The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-03-01

into Harrimau's operations to-day.
There viii be a conference held in
Washington in a few days TO decide
whether or not the Supreme Court viii
be asked to compel Hartman 70 answer
some Of the questions which he refused
to answer on the stand.
Chairman Knapp, Of tire commission.
stated to-day that the inference from the
testimony seemed pretty plain that Har-
riman did own some Of the stock which
he sold to his own railroad company. and
it may not be deemed important enough.
in view of what the testimony shows. to
lay the matter before the courts
To Confer About Bringing salt.
Although the commission would not in
dicate its action in advance. it is pretty
we'll known that the evidence taken is TO
be laid before the attorney general, and
if it is decided that the antitrust law
has been violated the matter Will be
taken to the courts TO dissolve Harri-
mans combination Of alleged competing
railroads. The government attorneys
feel. it is said. that the Northern Securi-
ties decision pretty well covers the Union
Pacifc's stock ownership in the Southern
Pacific. and also the Clarke road in Cali
fOrnia and that the joint control of the
Alton by the Rock Island and Union Pa
cific. which was brought out in evidence
for The first time in this Inquiry. VIII aisl
be held TO be p violation Of the law.
Got So, 3,824. 900 Out Of Alton.
Just before the conclusion Of the hear
ing here this morning. the commission
tried to get from Mr Hniard. the comp
tTollcr Of the Alton under the Rock ISL
and management an idea OF the profits
AIr. Hartman and the syndicate had
made out of the Alton. Mr. Hilard
could not give the figures. but the law
yers for the commission said that an esti-
mate could eventually be made up FROM
the testimony taken and this viii be
done 1t was found out later that this
pioEt amounted roughly 90 sz36515-u
This would include abeUt SS0)J.59 esti-
mated to have been made on the issue
Cf S5zO)9.oo0 first mortgage bonds. $780,
600 paid as au extra 80 per cent dividend.
4 profit Of about s. 10000 ou the So G0.9D
second mortgage bonds. and q profit of
s, 055,000 paid for the syndicate's preferred
stock in cash The profit on the 6tty-
eiEfst-Inile railroad turned into the Alton
for 100000. was estimated AZ SL590,Un
which would bring the estimated profits
of the syndicate up 10 S-3.62tG73-
Believe Bond Issue Illegal.
Il was brought out in the testimony to-
day that there is "a section Of the consti-
tuition Of Illinois which migh- be con-
strued so as to invaIidate the S32.o91050
bond issue. though this, il was pointed
out, was a case for the State courts 20
decide, the Alton being an Illinois corpo-
ration. Hilard, the comptroller. now ia
charge. said that be had been advised by
counsel that this bond issue was illegal
and when Judge Lloyett, OF the Harri-
man counsel, sought 10 weaken the ef-
feet of his testimony, Commissioner Har-
Ian read the section Of the constitution.
This section reads:
NO railroad corpora ton shall issue any
stock or bonds except for money. labor,
or property actually received and applied
10 the purposes for which such corpora
ton was created. and all stock dividends
and other fictitious increases of the CAPT
tai stock or Indebtedness of any such
corporation shall be void.
Bonds Sold to Pay Dividend.
Judge Loyett had tried to set Hulard
to say that the extra dividend voted by
the syndicate to themselves was the same
as stock dividend. Commissioner Har-
Ian said that. in view Of the statute he
doubted whether this would apply in this
case
Il think the validity OF those bonds
could be attacked he said later
These bonds were sold virtually 10 pay
this 80 per cent dividend aud SN697oCo
interest charges due on maturing coupons
OF the bonds, whose validity was quesl
toned to-day, the New York Life bought
600 for 80. and tie Equitable Sl-55o
COQ-l million at y. and the rest at 81.
These bonds were issued By the syndicate
to themselves as the stockholders at o.
Hartman Ran the Finances.
HfUard. put in as comptroller of the
Alton by the Rock Island interests.
proved to be the most hostile witness the
Hartman people have yet had to contend
with. Before he resumed his testimony
at the last session held by the commits
sion this morning. President FELTON, was
put on the stand to explain Harriman's
statement that he and his associates had
spent So OCT. 900 for improvements. FELTON,
was president of the whole Hartman
controlled road. and has been retained
by the Rock Island people. but ne testi-
fed that he had charge only Of operation.
and that i'm the Hartman regime HaT-
riman ran the finances.
1t was brought out that of the s.. .9o0,C0).
about s. Ol6.000 We're car-trust certificates.
which should really be deducted and
added TO the So, ,S72 52S obligations of the
road loaned by the Hartman crowd.
President FELTON, admitted that he had
made up the statement at Hartmann
request just before the inquiry.
How Proceeds Were Divided.
There was more testimony brought out
about that 30 per cent extra dividend
when Hillard was put on the stand. Hill
! lard. who had been over the books for
| the Rock Island interests TO find a way
to raise money to build the railroad that
had been bonded before IL was built by
/ the Hartman people. said that the books
showed that of the s2O.S32. 40 received as
result of the sale Of So, ,000.0o0 first mort
gage per cent bonds by the syndicate
CONTINUED on FIFTH PAGE