The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1914-12-19
TELLS HOW MORGAN
LOST Sl2.OOO.OOO
Partner Says Only Pere Mar
quette Stock Remains to
Show for c. H. & D. Deal.

The banking house OF j. p. Morgan
& Co. lost s12.O0O.O00 by relieving the
Erie railroad OF the stock OF the Gin
cinnati. Hamilton and Dayton rail-
road. Frederick W. Stevens, an asso-
ciate OF the Morgan firm. testified be
fore the Interstate Commerce Com
mission today. lie took the stand in
the commissions Investigation of
financing the Pere Marquette and Gin
ctnnati. Hamilton and Dayton roads.
stevens participated personally In
the reorganization Of the Pere Mar
quette railroad in 1907. and was gen
eral solicitor and a director Of the
cincinnati. Hamilton and Dayton
The Cincinnati. Hamilton and Day
Ton began TO go on the rocks In 1905,
stevens testified, when Eugene Zinn-
norman was president
During the year OF the Zimmerman
administration" he declared, ''as a re-
suit OF the general methods OF man
@Scment there was outstanding At the
close Of his administration in October,
1905. about $500, 900 indebtedness.
which the Cincinnati. Hamilton and
this. he said. the Morgan arm had
nothing to do.
Asked To Buy c. H. q D. Stock.
During the same year President Un-
derwood. of the Erie railroad. wro,.
the late J. p. Morgan. asking him 10
purchase the Cincinnati. Hamilton and
Dayton stock for the Erie. When the
purchase was concluded, he said. the
late F. II. Hartman wrote Morgan
expressing his appreciation Of the
purchase" and offering TO help Nor
gan in any possible way.
During the four years OF the Circin-
natl H2 rlflf0r and M
which ended In 1919 Stevens said, 'rhs
fnercial tansies arising from the trans
actions of the Zimmerman administra-
uon. were cleared up.
Stevens testimony included dstaiis Of
the reorganization and stated that II
P. Morgan & Co. not only did not re-
cclve any money as a result OF the rs
organization. but on the contrary ad-
vanced a very .arge sum OF money 20
allow the reorganization to be consulIi-
mated. a part OF which has never been
repaid.
si7,ooo,ooo Lost.
In February. 1911. the Morgan firm
purchased from the Cincinnati. Han1il-
ton and DAYTON the 10000 shares OF
Pore Marquette stock for s2,50.no pay
able In 1916 said Stevens, and At tina
time the Baltimore and Ohio agreed 20
pay J. P. Morgan & Co. IN 1915 c.S3ous
for the Cincinnati. Hamilton and Day
ton stock.
This amounted to an exchange OF the
Morgan firm OF their interest in the
Cincinnati, Hamilton and Dayton stock
for 10000 shares OF Pere Marqustte
stock" said Stevens, "but at the same
time" he added, "the Morgan house
furnished the Pere Marquette with
$4,000 OF new money to enable Il 70
the notes given for such
money being now In default
Thus the firm OF ]. p. Morgan q Co.
have the 1000 shares OF the Pere Mar
qEette stock. now Of doubtful value. 70
show for the 81. 90. 90 and upwards paid
by them in 1906 10 relieve the Erie Raj
road Company OF the Cincinnati. Ham
llton and Dayton stock purchase
Against the loss Of u3.oo!oo and up.
wards" said Stevens. there 10 TO ,.
Offset the trihins profits mentioned "
two instances"
Urged By Erie President.
The Morgan firm was FIRST drawn
into the affairs Of the railroad IN rS.
Stevens said. by written request o.
President Underwood, OF the Erie Rail
road.
the late Mr.. Morgan, THAT the matter
purchase OF the c. II. & D. BY the Ertes
will 20 by default. II you do not take
a strong hand. I earnestly hope you
can see your way clear to make tina
purchase"
The responsibility for the entire finan-
ciaI transactions OF the c. II. & D. and
Pere Marquette prior to the Morgan
purchase for the Erie Railroad. Stevens
placed upon Zimmerman, president %
the c. H. & D. and vice president or
the Pere Marquette.
II want you to know that I sppreci-
ate your action IN taking over the pur-
chase OF the c. II. & D. from IN, Erie
too great an undertaking for the Erie
and would have resulted. I fear, In
disaster to IL.