Show MRRIMAN FILES REPLY Gives Union Pacific Side of Great Contest Started SHOWS UP THE POOLS Affidavits of Sensational Kind Part of His Answer scene People Threatened to Make Trouble for Him if Dividends or Purchase Not Ordered New York prI1 1 1The affidavits In jhe answer of the Southern Pacific Eompany to tl > e suit of Talbot Taylor 1 Co it gaI1 it the Southern Pacific and IFnlon pacific deny that the Southern Facade Ls operated In the interest of the Tnlon Pacific The most important Of the affidavits Is male by E IL I Harriman JIARR1MYN ON EXPENSES E JI Harrlmanfe affidavit denies that nny or the expenditures for improvements II the Scmthern Pacific complained of im prompt pd by consideration of the talon Paeillc but asserts that they were ikmnnded by the Interests of the Southern facinc lone and wholly irrespective of uw relations between those two systems thai they were planned before tho Union Pacific became Intprosteu and that they jnclc designed ind recommended by Southern Pacific ofilcialF Tind wwc au thoilzed by Mr Harrlrnun only after n thorough pjrsnnnl cxrniinsiilon of the line whereby he became convinced of the absolute necessity of the improvements lie dcilos the allegations that the Union Pacific interests were planning to takeover take-over thu Central Pacific linos from the OVtf jjuthcrn Pacific and asserts that no such step IHs boon contemplated or even dls 1EItrIoNs VriTII KEENE Ir Harrlman then relates that in the autumn of 1201 Edward Lautcrbach introduced intro-duced David Lnmur to him Harriman tad that Latnar said he bad friendly relations re-lations with Junes R Keene I large itockholder in the Southern Pacific and ilhat Mr K cnc was contemplating pone Jicilon against the management ot the Eouthcrn Pacific MIo Lamar stated that he would like to work with me con CnuiK Mr llnrrlman itnd that if r itaulcl Tnakc nn allowance which would be t otl tulvantajjc to him he had such lifluenco over i Mr Keene thut be could tboucE him not TO Instigate any adverse rtlon nf ngninst myself uud allied Inter i f Ur llarrlmon did not accept Several Jslcrvlevs I with James Ji Keene followed IAt tillS point the affidavit says KEKNE HAD A PLAN t Mr Kfcne stated in ne Hint he bad r I Luoe holding In Boutlnrn Pacific slock tlt he would like to Join with me in t i rtidinslnr shoji In the market thaL he I Wieved there could be a great deal of fiuiiey mqde thereby nnd that hii would I Jtrt for me clthcT In 1 purchasing for our dnt riccount or for Tnystlf If 1 wished I tat It would be ndvnntaipouB for the Eloten Pacific to taJc over the Southern Rzdfic < ind issue its I I per cent bonds tercfor and he stated Lbat he was IU i3tpt in carrjln ont successfully large iek market operations that he bad l this capacity especially In the tanliulatlou of United l States Steel ntcks rtTo To this Mr narrlman replied thnt he I Wieved it would bo a mistake to create iipoculation in the shares of stoclc and liTnnco their price to a basis that would Jailfy thc buyirs In cipectln IL dividend h the near future that It WOH also ne eaAry to make Kuch repairs and 1m Po r raent8 ron purpltw earnings so far Blhcy would jjo In order to esutbllHh for ftccompanv a basis of credit Upon which It could refund the bonded Indebtedness tc Its RUbslfllarv companies a large portion por-tion of which would mature In a few rears r 1 LOOKS LIKE A THREAT r Mr Kecno then snve assrurancR that ho cU not want to IICl in any Sway antago ibUc to Mr Harriman In the autumn t1btlc 1 T > Mr harriman BUV he was In L1ned l that Edward autorbach and iilbol J Taylor would make the bill forts for-ts unto1 we nettled with them in some Oar Mr Hamman snys he had an Irl Wcrvluw t with a mutual friend of hut and I tMr Timtcrbach und tbla friend who Is lr fit t naTH d exiilahiod to me Unit Mr Uuterbach ha < l raid to him that Mr Krcno r < proi ntetl a pool holding about 13 WW 3 or 173000 Bharrs ami that Mr jwnc himself held about 7l WO shores ttat tlipy contemplated action which tmld make yj n great deal of trouble J t nl mlirlit bo dltwistroiiH to our interests t pcclally laying stress upon the large lipcadlturcB we were malclnir upon tbu wnlral Pacific portion of tho Southern Faelflc properties unless we purchased uW Hliarcs from them that he would Roll th t j > IIBOshare at about 70 nnd his own lurta ht about 78 I explained to this jflflid that there wns nothing In the sltiut I Wa that we had to fear from those pco 1 H or In the jnannBemtuit of the com Tay which would jublfy nay criticism or OoJCIlnn on the part of any