The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1907-02-26
Nothing to Show for In
crease of Millions in
Liabilities
CHARGES ARE DENIED
BY RAILROAD KING WHO JUSTt
FlES ALTON TRANSACTION
--CAPITALlZED AT $62,.
0o,ooc--iS WORTH
$4,000, 900.


man. master of the Union Pac A.
| sys EN-, spent today in recital of por'
| tons of the intimate history of the
financial operations OF himself and
associates before the interstate com
merce commission. The counsel for
| the government made particular at
tack upon the reorganization ard
financing of The Alton railroad by the
Hartman syndicate and their action
which with challenge by the coufi-
sci for the railroads TO the right cf
the interstate commerce commission
TO inquire into private transactions
of an Individual constituted the two
chief events of the days proceedings.
BY direction of counsel Hartman
declined To tell what proportion OF
the preferred stock Of the Alton. sold
to the Union Pacific belonged to him
individually and the way was pave1
for taking the question mo The fe,-
eral courts.
Limitations OF inquiry Raised.
The point raised involves the M.
terial limitation upon inquis.t1rial
power Of the commission and il o.
serious importance TO the whole ores,
ton OF the inters ate corporation in
vestigation. Thege wa an en5rt TO
show by Harriman's testimony ana
records of the company that there
had been enormous imitation, of the
stock securities and liabilities of the
Alton; that the Hartman Syndicate
had taken unfair profits by declaring
dividend OF 30 per cent from the
/ proceeds Of the first sale of bonds
amounting TO sfQ,000.000; that the
syndicate had sold itself the bonds at
an unreaso1ably low figure, only 10
resell them at an. en8s nous profit;
that the Hartman syndicate had n
the Alton capitalized losses of for
mer stockholders of the road. and
money which had been spent by the
old management for betterments
over period of ten years. ana al
ready charged TO operating expenses;
that the books of the company had
been doctored and that for an in
crease of stock and liabilities from
roughly si0,000,000 to about $4,000.
900 there was nothing to- show, ex-
Cept the expenditure Of s22 100000 In
Improvements on the property
Hartman Enters Denial.
Hartman testimony was denial
of all the charges and towards The
end Of the afternoon he made an ex-
tended explanation and defense OF
the entire transactions which he con-
tended was fully justified by condi-
tions and circumstances of the time.
and which he asserted had been con-
Quoted entirely In the open.
The examination of the Alton :
transaction consumed all the after
noon. Hartman first told of the for
nation Of the syndicate. Ninety
seven per cent of the Alton ock
was acquired. 5000 being paid for
preferred and s175 for common
hares. The total Investment amount
ing to si2 100000. Bonds to the
amount OF $4,000 600 were issueI
and shareholders subscribed for them
At s65 from the proceeds of the sale
Of bonds dividend Of 80 per cent
was declared.
The witness denied partic patton in
The sale Of bonds at soc 20 the New
York Life Insurance company. Thir
ty-two millions bonds were sold aud
the remaining SS,000O00 pledged IS
collateral against a loan Of $4,000 09j.
kellogg for the government as
serted that the bonds had been con
tinuously quoted in Wall street at
81 to 96 but tire witness said he
could not remember their price
He denied knowledge of the wbe~e-
abouts Of the record Of The syndicate
which handled them
Couldn't Explain By Item.
kellos showed that Ss5S.0o0 infar-
est on prior lien bonds was being
carried as an asset on tho hooks Of
The company but the witness cold
not explain the matter.
The witness ther told 4 the irsu
fer of the property Of the Alton rail-
rusd Ia the Alton railway COMPANY
When the stock was placed in thc
treasury Of the latter company
mortgage Of s22000.000 was placed
on L and preferred stock 10 the
value Of S1e e.43sy0o and eonmo7 stOeS
10 the value Of Sis.5l2S00 par issred
aginst IL.
"In other words Won capitsi'del
IS. 900 90 AHou stock for Sss.eaa.
Gg02" asked Kellogg.
That's As you put IT, answered
Hartman