The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1907-03-01

New York, February 27.-Counsd for
the government renewed their attack
upon the financial methods OF the Har-
riman group in the Chicago and Alton
railroad before the interstate commerce
commission late this afternoon when
they called Charles w. Hillyard comp
troller of the road, as a witness. Under
examination by Frank Ii. Kellogg,
Hillyard testified that he became comp
troller in October last, when, under the
joint arrangement for the management
Of the property, the Rock Island took
its turn. Hillyard said that his first
task was to find money to carry on tha
improvements that were under way.
There was money in the treasury for
current expenses but not enough 90
carry on the improvements which i'm
cluded a cut of of thirty-four and a
half miles Of road from a point near
s.MurrayyiIle TO Springfield.
There was not money enough. 10,
complete the building of this line, -
said the witness.
Il looked into the question of rais-
ing money by mortgage" he continued,
and l discovered that it had already
been mortgaged."
DO l understand that this road had
been mortgaged before 1t was built"
asked Commissioners Lane.
Yes / was told that Ii was covered
by the mortgage OF 1900 and there was
nothing that could be done except pat n
| second mortgage on IL, which would
have been poor security" said HillyaId.
Mr.. Kellogg then read the mortgage
| to show the line had been covered
by 1t, and resuming the witness said.
Cali the bonds were gone. found
from the books that the thirteen mil
lion dollars had never been paid for the
bonds; that the ten million dollars
had never been paid to Stanton for
the stock; that the 50, 900, 900 had never
been paid to Stanton for the road but
that the $4,000. 900 In bonds had been
turned over to the syndicate who de'iv-
cred the stock and the road through
the intermediary. Mr.. Stanton"
The commission wanted TO know
what the books showed had been act
ually paid in connection with the hand
ling Of the property. but while the
witness was searching for the records
the session was adjourned until TO-
morrow.
Comptroller Hillyard will be recalled
tomorrow morning and II Is expected
that the hearing OF the commission Will
be concluded about midday.
E. II. Hartman concluded his testi-
mony at the morning session and his
examination brought forth nothing oi
special Importance. He was succeeded
on the stand by Otto II. Kahn. one oi
the leading members Of the firm oI
Kuhn. Loeb and company. which hai
financed many Of the important deals
Of the Hartman party, and former
director Of the Union Pacific. Kahn
remained on the stand until mid-af; 'r'
noon and under examination OF {. A
Severance of counsel for the govern
ment told of the reorganization OF tie
: Union Pacific. There was special In
quiry as to the commissions paid hi
+, firm and the inter-relations Of the ii-m
! the witness and Jacob Schif with m
Union Pacific. The witness said tn
first had received a commission edua
to 5 per cent. on the purchase Of Sou
/, thern Pacific. a commission OF ) Pc
. cent. which was divided with othe
underwriters, on the Issue OF Union Pa
cific convertible bonds at a reduction
: of s per cent. The witness sDiritedl
n defended the acts Of his firm and clte-
instances where IL had sold stocks :
= the Union Pacific at figure below th
q current market
Before leaving the stand Mr. Kah
> made an extended defense Of the Alto
: transaction based on the methods an
Il conditions OF the time.
g Before he left the stand Mr.. Harr
= man again invoked the question
private business a against inter-stn
= n,~urnorra ANA yefsuaed To answer n