t
VOL. XLVI.-XO. 14,421.
PORTLAND, OREGON, TUESDAY, FEBRUARY 26, 1907.
PRICE FIVE CENTS.
GREAT IRRIGATOR
OP ALTON STOCK
Harriman Explains the
How and Why of It.
HUGE PROFIT OF SYNDICATE
Increases Capital Five Times
Added Value.
REFUSES TO GIVE DETAILS
iKlght of Interstate Commission to
, Learn Individual Holdings DU
irufpd Dividend of 80 Per
Cent on Bond eal.
NEW YORK, Feb. 25. K. H. Harriman.
Jicad of the Union Pacific system, spent
today In a recital of portions of the lnti
onate history of the financial operations
of himself and his associates before the
interstate Commerce Commission, which,
In behalf of the United States Govern
ment, is Investigating consolidations and
combinations of carriers, relations be
tween carriers and community of Interest
therein, their rates, facilities and prac
tices. Special counsel for the Government
made particular attack on the reorganiza
tion and financing of the Chicago & Alton
Railroad by the Harriman syndicate, and
their action, with a challenge by counsel
for the railroads of the right of the In
terstate Commerce Commission to Inquire
Into the private transactions of an indi
vidual, constituted the two chief events
of the day's proceedings.
Mr. Harriman declined to tell what pro
portion of the preferred stock of the Al
ton sold to the Union Pacific belonged
to him individually, and the way was
paved for taking the question into the
Federal courts. The point raised Involves
a material limitation on the Inquisitorial
power of the Commission and is of serious
Importance to the whole question of inter,
slate Incorporation investigation.
- Knornious Profits on Water.
There was an effort to show that there
had been an enormous inflation of the
stork, securities and liabilities of the
Alton; that the Harriman syndicate had
taken unfair profits by declaring a divi
dend of 30 per cent from the proceeds of
the first sale of the bonds, amounting to
$40,000,000; that the syndicate had sold it
self the bonds at an unreasonably low
figure, only to re-sell them at enormous
profit; that the Harriman syndicate had
in the Alton capitalized the losses of for
mer stockholders In the road and the
money which had been spent by the old
management for betterments over a
period of 10 years and already charged to
operating expenses; that the books of the
company had been doctored, and that for
an increase of the stock and liabilities
from about J40.000.000 to 1116,000,000 there
was nothing to show except an expendi
ture of $22,000,000 in improvements on the
property.
Harriman Denies Charges.
Mr. Harrlman's testimony was a de
nial of all the charges and he made an ex
tended explanation and defense of the
transactions, which, he contended, were
fully Justified by the conditions and cir
cumstances of the time and had been con
ducted entirely in the open. Mr. Har
rlman's examination lasted for five hours
and was unmarked by acrimony. The
witnes declined to be led into an attempt
to explain the details of the Alton opera
tions and constantly referred his ques
tioner to the records of the Alton Com
pany. Mr. Harrlman's testimony began with
the issuance of J100.000.ono of convertible
bonds by the Union Pacific for the pur
pose primarily of paying for the South
ern Pacific In 1901. and then led through
the purchase in connection with the Ore
gon Short Lino of the Northern Pacific
etock.
Mr. Harriman Identified a statement
shewing that since the first day of last
July the Union Pacific and Oregon Short
I-iue have purchased stocks at a cost of
1131,000.000, and Mr. Kellogg, the Govern
ment's attorney, sought to show that,
figured by prices In the market today,
there had been a loss of $11,000,000 on the
Investment. Mr. Harriman Hald that this
was possibly true, and, when further
questioned, asked permission to explain.
Profit on Hill Line Stock.
The witness said if Northern Pacific and
Great Northern maintain their present
prices the profit on the Northern Pacific
Investment would amount to about $61.
ono.oOO. The witness wae taken over the
total Investments and sales made by the
Union Pacific and Oregon Short Line, and
in the end denied that they had been
made for speculative purposes.
Tiie witness then related the story of
the purchase of H5.000.000 of the stock of
the Baltimore & Ohio, paying for which
would, he said, be completed In March
and September next. He had discussed
the purchase with the late President
Cassatt. of the Pennsylvania Railroad,
' but nothing had been said as to price
and no conditions were attached to' the
purchases.
