Los Angeles herald., 1908-01-17
HARTMAN
MUST GIVE
ANS WERS
COURT HOLDS HE CANNOT
EVADE QUESTIONS
JUDGE HoUeH's DECISION PAVEs
WAY FOR COMMISSION
Interstate Traffic Body, Under Latest
Ruling, May Now Learn Story Of
Illinois Central Deal with
the Union Pacific

TIC OIllOI
Sy Associated Press
NEW YORK, Jan. 16.-E. II. Hartman
was directed in a decision given by
Judge Hough, in the United States cir
cult court today, to answer all questions
propounded to him by the interstate COM
merce commission, except those relating
to the purchase of Union Pacl1c ana
Southern Pacific railroad stock in con-
nection with the dividend of August, l9Oo.
Judge Hough also directed otto n.
Kuhn of Kuhn, Loeb & Co., to answer all
questions asked him by the Interstate
commerce commission.
/. The questions to which Mr. Hartman
objected related to the purchase or the
stock of other railroads in the interest
of the Union Pacific.
In regard to the $2SOOO,OOO of Illinois
Central, purchased at $175 share the
questions which Mr.. Hartman declineu
to answer are as follows: .
"Were the ninety thousand shares soio
by yourself Mr. Rogers, and Mr.. still
man pooled?' 80
"Was it acquired for thepurpose OF
selling it to the Union PacificT
'rWas the stock purchased by you at
much lower price than si75 with the IN
tention of turning it over to the Union
Pacific?" .o- ooo
Did you have any interest in the lOo 600
shares sold at the time by Kuhn' Loeo
e co. to the Union Pacificg
"Were the 100000 shares acquired by
the same pool for the purpose of selling
to the Union Pacific?'
On the subject of the Union Pacific
dividend, which advanced from a rate or
6 to 10 per cent per annum, on august
Is. 1906. with a consequent Use in the
stock. Mr.. Hartman declined to answer
the following:
Other Queries Declined
'eWere YOU directly or indirectly inter-
ested in any stocks that were bought be-
tween the 10Th of July and the l1th' OF
August that appreeiated?"
''Did YOU or any director buy any Union
Pacific and Southern Pacific stocks in an
ticipation of that diyidendY"
Mr. Hartman Is sustained in his OBJ
iections to the Union Pacific dividend
question. The questions which Mr.. kuhn
refused to answer had to do with the
connection of Kuhn, Loeb & Co. with
the purchase Of stocks in the Chicago &
Alton ard the Illinois Central and what
what proportion of the stock so pur-
chased was held for the directors OF the
Union Pacific.
While the exceptions allowed Hartman
were regarded as important questions by
the government lawyers who were inves-
tigating the Chicago & Alton railroad re-
organization, they constituted only
small proportion of those that Hartman
refused to answer.
The clash between Hartman and the
commission occurred on February 25 of
last year For several days the investi-
gators had been endeavoring to get at
the bottom of Harriman's railway manip-
ulations conducted with the Chicago &
Alton. The question that marked the
beginning of the controversy was this:
Ibid you own any of the Chicago &
Alton preferred stock sold by the syndi-
cate to the Union Pacitlc?'
Immediately the railroad presidents
lawyer, John G. Milburn, contended that
the inquiry was not within the scope of
the federal investigation.
Frank B. Kellogg, the governments
attorney, took the contrary view. The
outcome, after prolonged argument, was
that Hartman declined to answer num-
ber of questions as to stock transactions
on the ground of personal privilege.
keIIogg's Appeal
Mr.. Kellogg and his associates appealed
to the federal courts to compel the wit
ness to answer.
Among the lawyers who represented
Hartman in the court proceedings were
John c.. Spooner, former United States
senator from Wisconsin, who had been
prominently identified with the passage
of the law under which the government
started its investigation.
Both Hartman and Kuhn were exam
ined In relation to the affairs of the Chi
cago & Alton, the Atchison, Topeka &
c. TNa ba fI1a
Joseph & Grand Island, the New York
Central & Hudson River and, the South
ern Pacific railroads.
Stock in these companies was acquired
by the Union Pacific company, of which
Hartman was president by an issue of
convertible bonds to the amount of $780,
900, 900 par. In addition, the Oregon Short
Line, one of the controlled companies,
issued bonds for $4,000, 900 par. Kuhn,
Loeb & Co.'S bank was stock depository
for the purpose of facilitating the trans
action.
Both Men Silent
Hartman declined to answer the ques-
ton whether he owned any of the stock
deposited with the banking firm, and
Kuhn declined to answer questions relat-
ing to the ownership by the directors of
the Union Pacific of any of the Chicago
& Alton stock so deposited. Hartman
also refused to say whether he had ac-
quired any part of the stock of the
Illinois Central with view to selling
it to the Union Pacific or whether he had
procured it at a lower price than that
paid him by the Union Pacific.
In the course of the arguments before
Judge Iough, the United States district
attorney, Mr.. Stimson said:
"What the commission is endeavoring
to learn is whether the enormous stock
investments made with Union Pacific
funds amounted to waste of the assets
and impairment of the facilities of an
interstate common carrier and whether
the matter of such investments would
be made subject to the regulation of
congress-"
Many to Resume Work