Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1913-07-03

| Missouri river and more tilan that, l
| was the fulcrum through which thi
group of men, Hartman to the exten
of $3.50, a00. 600 or 500 900; Kuhn. Loci
& Co, and one or two others to the ex
tent of $50. a000 900 or $100. 100000 more
were enabled to acquire those gigantic
| fortunes. -
',rhc first consolidated balance shee
of the Union Pacific Railroad Co., a.
of June 30. 1900. contained for the mrs
time the evidences and results of VIVA
had been going on from June 80, 1898
to June 30. 1900, and this is what hat
happened:
I'm the re-organiZa ton the old Uni
on Pacific had lost control OF what Il
known as the Oregon Properties. They
consisted of the Oregon Railroad an.
Navigation Co. and the Oregon Shor'
Line Railroad. Co. Between the date;
I have mentioned, the new company
recovered them and paid for them, mrs
by an issue of its own securities ana
secondly, by an assumption of debts o.
these companies, and, as l nave al,
ready said, the consolidated balance
sheet of June 30, 1900. showed for tht
first time the consolidated statemen,
of all these.
ION the debit side appeared thu
amount of securities issued and deb
assumed against the acquisition Oh
those properties. On the asset sids
there appeared credit equal to the
entry value of all the physical prop.
critics SO acquired, and then agar
there appeared a duplication of that.
The same amount was entered oves
again as representing the. value o.
the securities, which,, in turn, repre-
scented the value of the physical prop
critics acquired.
.vrhe sum of $4,000, coo. or its
equivalent, was entered twice on the
asset side. But up to that time the
transaction was only open to the OBJ
lection and criticism that it repre1
sented a piece of clumsy beokkeep-
ing; for. again. on the debit side there
appeared an entry corresponding,
treating the securities owned by the
Union Pacific Railroad as though they
were still afioat and in the hands OF
the public, but the. following year,
1901, somebody erased that entry on
the debit side.
so you had the entry on the one
side of the amount ofsecuritie is
sued by the Union Pacific Railroad
Co., and the amount of debt it had
assumed. representing the payment OF
the purchase price, that on the debit
side, and or the asset side there was
represented a corresponding entry. oil
an equal amount, representing the
physical value of the property. And
then, again the same entry oveI
again. And that condition existed a.
a result of this forgery. as a resul
of this erasure.
Aud that ss2,Ooo,OOo before it wa.
erased represented a debit entr,
against credit entry. that credit en-
try being the entry representing th'
securities Of these companies. which
the Union Pacific. had acquired.
Now here is what they did, AM
here is what flowed from the forgery
They took all the securities of tn
Oregon Short Line Railroad Co. and tn
securities of the Oregon Railway & Nav
igation Co, out from the treasury of tn
Union Pacific and pledged them as securl
| ty for an issue of bonds. and got tn
| money for them; and they took tina
money and applied it to the manage
ment and financing OF this Northern ia
| cific stock, which thereafter becam
Northern Securities stock. and then agar
Northern Pacific and Great Northern
Great Northern Ore, and that. In the enc
was sold out at most enormous prom
and the proceeds of that were then use
to buy from Kuhn. Loeb & co. In OF
day s20O.0Oo,000 of securities. which IN
Testimony before the Interstate Commere
lCommissiop has strongly tended to sho
they bought from themselves
Immediately after Lamar mao I"isn'
his remarkable statement, faui ~. ~
path of counsel Tor the Union i"o''