The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-04-08
STOCKHOLDERS
CAN BRING SUIT
Opinion Regarding the Alton
Deal Submitted to Illinois
Governor.
HARTMAN MADE MILLIONS
uoADs LEFT IN HOPELESS
BANKRUPTCY.
HARTMAN MADE MILLIONS


snrinpffeld. H., April Attorney
General Stead. in an opinion submit
ted TO Governor Deneen today, ex-
,,rassos doubt as to whether it is the
rro,.inca Of the state of Illinois to pro-
aeed against +. II. Hartman and his
associates for the alleged manipulation
- the Chicago & Alton railroad prop
critics. If the state should revoke the
,onraufcs' charters the loss would fall
nm the stockholders, the Hartman peo-
Mo already having disposed of a large
nortioD of their holdings. The attor-
nov general concludes, therefore, that
the hest plan would be for the company
i,ee1f 10 seek a remedy for the situa-
,ion or even for one or more stock
holders To act At the same time Mr..
Stead assures the governor that
ebouId he become convinced on fur
fber investigation that the state can
rsTiave the roads condition he will
make the necessary moves at once.
Remedy at Law Exists.
\OrWlt nEtdnNlNG IFS ttAlN lCttotlS d. ~
The wisdom of immediate action, Mr..
s+ead insists there is not the least
goubt but that a civil remedy exists
AGAINST the "finsncieTs who have
wrecked this prosperous railroad COM
many and. at the expense of innocent
sfockbolders and bondhOlders, have
Gathered 20 themselves a harvest of
millions Of dollars.
Attorney General Stead reviews the
testimony given by Hartman recently
Iefore the interstate commerce COM
mission and from the records of the
Illinois railroad and warehouse COM
mission. and the various resolutions,
certificates and documents pertaining
10 the Chicago & Alton Railroad COM
pany the Chicago & Alton Railway
company. and the consolidated COM
psny. all of which figure in the manip-
ulatiOUs.
Amounted to Millions.
Tire profits made out of the Alton
deals by Mt. Hartman and his asso-
GATES are placed by Mr.. Stead at SPA
6iS.6DO.
AS a result of this enormous profit
20 themselves" he declared, tine rail-
ROAD companies are thrown into hope
less bankruptcy
The Indebtedness of the companies,
rs shown by the figures in the opinion,
has been increased a total Of SS0,646. 21S
since they fell into Harriman's hands.
OF this amount, only S22, 500, 000, accord
ing to Harriman's OWL testimony, says
Mir. Stead. was incurred for improve
ments. betterments or extension of the
roads.
over $4,000 900 of this indebted
ness" concludes the opinion, ''Or more
than 20 per cent of the entire indebted
ness. created by this syndicate upon
;he properties of these companies, was
not created i'm furtheTance of any le-
climate purpose for which a railroad
company is or can be good under the
statutes Of the state OF Illinois.
Before Hartman Took Hold.
Mr.. Stead takes up the Alton deal in
sIoat detail. bringing out the fact that
in lSiS the company paid all its operating
expenses and Z per cent dividend on
iJs common and preferred stock and had
Nn.w@ left The COmnauy'S credit was
good and then the syndicate took hold.
purchasing f.I22 shares of preferred and
1921 of common stock. distributed as fol-
lows:
George J. Gould. 5453l shares: E. II.
Hartman. 54.535 shares; Mortimer l.
Schiff 5i535 shares: James Stillman 81
shares taken by others Mr.. Steed dates
the Atoms difficulties from 1899 when
It's new owners ordered the issue of $40
eV000 in per cent bonds for improve
ments OF these bonds So O00. 600 were
subscribed by the new stockholders at 10
cents on the dollar. Of which the syndi-
cate received 81 per cent. Part of the
bonds secured by the syndicate afterward
we're sold at sc. representing large profit
The next move in the series of manipu-
au0nS says Mr.. Stead. was to add Sl2.
ii4.l0 10 the cost and capitalization of the
Toad. This consisted in part of the in
come which the stockholders of the COM
lany i'm former years had been content to
apply to betterment and permanent inn
Wovements. and which by order of the
board of directors had been charged upon
me books of the company to operating ex-
pnses and consisted in part of losses sus-
laned by the stockholders of other COM
Ianies.
Enormous Dividend.
The next step was TO declare a 30 per
cent dividend on May 81. 1900 The divi-
uend on the stock owned by the syndicate
ialu by check TO Kuhn. Loeb * Co.
amounted to Sc, $50 $50, and was charged
upon the books Of the company against
construction expenditure capitalized"
ne syndicate's' profits up 70 this time,
eH told, were S14993.O09. when followed
me lease Of the Chicago q Alton Rail-
tvad company's property to the Chicago
Alton Railway company and the synCi-
IIdte ostensiblv transferred its stock to
luis l. stanton, a dummy. This trans
s S Included the St. Louis. Peoria &
NoFtheTn railway
Louis /. Stanton" then sold to the
Continued on Page 2.