Inquiry about the Union Pacific pur
chafes of stock In the Alton led the way
to the first objection of counsel for Mr.
Harriman to a question as to the amount
of stock the witness had held in the
AIon.
The witness explained the sale of stoci
and testified that he had served on the
committee which had fixed the price at
S4ii. He then was asked If he owned any
of the stock when it was deposited.
Mr. Mllburn objected, saying his clients
were ready to lend every possible assist
ance to the inquiry and that they re
joiced that It gave them opportunity to
clear awav many scandalous and unjust
reports. He denied, however, that the
question had any bearing on the question
of interstate commerce. He eaid the Com
mission had great powers, but there was
a limit, and he thought It was to the
interest of the Commission properly to
define its powers.
Chairman Knapp said the suggestion of
Mr. Milburn seemed to draw a distinction
between the transaction of the company
and the action of its officials and asked
if this could be called the transaction
of an indlvldiual.
There was an extended discussion of
the question and It was stated that the
commission would confer and announce
its decision later. At the afternoon ses-
ASSISTING IX THE PROSECUTION
OF BINGER HERMANN AT
i
Jesse C. Adklns. Assistant District
Attorney.
slon the question was renewed in another
form and the commission decided that it
had a right to make the inquiry. Objec
tion was noted in the record and the
witness formally declined to make an
swer. History of Alton Deal.
The examination of the entire Alton
transaction then began and consumed
most the afternoon. Mr. Harriman first
told of the formation of the syndicate,
which, he said, contained many persons
and which was represented by himself.
James Stillman, Georg Gould and Mor
timer Schlff. Ninety-seven per cent of
the stock of. the Alton was acquired, $100
having been paid for the preferred and
$175 for the common, and the total invest
ment amounted to $42,000,000. Bonds to
the amount of $40,000,000 were issued and
the shareholders subscribed for them at
66 per cent and from the proceeds of the
sale of bonds a dividend of 30 per cent
was de'.ared.
The witness denied the participation in
a sale of bonds at 96 to the New York
Life Insurance Company. Mr. Kellogg
asserted that the bonds had been quoted
in Wall street at from S4 to 96, but the
witness said he could not remember what
they were selling at. The witness denied
knowledge of the whereabouts of the
records of the syndicate which handled
them. Mr. Milburn. representing Mr.
Harriman, objected to what -he called an
effort to create the impression that Mr.
Harriman and other trustees owned all
the stock purchased by the syndicate.
"Why not jump to what you want- to
prove?" asked the witness. "I'll help you
to do it."
"All right sir, thank you very much,"
said Mr. Kellogg. "I want to prove that
after you bought those bonds for C5 you
sold them for some other price."
He Cannot Remember.
But the witness could not remember
for what they were sold and who were
the syndicate managers.
Mr. Kellogg showed that $973,000 of
interest on the prior lien bonds was be-
' (Concluded on Pape
IpwiT. - f
MRS
THAW SCORES
AGAINST JEROME
ExplainsThaw'sCable
grams to White.
EXPOSED EMBASSY OFFICIAL
Thaw Told Her White's Money
Was Poisonous.
JEROME'S BEST CARD LOSES
Mrs. Thaw Never Saw Doctor She Is
Alleged to Have Visited Re
pudiates Statement Against '
Thaw In an Affidavit.
NEW YORK, Feb. 25. Except for one.
brief moment, Mrs. Evelyn Nesbit Thaw
had a decidedly easy day today during
the continuation of her cross-examination
by District Attorney Jerome. When ad
journment was taken, the prosecutor an
nounced that he had practically con
cluded with the witness.
Mrs. Thaw will be temporarily excused
tomorrow morning to enable Mr. Jerome
to Introduce Abraham Hummel to iden
tify a photographic copy of the affidavit
Evelyn Nesbit is alleged to have signed
and which charges Thaw with many
cruelties during their 1903 trip to Europe.
