The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-11-13

CALLED AN
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MI. OtiAiAcoh Sflu the COAoAitohiohaitS "
a statute was not under consideration.
Mr.. Hartman, he declared, was trying to
cut Congress off from even considering a
statute which might affect certain of b
financial operations of his lines.
.'They are trying to cut Congress OF
from inqulring into facts upon which legis-
lation may be based" continued Mr.. Slim
son. The district attorney commended that
the Interstate Commerce Commission had
the same right to inquire into ell the nnan-
cial transactions of an interstate railroad
as 1t had to require the placing of safety
appliances onfall engines and cars, regard
less of whether the engines and cars in
were actually crossing State lines
or standing on side tracks.
What the commission Is endeavoring to
learn from the questions addressed to Mr..
Hartman Is, said Mr.. Stimson, whether or
not the enormous stock investments made
with Union Pacific funds amounted to a
waste OF the assets and impairment of the
facilities of an interstate common carrier,
md whether the matter of such inyest-
ments would be made subject to the regu-
lation of Congress.
Mr. Stimson asserted that immoral and
improper transactions were responsible for
the position in which some of the rail-
roads new find themselves. He quoted
from a statement by Robert Mather, presi-
dent of the Rohk island Railroad, In which
it was said that railroad directors who
stock from themselves were
largely responsible for the wave of dis
trust which has swept the country, the in
ference being but natural that where
Worldwide rules of honesty and fidelity
had been violated in one company the same
might exist in every other. COR
1T requires a great stretch of %imagina-
ton and a large amount of nerve for Mr..
to claim that the Union Pacific
stock transactions are matters of private
exclaimed Mr.. Stimson. But
even if they should be conceded to be
private business, no man has a right to
information pertinent to the mat
ter at issue by claiming a privilege OF
private business, There Is no such priyi-
h
Mr.. Stimson said that even if lbs in
tended to incriminate 1 witness
1t could not be withheld from the com
mission.
Mr.. Stimson reviewed the various pur-
chases of the stock of other railroads by
the Union Pacific and said:
Nearly S15O.00o, GOO was spent in these
transactions, not counting what previously
had been put into Southern Pacific. And
Mr.. Hartman assumes responsibility for
it all, The records show his motives and
purposes. No words could more clearly
indicate stock-jobbing than his replies at
the investigation by the Interstate COM
merce Commission"
John G.. Milburn opened the argument In
behalf of Mr.. Hartman. He asserted that
the Union Pacific had the legal light to
purchase stock in other railroads; it had
the legal right to buy Illinois Central
stock from MIR. Hartman, and Mr.. Harri-
man had the legal right 70 SCH 1t. h
transaction was authorized by the execu-
tive committee, adopted by the board OF
directors and ratified oy he Stockholders.
The transaction was all sat forth in the
minutes of the company in a perfectly
regular way.
Judge Hough interrupted Mr.. Milburn
to ask If he did not understand that the
Commerce Commission was en-
deavoring to elicit from Mr.. Harriman fie-e
facts as to whether or not he individually.
made large sums of money by selling
stock to a corporation in which he was a
director.
Broadly, that seems to be true re-
piled the attorney, land the question here
arises as to whether or not Mr.. Hartman
Is protected by the Constitution from an
swering such interrogations."
But" said Judge Hough, "the ground
of your objection. as it appears In the
record is that the subject matter of the
inquiry is Irrelevant and immaterial. I
cannot find that a constitutional privilege
is claimed"
sit is not" said Mr.. MiIburn. 1--WE
merely claim that the Interstate Commerce
Commission haS'neither the right nor the
power to make an inqulry of the scope at
tempted
Judge Hough desired to know if 1t was
contended that Congress could erect legls-
ffn -, - - -
pounded to Mr.. Hartman.
1--WE contend that Congress-, according to
the decision of the Supreme Court in the
case in the District of Columbia.
has not the power to lesislate to the ex-
tent Of administering a mans personal
business affairs" replied MI. Milburn.
And where Congress has not the power
to l~egislate certainly 1t has not the power
to investigate"
Interest was added to the proceedings to-
day by the first appearance of former
Senator John C. Spooner. of Wisconsin, as
an attorney for Mr.. Hartman.
The question Mr.. Hartman refused to
answer related to the purchase of the
stock of other railroads In the interest Of
the Union Pacific and the Union Pacific
dividend. In regard to the $2s. 60O,0O of llh-
nois Central stock, purchased at $i75 a
share, the questions which Mr.. Hartman
@AaAAS - A3FF tAS 1o A(AA0
Were the $4,000 shares sold by yourself,
Rogers and Mr.. Stillman pooled?'
Was it acquired for the purpose of SELL
ing it to the Union Pacific?"
WAS the stock purchased by you at n
lower price than SITS with the inten-t
ton of turning it over to the Union
Ibid you have any interest in the los, 900
shares sold at The same time by Kuhn,
Loeb & Co. to the Union Pacific?"
Were the $4,000 shares acquired by
the same pool for the purpose of selling >
to the Union Paciic?'
On the subject Of the Union Pacific
dividend which was advanced from a rate
Of 6 per cent. to 10 per cent. per annum
on August Is, 1906, with a subsequent rise
n the price Of the stock Mr.. Hartman
to answer the following:
Were you dire ctly or Indirectly inter-
in any stocks that were bought be-
tween July 10 and August II that appre-
ciated?"
did you or any director buy any Union
and Southern Pacific stock in anticipation
Of that dividend?''
In a brief which was filed with the court
yesterday MIR Hartman set forth at length
his contention as to why he should not be
to answer the commissions ques-
He takes the ground that the COM
mission in asking the questions sought to
go beyond the powers conferred upon IL
Congress, and that TO force him to
reply to the questions under the clrcum-
stances would be to deprive him of his