The Washington herald., 1907-02-28

Island interests got when Z. II. Hartman
and his associates. who had 'readtusted''
the finances Of the Chicago and Alton,
turned over that road to them last fall.
pursuant 10 the agreement entered into
between the tive parties. was brought out
late this afternoon IT the investigation
the Interstate Commerce Commission is
conducting into Harriman's operations.
The agreement made with the Rock
Island people when they put enough Of
their Alton holding with Harrimans to
form a majority Of the stock provided that
leach side should have a majority Of the
board Of directors in alternate years.
What Hartman Did tn Alton.
Charles ". Hillard, comptroller Of the
Rock Island, took the place Of William
Mahl. Harriman's comptroller. last Octo-
Der, as comptroller OF the Alton. and Hi
lard testified to-day that an examination
of the company disclosed that there was
practically no money in the treasury that
the road had been mortgaged I'd to the
limit and that there was no money even
for the construction Of new line which
had been mortgaged before il had been
built. and the bonds all sold. Hflard had
not gone far in his testimony when adj
ljOurnment was taken He VIII be the first
witness tomorrow morning.
Hartman, on the witness stand. to-day
discussed the Rock Island people who are
carrying the load. and suggested that
they be questioned.
Before Hillard was questioned to-day.
William II. Moore and =. 9. Reid. of the
Rock Island. were on the stand. but all
they did was TO testify as 10 the sgree-
ment and that the stock put uD was
owned by Rock Island and not by any in
dividuals
GET Millions in CommfSsIon.
Much Of the time to-day was taken up
by the commission in going into the deal
!Hgs OF Kuhn, Loeb & Co with the Har-
riman roads and OF the proiifsrre-psd by
tliat fifm iu-the many deals. ireluding tire
Southern Pacific and the Alton II was
brought out that not only did they get
what amounted 20 q > per cent commits
sion on S75.0o0000 of Southern Pacific stock
sold 10 the Union Pacific but that they
got , per cent commission on the $1,000
coo Of convertible bonds issued to pay
them for this stock They also got the
same commission on the remaining $4,000
o0o of bonds sold. but Otto Kahn. from
whom this was brought out. said that half
/ Of this commission went to "a syndicate.
Jacob H. SChin and AIr. Kahn were both
/ Union Pacific directors at the time. and
/ were charging ; per cent on what they
sold and what they got in payment The
I SN,W0G9 Northern Pacific stock bought
oy the JniCu Pacific before the famous
/ corner was sold To il 10y Kunn. Loeb
. 4 H..T. .-T..
! 1 per cent commission and getting the
! per cent commission on the bonds sold
/ to pay for the Northern Pacific stock.
Buying Northern Pacific sock.
! An interesting disclosure was that since
/ July i last, Kuhn. Loeb x Co. have been
buying back Northern Pacific from the
Union Pacific. and also the Great North
/ ern stock the Union Paclfc got after the
/ Northern Securities decision, Kuhn. Loeb
/ d co. paying considerably more than the
market price for this stock because of
/ their great love for the Union Pacific. as
Kuhn testified, in all. Kuhn. Loeb *
/ Co. have bought 100000 OF Northern
Pacific and Great Northern Practically
/ all Of the stock bought and sold by the
! Union Pacific was done through the firm.
which. because OF this love for the Union
l
Central at 175. though some one Kahn tes-
/ titled would have given them 200 for
I il. He refused to say who the person
was though presumably it was Fish, or
his friends
Kahn Declines To Tell.
Kahn refused to disclose whether any
Union Pacific directors were the real
owners of any Of these shares, and also 20
I 1,
shares sold 70 the Union Pacific Just as
Hartman did Kahn also denied that his
firm had any idea that the S160060 of
Alton bonds sold in 1890 were for the New
York Life. but admitted that they had
sold 81 1,55O.000 Of the bonds to the Equitable
for IS. Schif was u director then of the
Equitable. and. furthermore. Kahn was
the real owner of the Alton stock repre-
scented by his son Mortimer, one Of the
four men that Hartman testified were the
Alton road.
Hartman was the first witness on the
stand to-day. but his testimony lasted
only few minutes
Nan Mods to the witness.
When Mr.. Kahn resumed the stand at
the afternoon session the courtroom was
crowded. and among the interested listen
ers during the rest OF the afternoon were
". II. Moore and J. c. Reid. of the Rock
Island. The spectators were much inter-
ested in observing that Kahn frequently
looked in the direction OF a man. who
waited 70 hear the questions and would
thsn shake or nod his head at Kahn
before he answered. He was not Kahn's
lawyer.
II was the Alton deal that was taken
I'D when Kahn returned TO the witness
stand. and the first question put TO MIN
was concerning the sale OF Sf0i,0o0 OF
Alton stock preferred to the Union
Pacific.
Kahn Explains Alton Deal.
Mr.. Hartman had refused to answer
whether this was any of his stock Kahn.
explaining how Kuhn. Loeb & Co. came to
issue tho circular asking for deposits with
them Of Alton preferred. said the scheme
was initiated by Hartman. who said
that the ownership of a substantial block
would PUT the relations between the two
roads on harmonious basis" They
got about $4,000 OF the stock Kahn said
that Hartman was mistaken when he
oo,u-vN-rrrrr, ~ N-r,-r-rr