did you have any interest in the 1o5,-
900 shares sold at the same time by
Kuhn, Loeb & Co. to the Union Pacific2'
Were the shares acquired by the samc
pool for the purpose of selling them 70
the Union Pacific?"
On the subject of the Union Pacific
dividend which was advanced from rate
of 6 per cent to 10 per cent per annum on
August 15, 1906 with a subsequent rise
IN the price of stocks, Mr.. Hartman de-
clined to answer these questions:
Were you directly or indirectly inter-
ested In any stocks that were bought be-
tween July 10 and August II that appre-
ciated7''
Ibid you or any other director buy any
Union and Southern Pacific stock In anti
cipation OF that dividend2"
In brief which was filed with the court
GContinned On Page Tws.1