The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-05-30

pany.
when I was an officer of that company
In 1901 the question was frankly discussed
as to the acquisition OF the Cincinnati,
Hamilton and Dayton, but nothing was
done. President Underwood OF the Erie
OF course knew, OF my knowledge OF the
property and in 1906, I think, left the
Erie.
Glad to Get &. II. a ID.
Il recall receiving message from Mr..
Underwood In which he gave the informa-
ton with apparent delight that the Erie
had finally got control Of the Cincinnati
Hamilton and Dayton.
After this President Underwood and
his associates completed an inspection
trip" he said, land in a short time I
learned they had given up their contract"
How does a railroad give up its con-
tract?' asked Chairman Harlan.
II will explain that" said Mr.. willard.
They agree TO take the stock and con-
slider themselves the owners of the prop
erty Then they made the trip and re-
ported to the board Of directors OF the
Erie. The Erie board refused to confirm
the transaction.
"Mr Brandeis suggested that this was
done at the instance of Mr.. Hartman.
That may or may not be so. IL was after
the return OF Mr.. Hartman to the coun-
Wy ~ was bpDOltlttu ny ING
Erie board to call on MIR. Morgan ana
| say tn him that the board refused to con-
| firm the contract.
THE committee did call on Mr.. Morgan
| and told him that the Erie board had re-
fused to confirm the contract. Mr.. Nor
| gan met them himself personally. Very
we'll he said. If the Erie Railroad Is not
satisfied with that stock I will take II
| back personally and I shall see that the
Erie company shall not. lose a cent by
the transaction. am unwilling that any
| company shall sustain any loss because OF
any arrangement which II has with me OF
| with my firm. / will take the stock back
| personally
"Mr. Morgan took the stock himself
without any loss to the Erie"
Receiver Then Named.
Mr.. Willard said that some of the Erie
directors had even become directors OF
| the Cincinnati. Hamilton and Dayton. A
| few days afterward a receiver was APP
pointed and that. said Mr.. Willard, wI'
"the end of the Erles relations with th'
Cincinnati. Hamilton and Dayton" an'
that left the c.. IT, & ID. in the hands o
| "A receiver and the Perc Marquette ant
the c.. II. & u. continued 90 until 1903.
Continuing his narrative. Mr.. Willar'
then took up the acquisition Of the Gin
cinnatl. Hamilton and Dayton ny the Bal
timore and Ohio in 1903, which closed thu
receivership.
ut ought to be kept in mind" he said
that the c., H. 4 D.. as purchased b.
the Il. N o. was quite different from TN
c.. II. & d. purchased by the Erie ant
the terms OF the purchase were quit
| different.
During the reccivership the objection
able contracts had been cancelled. II 1
true that the c.. H. 4 ID. still neid 1000
shares of Pere Marquette stock. Tn
committee OF Il. & o. directors that rec
commended the purchase was. or course
aware of the situation OF the c.. II. & I
as II existed at that time, and In their es
Innate which they made concerning tn
future of the property they gave consid
GRAFTON to these various matters.
"Thcy felt that the ownership of tn
Pere Marquette stock might not brm
, money in the way Of dividends. but
might give them influence In the terrtor
served by the Pere Marquette Tina
forecast was found to be not justified"
Mr.. Willard said that most of the a,
vantages that would accrue to the B. an
o. AS the result Of the acquisition OF Il
Cincinnati. Hamilton and Dayton had NJ
. materialized.
Drain Began In 1911.
Mr.. Willard said that In the spring
, 1911 the Baltimore and Ohio encounter'
severe blow In connection with u
: transaction. 1t became evident at thi
time. he said, that the Pere Marquet
must get from $4,000. 900 to $4,000. 0,
to double track and make other improv
ments and that II had no means Of raj
ing money except on Its own credit.
As the result, he said. of the Baltimo
and Ohio advancing the money .hrout
the c.. II. Il ID. and through his neg
q tiations he sold 10000 shares OF Pc
!, Marquette stock 10 Morgan Co. In SUI
y a way az to Offset c.. II. & ID. sto,
which the Baltimore and Ohio is obligat'
to purchase in 1916.
Mr.. Willard could not fix the da
4 when he reached a conclusion that q
d Cincinnati and Hamilton was bound
J. involve the Baltimore and Ohio In a larl
r loss. but he said that he became co
d WINGED that 1t would be prolonged ter
@ porary loss after the flood OF 1913.
IS Mr.. Willard said that the u.
: has advanced approximately S23.oO0,oOo
one way or another to the C.. II.
). for which II has collateral OF certa
o. character, some Of 1t unquestioned al
X some to depend upon future development
n Mr.. Willard admitted that the collater
held by the Il. o. was really C..
Il u. bonds.
J. When asked II the reduction OF I
J., dividends to meet the possible loss fro
W G., Ii. ana ~. Hlldnces' was tdhc' w
s. consideration. Mr. willard said:
T, mo. sir. ! did not thin 1t would
~ necessary"
l. Mr.. Willard said that the Baltimo
and Ohio Railroad Company has ~
le plus of s40.00o,000.
10 you have been foremost among tho
III who have urged the absolute necessity
70 railroad management In connection wi
Oh the advanced rate case of preserving
n aroa aurnl,,s both for the safety and W
m dom of management, and here you ha
u an Investment, an obligation, which equi
and exceeds this large surplus OF the
& o." said Mr.. Brandeis. ut Is
yiously an Investment on which nothi
he Is being earned
an Mr.. Willard assented 10 this
on Chairman Harlan announced that
r. morrow being holiday the commissi
se would not sit and that the commissi
a. could not continue the investigation
~, Monday or Tuesday on account OF oti
"a worry and he announced the Investigate
90 would be resumed on date to be fla
later.
nm THE indications now are that as a
M sult of to-day's developments the inves
,s cation would be more extended than
"a first Thought. The opinion was express
"a nv Mr.. Brandeis. however, that the Inv
~. t,pation would not delay the handing do
Y - =. decision In the advanced rate ca
sh W.mbera of the commission would not
H. nress an opinion In regard to that phi
IT. OF the matter