Los Angeles herald., 1910-09-29
TELLS INSIDE OF
|. c. CAR FRAUDS
Former President of 0stermann
Company Relates Sensa-
tionaI Story
PAID OFFICIALS FOR BUSINESS
TestifieS Vice President RaWn
Received Percentage on
Repair Charges
Associated Pressf


CHICAGO, Sept. 2S.-Henry c. Oster-
mann, former president of the Oster-
mann Manufacturing company, who is
said to have been a big factor in the
Illinois Central car repair frauds, re-
lated a sensational story of the inside
workings of his concern before Munich
pal Judge Burggemeyer today.
The late Ira G. Rrawn, former presi-
dent of the Monon route, who was mys-
teriously shot to death at his summer
home last July, was named by Oster-
mann as one of the chief figures in the
alleged graft ring.
Ostermann declared that Rawn, when
vice president of tho Illinois Central,
was given 1900 shares of stock in the
Ostermann Manufacturing company
and that this was increased to 2700
shares.
He said Rawn sold his stock to the
Ostermann plant at par, or $5 a share
After he had sold back the stock for
S13,5OO, the witness testified, Rawn de-
manded and got first So, then $40, and
finally SIS for each car repaired, or al
legged to have been repaired, at the
Ostermann plant.
PAYS RAWN S1O,50O
Ostermann testified that he person
ally made one payment of $10,500 to
Rawn, which, he said, was for 700 cars
upon which the concern collected re-
pair bills.
In addition to the payment per car
as to Rawn, said Ostermann, fixed
monthly sum was paid certain officials
and a 2 per cent per month dividend
was paid on large blocks of Ostermann
Manufacturing company stock held by
Illinois Central officers.
What Illinois Central officials held
stock in your company?" Ostermann
was asked by Attorney Walter L.
Fisher counsel for the railroad.
IRA G. Rawn had 2700 shares, Frank
B. Hartman had 22O0, John M. Taylor
had first 1000 and then 5000, Joseph e.
Buker had 2200, William Renshaw had
1900 and w. J. Taylor had 500 shares.
S. P. and Mildred Hartman had 100
shares each but 1 do not know who
they are, or whether they were con-
nected with the Illinois Central COM
pany, their stock being %bought and
paid for by Frank B. Hartman"
TURNS DOWN FRIENDS
Ostermann then told of the organiza-
ton of his company and how the men
who helped him get started were later
linois Central officials.
Ostermann first secured patent on
a special door for box cars. To get
money to market the enterprise he
went to his old friends, to brakemen,
conductors, yardmen and other en-
ployes. Many of them purchased stock
in the concern with their savings. They
paid par value for the stock, but were
never given anything but a nominal
dividend upon their investments.
THE idea of going into the car re-
pair business was first suggested to me
by a Mr.. Considine, whom I met while
selling stock in the grain door enter
prise" said Ostermann. Later I took
it up with John M. Taylor of the Illi-
nois Central. He discouraged me at
first and later assisted me, Joseph Bu-
ker and Ira G. Rawn to arrange for
a contract to do the repair work for
the Illinois Central.
"Mr. Rawn asked me how many cars
I thought 1 could turn out and I replied
about twenty-five a day. You are the
man we are looking for he said, and
the deal was arranged"