Los Angeles herald., 1907-02-27

benefit. lie said there was no other
cause or reason for this action.
In 1903 he said he was approached by
several directors of the Illinois Central
who interviewed him as to the advisa-
bility Of reporting several of President
Fishs acts to the board with view
of having the board request his resigna-
tion. Mr.. Hartman said he took steps
to smooth over the difficulty. 1t APP
peared, he said that Mr.. Fish had used
his official position to further his own
interests. but he (Mr Harriman) pre-
vented any action at this time.
Another Incident
Mr.. Kellogg started to resume the ex-
animation when Mr.. Knapp went over
and addressed Mr. Hartman in low
tone. His question related apparently
to the Fish incident, and Mr.. Hartman
said:
Eyes, in 1908 Mr.. Fish deposited over
half a million dollars OF the Illinois
Central funds with the Trust Company
Of the Republic. We, the directors, l
mean, directed the secretary to with
draw this money, which was done"
Mr.. Hartman said that later in the
same year Mr.. Fish deposited with the
Trust Company of America large
amounts of Illinois Central funds to
pad the trust company's statement"
Notwithstanding the boards action,
continued Mr.. Hartman, in 1904 Mr..
Fish again began to deposit money of
the Illinois Central.
with certain trust companies, in order
to pad statements In addition to thai
he loaned himself large amount OF
money during that summer without the
knowledge, 1 believe, of the board OF
directors, and it was based on these
things that the matter was taken up
with the intention of having Mr.. Fish
deposed.
Loaned Fish Money
"I interfered in the interests of Mr..
Fish, loaned him $1,2O0,O00 to take up his
obligations to the Illinois Central and
let 1t remain with him for two years.
He paid it back gradually until the
securities which he had up appreciated
in value and he could arrange for the
matter somewhere else or dispose of
some of it. The trouble with Mr.. Fish
was that he looked upon the Illinois
Central as his personal property"
Mr.. Hartman told how Mr.. Fish had
contracted for the construction of the
Indianapolis & st. Louis and committed
the company without the consent or
action of the board, when the board had
positively expressed it's disapproval.
In his explanation of the Central incl
dent, Mr.. Hartman for the first time
spoke with warmth.
Refuses to Answer
There was a renewal of the objection
to the commissions right to inquire into
Mr.. Harriman's stock transactions, and
the matter took the same course as yes
terday The committee ruled that the
questions must be answered; then fol-
lowed a formal refusal and the record
was formally completed.
The first objection was against re-
Vealing the amount of holdings Of Mr..
Hartman and his associates in the
Santa Fe and the second as to the ex-
iStence of a pool or private understand
ing as to stock in the Illinois Central.
The most interesting objection was as
to possible speculation in Union Pacific
stock in July and August last, and par
ticularly on the day the announcement
of the dividend was held up. Mr.. Har-
riman first testified that he knew of no
speculation, and explained that the
directors of the road already held much
of the stock.
Commissioner Lane wanted to know If
the witness had himself bought any
stock after he knew that there was to
be dividend.
Attorney John G. Milburn quickly
blocked the question with an objec
ton. The witness created laughter
when he declared he had bought Union
Pacific at 25 in 1898 in expectation of
the dividend in 1906.
objection Renewed
The objection was renewed through
out the day whenever Mr.. Kellogg re-
ferred to the stock transactions of the
witness in the railroads under inquiry
tn IT,, ~1- kl,nA
was blocked. No steps have been
taken yet for testing the question in
the courts, but Chairman Knapp has
shown great care in laying the founda-
tion in the record every time the propo-
Sition has occurred.
Kellogg traced the purchase of
Southern Pacific stock by the Union
Pacific and oregon Short Line, carry
ing it down to the famous sale of 300,-
900 shares to William G. Rockefeller.
THE sale was made on q reciprocal
agreement made with Mr.. Rockefeller"
said the witness, "by which Mr.. Rocke-
feller could sell us the stock back on
May /, 1904, if he desired, at the same
price. Mr.. Rockefeller paid $6,O0O0O0
in cash and gave good collaterals. 1t
was a conditional sale.
Big Pool Formed
"The sale was a protective measure,
pure and simple. There had been
formed pool to speculate in Southern
Pacific stocks. The pool had acquired
100000 shares of stock and appealed ia
the shareholders and courts and tried
to get enough proxies to prevent us
from continuing the management of the
property.
THE pool planned to sell it's own
stock to advantage, We feared that
they would get a temporary injunction
to prevent us from voting the stock
In order to prevent this we took this
method to enable u.s. with other proxies,
to protect ourselves against this spec
ulative interest"
Mr.. Hartman frankly admitted that
the sale of the stock was to place it
in the hands of some one who would
act against this pool. He admitted
that Mr.. Rockefeller was paid five
eights per cent premium, or $167, 900, on
return of the stock.
Mr.. Hartman testified that the pur-
chase of 100000 900 In Santa Fe stock
was made as an investment.
DELAYED Dividend