Los Angeles herald., 1909-01-12
TELLS HOW ROAD
HAMPERED MINES
UNION PACIFIC MERGER PUT
BAN ON PRODUCTION
ONE EFFECT OF COMBINE FORCE
FULLY REVEALED
President of the Phoenix G. Eastern
Among Witnesses in Dissolution
Sult-Jacob Schiff Also
Testifies
-IRv Associated Press.1

NEW YORK, Jan. 11.-Frank M.
Murphy, president of the Phoenix &c
Eastern Railroad company, was again
on the stand before United States Spe-
cial Examiner Sylvester G. Williams
here today as a witness for the gov
eminent in the suit to dissolve the
Union Pacific merger.
In reply to questions by G. A. Sew
erance, government counsel he said
the Phoenix & Eastern ran through a
district in which gold, silver. iron and
copper were mined, but the mines were
not worked much now.
Before the Southern Pacific took
over the connecting lines,' he said,
the, ore was smelted at smelling
plant not far from the mines, but
after the transfer the Southern Pacific
naturally preferred to have ore sent
to Ell Paso for smelling"
Mr.. Murphy promised counsel for the
defendants to produce at a future hear
ing statements as to the amount of
freight shipped over the Phoenix &
Eastern railroad prior to the merger.
In reply to questions as to the
status OF the Atchison, Topeka & Santa
Fe with regard to transcontinental
traffic, Mr.. Murphy said that every
thing was in readiness for the build
ing of the line from Bengal, Colo, to
San Francisco.
George M. Hughes, president of the
New Jersey, Indiana & Illinois railroad,
who said he had charge of booking
freight for the Singer Manufacturing
company, testified that the Union Pa
ciic and the Southern Pacific still
competed for New York shipments.
Testimony Confirmed
J. F. Bannerman of the Otis Sewing
Machine company gave similar evil
dence affecting bids for eastern traf-
fic.
Jacob II. Schiff of Kuhn, Loeb &
Co, fiscal agents for the Union Pa
cific railroad, was a witness today.
Mr.. Schiff is a co-defendant in the
case. He identified the plan Of re-
organization of the present Union Pa
cific company under which 1t took over
the property and commenced business
in 1898.
Mr. Schiff said he was a member Of
pany took over the property and that
$100,000,000 was issued to pay for South
ern Pacific stock and perhaps the
Oregon Short Line interest.
When the Great Northern purchased
the Chicago, Burlington & Quincy
road he said he thought there were
one Or two differences between Mr..
Hartman, Mr.. Hill and himself
Mr.. Schiff said: "A1r. Hartman OBJ
jected to the Chicago. Burlington e.
Quincy passing into the hands Of the
Great Northern. He said he was
satisfied as to conditions and thought
they should not be disturbed, but that
If the purchase should be made the
Union Pacific should share it,
Mr.. Schiff said he thought Mr.. Hill
declined the suggestion.
The witness said Kuhn, Loeb & Co.
bought a large part Of the Northern
Pacific stock in 1901 and sold it to the
Union Pacific and Oregon Short Line.
Had you a talk first with Mr.. Har-
riman?'
Not until after our first purchase"
What was the purpose of the Union
Pacific and Great Northern in secur-
ing the stock of the Northern Pa
cific?"
Mr.. Hartman can answer that
question better than l could. But
believe it was to maintain the status
quo of the Chicago, Burlington &
Quincy, a sort Of half interest. Mr.
Hartman did not know what havoc
the passage of control of the Burling-
ton to another road or roads might
work for the Union Pacific"
You did not want the Northern
roads to own it?''
Things worked out differently. but
we wanted to hold on to the situa-
ton as it then existed"