The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1913-03-13
STEVENS TELLS HOW
p. NJ. RY; WAS "MILKEDc

tceati.usA srsm Page OssD
| Of the entire capital stock OF the To
ledo Railway 4 Terminal Co. | have
reasons to believe that Harding was
interested az stakeholder in the To
ledo Terminal company, AS a result,
of this letter the G. H. * ID. bought
1 the stock OF the Toledo Terminal
company. paying SAP per share for
II, q total OF $l,470.000. The &. II. n
! ID. then offered TO sell the stock "a
the Pere Marquette for $47 per share
cash. agreeing To buy the refundng
bonds at 80. Upon motion OF Thomas
II. Tracy. a director OF the Pere Mar.
quette. and believe interested as a
stockholder In the Toledo Terminal
company, the Per Marquette voted ia
pay $l.645,000 in refunding bonds for
the stock.
stock Was Worthless.
AT that time the stock Of the To
ledo Railway h Terminal Co., was
worthless. except for speculative
purposes. The Pere Marquette had a
long-term lease on terminal privileges,
and did not In any sense require the
control OF the company The deal
was made possible by the interlock-
ing boards Of directors and the con-
troll OF the Pere Marquette by the c.
II. & d.
The bonds were sold 70 innocent
holders by the c. H. & ID. AS par
tial recovery on this purchase the
Pere Marquette cancelled the track
age contract calling for 1000 per
year. but 1t was required to advance
$4,000 to pay operating expenses
Mr.. Stevens related how the Toledo
kTerminal company went into receiver
ship shortly after Judson Harmon
took control OF the Pere Marquette
and was finally reorganized in 1907
after foreclosure by the bondholders,
MS the Toledo Terminal Railroad Co.,
the Pere Marquette and the G. II. &
I'D. taking 20 per cent each OF the
stock and the remainder being dis
tributed among five other railroads
(which did not pay for the stock. but
assumed liability for share OF the
interest on 100000 In bonds. The
Fpere Marquette now has 100000 Of
phis Toledo Terminal stock which
may be valuable some time.
Later Mr.. Stevens said an arbitra-
ion for the settlement OF the accounts
between the Pere Marquette and the
y. II. 4 d. was had. w. w. Grape and
Judson Harmon being the arbitrators.
After hearings In which the Toldo
Terminal transaction was set forth
py the Pere Marquette attorneys. the
frbitrators awarded 31,364.000 to that
.oad, chiefly on the basis OF the
plaims In that transaction. This was
raid In bonds In 1909 upon the reor-
ganisatioh OF the c. II. 4 ID.
Mr.. Stevens then alluded TO the
purchase Of the ID. r. 4 l.. by the Zim-
herman and Harding interests and
he trackage agreements which the
'ere Marquette made with that
Dad. but stated that no loss was in
turred while they lasted.
He gave the details OF the so-called
<leibolte transaction by which the
:. II. & d. purchased equipment and
assigned some to the Pere Marquette,
mounting to $764.000. Under the dis
lolution plan the c. H. & d. conveyed
is rights to the Pere Marquette, and
hat road assumed the payments un-
Ter the equipment trust agreement.
n 1905. 80 locomotives were pur-
hased, costing $486.0OO and were &C.
epted In 1906, by the receiver, JUDI
on Harmon.
Debt Still Increases.
The Zimmerman-H Harding control of
he Pere Marquette lasted from
March. 1906. to October. 1906, said
Eir. Stevens. and In that time the
nnded debt OF the road was increased
3 .207 900 by the issue Of refunding
Ponds, $942 900 for additions and i'm
provements. $4,000 for fefundinH
md the balance In the Toledo ter.
hinal deal. They were sold to the
!. H. & d. at S5h on ga per cent.
asis. In October. 1905. the funded
ebt was $49,673.80o.
In October of that year, J. p. Nor
ian 4 Co., purchased the control OF
he G. Fl. & d., carrying with 1t con-
rol of the Pere Marquette. excepting
hat the Erie railroad would take it.
Fhe Erie was actually In control fec
short time, but IL was found thai
he road was In bad shape, and the
erie directors were released from
heir bargain by Mr.. Morgan. This
tas In November. 1905. and in Deem.
per. application was made for re-
eiver.
The hearing adjourned at this point
Ind was resumed at 2 p. IN. Senator
erdier was still absent on Thursday.
IL expected that Mr.. Stevens will
complete his narrative, Thursday az
ernoon, but the committee Will
probably have some questions to ask
him.
Stevens Continues Narrative.
Mr.. Stevens continued his narrative
II the financial affairs OF the Pere
Marquette railroad before the legisla-
I've investigating committee Wednes-
lay afternoon.
After describing the manner In
which the Prince administration push
Id the road through to the Niagara
F0ntfer, he took mp the negotiations
by which the entrance into Chicago