Watertown weekly leader. [volume] (Watertown, Jefferson County, Wis.) 1906-1908, 1907-03-01
new YORK PROBE OF
. union pacific ENDS
ORAL ARGUMENTS IN CASE WILL
BE HEARD IN WASHING
TON LATER.
WITNESS CONTRADICTS
HARRIMAN'S TESTIMONY
Says the Financial Statements Were
Sent to Southern Pacific StockhoId-
ers for Several Months Prior to
Dividend Meeting in July.

ers for Several Months Prior to
Dividend Meeting in July.
New York. March 1.-The interstate
commerce commission Thursday con-
Guided it's New York hearing on the
investigation of the operations and re-
latiOns of the Union Pacific system.
and while there will be oral argument
heard at Washington on an April date
to be decided later, the testimony has
probably all been taken. There has
been no decision yet as to an appeal
to the courts to compel Edward H.
Hartman and Otto Kahn to answer
the many important questions de-
clined by them, but the question will
be considered after the commission re-
turns to Washington. I'VE will dis
cuss the question at Washington
said Commissioner Franklin Lane
after adjournment, "and there decide
if we are TO ask that the stomach
pump be applied to these witnesses
The closing hours of the hearing
brought a statement from Controller
Mahl that financial statements were
not sent to Southern Pacific stock
holders for several months before the
dividend meeting in July last, this In
contradiction of Mr.. Harrimans testi-
mony; a suggestion from Commission
er Harlan that the 80 per cent divi-
dend on Alton was Illegal under the
Illinois constitution; a partial clear.
ing away of the aspersion about the
mortgaging of the Murrayville-Spring
field cutoff before it was built and q
lengthy discussion of the propriety Of
capitalizing the old expenditures for
betterments on the Alton.
Alton President on Stand.
When the commission resumed its
investigation Samuel FELTON,, president
of the Chicago & Alton since 1899, was
called to show that about 1000, 900
from income, as against proceeds from
the sale of securities, was included in
the statement that showed that s22,-
100000 had been expended in impro'f
ments. The 100000 also irc.uo<,e
81, ,0S0 600 expenSed since last Jsne
and paid for by car trust certificates.
This reduced the expenditures from
sale of securities in the Alton to be-
tween $18,00O,0 900 and $19,O00,O00.
Old Debt Are Capitalized.
Charles w. Hillard, comptroller of
the Chicago & Alton, was then re-
called Mr.. Kellogg endeavored to
show that the Hartman management
of the Chicago & Alton had capitalized
the debts of the old Joliet & Chicago
road, prior to 1868, but Mr.. Hillard
said his knowledge of the roads af-
fairs did not go back that far.
1t was elected, however, that there
never had been a foreclosure of the
Chicago & Alton railroad or railway
while the old Joliet & Chicago had
been foreclosed. The witness was ex-
amined as to the $12,OOO,OOO which it
is claimed the Hartman party added
to the capital of the Alton, because
that amount had been expended on i'm
provements or had been lost by for
mer shareholders.
Mr.. Kellogg then asked series OF
questions tending to show that certain
operating expenses also had been capi-
did not admit this. Certain construc-
ton expenses had been so charged, he
said. Mr.. Kellogg elected the admis-
sion that the discount on the bonds
had been SO charged that while the
books disclosed it the annual report
would tend to confuse the public in
regard to the item.
In, To
missioner Lane the witness questioned
the right of the directors of the Alton
in going back over their books for
period of many years and capitaliZing
the expenditures. He said that each
succeeding board of directors had
each year passed upon the accounts,
and he thought that such acts should
have been final.
The witness repeated his testimony
as to the transfer of the Alton from
the railroad company to the railway
company through Louis Stanton, and
said that it was evident from the
books that the syndicate had simply
handed over the s22,000,000 in bonds
and had received the preferred stock
property.
Unable to Name Profits.
When counsel had concluded with
the witness, Commissioner Lane asked
him how much the Hartman interests
had paid for the Chicago & Alton and
how much they got out of the trans
action. Mr.. Hillard was unable to
cta Ia hal nf
knowing. AS Mr. Lane continued to
press for some information on this
point, Mr. Kellogg remarked: Nobody
knows"
''Oh, yes,' rejoined Mr.. Severance.
I'VE can figure it out. 1t will show
they did not lose anything"
Report of Conditions Made.