Los Angeles herald., 1908-03-15
HARTMAN MUST ANSWER

AoA lile COucedieu personal IroillS WHICH
they may have made out Of the sale
of the stocks of various railroad COM
panies to the company which they
represented.
This action is a direct result of the
report of Investigations made by the
| interstate commerce commission last
| year. That Mr.. Harriman's position
with reference to these matters, and
especially that his complete control
over the affairs of the Union Pacific
| company may be shown in it's proper
light, a quotation from the report OF
the interstate commerce commission
may be of interest. The report says:
within three years after the reor-
ganfzation of the Union Pacific Rail-
road company in 1897 Mr.. Edward H.
Hartman became the dominating spirit
in that corporation. AS chairman of
the executive committee he exercises
powers that are Wel-nigh absolute.
The directors have delegated their
power to manage and direct all the
business and affairs of the company
to an executive committee of five men,
bers, who shall act in such manner as
such committee shall deem best for the
company's interest in all cases in
which specific directions shall not have
heen given by the board and in turn
the chairman of the executive commit
tee is authorized to represent that
body when it is not in session. Accord
ingly, we find that in 1902 Mr. Harri-
man was authorized to borrow such
sums of money as may be required
60. III.
execute in the name and on behalf of
this company a note or notes for the
amounts so borrowed The investiga-
tion showed that in practically all the
great transactions of this company
Mr.. Hartman, as chairman of, the ex-
ecutive committee, acted upon his own
initiative, and his acts were subse-
quently ratified and approved by the
executive committee. 1t may fairly be
said. therefore, that the policies and
purposes of the Union Pacific have
been those of Mr.. Hartman"
It will thus be seen that the board
of directors of the Union Pacific COM
pany intrusted the affairs of that COM
pany fully to an executive committee
or five members, and that this execu-
tive committee in turn intrusted its af-
fairs fully to Mr.. Hartman.
What occurred during Mr.. Harriman's
complete control of the affairs of the
Union Pacific in the matter of the pur-
chase of stock of other railroad com
panies is briefly summed up by the in
terstate commerce commission in the
following language:
"Thus the Union Pacific and its con-
Meeting and subordinate line, thu Ore
gon Short Line, have issued obligations
which are now outstanding amounting
TO approximately $1S1 ,000, 900, all of
which has been used in the purchase of
stock of other companies"
AS a specimen of how and from
whom this stock was purchased the
statement of the interstate commerce
commission as to the purchase by the
Union Pacific of Isl, ,231 shares of the
stock of the Illinois Central Railroad
company is interesting. That state.
ment is as follows:
"Of the stock so purchased by the
Union Pacific, l.. II. Hartman owned
10000 shares, H. H. Rogers 80, 900 shares,
James Stillman 10000 shares, all of
said parties being directors of the
Union Pacific, and Kuhn, Loeb & Co,
fiscal agents of the Union Pacific 105,
600 shares. Mr.. Hartman declined to
testify as to whether this stock was
acquired by a syndicate or pool for the
purpose of sale TO the Union Pacific, or
as to whether he was interested in the
105, 900 shares which were bought from
Kuhn. Loeb & Co. And Mr.. Kuhn of
that firm declined to state whether any
part of the 100000 shares so sold was
held by his firm for or on account Of
all or any of the directors of the Union
Pacific"
The report of the interstate COM
merce commission also showed that the
Union Pacific had purchased certain
stock of the St. Joseph & Grand Island
Railroad company from Mr.. Hartman
individually, and concerning this trans
action the report says
THE stock of the ST. Joseph &,
Grand Island Railroad company de
scribed in the foregoing table was pur-
chased by the Union Pacific from Mr..
Hartman while he was president of
the company and he declined to state
when he acquired that stock and what
he paid for the same"
1t appears from the report of the in
terstate commerce commission that Mr..
Hartman, with other members of the
executive committee of the Union Pa
cifc Railroad company, had acquired a
large interest in the capital stock of
the Santa Fe company, and that later
the Oregon Short Line company pur-
chased $1O,O0O,OOO of the stock Of the
Santa Fe company
As to this transaction the interstate
commerce commission in it's report
says:
1T appears further that the oregon
Short Line, on or about July 10, 1906.
purchased $10,O00,O00 of the stock of the
Santa Fe company at a cost of $1O,-
395 600. Whether this is a part of the
stock previously owned by Mr.. Harri-
man or the other directors of the Union
Pacific he refused TO state"
In fact, to all questions of the inter-
state commerce commission intended to
show whether Mr.. Hartman and his
co-members of the executive committee
of the Union Pacific had made personal
private profits out of the stock of yari-
GUS railroad corporations which the
Union Pacific company and the Oregon
Short Line company had acquired, Mr..
Hartman and his other associates upon
the Union Pacific board refused to an
sWer.
An action was brought by the gov
ernment for the purpose of compelling
Mr.. Hartman to answer these ques-
tions. and to show exactly what private