Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1910-02-10
To Explain Purchase by His Firm o.
Controlling Interest in Ohio Te|e-
phone Companies, to Which Deal
Minority Stockholders Object.

| New York, Feb. 81 Perpont Nor
| gan, one of the most difficult men in
| the United States to interview, may
| voluntarily testify in New York in
! few days concerning the recent pur-
chase by his firm of a controlling in
terest in the United States Telephone
| Co. of Cleveland and the Cuyahoga
Telephone Co of Ohio Protesting
minority stockholders of the companies
are in New York taking dispositions to
be used in the Ohio courts in suits to
check contamination of the purchase,
| maintaining that j. p Morgan & Co
acted for the American Telephone and
| Telegraph Co, in acquiring six indie
pendent companies in Ohio and Ind-
ana; and that competition has ceased
to exist in that territory, hence the il
| legality of the transaction. Morgan &
| Co. hold that any purchases they made
We're simply an investment of the firm.
| H. B. McGraW of Cleveland and Sam
| uel 3. Jeffries of St Louis, jointly rep
| resenting the minority stockholders
| said this afternoon that Mr.. Morgan
had volunteered as q witness and that
| he would be called probably in a day
or two.
| The hearing is being held before a
| notary mere, deputized by the Ohio
| supreme court, where the original suit
was brought. The American Telephone
and Telegraph Co. which controls the
Central Union Co. in Ohio and Indi-
ana, contends that the deal was never
carried through and that it does not
now know who owns the independent
companies and that it has no interest
whatever i'll them 1t further asserts
that competition in that territory is
as strong is ever.
Evidence taken today showed that
the American Telephone and Telegraph
Co. negotiated with r. l.. Day & Co.
bankers, to acquire the controlling in.
terest in the Ohio and Indiana COM
panics on the understanding that the
American Co. would take these hold
ings if it found it could do so legal
ly r. L. Day & Co. acquired the hold
ings and later disposed of them, but
the American Co. asserts that it was
not the purchaser.
The American Co. admitted today
that they loaned Day e Co. more than
S700O,O0O to acquire them for holding
but that when Day & Co. We're re-
leased from their contract the loan
was paid.
New York Feb. 9.-TO find out
whether or not the recent purchases by
j. P. Morgan of six telephone com
panies in Ohio and Indiana were really
Cor himself or for the Bell interests, at
torney for the stockholders in the
United States Telephone and Tioga
Telephone Co. began examination of
witnesses in this city today The in
quiry is the outgrowth of injunction
proceedings against the contamination
of the purchase, brought in the Ohio
courts.
L. j. Hall, vice president of Ameri
can Telephone & Telegraph Co., the
first witness, declared the American
Telephone & Telegraph Co. was the
controlling stockholder in the Western
Electric Co, the largest electric equip
ment manufacturers in the world
an Ohio and Indiana we operate tho
Central Union Co." said Mr.. Hall.
THE American Telephone & Telegraph
Co. has no control of any other COM
panics in Ohio, excepting the long dis
lance the Cleveland Telephone Co. and
the Western Co. Of Cleveland
Prior to September, 1909, the United
States Co. and companies in all cities
in Ohio and Indiana competed against
the Bell Co, Mr.. Hall said. Part of q
letter written ny President Vail Of the
American Telephone & Telegraph Co,
to the attorney general of Ohio, rela-
tive to the acquisition by D. L. Day &
Of tho Ohio riaC road hy,
II. B. McGraw of Cleveland. one of the
counsel for the minority stockholders.
The letter said that the company had
been offered 80 per cent interest in
the United States and Cuyhoga COM
panies.
who made the offero'
"a Mr.. Cor and James Bradley. We
had FREQUENT offers of the properties
but always refused them"
The bill of complaint alleged Bradley
and Go1 secured stock from holders
under a promise, deposited 1T in the
Mississippi Valley Trust Co. at st.
Louis and then sold it to r. l.. Day
& Co, New York, brokers; that Morgan
&; Co. backed Day &, CO. and that the
American Telephone & Telegraph Co.
were represented by J. P. Morgan &
Co.
Mr.. Hall said that in October last he
represented Henry Everett and others
who owned most of the two Ohio COM
panicc and that they wished to sell to
the American Telephone & Telegraph
Co.
Il recommended to President Vail
that we purchase the properties if the
matter could be arranged legally"
The witness said that later the
American company arranged with the
banking firm of r. l.. Day & Co. to
take over all the stocks of the COM
panies in this suit upon which Golf had
ort;ape apd hold tho cfocly FOR tho