The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-04-06

fact was evidence of the lack of COM
petition
Referring to the purchase of the
stocks of eastern roads by the Union
Pacific, he expressed the opinion that
there should be legislation prohibiting
an interstate railroad from engaging
in stock speculation.
MIR. KeIIogg's Argument.
Frank c. Kellogg also spoke for the
government, first replying to Mr.. Mil
Durn's suggestion that a general in
quiry into railroad combinations and a
general verdict against them would be
disastrous. Mr.. Kellogg did not ac-
cept this view, and instanced the dis
solution of the Northern Securities
company in support of his contention.
He believed that any plan which would
place the railroads of one-third of the
country under one control would be in
violation of the law. He agreed with
Mr.. MilburE that the problem was an
important one; it must be of supreme
importance so long as we adhere to the
principle of competition in business.
Was it an important fact that Mr.
Hartman should use his ambition TO
control the Santa Fe and the Northern
Pacific, or that the Union Pacific, with
1000 miles of road, should seek to con-
troll the Southern Pacific with 1000
miles? Were the people prepared to al
low one man, through purchase or
agreement. to tie up the transportation
facilities of a great empire?
He took the broad position that any
restraint upon competition is impor-
tant and that the means, whether by
purchase or otherwise, is subordinated
tine end to be accomplished being the
important consideration. Any such
suppression Of competition comes with
ing the inhibitiOnS of the antitrust
law, said Mr.. Kellogg, and he declared
that such statement was in lire with
the decisions of the courts. No one
would deny that the Union Pacific
might acquire the old Central Pacific
line; the inhibition was against the ac-
QUESTION Of the Southern Pacific. That
was competing line, while the Central
Pacific was only a connecting line.
Mr.. Kellogg cOntended that parallel
ism was not essential to competition.
and urged that the fact that the Santa
Fe traverses the country lying between
the Union Pacific and the Sunset
route did not stand in the way of COM
petition between these two lines. COM
petition could not be confined to local
business, pOr so narrowed as to ex-
clude transcOntiEentaI business.
The Alton Deal.
Mr.. Kellogg then turned his attention
to the Chicago & Alton road and Mr.
HarTiman's connection with it, He said
the liabilities of that road had been in
creased $4,000, Goa, for which, he Ge-
clared, ''the syndicate did not give the
company one dollar aside from a mod
crate equipment" To say it was neces-
saTy to make this increase in view of
the excellent credit of the road was 10
his mind incredible. Mr.. Hartman had
said that $50 900 600 had been expended
on the road, but if that was true not
all the money had been a part of the
expanded capital. He would not say
that other roads had not made similar
expansions. but that this was an exam
pie TO be brought to the attention 81
congress. All the improvements could
have been made by a comparatively
slight increase of the roads interest ac-
count.
Schiff Also Blamed.
Mr. Kellogg said he did not hold Mr.
Hartman more responsible that Mr.
S.hiff or any other purchaser of the
stock
I'VE are only interested in him in
connection with the transaction ne
said.
He is only an incident, and 1 viii
say that he has not shirked responsi-
bility.''
He claimed the Alton bonds had been
sold to Hartman and friends at 90
cents on the dollar when they could
have been made TO bring par. NO one
can say that that is conservative
financing" he said. He declared that
the proceeds of this sale had been used
in paying dividends to the stockhol1-
ers, the men who had bought the bonds
Deducting the dividends, the bonds had
aI,4 60, -
on the dollar. He insisted the country
was largely interested in such trans
actions. and urged that congress should
limit the. imitation of railroad securi-
ties.
Making Schemes.
The great railroads should not be
shining marks of manipulation in Wall
street. There could be no excuse for
expanding railroads securities merely
for the purpose of making a profit out
of them" He also urged that the sys-
TEN of bookkeeping was calculated to
make obscure the operations to the
owners of the Alton. He said that in
the recapitalization of the road the
losses of the original stockholders
which had Injured to the benefit of the
company to the extent of 81, 000, 900 had
been utilized as the starting point of
that transaction. Those losses had been
sustained as far back as 1853. and il
looked to Mr. Kellogg like f-rohbing d
graveyard" He denied the right of the
directors to take this sum and capital
lie 1t and pay IL out as dividends
4 deny the necessity and the morality
of such a course" ne said, and ex-
pressed the opinion that restriction
should be placed upon such transac-
tions. He did not believe in unreason-
able restrictions, but it was not in the
interest Of the roads themselves that
they should be largely utilized for in
VeStment.
The hearing was then concluded and
the announcement was made by Mr..
Clements that the commission would
take the question under advisement
LABELLED IN ENGLAND.
London. April 5.-Dr. Thomas, the
chief health officer of Stepney during