Show TURNING ALTON I DElL DEAL INSIDE OUI Interstate Commerce Commis Commission Commission Commission sion Unearths Some Very Interesting Facts LESSONS IN HIGH FINANCE TESTIMONY OF CONTROLLER OF THE TH E ROAD Now York Feb 27 Counsel for the government renewed their attack on the financial methods of the Harriman group in the th Chicago Alton railroad before the interstate commerce commission this afternoon when they called Charles W V Hilliard conti controller of the road as a witness HIlliard testified that he lie became con CO In October last when under tinder the Joint arrangement ment for the tho management of the property pro pert the Rock Island took its IUt II turn said his first task was w s to t find money mone to carry on the Improve Improvements improvements ments menta under tinder way There was money in the treasury for current expenses but not enough to carry on th improvements which Included a cutoff of or thirtyfour and a half miles of road from a point near mar Murrayville to Springfield There The was not enough money to complete comp complete ete the building of this line said the witness I looked locked into I the question of raising money mone by mortgage he lie continued and I discovered that it ha lad already been mortgaged Mortgaged Before Built Do I 1 understand that this road ro il hail been ben mortgaged before it was built asked Commissioner Lane Yes I was told that It was wa was covered by b the mortgage of and there was nothing that could be dono except to put a second mortgage on it which would have been poor security said Hilliard Mr Ir Kellogg then read the mortgage to t show the line had been covered by W it and the witness said AU the Bonds Gone aone All the th bonds were gone I found foun om the books that the 13 had never been paid to Stanton for the stock that the had never been paid to Stanton for the road but that the fX In bonds had been turned over to the syndicate who delivered the stock and the road through the intermediary Mr Ir Stanton The commission wanted to know what the books showed had hall been actually ex ax expended expend pend Id in connection with the handling of the property but while the tho witness was as searching for the records the session was adjourned until tomorrow Mr Ir Mil Hil Milliard Hilliard liard hard will be recalled tomorrow morning Some Large Commissions Edward II U Harriman concluded his tes tea atthe at the rooming session and hi examination brought forth nothing of special Importance He was succeeded d on 01 oil the stand by Kahn one of leading members of ot the firm of Kahn Loeb Loch Co which has financed many mad madof of the important deals of the Harriman party and a former director of the Union Pacific c Mr Ir Kahn remained upon the stand until and under unde r ex cx examination examination I of C A Severance of counsel caunsel for the government told of the mOrgan reorganization of the Union Pacific There was wasa a special inquiry as to the commissions paid Fald to Kahn Loeb Loch Co and the inter interrelations Int Interrelations r relations of the firm finn the witness and Jacob chiff with the Union Pacific The Th witness said the firm had received a com corn commission commission mission equal to 5 ii per cent on the pur purchase purI purchase chase of Southern Pacific a commission I Of 5 ii per cent divided with other under underwriters underwriters underwriters writers on the issue of Union Pacific convertible bonds bon at a reduction of 5 S per por percent percent cent The witness spiritedly defended the acts of ot his firm and cited instances It has sold stocks to the Union Pacific at a figure below the current market Mr Kahn made madean an extended defense of the Alton transaction based on the meth methods methods methods and conditions of the time Private Business Mr Ir Harriman during his again invoked the question of private business as an against Interstate commerce and refused to answer Interrogations as is asto asto isto to his individual stock deals and Mr Ir I Kahn refused to divulge anything specific specific as to the business transactions un on undertaken undertaken by his firm on behalf of clients or outside of the Union Pacific director directorate ate He and his counsel Paul D Cra Cravath C Cravath a vath yath urged the same objection made by DY Attorney G C In behalf of Mr Harriman and added the special plea of tile the confidential privilege between a ab hanker banker b and his clients client The commission ruled against all ob objections objections objections and the record was In each in instance Instance stance properly completed for reference to the courts No Benefits William II It Moore and Daniel G Reid directors of th the Rock Island bland testified as asto asto asto to the contracts with Mr Ir Harriman and his associates for tor Joint control of the theAlton theAlton Alton ilton and that there was no other writ written written ten or verbal agreement Mr Moore said that while the contract was still beng fully full observed its effect was nominal He and his associates had Iud expected ex bene bane benefits benefits fits from the arrangement had not materialized m and their earlier plans in connection the project had not been carried out |