The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-07-14
of the Union Pacific and the Rock Island
over the Chicago and Alton
MANIPULATION or THE ALTON.

"
10 treated at great length. No new light
is thrown on this particular transaction.
The report refers to the Alton deal as in
defensibie financing, BY way OF justi-
are told that the methods Of the financing
OF railroads which prevailed In the year
1900 are now obsolete, owing to a higher
degree OF cons-cicntiousness among Imam
ciers; and, moreover, that the Chicago
and Alton should not be regarded as an
isolated instance. inasmuch as IL was dealt
with much as many othor roads were at
that period. The first OF these statements
il. we trust, true; the latter statement is
not calculated to uphold the value OF Ameri-
can railroad securities"
Kuhn. Loeb a Co.'S connection with the
Alton deal is referred to as follows:
incidentally IL may be observed that the
bankers who manage these operations appear
TO he richly rewarded. The testimony shows
that Kuhn. Loeb & Co. received s per cent 4,
or s., o0O. 900, on the issue Of 500. 600. 900 Of
Union Pacific convertible bonds. one-half
of which was retained by them and the other
half given to the syndicate to whom the
bonds we're sold. On the ESQ. 900 shares Of
Southern Pacific which. the Union Pacific
purchased at S5O.eI per share the same bank
ing house received a commission Of $3.50 a
share. They received a like commission Of
$3.50 per share on the Chicago and Alton
stock sold to the Union Pacific at $50 so per
share, 1t In significant that q member OF this
firm refused to disclose the extent OF its
interest In these securities,
OF n COMMISSION.
The conclusions OF the commission are as
follows:
The effect of the control Of the Southern
Pacific by the Union Pacific has been to unity
go ran.o~ oornnaniss ora ,ha;r .,aanshIn
,... oII.at~at. oanas,,,;.n ha,waap
49, a. raD.onntinantsl bnsinsss md An hnsi-
TO-. 80 "a - oriaD,aI go
Tha Irnion poc,ec as has hssn sboun nm
,-aia,h. g. psSra os Inaslas "a sai, ~.
pa,I,oad The stoct ~ Witch "a dsnos,tad IN
- 49,. ., a trns,sa This H. nas 80
Iii, ;n,..d.d ~ On irdananaan, road q
tanJ,na ,,on, sa,, I.La vhsre 4, connsc,
'ri.n 81. i%n;nn pao;eo ond .I,h ,ha Danr.r
49, ptnc..nda - ngai.. and o. padro
g. IT, &. ,hora,o,. ~ cor,na,,ion
49,. H. 49,. ,ha r-aion paa;ao "a
So,,Se., p.a,oa
az. r,,u, p.o,oo
enat ."o ,ho n h, n
T.noa va So. ia paitnan Car,naa"
son' -, 90 . 900 ~, IA
-II,a 1900 LEI ,ha yrnion p.a,eo
aiartn,. .o 40 ooo ~, suha,an,ian" =, nasonn,
80, s,sn,' 80" So. "a -
W. ~ ,his 800 outa;da =, ,ha
s s" a. ooo ~. unn.o Saotinod % go
,.o'OOI.ooo ~ ~ Trnton paniSo 80 -
n.so ~ ~. s.n,o "a "omnan, "a 49,
.av a;rtIoa - ar ortantaI 80 an b., ~.
~ ~ s.on ca.enasu ha.a..o ~
NE - ,wl 800 81 ".."sa
-"s I
,~.t. - -. aS,,.in C.iirssaI.
% - - e.. 80. ..L... an..n"
Nil'eo.S ~
.ITnI I'd 80 49, a.. 80. INtSsS
- 49, ..s rH..
hlu utlAlkhulhtru JHClI tlItICbtb III NNc NOINu-
1871. -. .ngnaa TT. -.
~ ou,. .Ao Souxu
Pacific nv the Union Pacific the Denver and
Rio Grande system extending. from Denver.
where. II. connects With various lines TO the
east. to Salt Lake and Ogden. was gwen equal
facahties over tne ,ehura, racine ahu .hereov
practically formed enother transoontnentai
llne. since the amatgamauon OF the Union
facnc anu oouthern racine anu tne con
structioh y 'he oah ieuio y IA .niS NV nns
been denied euuai IacIues IN the rece'pt
nho LrahSportauoh OF 'tefRh' over the 'entra
Pacinc and the san redro hnes, its business
therefore,, has decreased. ana It's anlity TO
compete WIN the mon racine ana southern
Pacinc impaired on TINS account the uoulo
hnes are aiuinu the construction Oh ahother
hne IRON Ogden 10 san Francisco.
Inc JOINT controi OF the AitOh hFiiwhy oy
the Union Paclfc ana the chicago, ROCK
Island and Pacinc Halfway Company has un-
douotedly eliminated competition between
the Alton ana the ROCK Island between Chi-
cago, ~ Louis ana Kansas Oity'
These are CONSPICUOUS illustrations OF the
development OF the theory OF community
OF interest ana harmony OF MANAGEMENT
which Mr.. Hartman suggested when ne de-
mHnded representation upon the santa re
board.
III the policy OF purchasing and controlling
stocks in competing lines Ia permitted TO CON
tinue. II must mean suppression OF compe-
tition.
RECOMMENDATIONS.
puoum.,d.,ion q, a.n.-ol mellow ors
1900 az goii"ws, ~ "
~ Inc iunotion OF a raiiroad corporation
should De conhned 10 me furnishing Oh trans,
portation' hailroaus Snouiu not De permitteu
10 invest Reheraiy IN Ihe s.ocAs: pohus sno
securities OF other railway ana Oh s'eanhsnIp
companies. except connecting hhes' o lhe
PURPOSE OIL FORMING tnrousn routes o, Trans
poftation' incluuins utuhches ana ieeucrs'
II ~ III the ihteres, Oh the puDnc 10 iaci"saVe
the concentration OF CONNECTING hhes; Inc
creolt On a Runway company !" ,ounoeu upon
Ine tssources aho pr"Speits V, y country
UHfOAkD WHICH IL runs. Us WI pluh luUuH anu