stockholders rd that I certainly would not be forced 1Ij fear of rtnythlntr they might I do Into rrtommendlnff a course which would be tdtj0 to till Interests of the general Wy of stoclUioId of Southern Pacinc I KnUTSCIJNITTS STATEMENT 1J Krutschnllt the fourth vlfjoprcsldcnt I i4 gfncrul manager who hod boon In JiTfe of oporatlons under C P hunting I 15JJ for many yearn mll < le an affidavit otttln regarding the Improvements bc t f made on tho Central Pacific Urn Mr wwfcchnllt said that the necessity form for-m had bcn fully recognized l > j the Jntlncti > n management Mr Jvrulschnltt 411 pofuivo t rms that nil or the Im r r ttoilmentH In question arc absolutely uc I thna not only to reduce the expense of vtvon hut also to enable the compsmy 0 bold UH traffic and compete with rIval raminontal lines lie denies that the 1 hl ° cmiint3 wore ever sum rStld by any c1nter of the t Union Pacinc but were ail utsei1 find uwd by officers ixcluslvcly or ttbc Southern Pacific In its own interests tYJiltWHA WHAT STUBBS SAYS i C Slub bF third vicepresident of the Ilhcrn JPirlllc In charge of traffic and 1 tJfS tslrno < llrt ctcr of HID Union Pacific doa l In do-a sworn statcmrnt that h any trnftit t tror btecr has ben at any time diverted rr the Southern Paclllc to the Union nldnc Af11allltg were 11110 flelt by WlIlinm 0Otl4i tr < lght traffic munoxor and is kormlclc > Iin JMO Pcr traHIc manager Southern Pacific wherein those oN r Jt h risurj t that J neither has at tiny tr I tti jilccfclvctl any directions or instruc I j I t i 4to favor tIne Union Pnclrto as agaInst 1 tf Ur lta of the Southern Pacific and JI1 IV tho > have not done B0 but that each 1 d or Mmnnncomcnt of Ulc department un 1I1 1 supervisIon has worked cxclu a l1rItor the IlUroit of tbo Southern t DiiCTOft RECTOR KUHNS STATEMENT p OUt ehn > H Kuhn a member of tho firm of I Ji hiihtt 1Qeh Co anti a director of the i ltn h Parltc med nn affidavit in jell Ih ic following appears I te tv During the f hclo or flffhtoen months Edward i ts Ut5rhch of counuisl for tho complain In I thin action ropoatfdly spoke to fl the subject of Kconc pool holdIngs J t 1oI11rn Mi Paclflt stock The substance J4 stntrmcntJ was to the effect that 11111 II retained h by Jame R ICticnc Z ZItIeCUCII i with a contemplated action dT rilLb Salt to oust the interests at prcs 1j ontrol ot the Southern Paclnc JldUTI but t lie thought It dcalrubio In 0 fldIIi4a to both Intcrosut that no COlllllc nhould take place I but that here wore only two ways to avoid hostile proceedings namely either to buy the holdings of the Tvtene pool at the price of about TO or to stnrt the payment of dividends divi-dends on the stock at a mto of not less nan 4 per cent per annum I answered Iriiutrbach that wo would not consider purchasing the pools holdings and that in determining the policy of the company In regard to dividend payments the dl rectors were acting and would continue to act In accordance with their beat Judgment Judg-ment and would not allow any other consIderation con-sIderation to influence them nor be turned b y throats of troublesome litigation from nirsuing what after conscious deliberation tion they felt the only right course for the Interests of the property EARNINGS AND EXPENSES William Mahl the comptroller filed an iflidavlt appended to which arc tables showing earnings expenses etc of the different lines since the Unlon Pacifics In crest was acquired ns compared with the previous years Jt appears therefrom hit as compared with tlio year ending tine 30 3WW the gross earnings of the Central Pacific line in 1301 incrcnsed 42D pet cent whereas the earnings of the other oth-er lines of the Southern Pacific increased 851 per cent and for the year 1002 the earnIngs of tho Central Pnclllc Increased 41 per cent white the earnings of the other lines of tho Southern Pacific increased In-creased 7SC per cent KEENE GIVES OUT TELEGRAM James R Keene who is confined to his room at the WaldorfAstoria made pub ic tonight the following telegram sent by mini to Edward Lautorbnch his counsel vlio Is In Nashville Harriman and Kuhn affidavits pub shed broadcast 1 expect you to furnish lie Associated Press with your answerIng answer-Ing affidavit Immediately settling forth he true fact that no otter to sell stock was over nmdo by me except In reply to lie request to purchase the holdings vhlch 1 represented and that you wero requested by them to ascertain the cost of the Fame nnd that I absolutely refused when 1 made the answer to sull my Indl Idual stock at any price l |