The San Francisco call., 1908-07-30
HARTMAN
ELIMINATES
RIVAL ROAD
Effectively Breaks Back Of
GOuId's TranscOntinental
Railway System
Lack OF Money Forces George
Gould TO Accept the Terms
of Competitor
Magnate Becomes a Powerful
Factor in Lines East of
St. Louis
Immediate Need OF SS.OOO,OOO
to Pay Wheeling Note Forces
New Arrangement
spEcIAL 80 10 rHk -

SPECIAL DrsPATCE TO The CALI
NEW YORK, July 2s.-E. H. Har.
rinan effectively broke the back today
of George Gouid's projected transcon-.
tinental railway system He pct only
eliminated Gould as a coast to coast
competitor, but entrenched himself as
a powerful factor il the Gould lines
east of ST. Louis The Gould roads
west Of St Louis. including the Den
yer and Rio Grande and the Western
Pacific, will retain their independence.
Itwas lack of ready money that
forced Gould to Harriman's terms.
The two men met today in the once
OF Kuhn. Loeb & Co. each supported
and after a prolonged conference ar
ranged the terms OF settlement. Gould
was in immediate need OF sS.o0O.0 900 to
take up the Wheeling and Lake Erie
notes. which viii mature Saturday.
Hartman agreed 10 finance the deal
through the banking frm OF Kuhn,
Loeb & Co. but he demanded heavy
concessions TO which Gould. in his
present financial predicament. was
compelled 10 accede-
GOULD Is EMBARRASSED
1t has been the ambition OF Gould
TO expand his system into a transcOn-
tinental line. and for this reason he
was hurrying the Western Pacific to
completion. but he was crippled Sc
verely in the recent panic. which threw
the Wheeling and Erie into bankruptcy
and embarrassed The Wabash and Ms
souri, Pacific As the Wabash had
guaranteed the notes OF the Wheeling
and Lake Erie. Gould appealed 10 Har-
riman IN order 10 save the former road
As a result OF tOday's conference Har-
riman viii hencefOrrh play an import
ant part in the management OF. the
Wheeling and Lake Erie. the Wabash
the Pittsburg terminal and Western
Maryland. all Gould properties between
ST. Louis and the Atlantic seabOard-
This eastern addition 10 Harriman's
chain OF lines in the west VIII give
him a commanding position in thu
railroad world
BIG DEAL Is ARRANGED
Hartman and Gould met al the once
OF Kuhn. Loeb & Co. at Pine and VIII
liams streets. shortly before uoOn-
Jacob H SchiH participated in the con-
ference as the financial agent OF Harri-
man. and a representative OF the bank
ing house OF Blair & Co. was in attend
ance in behalf OF Gould Judge LOckerr,
Harriman's personal attorney. accom-
panied the railroad CHIEF 10 the confer
ence. Winslow S. Pierce. Gould's per-
sonal counsel appeared a few minutes
later The men were clOseted IN
Schifrs private Office and arranged
with care every phase OF the deal
Although Gould and Hartman re-
fused TO enter into discussion OF the
negotiations. 10 was not long before the
result or their deliberations became
public
In addition 10 the realignment OF In
terests as stated above. the new deal
viii mean a close trafSc alliance be-
tween the Erie railroad. which viii ac-
quire a Pittsburg terminal and the
Wheeling and Lake Erie, now in bank
ruotcv IL also viii mean the double
tracking OF the Wheeling and Lake
Erie system and the development OF the
LOrain steel prOpertys at LOrain, o..
owned BY the United States steel cor
poratiOn-
CONSENTS To REHABILITATION
The fact that Kuhn. Loeb & Co. the
bankers OF the Hartman system and
Pennsylvania lines. have agreed 10
finance the Wheeling and Lake Erie
notes means that the Pennsylvania
railroad also has given It's consent 70
the financial rehabilitation OF the
Wheeling and Lake Erie. the Wabasa.
the Pfttsburg terminal and Western
Maryland. three embarrassed Gould
properties All OF this was foreshad-
owed in the interview given by George
J. Gould Tuesday upon his return from
Europe II was accurately forscasted
IN these dispatches Tuesday morning
Wall street has regarded the matur-
ing OF the $S.000.0O0 note issue. brought
out BY the Wheeling and Lake Erie
three years ago and guaranteed BY. tho
wabash. with a great deal or uneasi-
ness. Apparently. until today Gould
had taken no steps whatever 10 pro
vide for these notes. which fail due sat
urday- II Is believed. however. that
during his absence IN Europe Gould
was in constant communication with
Hartman and that Hartman purposely
delayed his trip west IN order 70 confer
Could