New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-01-12
MR.. SCHLFF ON up DEAL
NEW PHASE OF MERGER.
Differs from Mr. Hdrr'mon-hr'
Fish Tells of Conn., etition.

yesterday in the case IN the custom hoLSe'
the former TO tell Of the Union Pacific Railroad
steps 10 domination in the transcontinenta shipping
interests and the latter testify to the extent OF
competition before the merger was made, IN lSn.
Mr.. Fish said that there competition before the
merger and that conditions had changed vastly
since. that line he president Of being
a north and south line, not at any time in the
thick OF the railroad competition for Far western
freight Much interest attached TO his appear
ance because OF his conflict with Mr.. Hartman for
the control of the Illinois Central
Mr. ScniT accompanied by his counsel Paul
Cravath. Els firm had reorganized the Union
Pacific. and had been the financial agents for Mr.
Hartman and his associates in the crusade Tor
Western control The witness recited the EFFORTS
made by 3fr. Hartman and himself in a conference
with J. J. Hill TO prevent the absorption of the
Chicago Burlington & Quincy by the Northern
roads. and, when this was seen to be inevitable.
urging that the Union Pacific be admitted to
participation in the purchase. This also I'M
successful.
The purpose Mr.. SchlT said. was 10 maintain the
status quo OF the Burlington. There sharp
competition between the latter and the Union Pa
CifC. but-and Mr.. SChin smiled little-they the
Union Pacific interests could always get along
amcably with the Burlington interests and feared
that II the Hill roads dominated there might be
little friction. After these refusals of Mr.. Hill
things began to happen.
Kuhn. Loeb & Co. interested in Northern
Pacific. Soon they little SO. and the
first thing Mr.. Hill knew they held the majority
Of the common and preferred stock. Mr. SchiT said
that Mr.. Hartman not consulted about this.
II was only after considerable OF the stock had
been acquired that he informed. The bankers
resoid The stock the Hartman interests ard the
Burlington was saved from the Hin interests.
BOUGHT BECAUSE STOCK WAS CHEAP
or the Atchison deal whereby the immunity OF
that road was assured Mr.. Schf declared that his
firm purchased the great block Of stock not give
the Hartman interests commanding holdings, but
simply, and wholly because the stock cheap.
1t a bargain, and they did II pass up.
The fight to have H II. Rogers and Henry c. Frick
put the directorate not because they
IN and Of the Hartman interests but solely be
cause. holding so much stock under the laws OF
Kansas they entitled to two members on the
board
There first brief conference with Mr.. SchH
by Mr. Cravath and ex-Judge Ilovett the latter
the counsel for the railroads. and c. A Severance
representing the government. included. and
then Mr. Schn went on the stand. He identified
the plan Of reorganization OF the Union Pacific.
and II put in evidence. Questions recalling In
cdents in connection with It followed rapidly. Mr..
Schir remembered the issuance Of 100000 con-
vertible bonds 10 put the company in funds or
this 100000 used TO pay for the purchase
Of Southern Pacific stock rather. the witness
said. to put the oregon Short Line in funds to pay
for its purchase OF the Southern Pacific Then he
told OF the efforts made TO ge. Mr.. Hill 70 permit
MI Hartman TO take part in the Chicago. Burling-
ton < Quincy purchase before its accomplishment
Judge Lovett objected 10 this line OF testimony
but the answers went in
DO you recall OF request that vas made either
by Mr.. Hartman yourself. or both Of you in
enc OF these conversations that you gentlemen or
the Union Pacific. in the purchase was 10 go
through. should be allowed to participate in II with
the Northern Pacific and the Great Northern" was
asked.
4 cannot exactly remember whether II was a
formal request. know such was the desire in
order TO keep the Burlington & Quincy ndapen-
dent, that the Union Pacific interests II said pur-
chase were made by the two Northern companies.
should have an interest in it," Mr.. schir replied.
NOT TO ELIMINATE BURLINGTON
Mr.. SchiH would say that the object OF con
trolling the Northern Pacific was TO control the
Burlington and thus eliminate competitor. The
plan was to leave the Burlington independent. Ex-
listing conditions. he said should not be changed:
that was the sole purpose Efforts get the Wit
10 say that the purpose Of the whole deal was
to quash the Burlington met with failure at every
In the efforts to get Mr.. SchifT to tell Of tralc
arrangements terminals and other operative rail
road matters Mr.. Severance was met with the
answer that Kuhn. Loeb G. Co. merely the
financial agents OF the Union Pacific Mr. schn
said that he a director Of the Northern Pacific
for many years, but he knew only OF financial
matters. His firm had done business for other
transcontinental lines. When the Union Pacific had
any securities to sell or buy, Kuhn Loeb & Co had
the first call.
The question of representation on the board Of
directors OF the Atchison. Topeka & Santa Fe was
then taken up, Mr.. Schif calling the stock pur-
chase fine bargain He asked whether the /
following testimony Of Mr.. Hartman agreed with |
his recollection:
1t was, I'm substance. that to try to es- |
in line that we should deal more franky %t5
each other, more publicly and more frankly and |
ing other for the purpose OF Of qSS spi3
BY each: and TO that EXTENT f even e seryed
vim MF MS5swefz to tell him that as sS Tar Tar
be- be willing to even put him on the executive com
know what our relations were II he chose TO- |
That did not agree with Mr. schir-s recollection |
at all. The stock was purchased solely because Il
was cheap for other reason He remeno- |
bered nothing about the discussion. He said that |
OF course, in purchasing stocks, different persons
might have different reasons different purposes
Kuhn, Loeb & Co.'s purpose was because the stock
cheap, tut Mir. Schf said even II he did not |
remember 1t might still have been a fact. as Mr. |
Hartman stated, that the object was to establish
"a better relationship between all railroads.
In the cross-e1amnation Mr. Schin said that |
control of the Burlington by the Northern COM !
panies would have diverted much traffic from the |
Union Pacific lines TO Mr.. Severance Mr.. Schirr
said that his associates at the time of the pur-
chase of the Atchison stock were MIR. Kahn. Mr.. |
Hartman. William Rockefeller, Henry H. Rogers |
aud James Stillman.
NJ Fish followed Mr. Schir on the stand. The |
e1-presdent of the Illinois Central first gave
account of the physical properties OF the road. Up
~ 1901 he declared that Inc Union racine ana the
Southern Pacific competitors for the Illinois |
Central business. the former at Omaha and the |
latter at New Orleans. They we're as actively in |
connection SIS any two lines in the business
The witness could not tell about the rates lie !
eaid that he never gave them much attention He /
believed that, with the Union Pacific having an
outlet AZ Portland by the Oregon Short Line. all
rail competition possible. The policy OF the /
Iuipos central. Mr.. Fish declared, was to treat !
all lines impartally, to treat those best who |
treated II best It purely selfish policy, he
I'D lie said that no rates that ORIGINATED ON the