New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-04-05
HARTMAN CASE UP.
LEGAL ASPECTS ARGUED.
Stock Watering, Once Right, Should
Nosc Be Stopped, CraUath Says.
Iron The Tribune Bureau. !

From The Tribune Bureau
washington April 4-The attorneys for z. H.
Hartman appeared to-day before the Interstate
Commerce Commission make their arguments
in support OF Mr. Harriman's railroad transactions
as told in his testimony before the commission IN
New York They argued that the conditions at the
time OF the transactions different from those
~ TO-DAY and one asserted that watering stock
had BEEN in fact aid TO the growth Of the coun-
try The lawyers pointed out that Mr.. Hartman
was only one Of several men who were responsible
for the policies criticised and said that it was I'M
inst IN condemn him alone. They also declared
that the time when watering OF stock should De
permitted had passed. and that there should be
strict regulation OF stock and bond issues coming
strongly in favor OF Governor hughes FuOllc
Utilities bill.
Mr.. Harriman's operations were strictly within
the law his attorneys asserted They declared That
even the Sherman Antitrust law did not prohibit
the requirement of property by purchase, whether
the purchaser was an individual or a corporation.
and asserted their conviction that single indi-
vidual corporation might acquire for instance
all the railways in the United States, provided he
possessed sufficient funds or credit to erect such
purchase without coming within the purview Of the
Sherman law That law. they maintained, merely
prohibited combinations in restraint of trade when
such combinations were effected between railways
or properties owned by several individuals or cor
porations such combination being merely for the
purpose Of restraining trade and augmenting profits
All the afternoon R. S. LOvett and John g. Mill
burn developed this argument, and when an ad-
journment taken until tomorrow MI AlDurn
was engaged in enunciatng a logical basis for his
argument He expects TO close tomorrow. when
counsel for the commission will present the op
posing arguments.
Mr. CRAvATTs ARGUMENT.
Paul D. Crsvath. the representative Of the Harri-
man railroads and Kuhn. Loeb & Co. made the
principal defence OF the Chicago Alton recap
italIzation. spending time IN attempting to
show that. although there had been money
add Of @Ra hVy4 hA v-hic
1893 secured control Of ~ per cent OF the stock the
public had not been compelled to pay increased |
rates.
Mr.. Cravath began his argument by coming out |
for regulation OF stock and bond issues.
cit seems me that any fair minded must |
recognize that under existing conditions the time
has come for stricter regulation of the issuance
Of securities by sem-public corporations said he
Il think that in the Development of American in
dustry such progress could not have been made |
except with the liberal laws governing securities |
This has been OF the utmost importance to the |
railroads Of the country. I am with the strict
laws which exist in England and which are pro-
posed in several states that the great growth of
the country would have been impossible. The So
called vice OF stock watering instead OF being an
injury. has been a real aid. l am inclined to be-
leve now. however. that balancing the advantages
with the evils. there should be regulation OF the
issuance Of stocks and bonds.
There has been a widespread misunderstanding
Of the facts in the various steps in the recapaiza
sion OF the Chicago & Alton. not only among the
3ublic. but possibly among the members Of the
commission II should be borne in mind that while
It is now time regulate the issue Of stocks and
bonds the disqualification of the Chicago Alton
was done in 1893. just after the panic and when
the rapid development OF this country was at its
height These transactions should be viewed in
that light
Mr. Cravath went on to explain the Chicago &
Alton dealings and at the close of his argument
was asked by Commissioner Lane TO give his idea
as 10 how he would have the issuance of stocks
and bonds regulated. Tor a moment he hestated.
saying that big question to answer.
Its up TO you" suggested Mr.. Milburn Mr.
Cravath's associate.
FAVORS UTILITIES BILL
well We have carefully studied Governor
TIughes's Public Utilities BILL said he and I am
authorized By the interests represent to say that
believe in It. One OF the chief features Of that
bill is very strong control Of issues OF stocks
and bonds OF all public utility corporations. I
have recommended modification of the original
BILL which requires the consent Of a public COM
mission for every issue OF stocks and bonds by
every public service corporation. very much
opposed certain features OF the bill which for
/ bade unconditional issue OF stocks and bonds
against franchises. knew that scores Of corpora
lions would be prevented from conducting legal
/ business with such a restriction
Commissioner Lane asked II he thought that the
I, issue. IL a commission should merely see TO