The District Attorney got the contents
of the affidavit before the jury this
afternoon by reading certain of its state
ments in the form of questions and
asking Mrs. Thaw If she told such things
to Mr. Hummel. In each instance she
declared she had not. She also denied
ever having signed such an affidavit, ad
mitting that she had, however, signed
some papers for White In the Madison
Square Garden tower, the nature of which
she was not aware.
His Strongest Card Played.
. During tire morning session? J ron.
played his! strongest card of the day.
Mrs. Thaw had denied most positively
that she had ever been to see Dr. Carl
ton Flint with Jack Barrymore.
"Can Dr. Flint," commanded Mr.
Jerome.
The doctor entered from the witness
room and was escorted to within a few
feet of the witness chair.
"Did you ever see that man before?"
Mr. Jerome asked Mrs. Thaw.
Tie witness seemed a bit - startled,
looked quietly and intently at the physi
cian, then turned to Mr. Jerome and
shook her head.
"Never," she declared.
Thaw was intensely Interested and.
when the Incident was over, he turned
to the newspaper men sitting near him
and whispered:
"That man made a mistake In coming
here. He stood there a liar. Do you
catch the point? a liar."
lrs. Thaw Scores Twice.
Mrs. Thaw was In much better spirits
when she took the stand today and
looked decidedly better physically than
she did last week. She had all her wits
about her and did not fare at all 'badly
at the hands of the District Attorney,
who was more gentle in handling the
witness.
Instead of further hurting the cause
of her husband, Mrs. Thaw managed to
make two decided gains. When court ad
journed last Thursday, It appeared from
her own statements that she had used a
letter of credit from Stanford White
while touring in Europe and' had turned
IS HE HEAVY ENOUGH TO RAISE IT?
the letter over to Thaw. She explained
today that Thaw took the letter of credit
from her, saying the money was "poison
ous" and neither she nor her mother
should touch it and that he would provide
them with funds. Whatever had been
spent of the money, she declared, was
for her mother.
The second point Mrs. Thaw made was
concerning the cablegrams which Thaw
fs said to have sent to Stanford White
from Liondon. It appeared Thursday
that those cablegrams were requests to
White to use his influence In - keeping
Mrs. Nesbit from "raising a row" and in
terfering with Evelyn's continuing in com
pany with Thaw. Mr. Jerome took up
the EUbject again today, but his ques
tions elicited the information that his
messages did not concern Mrs. Thaw at
all, but related- to a man, a secretary of
th-American Embassy in London, who,
Mrs. Thaw said, had "sneaked up to
mamma's bedroom and insulted her." She
said the man had also Insulted her, and
that Thaw had gone in search of him,
but failed to find him.
Hummel May Discredit Her.
The proceedings today dragged a great
deal and it was evident long before he
announced the fact that Mr. Jerome was
nearing the end of his cross-examination.
The proceedings tomorrow with Mr.
Hummel on the stand should be more
interesting. The defense on cross-examination
will attempt to discredit the
witness, who is under indictment. It
may be late in the afternoon before Mrs.
Thaw will again take the stand for Mr.
Jerome's final questions, which will have
to do with the affidavit. Should the de
fense decide to proceed with the re-direct
examination of Mrs. Thaw and Mr.
Jerome should take up the re-direct
cross-examination, Mrs. Thaw may be
kept on the stand all of Wednesday and
Thursday.
Mrs. William Thaw, mother of the de
fendant, and Mrs. Carnegie, his sister,
were at the courthouse today for the first
time in ten days. Mrs. Thaw has been
suffering from a severe cold.
MRS. THAW'S STORY CONTINUES
White Denied Yrongrin;r Her.
Threatened to Sue Barrymore.
NEW YORK, Feb. 25. On resuming the
cross-examination of Mrs. Evelyn Thaw
at the trial of Harry K. Thaw today.
District Attorney Jerome first asked
if she had not had trouble with her
mother in Allegheny before going to
Philadelphia to live if he had not run
away with a. girl. Mrs. Thaw replied in
the negative. Mr. Jerome's next question
was:
"How long after the drugging In the
Twenty-fourth-street house was it that
the account was opened for you In the
Amsterdam Bank by Stanford White."
"I can't tell how long it might have
been a month."
"When did you first meet Frances
Belmont?"
