New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-06-15
TO GUST HARTMAN.
NUST GET OUT OF 4LTON.
Joint agreement Declared T0id -
St0ckh0Idcrs May Control.

Chicago. Rock Island & Pacific interests in the
! Chicago Alton have served notice on the
| Hartman holders in the same company of the
! cancellation of the agreement under which joint
control of the Chicago & Alton is held by the
| Rock Island and Union Pacific. The Rock Island
! holds more of the Chicago & Alton stock than
| is owned by the Hartman people, and the for
| mer has sent word to the minority stockholders
! of it's intention 10 oust the Hartman interests
and ask the minority for support in the opera
| ton.
| The relations between the Rock Island and the
| Union Pacific have not been cordial for many
! months, and the fact that majority interest in
| the Chicago & Alton property is held by Rock
! island has suggested to the directors the wis
| dom of taking steps to abrogate the agreement
made in 1904, which to run for ten years,
and by which the two interests acquired control
| of the Alton. the Rock Island securing S14,22O-
| 600 common and S4,470.OO0 preferred. and the
| Harrmans s10,243,1OO preferred this stock to
! be pooled until October. 1914 the odd repre-
! sentative on the board of the Alton 10 alternate
| annually.
It is supposed that when the agreement
made there was cancellation clause in the docu-
ment but it is evident that, irrespective of this
consideration the Rock Island people desire to
cut loose from the Union Pacific. The Chicago
& Alton has outstanding S19,542,S0O common
!
the cancellation will be that the stockholders
| Of the Alton. at special meeting to be held in
| the future. will be asked to vote on the
question of management.
TO ALLOW STOCKHOLDERS TO MANAGE.
A Chicago & Alton official. in speaking about
| this matter Yesterday, said that the abrogation
! Of the agreement which he declared was b.
| mutual consent. simply case where It was
the desire of certain persons TO allow the stock
| holders of the Chicago & Alton TO manage their
own affairs and he further said that this policy
would be to the interest of the stockholders. Ac-
cordng to this there Is TO be change IN
| the policy of the road which. by tho way, has
been managed by the Rock Island officials under
| the joint agreement since last September.
| At the present time B. r Yoakum of the Rock
Island and Of the St. Louis & San Francisco
| Railroad Company, is the chairman OF the Chi
| cago & Alton executive committee Under the
| joint agreement the interests which would
troll for year would have six representatives
! on the board while the other would have five.
| The controlling interest would have the chair
/ man Of the executive committee
1t so happens that at the present time. while
the Rock Island Is In control. it has six repre-
! sentatives in the board Of directors OF the AL
! ton against five so-called Hartman directors.
| AS matter of fact, the recent resignation Of
/ J. B. Forgan. OF Chicago from the Chicago s.
! Alton board. reduced the Hartman representa-
tlon 10 four. In financial circles II is generally
understood that the Rock Island interests hold
| over 10 per cent OF the Chicago & Alton stock,
| while Mr.. Hartman and those associated with
! him hold about - per cent.
! MORE THAN LIKELY TO BE a CONTEST.
! 4 prominent stockholder Of the Alton said
The result of the cancellation Of the contract
will be that the stockholders will be requested
ment they now wish the railroad to remain If
there should be a contest for control the decision
/ would lie with the stockholders who have no al
! lance with either party. That there will he
! such a contest think quite likely. The Rock
! Island people fear such contest as they
believe that their economical management of
! the property during the fiscal year past as COM
! pared with the previous year, when the property
was managed by the Hartman interests. Will
! guarantee the support by disinterested stock
| holders of the Rock Island party.
/ Chicago &, Alton officials explained that it
was sinply an instance Of letting stockholders
manage their own affairs. 1t felt that this
! nolicy would best subserve their interests
! There Is to be no change in the pohcy Oh 'ile
| road. according TO these officials
II will be recalled that during the investga-
! tjou conducted by the Interstate Commerce
| Commission in this city last February some
| testimony
| ING the management of the Chicago & Alton
! nronertv while 1t was in the hands of Hartman
According TO his testimony before the commits
| ,op Mr. Hartman first became interested ia
| the road In 1899 and was It's president for about
! q wear as well as chairman of the board Of
| directors and the executive committee lie tes-
| tilted that he remained chairman of the eXecu-
| tive committee and the board until October 1906.
| having charge Of the financial operations. ana
that during that time he placed a mortgage or
| $40 0OO. 900 the property
BOUGHT AT 65; SOLD AT 96.
Tho commission brought out the fact tina.
| s32 900 900 Of bonds were sold to stockholders
| At g. and tat these stockholders were F. II.
| Hartman. Mortimer Schif. George ]. Gould
and James Stilman, and that s10.000,000 Of
| these bonds were subsequently sold at 96 to
| life insurance companies.
II was at this point in the investigation that
| Mr. Hartman refused to answer the question
| put by the commission as to whether when
| president of the Chicago & Alton and a MEM
| ber of the committee which determined at what
| price the stock would be bought he owned
! any of the stock which the Union Pacific had
purchased He also declined to say what profit
| had been made by the sale of the bonds. and
| when asked If 1t was $2O00O00 replied that he
| did not remember. but that little matter of
| S2oOOOOO did not amount to much one way or
| the other
The commission is still considering whether II
| will compel Mr.. Hartman to answer these and
| other questions egarding his management OF
| the road.
A severe criticism of the Hartman manage
| ment has been made. however. by the commits
sions counsel and by Attorney General Stead
IofI Tba lar in tn he