The Sentinel=record., 1917-12-21
INSIDE Of THE
 PACKING TRUST
CONTINUED FROM PAGN ONE.

F. R. Hart, vice chairman of the Old Colony Trust company of Boston, and F. V. R. Thayer, president of the Chase National Bank of New York, l formerly president of the bank of | Boston, testified of their activities as representatives of Mir. Olneys organ l ization which induced holders of 60,- l 000 shares of the New Jersey com mon stock, to surrender their stock and their right to more than S3,O00,- l 900 surplus and accept in return guaranteed nine per cent from the new company, The whole plan was an entirely transparent proposition" Mir Heney told the commission, "to hide the real ownership and conceal the fact that Armour and other big packers had an interest" Woven through the testimony of millions controlled by bank presidents and packers was the name of Frank R. Pegram, for a quarter century bookkeeper and cashier for F, II Prince and company of Boston Ac- cording to the certified minutes of the Chicago Stock Yards companys first meeting, Pegram controlled the assets of the Junction Railways stockholders 10 the new plan and was given $S,000,000 in Chicago Stock Yards common stock for the assets and $1.100,000 in cash.
 My salary is 2,J00 a year." Peg ram testified in reply to questions
 No, sir, never had million dol lars. q knew nothing of the agree
 ment you read and | never had the stock in my possession except for en- l dorsement purposes
 He added that although he was treasurer of the Chicago Stock Yards company, he knew none of the other officers, who were mere figureheads, holding one or two shares of stock ! each. George F. Doherty, president, was said to be clerk. Pegram said
 he signed whatever he was told to | sign by Bradley Palmer, counsel for | Prince
 l Hart and Thayer declared organiza- | ton of the Chicago Stock Yards com pany was made necessary by the fact | that the packers were considering 1 leaving Chicago for cities farther west, where they would be in closer l touch with the live stock supply l Briefly stated, it was said that the
 New England stockholders of the 1 Chicago Junction railways and Union Stock Yards company found them | selves out of touch with their clients
 and likely to be left with their in vestment on their hands and no busi- ness.
 Accordingly the new Stock Yards company was formed under the laws of Maine as a holding company to as- sume this risk Prince, leading spirit Tn the organization was relied upon Hart said, to influence Armour through his business and social ac- quaintance with the packer to remain l in Chicago
 The commission endeavored to show by letters from r, S. Mosely and company, brokers of Boston. that the new company was simply means of keeping the packers satisfied by paying them dividends on the new company's stock instead of bonuses and rebates, which were outlaWed by federal legislation.
 Tt is merely tue choice of way In which they will receive compensa- tion," said one letter, whether in large blocks or bonds or cash, or in dividends"
 Heney also endeavored to draw | from witnesses that there was no real danger of the packers levaing Chicago Thayer said he feared they would | move He admitted, however, that he knew nothing of the amount Of thelr Investments in Chicago or the cost of moving elsewhere.
 "How much will you pay us?' was declared in one letter to be the pre- dominant question every time the packers and stock yards owners came to d renewal for leases. At one time, the letter said, renewal had cost the Junction Railways company S3,OOO,OOO in bonds In 1891 when the packers were threatening to move to Gary, Ind. the Junction Railways company gave Morris, Swift and Armour, MT, Heney said, s750.0O0 in stock, besides other inducements to sign a 15-year contract.
 Expiration in 1916 led to resump- ton of negotiations between commit tees representing both sides, which had not been concluded in 1910, when a test case to decide whether or not the terminal railway was subject to the interstate commerce commission was taken to the commerce court.
 Mir Heney said he would endeavor to show that anticipating an adverse decision, Prince devised the scheme of forming the new Stock Yards com pany to legalize the packers rebate and hide the control of the yards.
 The Kansas City stock yards was the only other cattle market brought into the testimony today. Thayer,
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