The Washington herald., 1907-02-27

view OF the increased earnings we had
estimated we ought not TO consider the
question of a dividend until we had the
actual figures; that the estimates for the
earnings Of the Southern Pacific were so
surprising that / thought we should wait
until we got the accurate figures, 90 as TO
be sure that our statements were correct,
and that If they were found to be correct
we should increase the dividend on the
Union Pacific materially. / said that l
would bring the matter up again at the
august meeting. and in the meantime l
would Ike them all TO be considering the
question and informing themselves on the
subject"
Hartman said that at the August meet
Ing they did not even then have the ac-
tuai figures. but that the figures were APP
proximate enough When the figures
were presented the Southern Pacific board
of directors declared dividend of 2ib per
cent IS per cent OF which went to the
Union Pacific. At the Union Pacific meet
ing Immediately after this. Hartman said
that he had stated that the Southern Pa
cific dividend would have TO be added to
the figures presented. Then, he said,
came the declaration Of the per cent
Union Pacific dividend and the discussion
.of the method of charging.
Cause Of Divers Delays.
cor course, it must have been intended
to charge this from some other than the
usual way" he said, otherwise they
would not have referred this matter to the
executive committee. Now the board Of
directors had that fun month in which 10
consider the question. The executive COM
mittee met the next day at O'Clock. The
ordinary time would have been at go Ia
the morning. That was their regular day
for meeting, but because Of my having TO
go to the funeral of "A very old friend of
mine. the meeting was deferred until after
got back. and we did not get together
until ? o'clock in the afternoon Now.
then, IL was after o'clock. also. we had
communicated. or, ! had communicated.
particularly with one Of the executive
did not want 10 take any action until at
least he might be heard from.
1T got 10 be after o'clock in New
York. and il was then a question Of
whether IL was advisable TO announce
that dividend at once and have il come
out in London before il did in New York
or 10 give the New York market the adj
vantage OF II. we discussed that in the
executive committee. and IL was decided
best 10 have the announcement made in
New York before IL was made in London"
The three directors present at this meet
ing were Hartman, Lovett, and Stlllman
Marvin Hugbitt. Hartman. said. was the
director he lad communicated with He
said he wanted to hear from him par
ticularly. but that he did not explain why.
Explaining why the action was taken
with so many away Hartman said, We
had a fun board in July. They were all
notified that it was expected we would
increase our dividends materially, and If
they did not come 10 the August meeting
il was their own fault"
Hartman Would Not say.
Some Of the directors. he said. were of
on yachting trips lie himself took a
yacht after the meeting. after leaving
directions, upon comforting with the other
members. that the announcement should
be made the next morning 1t was not
made until some minutes after the stock
/ exchange opened.
Were there any heavy speculations.
asked Commissioner Lane. "in that stock
TO your knowledge in the intervening
days between the 18th o. August and the
date in July when the notification was
given that there should be such a divi-
dend?"
Hartman said that there hadn't been
any. 10 his knowledge
He was asked If he knew of any COM
/ bination who were interested and had
bought heavily OF the stock In that in
terval. He said that he did not. that
many people had been holding their stock
for "A long time.
.rar.
sertatiOn on the railroads had been lis
tened 10 by a crowd that packed The
courtroom. and there was q great deal Of
discussion when he got through He had
taken so long that the attorneys for the
government could not finish his examina-
ton. and he viii go on the stand again
tomorrow. though he pleaded hard for
q rest.
After him. Otto Kahn Of Kuhn. Loeb &
Co, Will be called.
Morning Session.
OF the commission, only Chairman
Knapp and Commissioners Clements and
Lane were present when the hearing be
gan this morning.
Mr. Hartman took the stand at 1912
o'clock.
Commissioner Prouty attended later.
Hartman as Buyer and Seller.
The witness conceded. in answer TO Mr.
Kellogg's questions, that Jacob Schiff.
George J. Gould. James Stillman, and
himself were the principal stockholders Of
the Laclede Construction Company, which
owned the stock of the St Louis. Peoria
and Northern Railroad Company, which
was sold to the Chicago and Alton for
50 0o0 900 at the time the Chicago and Alton
Railroad was recognized into the Chicago
and Alton Railway Company. Mr.. Harrl-
man said that he had probably fixed the
price both for the seller and the pUr-
chaser. But Mr.. Hartman remarked that
ne and his friends had owned all the stock
Of both the vender and the purchaser
companies
A1r Kellogg dwelt upon the big Increase
in fixed charges which the reorganization
Of the railroad had forced upon the Alton
property. and he asked Dir. Hartman if,
in the reorganization. there had been any
provision made for the payment of divi-
dends on the S19O00.000 of common stock
which had been issued to the public. He
wanted to know il Hartman thought it
right to issue TO the public stock on which
dividends could never be paid.
WAS any assurance ever given the
public" demanded Mr.. Hartman, that
dividends would ever be paid on Alton
common
Then you think" asked Mr.. Kellogg.
that the public ought to take care Of
itself in buying stocks?"
Not Like the Union Pacific Rates.
Then remarked Mr.. Kellogg. with a
sneer in his voice, "the rates on the Alton
seem 10 have acted very differently from
rates on the Union Pacific"
The rates on the Union Pacific have
nothing to DO with the matter" snapped
in,