The Washington herald., 1907-04-10
WILL SUE HARTMAN
InterStateCOmmiSsionW Would
Force Him to Answer.
RESULT OF RECENT INQUIRY
Magnate Declined TO Reply to Ger
tain Questions Bearing on His
Chicago and Alton StOcks--Frank
r. kellogg VIII Handle the Case.

The Interstate Commerce Commission
through its chairman, Martin A. Knapp,
formally announced yesterday it's inten-
ton to file an application in the United
States Circuit Court In New York for
the issuance Of an order requiring f. Il
Hartman TO answer certain questions
| concerning transfers and sales Of stock
of the Union Pacific and other systems
that he refused to answer when on the
stand before the commission as a wit
ness in New York City some weeks ago.
Just when this proceeding will be in
stituted has not been determined. The
/ case viii be handled in the court for the
commission by Frank 3. Kellogg, special
/ counsel, engaged when the Federal body
undertook its investigation into the con-
/ duct and management Of the Hartman
/ lines. The purpose OF the commission in
! entering upon this action is 10 establish
what is believed to be its right to inquire
| into stock transactions of railroad COM
panies and railroad men, a right that
was denied by Hartman and his counsel
when the former refused 70 throw any
light upon deals of himself. Rogers, Still
man, and Gould in stock of the Union
Pacific and other systems In which Har-
riman is a controlling spirit.
Questions That Are Unanswered.
TIE questions at issue to which Harri-
man refused to vouchsafe answers re-
lated first TO the sale by himself, Rogers.
Sullman, and Gould 10 the Union Pacific
Of 10000 shares Of Illinois Central He re-
fused to state what price was paid for
this stock, which was sold to the Union
Pacific at 155, yielding. 1t is believed, a
handsome profit 10 the four members Of
the syndicate. Second he would not tell
the commission whether he owned any Of
the Chicago and Alton stock which was
also transferred by sale to the Union Pa
ci8c.
Hartman likewise declined 10 reply to
interrOgatories put by the commission as
to whether he was interested. directly or
indirectly. in Union Pacific stock bought
during the period intervening between
July - and August H. 1906. On the first
named date, it is alleged. the directors Of
the Union Pacific decided to increase div
idends 20 10 per cent. which increase he
came effective on or about August - In
the interregnum. it is believed. with thu
knowledge lie possessed of the intention
20 uplift dividends. Hartman purchased
large blocks of Union Pacific shares from
stockholders who We're not so fortunate as
TO be on the inside" Counsel for Har-
riman commended that. under the rules
OF the road. each stakeholder was in
formed at once Of purpose TO increase
Union Pacific dividends.
Operations Not Purely Personal.
It was later developed. however. In the
case II the Southern Pacific. that the
practice OF notifying stockholders Of
prospective increases in dividends was
discontinued by Hartman. Government
I officials assume that Union Pacific stock
holders generally knew nothing about the
famous 10 per cent dividend Of August
1896, until after it had been declared, ana
Hartman and his associates rad reaped
the fruits of their operations based on
inside information
The Interstate Commerce Commission
disputes the claim Of counsel for Harri-
man that his transactions in railroad
stock are matters over which. the commits
sion has no jurisdiction: it asserts that
under the authority placed upon it by the
act 10 regulate commerce the commission
is clearly within its rights in probing into
transactions concerning which Mr.. Harri-
man refused 10 give any information, and
it is to establish this that IL is taking this
case into the courts.
Hartman, set up the plea that the
transactions in controversy affected him
as an individual, and that they had moth
ing whatever to do with interstate COM
merce. Hence, he argued the commits
sion had no jurisdiction. The government
claims that under the law a railroad can
not convert Itself into an investment
company deal in stocks and juggIe them.
and then set up the plea that such mdnip-
ulatiOns are in no way related 10 inter
state commerce.
To Settle Questions at Once.
The decision reached yesterday by the
commission 10 make an effort to get the
help Ct the courts in compelling Hartman
to dfsgorge information concerning his
stock manipulations was the culmina-
lions of a series of conferences that were
begun on Saturday Monday there We're
indications that it might be a week. or
probably several weeks. before this step
in the inquiry would be taken When the
commission returned from New York early
in March. after its experiences with the
.recalcitrant Hartman, it was decided to
so into the courts without delay. Special
Counsel Kellogg advised that action be
deferred until after the conclusion of the
argument on April on the question as to
whether the Union Pacific and Southern
Pacific were competing roads. Then the
suggestion was made, it is understood,
that no useful purpose would be served by
such q course. It was finally decided that
the courts should be asked TO pass at
once upon the right Of the commission to
inquire into stock deals, such as Hartman
engineered in his handling Of the great
railroad properties over which he appears
to exercise a dominating control.