Omaha daily bee., 1909-01-13
JACOB 4. SCRIFF ON STAND
Fiscal Agent Of Hartman Tells Of
Number Of Financial Transactions.
MEN PLACED ON ATCHIsoN BOARD
President of DeRver a Rio Grande
Says Merger stopped Exchange
of Business with Southern
Pacific.

Of Business with Southern
Pacific.
NEW YORK, Jan. 12.-Jacob n. Schiff
Of Kuhn. Loeb & Co, fiscal agents for
the Union Pacific railroad, was q Wit
ness yesterday TO the hearing OF govern
ment's suit TO dissolve the merger of the
Hartman roads. Mr.. schiff Is a CO.
defendant in the case. He was questioned
by Clarence A. Severance of counsel for
the government. He identified the plan
Of Reorganization of the present Union
Pacific company under which il took over
the property and commenced business In
1893. Mr.. Schiff said he was q member
of the board of directors when the com
pany took over the property and that
500, 000, 600 was issued to put the COM
pany in funds to pay for Southern Pacific
stocks and perhaps the oregon Short
Line interest. When the Great Northern
purchased the Chicago. Burlington &
Quincy railroad, he said, he thought there
were one or two discussions between Mr..
Hartman, Mr.. Hill and himself. Mr..
Schiff added:
"Mr. Hartman objected to the Chicago,
Burlington & Quincy passing into the
hands of the Great Northern. He said
that he was satisfied as to conditions
and thought they should not be disturbed,
but that II the purchase should be made
the Union Pacific should share in it."
Hill Takes Burlington.
Mr.. Schiff said he thought Mr.. Hill de-
clined the suggestion. The witness said
that Kuhn, Loeb & Co. bought a large part
of Northern Pacific stock in 1901 and sold
1t to the Union Pacific and Oregon Short
Line.
Had you a talk first with Mr.. Hsrri-
man?'
Not until after our first purchase
"How much did your first purchase
amount tor"
'I don't remember said Mr.. schiff.
what was the purpose of the Union
Pacific and Great Northern in securing
stock of the Northern Pacific" asked Mr..
Severance.
"Mr. Hartman can answer that question
better than 1 could. but / believe 1t was
to maintain the status quo of the Chicago,
Burlington & Quincy, a sort of half in
terest. Mr.. Hartman did not know what
havoc the passing of control of the Bur-
lington to another road or, roads might
work for the Union Pacific"
you did not want the Northern roads
to control?"
'SThings worked out differently, but we
wanted to hold onto the situation as it
then existed"
Mr. schiff said he knew the western
terminus of the Northern Pacific at Port
land was the same as that of the Union
Pacific and subsidiary lines.
Two Men on Atchison Board.
Mr.. Severance then questioned the wit
Tess about a conference in which Mr..
schiff said that MIR. Rockefeller, H. H.
Rogers. James stillman, Mr.. Ripley. Mr..
Morowetz and himself took part. Mr..
Schiff said they wanted representations on
the Atchison board of directors, because
they had made large purchases of common
stock of that road and the laws of Arizona
gave them the right to have two members
on the board. Mr.. Rogers and Henry c.
Prick were chosen. Mr.. Severance asked
whether Mr.. Harriman's name was sug-
gested as a director and whether Mr..
Ripley objected. but Mr.. schiff said he
did not recall any such incident.
"Mr. Hartman has testified that the
object of your effort to secure an agree
nent was to bring about n better under.
standing between the roads, so that they
would not be working against each other,''
said Mr.. Severance. t
81 don't know" said Mr.. Schiff. Kuhn,
Loeb g. Co. are not in a position to know
all about those details"
Stuyvesant Fish. former president of the
Illinois Central railroad, was the next wit
ness. He said it was feasible for the Union
Pacific to compete with the Southern Pa
cific by shipping from Portland to San
Francisco by water route. An all-water
route from New York to San Francisco,
by way Of the Panama canal, he said,
would compete with all-rail lines.
Asked by counsel for the government
- " $1,000 A. -
traffic of the Illinois Central had followed
while he was its president, Mr.. Fish re-
piled that the policy followed had been
a purely selfish one. I'VE tried TO get
all the traffic we could" he said.
western Pacific VIII Compete.
Edward T. Jeffrey, president of the Den
yer & Rio Grande railway, followed Mr..
Fish. He was questioned concerning the
Western Pacific Railway company, Of
which he is also president, and allowed it
TO DO understood that the only reason the
Denver & Rio Grande was actively push
ing tho completion of the Northern Pa
ciflc from Salt Lake City to San Fran
cisco was to re-estsblish competition for
eastern traffic, which the common con-
! troll of the Union Pacific. Southern Pa
cific and oregon Short Line had prac-
tically abolished.
I0 AAN NN 1oAhf q IL
verted this traffic from the Denver &
Rio Grande TO the Union Pacific and the
Atchison. Topeka & Santa Fe. The clos
ing OF the gateway to Portland, he de-
clared, had also injured the business OF
the Denver g. Rio Grande. Before the
merger tin Southern Pacific turned over
to the Denver & Rio Grande a great deal
OF its e~astbound traffic. The Denver &
Rio Grande in return gave to the South
ern whatever through freight was carried
over its lines. Under the new conditions
the Denver g. Rio Grande. having no other
outlet. continued, he said, TO turn over
traffic to the Southern Pacific, but the
/; volume of business transferred to the
Z Denver & Rio Grande by the Southern Pa
cific had shrunk steadily.
= This state OF affairs would be remedied,
' the witness intimated. as soon as the
I. Western Pacific line TO San Francisco
0 was completed. 1t would then be possi-
3 BILE for the Denver & Rio Grande. Mr..
: Jeffrey said, TO compete with the South
2 ern Pacific on a basis at least as favor
able an that which existed before TN