The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-01-17
HARTMAN MUST
TRULY ANSWER
Interstate Commerce Com
mission Allowed to Pump
the Railway Magnate.
ONE QUESTION is BARRED
OTTO n. KAHN INCLUDED IN
THE ORDER.
ONE QUESTION is BARRED

New York, Jan. 16.-Jurge Hough of
the United States circuit court handed
down today an opinion directing OTTO
H. Kahn, a member of the banking
firm of Kuhn, Loeb & Co, to answer
all questions propounded to him by
the interstate commerce commission.
e. H. Hartman was directed TO an
swer all questions except those reia-
tive to the purchase of Union ana
Southern Pacific stocks in connection
with the dividend of August, 1906.
While the exceptions were regarded
as important questions by the govern
ment lawyers who were investigating
the Chicago & Alton railroad Organiza-
ton, they constituted only small pro-
portion of those that Hartman refused
to answer
The clash between the witness and
the commission occurred on Feb. 70 or
last year. For several days the investi-
gators had been endeavOring to get at
the bottom of Mr. Harriman's railway
manipulations conducted with the chi
cagO & Alton. The question -that
marked the beginning of the o5At.S,- |
versy was this:
did you own any of the Chicago &
Alton preferred stock sold by the syn
dictate to the Union Pacific?"
Contention of MIR. MiIburn.
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 government
attorney, took the contrary view. The
outcome, after prolonged arguments,
was that Hartman declined to answer
a number of questions as to stock
transactions on the ground Of personal
privilege.
Mr.. Kellogg and his associates ap-
pealed TO the federal courts to compel
the witness 10 answer. Among the
lawyers who represented Hartman in
the court proceedings were John c.
SpOoner. former United States senator
from Wisconsin, who had been prom
inently identified with the passage Of
the law under which the government
>started its Nvestigation-
Stock Acquisitions.
, Both Hartman and Kahn were ex-
amined in relation to the affairs of the
Chicago & Alton. the Atehison. Topeka
& Santa Fe. the Illinois Central the ST.
Joseph & Grand Island, the New York
Central & Hudson River and the South
ern Pacific Railroad companies.
Stock in these companies was ac-
4uired by the Union Pacific company,
of which Hartman was president, by
an issue of convertible bonds TO the
amount of s10O0O0,OOO par. In addition
the Oregon Short Line. one of the con-
trOlled companies, issued bonds for
$45,000.000 par Kuhn, Loeb & Co.'S
bank was stock depository for the pur-
pose of facilitating the transaction.
Hartman declined TO answer the
question whether he owned any of the
and Kahn declined to answer questions
relating TO the ownership by the direct
ors of the Union Pacific of any of the
Chicago & Alton stock so deposited
Hartman also refused to say whether
he had acquired any part of the stock
of the Illinois Central with a 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 be-
fore Judge HOugh 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 a waste of the as
sets and impairment of the facilities of
an interstate common carrier, and
whether the matter of such invest
ments would be made subject TO the
regulations of congress"
The questions to which Mr.. Harri-
man objected related 10 the purchase
of the stock of other railroads in the
interest of the Union Pacific.
Illinois Central Deal.
In regard to the SIS. 900, 600 Of Illinois
Central. purchased at S175 a share, The
questions which Mr.. Hartman de-
clined to answer are as follows:
Were the $4,000 shares sold by your
self. Mr.. Rogers and Mr.. Stillman
pcoled?"
WAS 1t acquired for the purpose of
selling to the Union Pacific?"
WAS the stock purehased by you
at a much lower price than $40 with
the intention of turning it over to the
Union Pacife?"
Did you have any interest in the
los, 900 shares sold at the time by
Kuhn. Loeb & Co to the Union Paei-
f1c?'
Were the 10000 shares acquired by
the same pool for the purpose Of SELL
ing to the Union Pacific?"
On the subject of the Union Pacific
dividend. which advanced from a rate
of TO 10 per cent per annun on Aug.
Is. 1906, with a consequent rise in the
stock. Mr. Hartman declined to an
swer the following:
Were you directly or Indirectly in
terested in any stocks that were
bought between July IS and Aug. II
that Appreciated"
Did you or any director buv fny
Union Pacific and Southern Pacific
canfinued on Pane 2