The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-02-26

non mad any bearing on the question of
interstate commerce. He said the com
mission had great powers. but there was
unit, and he thought it was to the
tenterest OF the commission properly to de-
fine its powers.
Declined to Answer.
Chairman Knapp said the suggestion of
~. Mlloufn seemed to draw a distinction
oet~een the transaction of the company
and the action of its officials and asked
II this could be called the transactio7, Of
an individual
There was an extended discussion of
the question and it was stated tdat the
COMMISSION would confer and announce
It's decision later. At the afternoon ses-
SION the question was renewed in another
FORM ana the commission decided that it
had right to make the inquiry Obiec-
Jlon was noted in the record. and the wit
ness formally declined to make answer.
Inc eXaminf>ion of the entire Alton
transaction then began, and consumed
most of the afternoon. MIR Hartman
flrst told Of the formation of the syndf-
cate. which. he said. contained many nor
sons aud which was represented by him
sen James Stillman. George Gould and
Mortimer Schiff. Ninety-seven per cent
OF the stock of the Alton was acquired
SUI having been paid for the preferred
anu anu SIts Tor the common and the total in
NeStment amounted to S42 100000 Bonds
10 the amount of $4,000 900 were issued
and the shareholders subscribed for them
az % and from the proceeds Of the sale
declared The witness denied participa-
ton in a sale of bonds at IS to the New
York Life Insurance company.
Could Not Remember.
Mr.. Kellogg asserted that the bonds
mad been regularly quoted in Wall street
at from So to 90. but the witness said he
could not remember what they were SELL
liiS at The witness denied knowledge of
Ine Whereabouts of the record of the syn
dlcate which handled them. Mr. s4fIburn.
representing Mr.. Hartman. objected TO
what ne called an effort to create the i'm
preston that Mr.. Hartman and the other
trustees owned all the stock purchased
by the syndicate
Why not lump to what YOU want to
PROVE asked the witness. "IH help YOU
All right. sir; thank you very much -
SAID MI Kellogg Il want to prove that
after you bought those bonds for s. YOU
solo them for some other price"
But the witness could not remember
the syndicate managers
Mr. kellogg showed that s972OOO of in
terest on the prior lien bonds was be-
ing carried as an asset on the books of /
the company. but the witness could not
explain.
Books Were Wrong.
He said the books might have shown /
surplus of only 500. 600. but the books
We're wrong and had been corrected /
Twelve million dollars had been taken
from the profits of the road and expended |
in improvements Mr. EeIlore ,1ointaI /
out that the Old management had meyer 4
increased its capital stock and then
questioned the witness al length as to 4
the action of the new company endeav- |
orlng to show. among other things that /
the stock standing in tho names of The
new directors really belonged to the syn /
dictate. IN
The witness then told of the transfer
OF the Alton Railroad company to the Al /
ton Railway company. When the stock /
was placed in the treasury of the latter
company mortgage of S22 100000 was |
placed on It and preferred stock to the /
value of Sl9. $1,000 and common stock to /
against it.
an other words, you capitalized tho so
600 OF the Alton stock for $50 Gao O0G9''
asked Mr.. Kellogg.
:, That is as YOU put It" answered Mr..
Hartman.
Millions of Water.
The witness said the new company as
sumed the mortgage of $4,000 OC0 issued
BY the old one and Mr.. kellogg declared
that the stock and liabilities of the conn
pany has thus been sweIled to sf92 GOO. 0oa
Counsel for the railroads insisted that
these figures were SS.000.000 in excess of
CORRECT ones, and Mr. kellogg, saying
that he would admit the difference asked
what the roads had to show for the in
crease of more than S700o0.090 in IabiI- N
tiles except the So 009.000 spent in better
was water.
There was long discussion of the
manner IN which certain errors had been
charged in the statement of the Alton
and while the witness could not explain
The matter. he denied that il represented
an attempt at concealment-s
Harriman's Explanation.
Mr.. Harr'man's general explanation of
the Alton deal was as follows:
THE syndicate found itself in the posi-
lion of having paid $42.000.0O0 for the
stock and property mentioned, less So
00,0o which it had received in dividends
1n the stock of the railroad company or
'36, 000,0 GOO. Now, the return of about ST.
10000 year is less than AZ per cent on
hat amount invested. 1t would seem J
hat II was not very liberal distribution
Continued on Page 5.