Los Angeles herald., 1907-03-01
HARTMAN HAS
CHANCE TO REST
VARIOUS RAILROAD OFFICIALS S
QUESTIONED
Financial Affairs of the Chicago &
Alton Probed by Attorney Kellogg
of interstate Commerce
Commission
BY Associated Press.

NEW YORK, Feb. 2S.-When the in
terstate commerce commission resumed
it's investigation of the Hartman lines
today it was with the understanding
that a few hours would conclude the
hearing. 1t was said by counsel for
the government today that no steps had
yet been taken to place before the
courts the question raised by the re-
fusal of Mr.. Hartman and Mr.. Kahn
to answer certain questions relative to
holdings of stock Mr. kellogg said he
was not prepared to state what action
would be taken in this matter.
Before the hearing began 1t was said
that contrary to expectations, William
G. Rockefeller would not be called to
testify regarding the alleged sale to
him by Mr.. Hartman of 100000 shares
of Union Pacific at the time of the So
called Keene raid in 1908.
Samuel FELTON,, president of the Chi
cago & Alton since 1899, was called to
show that about $1,000,000 for income
as against proceeds from the sale of
securities was included in the state
ment that showed that $22,000,000 had
been expended in improvements. The
1922, 900, 900 also included $2,780,000 ex-
pended since last June and paid for by
car trust certificates. This reduced the
expenses from sale of securities in the
Alton to between $1S,000,000 and $19,-
100000.
Mortgage Deal Explained
Charles w. Hillard, controller Of the
Chicago & Alton, who was upon the
stand when the hearing adjourned last
evening, was then called. He eX-
planned that the branch line or CUTOFF
from point near MurrayVille to Spring.
field, which he yesterday testified had
been mortgaged before it was built, was
one the Alton had right to build.
The proceeding was not unusual The
expense and the method of mortgag-
ing were legitimate. The line of in
the impression left by counsel's ques-
tions and Mr.. Hillard's replies yester-
day.
Then Mr.. Kellogg asked series of
questions, eliciting statement of the
Chicago & Atoms assets and liabili-
ties in 1898, before Mr. Hartman en-
tered the property and at the present
time. These figures were taken from
an annual report showing that before
1893 it's capitalization was in round
numbers $33, 100000 against $122,S72, 1923
June 1 last.
Total Is Increased
The witness said the car trust cer-
tificates were not included in the capi-
talization, so the total should really be
$125, ,OO00 900 and not $122000,000. Mr..
Kellogg examined the witness at length
as to the books of the company and
had him produce, identify and explain
many of the accounts already covered
by evidence. The witness produced a
record showing the stock standing in
tba mo of tba a m no
Mr.. Kellogg endeavored to show that
the Hartman management of the Chi
cago & Alton had capitalized the debts
of the old Joliet & Chicago road prior
to 1863, but Mr.. IIillard said his knowl
edge of the roads affairs uld not go
back that far. 1t was elected, however.
that there never had been foreclosure
'of the Chicago & Alton, while the old
Joliet & Chicago had been foreclosed.
The witness was examined as to the
$12, 100000 which, it is claimed Harri-
man already added to the capital of
the Alton because that amount had
been expended on improvements or had
been lost by former shareholders.
Counsel Objects
Mr.. LoVett of counsel for Hartman
objected to Mr. Kellogg assuming that
$10,00O,00O of the amount represented
loss to any old set of stockholders
through foreclosure. 1t developed that
neither witness nor counsel knew if
there had been a foreclosure, so Mr..
Kellogg amended his question to in
clude improvements or losses or both. 3"
The witness said that the S12, 900 900
In question had previously been paid
and the accounts were written off. He
did not know if other railroads ever
added to their capital in that way.
Mr.. kellogg then asked a series of
questions lending to show that certain
enterprises also had been capitalized
| by the Alton, but the witness did not
admit this. Certain construction ex-
penses had been so charged he said
Mr. Kellogg elected the admission that
the discount upon the bonds had been
so charged that while the books dis
closed II, the annual report would tend
to confuse the public in regard to thfs
item.
In answer to questions from Com
missioner Lane he questioned right OF
the directors of the Alton in going
back over their books for period OF
many years and capitalizing the ex-
Ing board Of directors had each year
passed upon the accounts and he
thought that such acts should have
been final
The witness repeated his testimony
of last evening as to the transfer OF
the Alton from the ilroad company
to the railway Nmpany through Louis
stanton. and said that il was evident
from the books that the syndicate had
simply handed over the $22.000,000 in
bonds and had received ythe preferred