New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-02-28

6-But you survived lllttt
Union Pacific out Of those transactions.
Mr.. Severance then drew from the witness the
that Kuhn, Loeb & Co had taken
$50 100000 Of the Union Pacific convertiole
bonds for sale. after the $40OO0O0O had been
sold, and that the bankers received commits
sion of per cent in the second transaction
PURCHASE OF GREAT NORTHERN SToCh.
Returning to the purchase OF Great Northern
stock for the Union Pacific, Mr.. Severance tried
to make the witness admit that there had DOC"
q violation of the law In the transaction
O-You knew at the time you bought this stock
OF the Northern Pacific and turned IL over :" - ~
1a tb9t The Northern Pacific and Great
Northern had Jointly acquired the burning 'o" -
QYou knew that for large part Of t Rss d5 an
active competitor with the Burlington, oldh Sou'
Q.IYou knew that on transcontnental business si's
the Northern Pacific was a competitor Compel WITH inc
Union Pacific, didn't you? A-Yes. -, t,Doy,inp
these facts, and Of course knowing the law, being
banker you you sGug T6a ~ Of law? ATo begin
with knowing the law. being banker. there Is
difference between a bankers understanding of tho
law and lawyer OF t te law Law bsnker
is not competent to judge Of the niceueS OF tho
interstate commerce and antitrust laws r,t, the
matter? At did to such an extent tH9t on wb9
the Northern Pacific stock at a very great risk,
legal and Otherwise ana We OlIeItI II ~ CIO
Pacihc and l one OF the fifteen who deter
mined that the Union Pacino should buy that
whether it should buy It or not declined to vote
on the So s in 2eST5 to am 1af East
Q.-At that time you bought that stock ana
Of Cabling SFf the Uni6n Paod to conrl the
ern Pacific and through 1t the BuFIinston' A
Q.,You did that, knowing they were comPPetitiye
advised that the Oregon Short Line would have the
right e hold the Northern Pacific stock Gu.
Line? At f1t was sold 70 the Union Pacing Of
Line, the Union Pacihc being simply the financial
int ernediary because the Oregon Short 1Ane did
hS5 HaE e2o ef through H the Union Pacific
Q.-fou sold # to a company which you realIzea
get It into the hands OF another company that had
right MG dd not th SAY thu mat Union ' Pec R
had not the right, but l advised they had a
aid were similarly advised Of the physical
situation that they were competing Anesf An
o.-But as to whether or not one. competing line
could buy another, you did not know anything
about Il? A.IThe Union Pacific not buying
ct Was buying the Northern Pacific which
YOU said was competing with the Union PachcI
A-But was not told ana l dtd not see - IT. SiiS
cidc and Northern racfc, taken by themselves
are competing lines in the meaning OF the law.
don't know whether they may or may not be,
Regarding tho sale Of Chicago & Alton stock
TO the Union Pacific in 1904 Mr. Kahn said Mr..
Hartman did not join with John a. Stewart and
John J. Mitchell in fixing the price at which the
stock was 10 be sold.
% acting GG a. Union ana Pie f69 thS A ri
son declined 20 have anything 10 do with tho
Q|i see, lie got out Of this agreement at that
time and was mistaken saying lie Joined IN liking
the price7 A-Yes; he was mistaken. ! Ga!led ms
attention It, ana he said he was mistaken. &c. "a
Q-But tho price agreed upon finally al so %
a share? A-Nes.
WILL NOT GIVE NAMES
Mr.. Kahn declined to tell the names Of cit
ents OF Kuhn, Loeb & Co. who had participated
with the firm in dealings IN stocks which had
been sold 10 tho Union Pacific. He was sup
ported by q long legal argument by Paul d.
Cravath. to the effect that the commission did
not have the power TO inquire into the private
affairs OF clients Of tho banking house. Mr..
Kahn said:
Let me state Will answer every question bear
ing upon our dealings with the Union Pacific
freely aud willingly, but / VII not answer any
question bearing upon our relations 70 our c4lehts
Mr. Kahn said his firm sold to tho Union Pa
cino stock of the Illinois Central at 40 which
was being sold in the market at higher figure
and which the firm might have obtained 200 fer
from other purchasers.
Q-Then you desire the record 70 show that you
sold Ills stock a. loss 10 y of POM
10 disclose. ana You let the Union Pacidc have i
bocase OF your loyalty and affection for road?
Al mean 10 say that the control OF what prac-
tically amounts 10 q dominating Interest IN Illinois
Central was worth and could have been made
Q"What others7 A.-That I don't think it is
my business TO state 800, ,,.,o,n e.. mama -, M.
party to whom you could have sold III A.-Yes
Q.-And you had good grounds fer that beIiet!
Q-Caused by any interviews with this party7 A.
i don't think l Will pursue that subject any
further. because 1t is going into affairs which are
In way relevant 10 this.
EXPLAINS STOCK TRANSACTIONS.
Late In the afternoon Mr.. Kahn was per-
United to make a statement of the position of
Kuhn, Loeb & Co. in certain stock transactions.
He said:
At the time the Chicago & Alton proposition was
brought to us and We We're asked TO get up syndi-
cate to put S42OOO,OOO In that property the rail-
roads Of the country had Just emerged from
Zion; their credit was very bad and to get at that
time syndicate or any body Of men TO put $42.-
which necessitated holding out certain inducements
70 them in the way Of profits That was eight
generally followed IN all the reorganizations and
toward the making valuable OF which the stock
great length of time and putting all their earnings
into the property for great length of time. What
cedure, adopted in ali forms Of REORGANIZATION.
%9 would % now no LONGER proper method Of pro.
firmly %staohIhed ana IL Is possible now to make
Inducements as were absolutely necessary at that
time. The Burlington at that time offered It's Sls
to its stockholders. Ten years previous that the
times We're stu different, and the railroad with
which Mr. Kellogg now has some affiliations offered
it's per cent bonds TO its stockholders 20 cents
years ago. and what was possible eight or nina
years ago Is no longer necessary now. and we do
that time and under those very different circum-
stances should be compared To the situation as il
| issued at 90 a new departure Three per cent
! bonds We're at that time untried, or a very
We're