New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-02-28
G. II. KAHN TESTIFIES.
HARTMAN QUITS STAND.
Part Played By Kahn, Loeb 6 Co.
IN T.. p. ReOrganizqtiOn.

Following Edward II. Hartman into tho wit
ness chair early in the morning session, Otto
n. Kahn, Of the firm Of Kuhn, Loeb & Co.. was
the chief witness before the Interstate Com
merce Commission yesterday He Wit
ness nearly all day, testifying a former di-
rector OF the Union Pacific and also mem
Der Of the banking firm. which had acted IS the
fiscal agent for Mr. Hartman in many Of his
railroad deals.
Mr.. Kahn followed the example OF Mr.. Harr1-
man in refusing to tell if directors of the Union
Pacific sold stock OF the Chicago & Alton which
they owned individually TO the Union Pacific
He also refused to tell if any Union Pacific di-
rectors sold through Kuhn. Loeb & Co to the
Union Pacific stock OF the Illinois Central which
they owned Mr.. Kahn based his refusal on thu
ground that he could not divulge the private
transactions of clients of his banking house.
Mr.. Hartman. in finishing his testimony az
the morning session. declined to answer several
questions relating 10 his individual stock trans
actions. following the advice OF counsel that the
commission had power to inquire into such
transactions. The rulings. both as to Mr.. Harri-
and Mr.. Kahn, that the questions should
he answered, left a way open for proceedings to
punish the witnesses for contempt OF court, but
Frank p kellogg. OF counsel for the government
would not say last evening II the courts would
be asked to pass on the question in either case
The impression conveyed by the attitude of the
commission that the refusal TO answer Ques-
tions would be ignored II the information de-
sired could be obtained from other witnesses In
that connection it was said last evening by Mr.
Kellogg that the commission did not intend to
call George J. Gould as witness. Mr. Gould
was a member Of Mr.. Harrimans syndicate that
reorganized the Chicago & Alton
Mr.. Kahn as witness contradicted Mr HarTf-
to fixing the price OF Chicago & Alton
stock. which sold TO the Union Pacific az
S6la IN 1904. MI Hartman had testified that
the price fixed by committee consisting OF
himself. John a Stewart and John J. Mitchell
MFR. Hartman had nothing to do with fixing
that price" Mr.. Kahn said and he was mis-
taken yesterday when he said that"
In the course OF his testimony Mr. Kahn
serted that Kuhn. Loeb & Co. had turned over
to the Union Pacific stock of the Northern Pa
cific in the spring OF 1901 which the firm had
been buying up gradually. and that Mr.. Harri-
man allowed to get the stock for the Union
Pacific at the price the bankers had paid for IL,
plus a small commission, because Of the firms
feeling of loyalty To the railroad company it had
helped to reOrganize-
We were rather distressed. because would
much rather have kept the stock" Mr.. Kahn
said. and when asked IL the firm had survived
the distress he said. calmly: We survived IL
and let profit OF S63,O0OOOo go to the Union
Pacific out of those transactions"
In the sale Of a controlling block OF Illinois
Central stock to the Union Pacific at 1I5. Mr..
Kahn said his banking house had sacrificed n
large profit, as there was reason TO believe that
the firm could have obtained 5000 share for the
stock from another person. He would not tell
the name Of the person who was supposed to be
willing to pay that price for control OF Illinois
Central
Mr. Kahn was asked why he h~d sought. as
a director OF the Union Pacific. TO acquire tbs
control Of competing line in violation OF law,
the sale Of the Northern Pacific stock to the
Union Pacific being made after the Northern
Pacific and Great Northern had acquired control
Of the Burlington. He replied that he
banker. not lawyer. and he did not understand
that the Union Pacific and Northern Pacific weFs
competing lines.
After NJ. Kahn had finished his testimony the
commission heard TWO directors of the Rock ISL
and. who said that the joint ownership OF tha
Chicago & Alton had not been Of particular BEN
EFT 10 either the Rock Island or the Union Pa
cifc. Controller FiIIard. of the Chicago & AL
ton. testified that it was discovered recently
that small branch Of the road had been left
uncompeted. but covered by mortgage at the
time IF the Chicago & Alton reorganization. As
Mr.. Kellogg put it. the branch road had been
moctE ged before it was constructed. Mr. Hill
iarG said, after leaving the stand for the day.
that funds to complete the road had been pro-
videc He Will continue testify to-day.