The Fairmont West Virginian. (Fairmont, W. Va.) 1904-1914, 1907-03-02
BIG PROFIT IN
HIGH FINANCE

utUlI FlIlHlSUE
THE HARTMAN SYNDICATE MADE
s2s,624. ooo-coURTs MAY TAKE
\ A tiAND-THiRTy PER CENT.
DIVIDEND PROBABLY ILLEGAL.
NEW YORK, March 1.-The inter.
state commerce commission has I'm.
iahsd It's inquiry into Mr.. Harriman,s
operations. There viii be d confer
ence held In Washington in d few
days TO decide whether OF not the sn..
preme Court vii be asked to compel
Mr.. Hartman to answer some Of the
questions which he refused 10 answer
on the stand. Chairman Knapp, Of the
commission. stated today that the in.
ference from the testimony seemed to
be pretty plain that Mr.. Hartman did
own some Of The stock which he had
sold to his own railroad company, and
II may not be deemed Important
enough, IN view Of what the test
mony shows, 70 lay the matter before
the courts.
Although the commission would not
indicate its action in advance. 1t Is
pretty wei known that the evidence
taken Is TO be laid before the attorney
genral, and H. 1T Is decided that the
Antitrust law has been violated ap.
parently the matter will; then be TAX.
en- to the courts to dissolve Mr., Har-
r!man's combination OF alleged com
peting railroads The government at
torneys feel, II is said that the North.
ern Securities decision pretty wen coy
ers the Union Pacific's stock owner
ship in the Southern Pacific and also
the Clarke road, in California, and that
the Joint control of the Alton by the
Rock Island and Union Pacific, which
was brought out In evidence for the
first time in this inquiry. will also be
held to be a violation OF the law. Z.
syndieate,s Big Profits,
Just before the conclusion of the
hearing here the commission tried u.
Iget from Mr.. Hillard, the comptroller
of the Alton under the Rock Island
management, an idea or the profits
Mr.. 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
estimate could eventually be made up.
lon the testimony taken, and this will
be done. 1t was found out later that
this profit amounted roughly to $685.:
624, 900 This would include about
Ss.ooo,o0o, estimated to have been
made out of the issue of ss2, 100000
mortgage bonds. 50, sGs, GOO paid as an
extra 30S per cent dividend, a. profit
of about s4,4Oo, 900 on the $50, 100000
second mortgage bonds and profit
of ss,o55.00o paid for the syndicate's
preferred stock in cash. The profit on
the 5s mile railroad turned into the
Alton for 100000 was estimated at
500 900, which wonld bring the es.
timated profits of the syndicate up to
S2S, 624 900. IA 8 8
so Per Cent. Dividend Illegal. Y
1t was brought out, III the testimony
today that there is section OF the
Constitution of Illinois which might
be construed so as to invaiidate the
ss2, ooo. COO bond issue, though this, it
was pointed out, was q case for the
4 State courts to decide. the Alton be-
ling an Illinois corporation. Mr.. Hill
lard. the comptroller now In charge,
said that he had ben advised by coun-
sci that this bond issue was illegal,
and when Judge Lovett, OF the Harri-
man counsel, sought to weaken the ef.
feet Of his testimony. Commissioner
Harlan read the section of the con-
stiution. This section read: mo
railroad corporation shall issue any
stock or bonds except for money. labor
or property actually received and ap-
piled to the purposes for which such
corporation was created, and all stock
dividends and other fictitious increas-
es OF the capital stock or Indebtedness
of any such corporation shall be void"
Judge Loyett had tried to get Mr..
Hlllard to say that the extra dividend
voted by the syndicate to themselves
was the same as stock dividend.
Commissioner Harlan said that, in
view of The statute, he doubted wheth.
er this would apply in this case.
81 think the validity Of those bonds
could be attacked" he said later.
These bonds were sold virtually to
pay this so per cent! dividend and ST.
COZ 900 interest charges due on matur.
ing coupons. OF the bonds. whose val
tidity was questioned to-day, the New
York Life bought s1oooo,ooo for se