The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1907-05-15
HARTMAN MEN NOW FACE
JAIL AND BIG FINES
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Continued from First Page)
All the huge financial transactions have
been made by him and later approved
by his dummy directors
Clark and the San Pedro.
The commissions report tells the
story of Senator CIarlO's effort TO build
and operate the San Pedro road as an
independent line. lac was well on the
way to comp elton of his line when
Hartman blocked him. Part of the
right-of-way which Clark was using
consisted of a route through a canyon
about sixty miles long, in Nevada,
known as Meadow Valley wash This
route had once been owned by the Ore
gon Short Line, but had been relin-
quished many years before. When
Clark was ready TO build through the
canyon the Oregon Short Line revived
its claim. started litigation, began build
ing road through the pass, and
threatened Clark that. If he constructed
his line, IL would parallel every mile of
II, and having all the connections for
handling through business, would make
his road absolutely profiuess.
Clark finally surrendered. and entered
into the contract with the Hartman
system by which the latter secured half
the stock OF the San Pedro road and
absolute domination in all traffic mat
ters. Since the investigation, an
nOuncement has been made that the
Union Pacific has bought the other half
OF the stock, and now owns absolutely
the whole road
Clark Weaker Than Hartman.
Thus was killed the last attempt 10
secure competition in this great region.
Clark is reputed the second richest man
IN the world, and he felt that he mad
a grievance against the Southern PACT
tc because of the high rates charged
him on the ores from his copper mines.
But even his great wealth was not
enough TO enable him 10 fight the Har-
riman system. Ii was the end of COM
petition throughout that area. The
Santa Fe was brought into subsection,
Hartman and his associates buying
stock in it till they were able TO force
two of the Union directors. Henry 9
Prick, and H II. Rogers, on the Santa
te directory. Some time afterward the
Southern Pacific and UniCn Pacific, each
owning some minor pieces of road north
OF san Francisco, planned TO develop
these into more important routes, ami
10 connect them up into important lines
along the northern California coast.
Violation of Antitrust Act.
AS they would have been competitors.
an arrangement was completed by
which the Northwestern Pacific road
was organized. took over all these minor
lines, and undertook 10 develop them
into single system, which should DC
jointly owned by the Santa Fe and the
Southern Pacific. each holding control
for d year at a time in alienation. This
Is exactly the plan under which the
Union Pacifc and Rock Island jointly
control the Alton. and the commission
hnds that In both II IS in violation Of
the antitrust act, and recommends that
the attorney general Or, coed against il.
Remarkable Stock Watering.
The famous hnancial-irrigation project
in Chicago and Alton receives more at
tention IN the text Of the report than
any other one matter II is declared
''the most remarkable story of manipu-
lation and stock watering" The men
who are charged with il are T. II. Harri-
man, Mortimer II. SChifT. as representa-
tive Of Jacob II. Schin; James Still
man and George J. Gould. When they
bought up The shares OF Alton Il had
a complete capitalization Of $33. 800, 900
stocks, bonds, and floating debts In
seven y,ars th-y increased this 10 Sll4-
| 100000. and in that time they spent only
Sl6,O0O,O00 in betterments and extensions.
In other words, the report says, they
added $4,000 per mile 10 its capitalize
! ton without "One dollar of COnSidera-
ton"
Utterly Unjustifable Transaction.
The story Of how this was done is
told in detail, but for the first time In
understandable fashion. II has been re-
peatedly outlined in the newspaper re-
ports of the hearings several weeks ago.
! Some Snarp accusations are made against
| Hartman Ii Is declared that to make
an excuse sOr borrowing money to nay
1 a dividend OF nearly $4,000 TO the new
stockholders Mr. Hartman caused the
! books TO be altered and over $4,000 900
10 be credited TO construction and i'm
prOvements unexplained d" 1t IS ex-
plalned by the report that all this money
mad been spent in previous years. ap-
| proprlated BY the directors, and that
TINS accounting was utterly unjustified.
I The commission Is not able to estimate
/ how many millions the reOrganizinR
/ syndicate made out Of their substitution
OF the big for the smaller issue but
its analysis indicates that II was a ire
mendously profitable transaction.
How Union Pacific Invests.
The investment by the Union Pacific
Of over Sls2. 10000 in the securities of
other railroads is analysed in detail.
and t-ble IS given, showing IN what
roads Union Pacific money has been
invested Since June 30. 1906. these pur-
chases are stated at $l32. O0O,O 900, consist
ing in the main of 100000 Of Santa
Fe, over $4,000 600 Of Baltimore and
Ohio, over 100000 Of Chicago Nil
waulee and ST. Paul. LOCO. 900 of MI
nois Central, 100000 of Chicago and
Northwestern, $20,000,O00 Of New York
Central. and 100000 Of ST, Joseph and
Grand Island. The Union Pacific is
shown to hold, besides complete control
of the Southern Pacific, p per cent of
the common and u per cent Of the pre-
terred in the Baltimore and Ohio. %
per cent in Illinois Central, nearly 8
per cent of Santa F'e. over per cent OF
Chicago, Milwaukee and St Paul S
per cent Of New York Central. and con-
troll Of st. Joseph and Grand Island.
II owns practically all bonds and stocks
Of the Oregon Short Line, and all the
stock Of the San Pedro road. amounting
10 S25,0OO,O00. 1t holds, in addition to an
this, about 600 worth Of securities
of the Hill system, and has sold
Sll6.00O.OO0 worth of Hill road securities
which were purchased a number of
years ago.
Prior to the Union Paclfcs acquisi-
ton Of a big interest in the Santa Fe.
the latter system operated line OF
steamships from San Diego to the far