Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-02-26
AFFAIRS OF THE Al TON
E. H. Hartman Explains Then.
at Length.
WAS A DOcILE WITNESS
Sale to Rockefeller Was Protective
Measure"
RELATIONS OF THE SANTA FE
Statement by the Financier as to the
Earnings and Disbursements
Of the Alton.

when the interstate commerce commission
resumed its investigation into the affairs Of
the Union Pacific and allied lines today. It
Is expected that Mr.. Hartman will be ques-
toned regarding the Union Paciflc's control
of the Southern Pacific and Northern Pa
cifie and the effect Of such control When
Mr. Harriman's examination is finished it
Is probable that member of Kuhn, Loeb
& Co. will succeed him in the witness chair
Mr.. Harriman's answers while on the
stand were given with readiness and with
apparent frankness At times he even vol
unteered information. In only one instance
did Mr.. Hartman refuse to reply, and that
was in regard to his personal holdings OF
the stocks of the Chicago and Alton. the
financial affairs of which road were under
consideration yesterday Mr. Hartman, un-
der advice of counsel, still declined to an
swer this question when the commission
ruled that he should reply. His refusal to
answer was recorded, so that the question
of contempt could be brought to the atten-
ton of the United States courts If de-
sired but Frank B. Kellogg Of counsel for
the government, who Is questioning the wit
nesses. said after the session yesterday that
he might not ask for a ruling by the courts,
as the information sought might be OBJ
tanned from other witnesses. This was
taken to indicate that other members of
the Chicago and Alton syndicate would be
called to testify.
Sale Of the Alton.
Mr.. Hartman testified yesterday that he
did not know whether he mad an interest
in the Laclede Construction Company which
had built the ST. Louis, Peoria and Northern
railway and when he took the stand this
morning Mr.. Kellogg produced a contract
relating to Chicago terminal transfer bear
ing the names of Hartman, George ).
lvv,o q
The witness said the document was no
doubt correct and that possibly he had
acted in fixing the price OF the road Wnen
it was sold to the Alton. Mr.. Kellogg also
produced two original checks to show that
Kuhn, Loeb & Co. had been managers OF
the Alton syndicate, and the witness, who
had been unable to remember yesterday,
said that Kuhn, Loeb & Co. undoubtedly
had been the syndicate managers.
After reciting a statement of the Chicago
and Alton railroad showing the interest
charges, Mr.. Kellogg asked the witness II
he thought it was right to put upon the
public the large issue Of common stock
which never would and never could pay
dividend.
Did we ever tell the public it would pay
diyidend?" asked Mr.. Hartman quietly.
He continued:
NO dividend was ever promised, and in
addition the public got the services of the
Chicago and Alton at 30 per cent less IN
1906 than it paid in 1898 The ROAD aiso
along it's line to increase their business
three-fold.' .s,
Then the Chicago and Alton reduced its
rate much faster than the Union Pacihc?
asked Mr.. Kellogg.
1.-The Union Pacific has nothing to do
with this. We are now considering the
Chicago and Alton was Mr.. Harrimans
response.
Mr.. kellogg asked what the total fixed
charges of the Chicago and Alton railroad
were.
Mr.. Hartman scanned some papers he
held and proceeded to read e tne a Am We1
logg His total did not seem to agree with
that of Mr.. Kellogg, and this led to seVerai
brief colloquies.
Mr.. Kellogg was endeavoring to show the
difference in the charges between the old
company and the reorganization, and. haV.
ing done this, he passed to the matter OF
the Chicago and Alton Railroad Company's
bond issue of 1899.
Alton Bond Issue.
Mr.. Kellogg asked Mr.. Hartman If there
was anything to show that the syndicate
was in any way obligated to take the bonds
of the Alton before September. 1899. Does
any record of such obligation exist any
where?" he asked.
The witness knew of no such record, but
said he was certain the syndicate members
were bound to take the bonds at 65. You'll
have to seek that information elsewhere,
Mr. Kellogg" he said.
Mr.. kellogg continued the attack on the
issue and sale of the Alton bonds, but the
witness declined to be drawn very far. He
said he was absent from the country during
the summer of 1899 and did not arrange
any of the details. He was sure that mar
Of the bonds at high figure. In reply to
a question, Mr. Hartman denied that he
was the head and front of readjustment or
reorganization of the Chicago and Alton
Railroad Company. II was only one OF
several" he said.
AS chairman of the committee he pre-
sumed that he might be regarded as the
head, but his responsibility was no greater
than that of his associates.
AS Mr.. Kellogg paused at this point. Mr..
Hartman suddenly asked: Are you
through with the Chicago and Atom
Mr.. Kellogg said he was, and the witness
Harriman's Statement.
Permission to make the statement was
given, and Mr.. Hartman said:
Now, our figures show that the whole
charge for the year 1906 for interest and
dividends on the Chicago and Alton Con-
solidated Company was s., 228, 1874. In 1898,
that including the same distribution. inter-
est and dividends, it was 1888, 400; or an in
crease of $S45.4O4 after SO, 327, 900 had been
expended In improvements and betterments
on the property
.'The syndicate does not hold any of that
issue of twenty million Of common stock of
the Alton upon which no dividend has been
paid. They unloaded it, didn't they?" asked
Mr.. Kellogg.
You ask the Rock Island people about
that; they can tell you," answered Harri-
man. amid laughter.
Mr.. Kellogg then passed to the Southern
Pacific and the operations by which the
Union Pacific interests acquired its hold
fngs.
"Why did you buy just a little less than
the majority of that stocl<?' he asked.
Mr.. Hartman replied that 1t was all they
needed. Fer their purposes 1t was sufficient
as majority of the stock. His recollection
was that this original purchase of Southern
Pacific was not all acquired from the Hunt
mgton estate. but of this he was not alb
solutely sure.
Sale to Rockefeller.
Mr.. Kellogg traced the purchase Of South
ern Pacific stock by the Union Pacific and
Oregon Short Line. carrying 1t down to the
famous sale of 30e.000 shares to William q.
Rockefeller. Mr.. Kellogg produced the
Rockefeller letter, already in evidence.
THE sale was made on reciprocal
agreement made with Mr.. Rockefeller"
said the witness. "by which Mr.. Rockefei-
Ter could sell us the stock back on MAY 1.