New-York tribune., 1908-03-13
TO RECOVER MILLIONS
l.. u. STOCKHOLDERS ACT.
Demand That Directors Restore 4t-
Ieoed Stock Deal Profits.

Formal demand was made yesterday upon ths
board of directors Of the Union Pacific Railroad
Company in the name Of four stockholders %
the road that ii at once institute proceedings
for the recovery Of approximately $2bt's.OD
which the stockholders aIlege realized by
certain OF the directors in the sale of stocks OF
various railroads. which they owned, 20 the
Union Pacific Railroad Company. The directors
specifically mentioned in the notice, which was
signed by Lewis a Storrs. William A Arnold
Albert c. Bates and Henry r. Buck, all OF
Connecticut were F. II. Hartman. H H
Rogers and James StilIman-
In their notice to the directors the stock
holders refer Mr. Harriman's testimony be-
fore the Interstate Commerce Commission IN
January and February, 1907. and mention al
legged deals in which they say he and his asso-
ciates participated. among them being the sale
by the directors already named of 3o.oo shares
each of Illinois Central stock 10 the Union Pa
cific Railroad Company lat an extremely hign
price" The notice asserts also that Kuhn.
Loeb & Co. fiscal agents for the Union Pa
cifc. sold 10 the latter 10000 shares of I'LL
nois Central stock at the same price. They
point out that Mr.. Hartman refused 20 answer
questions before the Interstate Commerce COM
mission regarding those sales Of stock. and go
on to say that they advised that IT Is weli
established in law that a person cannot pur-
chase on account of another that when ne sells
TO his own account They are furJher ADVISED
the stockholders say. that this IS especlaiiS
trus with regard to corporate directors anu
that the corporation can by appropriate ac-
tiOns, compel such directors 10 uiS7'i77 ~
unlawful profits
7, ,beir demand for restitution the stockhoid-
ers saw also that the acquisition by the Uhiou
Pacific Railroad Company Of stock IN tne ran
road Securities Company was unla"fui III 'h''~
il was an ultra wires transaction and resuited 'l
a loss TO the Union Pacific of over S4'oo'oV'-
.-rb,e- they add. "is only part of the loss of
$4,000. 600 sustained by the Union PaciIic OH
the speculation in stocks into which our COM
pany and its subsidiary corporations nave Oeeh
thrown by the present management
II Hartman refused to discuss the demand
made bv the four stockholders. You had better
see Mr. AIiIIar. our secretary, he said; ne may
know something about IT, don't
Mr. Mfllar said he had received a copy OF the
demand and had turned it over 10 the law de-
partn1ent He said that the four stockholders
whose names were signed 10 the paper. nad onIy
$50 shares Of stock among them Ihls was an
the information that could be obtained rom MN
and Mr. Hartman again appealed TO-
.rybv don't Won go and see these stockholders?'
he asked Don't come TO me- can't tell you
anything about the case
Leonard ~ WaTIstein. of No 20 Wall street.
is counsel for the four prOtestants. He said tnat
behind these men were people of substance. that
they were really bent upon an important OBJ
1ective and that the demand for restitution
would be pushed to the end
There are two reasons for this petition he
said "One is that before suit is brought we
must give notice that we feel there are certain
things which it is imperative for the board OF
directors to do. That is the purpose of this
petition If the things are disregarded. then the
affair will proceed 10 its logical conclusion.
THE other is that do not want the di-
rectors of the Union Pacific 10 feel that by
segregating the stock issues they are erecting
wall of immunity. Segregation will not build a
wall. and they liable for the profits
We have the best sort of evidence that there
was cleared from the Illinois Central deals So
$4,000 and S6S3.5O respectively; that Harri-
man profted to the extent Of 100000 by the
St Joseph & Grand Island deal, and that there
were enormous profits in the Railroad Securities
deal which we are not certain enough concern
ing yet to make a positive statement In the
Atchison Topeka & Santa Fe. the Baltimore &
Ohio the Chicago & Northwestern. the Chicago.
Milwaukee & st Paul. the Chicago & Alton and
the New York Central stock deals there were
profits approximatng S1J.oc0O00- That, with
out the Railroad Securities deal, means $26,-
600 600 profit
AS vet We are not in a position TO say
where suits will be brought. if they have to be
begun Frankly. do not think that this petit
ton in itself viii serve any o-her purpose than
as 1 said. of serving notice
Let it be understood IN the first instance
that this is IN TO sense an attack on Hartman
persOnalIy Furthermore, this is not an attack
by Stuyvesant Fish. So far as 1 know ana
am saving it with TO equivocations or reserva-
.iors Mr. Fish is not interested in this move
n7ent. Some persons have seen fit 70 charge
that. il being known that | was one OF MI
Ffsh's attorneys IN the Illinois Central hsh'-
F,,,t am not acting for him in this matter