| OCR Text |
Show Heed of Birj Bcnliing Firm Tells of Ucrk on Reorganization Board and of Purchase of Souiliern Pacific; Ikrrimcn Was Reedy to Purchase: Properly; flcgnate of Pccifics Excused this Homing After Oefri Med few Questions. NEW YORK, Feb.' 27. Just before the Interstate Commerce commission conducting con-ducting an examination into the financial operations of the" Harriman roads, adjourned ad-journed last evening, Kellogg Kel-logg of counsel for the Government, Gov-ernment, said that he had only a few more questions to put to E. H. Harriman, but that he would prefer they go over until today, as the hearing hear-ing had already been prolonged pro-longed until a late hour. Harriman at first demurred, but on Kellogg 's assurance that he would only be detained de-tained a few minutes today, adjournment waS taken with that understanding. Harriman took the. witness wit-ness chair at a little after 10 o'clock. He testified that the Union Pacific had 'purchased, 'pur-chased, the St. Joseph & Grand Island since last year.. The price paid' was $2,022,-000, $2,022,-000, and the witness had owned the property and sold it to the Union Pacific- Objection Ob-jection was" made to questions ques-tions as to when he bought the stock of the St. Joseph & Grand Island and what he paid for it, and the witness declined to answer. The commission ruled that he must answer, and there was the usual formal for-mal refusal. The witness said the St. Joseph k Grand Island was not a parallel par-allel and competing line. Kellogg asked of whom the New York Central stocks acquired by the Union Pacific were' bought. Harriman said they were bought in the open market. "Were you or any of your associates interested in the sale at the time of the Union Pacific purchase t " asked Kellogg. Kel-logg. Milburn objected and Harriman declined to answer. Kellogg asked if it was not a fact that of the $22,000,000 said to have been spent upon the Chicago & Alton, $2,740,000 was made up of ear trust certificates and $1,000,000 from Knhn, Loeb k Co., so that tne expenditure on the line out of the new securities sold were only about $18,000,000. Kuhn on Stand. Harriman said that possibly the figures fig-ures were aorrect. He simply knew that $22,000,000 had been spent upon the line. The witness was excused and Otto Kuhn of Kuhn, Loeb k Co. took the stand. Severance took up the examination exami-nation of Kuhn and asked a few questions ques-tions as to the organization of his firm. ' The firm of Kuhn, Loeb k Co. were bankers to the reorganization committee, commit-tee, and Severance asked the witness concerning the stock issuance, bonding bond-ing and general handling of the old Union Pacific securities -and-that issued is-sued by the reorganization. Kuhn re plied from, printed reports and for some but he insisted that it was not bought with the understanding that the Union Pacific would take it, the only, understanding under-standing being that it was to be offered of-fered to the Union Pacific. Harriman, he thought, waa in favor of purchasing, but his firm took a big risk in buying the Southern Pacific stock as the remainder re-mainder of the board might not approve of it and it "would be left on thSir hands. While Kuhn was upon the stand Harriman Har-riman remained in the courtroom. At first he found, a vacant chair among the newspaper men, who occupied the jury box, and after remaining there about half an hour, he went over and sat between Severance ' and the other counsel. I time me proceedings were connnea to a recital of details. Kuhn said that both himself and Jacob Ja-cob H. Schiff remained upon the Union Pacific board until a year ago. He said he desired to say that in going upon the board they did so because they felt it a duty to the public, which held the securities. At the same time they wished it understood thst they did so as bankers and at no time ceased to be bankers, and thst in dealing with the Union Pacific they aia so at arms' length. At no time had they ever charged the Union Pacific more than a banker's bank-er's regular commission, and often rendered ren-dered valuable service for nothing. About a year ago they felt that the necessity which caused them to go on the board had passed, and also the der-mands der-mands of their own banking business had increased; the credit of the Union Pacific had become firmly fixed and he and Schiff resigned rom the board of the Union Pacific. ; Bought Southern Pacific. . Kuhn aaid his firm had purchased the Southern-Pacific stock control which afterward passed to the Union Pacific, |
