The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1907-02-28
Master Of Union Pacific Con-
cIudss Testimony Be-
fore Commission
CONTROLLER HILL|ARO OF
ALTON IS NOW ON STAND
Says the Road Was Mortgaeed Before
1t Was Buit-All Bonds Were
Gone-Member of Kuhn G.
Loeb Is Called.

| New York, February 27.-Counsel for the
government renewed their attack upon
| the financial methods of the Hartman
| group in the Chicago and Alton railroad
| before the interstate commerce commits
| sion late this afternoon when they called
| Charles Hilliard, controller of the road,
| as a witness. Under examination by
Frank B. Kellogg, Hilliard testified that
| he became controller in October last,
when under the joint arrangement for
the management of the property, the
Rock Island took it's turn. Hiliard said
| that his first task was to find money
to carry on the improvements that were
| under way. There was money in the
treasury for current expenses but not
enough to carry on the improvements,
which included cutoff of 34l2 miles of
| road from a point near Murrayville to
Springfield. There was not enough money
to complete the building of this line,
| said the witness.
II looked into the question of rails
ing money by mortgage" he continued.
land l discovered that 1 had already
been mortgaged'
do [ understand that this road had
been mortgaged before it was built
| asked Commissioner Lane.
Eyes, / was told that it was covered
by the mortgage of 1900. and there was
nothing more that could be done, except
TO put a second mortgage on It, which
would- have been poor security" said
Hnliard.
Mr.. Kellogg then read the mortgage to
show the line had been covered by it,
| and resuming, the witness said:
'All the bonds were gone. l found from
the books that the thirteen million doi-
lars had never been paid for the bonds.
that the ten million dollars had never
been paid to Stanton for the stock; that
the three million dollars had never been
paid to Stanton for the road, but that the
twenty-five million in Londs had been
turned over to the syndicate who de-
lvered the stock, and the road through
the intermediary Mr.. Stanton"
HilIiard Up Today.
The commission wanted to know what
the books showed had been actually ex-
pended in connection with the handling
of the property, but while the witness
was searching for the records the ses-
sion was adjourned until tomorrow.
Controller Hilliard will be recalled to-
morrow morning. and it is expected the
hearing of the commission will be con-
cluded about midday.
Edward II. Hartman concluded his tes-
timony at the morning session and his
examination brought forth nothing of
al m succeeded
on the stand by Otto II. Kahn, one of
the leading members of the firm of Kuhn.
Loeb & Co., which has financed many
of the important deals of the Hartman
party and former director of the Union
Pacific. There was special inquiry as
to the commissions paid to the firm of
Kuhn, Loeb & Co.. and the inter-relations
of the firm, the witness. and Mr.. Jacob
Schff with the Union Pacific. The wit
ness spiritedly defended the acts of his
firm and cited instances where it has
sold stocks to the Union Pacific at fig
ure below the current market.
Before leaving the stand Mr.. Kahn
made an extended defense of the Alton
transaction. based on the methods and
conditions of the time.
Hartman Ends Testimony.
Edward II. Hartman, who has been a
witness before the interstate commerce
commission in its examination into the
| financial operations of the railroads of
| which Hartman is the head. took the
stand again at 10 clock this morning. He
will be succeeded in the witness chair by
| Otto II. Kahn of Kuhn, Loeb & Co. Ii
| is said that George j. Gould will also
| be a witness.
Mr.. Harriman's attack on Stuyvesant
| Fish. who was ousted recently from the j
presidency of the Illinois Central rail-
| road has caused a sensation. Mr.. Fish
i H. tot. nafaf IN af,lz
and it is considered possible that if he
! does make one he will make it on the
| witness stand before the commission.
| Mr. Hartman, In answer to Mr.. Kel-
| logg's first question this morning. testi-
| fed that the Union Pacific had purchased
the st. Joe and Grand Island since last
| year. The price paid was S2,O22eo. and
the witness had owned the property and
| sold it to the Union Pacific.
Objection made TO questions as to
when he bought the stock of the st. Joe
| and Grand Island and what he paid for
| it. and the witness declined to answer.
| The commission ruled that he must an
| swer, and there was the usual formal
| refusal.
The witness said the st. Joe and Grand
Island was not a parallel and compet-
| ing line.
In Open Market.
Mr.. Kellogg asked of whom the New
York Central stocks acquired by the
Union Pacific We're bought Mr.. Harri-
man said they We're bought in the open
market.
Were you or any of your associates
interested in the sale at the time of the
Union Pacific purchaser" pursued Mr..
Kellogg.
Mr.. Milburn objected and Mr.. Harri-
man declined to answer.
Mr.. Kellogg asked the witness If it wa
not fact that Of the s22.000.001 said to
have been spent on the Chicago and AL
ton. $4,000 was made up of car trust
certificates and s1.000000 loan from
Kuhn, Loeb & Co, so that the expendI-
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