Omaha daily bee., 1907-03-01
RACING DOWN LARGE SUN
-nterstste Commerce Commission Continues
Inquiry Into Alton finances
ACCOUNTING FOR IMPROVEMENT BONDS
No steps Taken TO Bring Before
Court Right of Commission
90 Force Answers TO
Questions.

NEW YORK, Feb. 2s.-when the InterI
state Commerce commission resumed III
investigation OF the Hartman lines todsF
1t was with the understanding that ICY
hours would conclude the hearing. II TAs
said by counsel for the government fat
no steps had yet been taken to place Ioe-
fore the courts the question raised blythe
refusal of Mr.. Hartman and Mr.. gum
to answer certain inquiries relating % IN
dividual holdings of stocks. Mr.. Kslogg
of government counsel said he was not
prepared to state what action would De
taken in this matter. Before the bearing
begar it was said that, contrary TO ex-
pectations, William @. Rockefele kvould
not be called to testify regarding he al
legged sale to him by Mr.. Harr Fan Of
10000 shares of Union Pacific at 1e time
Of the so-called Keen raid in 1g
Samuel FELTON,, president of tb1Chicago
& Alton, was called to show fft about
100000 from income, as against proceeds
from the sale of securities. wa included
in the statement that sbowss that s22,-
o0OO0O had been expended in improvements
The S22,0OO,OOO also include f27So,WO ex-
pended since last June, paid for by Car
truJt certificates. This redlced the ex-
penditure from the sale of sesurities in the
Alton to between S1s,OOOIOOA pad Sls,OOoOOO.
HiIIIard COrrects skement.
Charles w. Hilliard, COZ roller of the
Chicago & Alton, who Wis on the stand
when the hearing adjour1s/ last evening,
was then recalled. In rofE to Mr.. Kel-
logg he explained that Z branch line or
cutoff from a point nent Murrayville to
Springfield, which he y, Ierday testified
had been mortgaged VIII 1t was built,
was one which the Chidlb & Alton had
right to build. The prds edings were not
! unusual The enterprise dnd the methods
of mortgaging were legiI rhate.
The line Of inquiry w evidently meant
| to correct the impressi5 left by counsel's
/ questions and Mr.. HilkIrd's replies yes
! terday.
Then Mr.. Kellogg asfd series of ques-
| tions, eliciting a statehnt Of the Chicago
& Atoms assets and abilities in 1898, be-
| fore Mr. Hartman ekered the property,
and at The present me. These figures
were taken from an aAnual report showing
that before 1888 its Cd cSkitalization. In round
numbers, was s3S,O00tQ, against S122, 81, ,S2S
| on June last.
The witness said NE car trust certih-
Gates were not incl ID in the capitaliza-
ton, so the total ST. lid really be $125.OOO,
900 and not $122,00fp
Mr.. Kellogg exit med the witness at
length as to the boks Of the company
and he had him eIp plain many of the ac-
counts already cokred by evidence. The
witness produced a record showing the
stock standing ipk he name of the syndi-
cate managers .--
ExplaB HiOn of Books.
Mr.. Kellogg en- avored to show that the
Hartman mana Nment of the Chicago &
i Alton had capitk ked the debts OF the old
Joliet & Chica4 road prior to 1868, but
Mr.. Hillard 81 his knowledge Of the
roads affairs ID not go back that far
1t was elictedN however, that there never
had been aWf eclosure of the Chicago 8
Alton road al ailway, while the old Joliet
& Chicago 70 been foreclosed. The wit.
ness was n mined as to the S12, ,OOO,O ,OOC
which it 10 lined that Hartman party
added to IL, capital Of the Alton because
that amopr had been expended on i'm
provement had been lost by former
shareholdsfd
Mr.. Low counsel for the Hartman in.
terests, o tied to Mr.. Kellogg assuming
that S1O,0JbO of the amount represented
losses of Iold set of stockholders through
foreclosup 1t developed that neither wit.
ness noL Punsel knew If there had beer
a forects Re, so Mr.. Kellogg amended his
question include Improvements OF losses
or both.J
The wIness said that the $12OO0.OO0 in
questionbad previously been paid and the
accountt were written OF. He did moi
know ifbther railroads ever added to theil
capital th that way. Mr.. Kellogg ther
asked dseries of questions tending to show
that oHtain operating expenses also hat
been fpitalized by the Alton, but tht
witne1 did not admit this. Certain con,
structfn expenses had been 80 charged, h,
said Mr. Kellogg ELECTED the admission
that tle discount on the bonds had been 81
charge that while the books disclosed 1t
the hnual report would tend to eonfus.
the lhblio in regard TO this item.
Cofnsel Lovett and Mr.. Cravath cross-ex
amikd Mr.. Hillard briefly, but he main
taluI his position firmly, particularly a.
to 10 propriety OF capitalizing the old ex
PEI IitDres on the Alton.
MahI ON stand.
:, r. Mahl controller OF the Hartman
Ilifls, was then recalled and identified /
number Of exhibits.
ar Mahl explained that the resolution O.
tie board of directors of the Union Pacin,
authorizing Mr.. Hartman to borrow none,
b the name Of the corporation was a pureI,
brmal matter, done at the request Of tn,
kitness and without the knowledge of Mr.
7 Hartman. II was done TO meet require
nnent Of certain California bankers.
Mr.. Lovett also showed by the witness
that the late c. p. Huntington had a liis
authority in the Southern Pacific board an,
that It was a common business practice
During the discussion between Judge Low
EFT and Mr.. Hillard, Mr. Harlan read al
extract from the constitution Of ullnoI
which prohibited the payment OF stool
Idividends from the sale Of securities, rails
Iing the point that the Atoms 80 per cen
ldividend probably was illegal
Mr. Severance then informed the com
mittee that counsel for the government hal
no more witnesses at this time and woul
ask for an adjournment without date. MI
Harriman's counsel conferred and Judg
Isovett stated that they would like ora
argument. but he presumed that could b
made in washington. Mr.. Severance sal
he thought the whole matter should b
closed and arguments made by the end O
April Judge LOvett said n no more test.
mony was 10 be taken that would suit hi
! side
Chairman Knapp then announced that tn
hearing was postponed to a date TO b
fixed and adjournment was taken.
In answer to questions OF Commissions