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

Interest allowed on daily balances.
wanted bankers obligation, and were not salts
fed with a corporation oblga tion-they Wanteu 4
bankers obligation to protect them ana mere M1S
had to be paid at once, before the Union Paci INC
gether, and we simply stood IN the preach anu 'o0N
di95t f S9uy wrote 44e communication 10 the Dor'
On which YOU said: I'VE have purchased 1872
100 shares the Southern Pacific Company, or Ken
lucky, to be paid for as follows: one hundred anu
SHARES on TebruaIy il; 2s8 I67 shares, or at our
3 3sr Pe5o[ from eusTv H. ali Said shares to be
deposited with a trust company untl entire pay pay
the following shares: Two hundred thousand shares
TO be paid for on or at our option before MaTcn =;
3 ana one half on February 5 Tie average prices
elusive Of interest accrung is $50sll6 per share
That is an accurate statement isn't It? A.-Cer-
oAHd then you fgrthqr add od In order g that
gate $1,000 shares, We agree to sell to you on
March J. 1901, 1880 additional shares at the same
rate Of per cent from February Il. 1901" From
we buy that stock? We undertook to deliver that
stock be bought it in the market And bougbt
that for Whatever price you could get It. and made
whatever profit you could on it? A.-Or whatever
,Q-Had YOU not already bought it when YOU, adj
dressed this comm9nca a to the 69aFd Al
! Q.-You know perfectly we'll MI Kahn. do you
/ ", Il
J, know perfectly well that we had not now that
/ oNThis communication is dated the 4th OF
! February. You say you had not bought IT.? A
know perfectly well, now that think back that
Upon that purchase price you say you were
/ 'also to be paid by the company - 20 share upon
sEmed in making these purchases? A-That Is
RISK or UNION PACIFIC BOARD.
Q-The risk you assumed the risk that the
! Union Pacific board would not approve Of MI Har-
riman's provision relative to the acquirement OF
this stock, was it? ANo; that was only one of the
risks There was an addi%nal risk r,s, 70 which
ta at WAS rs cied by oT co1nsei Was
legal risk At that time it not certain whether
Legally Leg acquire s' the southern nth Pacific stock
! oQ.-Why? A.,Because the Southern Pacific
later on cmref by appToprate Hesitation, believe
But that time that ri5, existed and forclbly
called TO our attention by our counsel and we were
! told that were incurrng very substantial risk
! .Q.-You thought you were mourning a substan-
Q-But you were willing to accept the risk IN
new @ me tac as you saa nat 6aaf stook %e
! known that az the time undertook the risk. II
and it Went down. It varied, as all stocks do. ~
Q-1ou We're member OF the executive com.
! the Union Pacific in acquiring ths stock? A.-As
On sd 20 you ana am b pretty poor
| of the Union Pacific, of course am not expert
way that the main purpose OF the Union Pacin in
Of 1o I Ige S0ut1grn facne was to be certain
! Francisco. At that time II had become quite ap-
parent that the southern Pacific would not remain
| an ihqIePenGent Inc mat one or another Of tho
| Q.-Would no. what A.-Would remain an
large systems woaid buy itwoud i' get contPo Of
! II Reports had come 10 all OF u of negotiations
! understood fl Of vital imnorfance r. the T-,-iot
Pacific not 10 be shut off at Ogden and 10 continue
cisco Naturally I also understood that the north
/
9EY9u DID not know that trafac moved e Gail;
over a tae se oGlheTn Paeiac Sunset Route Al
! only know bought the Southern Pacific because
| II was represented 20 us that It was necessary
buy It the Union Pacific would be bottled up at
.Q;moThe Union Pacific, owned tho line to Port
SO that hey could not shut hut yoa on from a
cess cess 10 me F ~ Ocean ACbut they could
TIE southern Pacihc, which We had always used
/ Q.-And 50, for the sake OF getting a line eight
! hundred miles long; which YOU regarded essen
! thousand miles. Is that the idea? A@No: sa,i
/ The lines in California were doubtless an add
2.T Sa. not p the Southern Pae,ne qaueement
understood at that time that It was nuisance. II
eT}9VIB Vas net an ala igdTGsmea a. that time
/ Tor this roadE ] mean what provision did the
Pa}5 KG n5n' I0e e e CO. Tor ms 53ek; A-Ihey
| offer
/ GLOW ala they get that cash? Al think by
/ the issue OF convertible bonds which were sold
Q-Now. calling your attention to that matter, It
! appears by the minutes OF the meeting which
your proposition was ~ form laid before the board
namely, meeting Of the hoard Of directors OF
February 20 1901. that resolutions adopted
| cepting your proposiuon and providing for the
issuance Of 100000 G1 Of convertible bonds That
| Is right. ia 1t: A.-That IS right.
THE SALE OF CONVERTIBLE BONDS.
Mr.. Kahn described in detail the manner In
| which tho $1000OOOOO Of convertible bonds were
| sold to the public. The banking house formed =
syndicate for the sale OF 100000 600 Of the bonds
receiving a commission Of pa cents on the par
value and additional commission the
underwriting. Regarding the acquisition Of
Northern Pacific stock by the Union Pacific MIR.
Kahn said:
t,a ar hartman and We in April. 1901 owing TO
ESie ic4uIslIoI by the Northern Pacific and Cirear
NoTthern Of the Burlington. became convinced mar
- was very desirable that controlling interest or
! az least an influential holding of Northern pa.
| Sinc should, be concentrated in friendly hands
| peIulls decision OF the question. II was not q
mater that could be decided in a day or a week
| OF TOUR weeks, or six weeks pending the decision
| or the question of the action If any the Union
| q tai gp In fIe