South Bend news-times. (South Bend, Ind.) 1913-1938, 1914-05-30
ANOTHER MORGAN
DEAL IS RELATED
Cincinnati, Hamilton and Day.
ton Road UnIOaded Onto the
Baltimore and 0hiO-MOr-
gan Was Big Gamer.

WASHINGTON. May 3O.-Other f.
nancial sins were Friday unloaded on
the house Of Morgan when the inter-
state commerce commission opened up
the deal by which j. p. Morgan placed
the Cincinnati, Hamilton and Dayton
road on the shoulders of the Balti-
more and Ohio.
This deal was shown TO be even as
remarkable as those made by Morgan
In connection with the New Haven
system recently exposed by President
Mellen.
Daniel willard. president of the
Baltimore and Ohio, spent the entire
day on the stand and though at times
reluctant, he told under the guidance
OF Louis d. Brandeis, attorney for the
commission, just how Morgan worked.
He admitted that the c., II. and ID.
transactions were an investment on
which nothing had been earned and
admitted that II may end in the hands
of receivers. The whole deal was un-
wise, according to Mr.. Willard.
Attorney Brandeis sought to bring
out that because of this unsuccessful
venture which he stated would end
in the loss Of some 100000 by the
Baltimore and Ohio, that road is now
urging a five per cent increase in
freight rates. Mr.. Wizards story was
Morgan Got Control.
Morgan got control of the Cincin-
natl. Hamilton and Dayton in 1903.
lie tried to unload IT on the Erie.
Hartman blocked that deal and Nor
gan succeeded in finding a home for
the Cincinnati. Hamilton and Dayton
with the Baltimore and Ohio. The
deal which Morgan made provided:
L. That the Baltimore and Ohio
would guarantee the principle and
interest Of the first and refund
ing mortgage bonds OF the g, II.
and d. amounting to S12,50O.0O0.
go. That the Baltimore and Ohio
guarantees the S11.557.O0O of 'pur-
chase money notes secured by the
S12.500.00O of first and refunding
mortgage bonds
"3. That the Baltimore and Ohio
would agree whenever they took over
the c., II and d, from Morgan, this
10 be not later than December, 1916,
either to guarantee $2O.OOO.OOO of
per cent bonds, or TO buy at cash S20,-
600. 600 Of these general mortgage
bonds.
-. That the Baltimore and Ohio in
addition 10 the above was 10 buy from
Morgan $4,000 odd shares OF common
stock OF c. II and D.. and TO buy from
other persons about five thousand
shares. making up the balance OF S.
900. 900 OF common stock.
Later the Baltimore and Ohio
made an agreement whereby they
were TO buy the c., II. and u. stock
from Morgan at a minimum price OF
S34 plus $40 a share. The plus ten
was made a contingent as 20 whether
the Baltimore and Ohio must buy So
100000 of Pere Marquette stock which
Morgan also held.
''The first change in the original
agreement was made in 1911 at which
time the Baltimore and ohio agreed
10 a minimum amount OF $34 a share
and a maximum amount OF 500 a
share.
Modify Agreement.
"A year later they modified that
agreement and made il S34 plus $40.
In addition 20 this they also relieved
Morgan from certain obligations
whereby he was TO bear part of the
burden should the G., II and ID. prove
unsuccessful. This last part Of the
contract has made the house OF Nor
gan big gamer
Ia showing how the Baltimore and
Ohio viii be out about $5O.O00,0OO on
the c.. and ID. Mr.. Brandeis showed
their liabilities from these transact
ions In detail. They are:
J. A $4,000. GOO cash advance up
10 July j. 1914
.. 4 guarantee OF S7.5OO.OO0 refund
ing mortgage bonds This is part
OF the S12.5O0.OOO first and refunding
mortgage bonds The remaining So
100000 had not been sold.
.. S1T529. GOO ia bonds which the
Baltimore and Ohio had agreed TO
guarantee 90 buy These were for
settlement OF various claims against
the G. n. and H.
S632, 00O which the Baltimore and
Ohio has bound itself 70 pay at S44