,j "When I was in "Ulorodora. "
Mr. Jeome continued to hold the
documentary evidence before the wit
ness before answering his questions,
formed on affidavits from her mother.
"Had you gone to supper with
Frances Belmont before you met
White?"
Again the reply was In the negative.
The witness said she had gone to sev
eral suppers afterward, but White was
present-at all of them except one.
Mr. Jerome asked the witness if she
had not often gone to suppers with two
men whose names he whispered to her.
"I never went with them,, but they
were present."
"Did they not on occasions take you
home?"
"One took me home once, and the
other twice, but there was another
person with me."
"Do you know Angela Vincent?"
"Yes."
Her Allowance From While.
A letter was- shown Mrs. Thaw, dated
Boston, January 20, 1902, addressed to
Charles Hartnett, White's private sec
retary. It read:
"Dear Hartnett: Telephone Mrs.
Nesbit to let you know whenever Miss
Evelyn decides to go on her vacation.
Then send this note to the Mercantile
Trust Company:
' 'Please notify Miss Nesbit that on
receiving word she is about to start
on her vacation you will send her the
weekly checks for $25 and an addi
tional check for $200.'
"STANFORD WHITE."
The Introduction of this letter and
several checks retreshed Mrs. Thaw's
memory to the extent that she said she
lived at the Audubon apartments, from
February 10 to April 1, 1902. Between
(Concluded on Page 4.)
PUTS A BAR UPON
FOREST RESERVES
Senate Adopts Fulton's
Amendment.
ONLY CONGRESS CAN CREATE
Beveridge and Spooner Ex
change Angry Words.
ABOUT MEAT INSPECTION
Date to Be Put on Cans, but Packers
Not to Pay for Inspection.
Fairbanks Rules Against
Indiana Colleague.
NO MORE FOREST RESERVES.
OREGONIAN NEWS BUREAU,
Washington, l-Vb. 25. The Senate to
day agreed to Senator Fulton's
amenlment to the agricultural appropriation-
bill prohibiting the cre
ation of further forest reserves in
Oregon. Washington, Idaho, Mon
tana. Wyoming and Colorado, except
by specific order of Congress. The
amendment is intended to curtail th
arbitrary power of the Forest Sei
vtce and Interior Department, and
was enthusiastically indorsed by the
entire delegation from all the states
named.
There. Is a possibility that the
amendment will be stricken out by
the conference committee, but the
Senators from the Northwest have
hopes that it may be retained. It
will be fought by Forester Plnchot.
WASHINGTON, Feb. 25. The Senate
today passed the agricultural appropria
tion bill, carrying- nearly $10,000,000, with
an amendment providing that forest re
serves in certain Western States shall
not be created or enlarged without an
act of Congress; the postoffice appro
priation bill, carrying $210,000,000; the pen
sion appropriation bill, carrying $145.
000.000, and the bill authorizing the es
tablishment of . an agricultural bank In
the Philippines.
The principal fight today over the
agricultural appropriation bill took place
on the Beveridge amendment, requiring
the packers to pay the cost of admin
isterlng the meat inspection law. This
amendment was defeated on a point of
order. Beveridge secured the adop
tion of an amendment which requires
the date of canning and inspection to ap
pear on the label of the can containing
meat products.
Anti-Imperialists Beaten.
The postoffice biH was passed in an
hour and 15 minutes. Amendments adding
$1,388,759 for the extension of the pneu
matic mail service and requiring postal
cars to be lighted with electricity were.
adopted.
Lodge secured the passage of the
Philippine agricultural bank bill. An
amendment offered by Culberson, de
claring the Intention of the United States
to abandon the islands as soon as a
stable independent government should be
established, was defeated.
The Senate also passed a bill granting
a service pension to Army nurses. Those
who are disqualified to earn a livelihood
and have reached the age of 62 years are
to receive $12 a month; at 70 years, $15,
and at 75 years, $30.
When the agricultural appropriation
bill was taken up. the Fulton amendment,
providing that no forest reserves shall
hereafter be created or enlarged without
an act of Congress, in the States of
Oregon, Washington, Idaho. Montana,
Colorado and Wyoming, was adopted
without debate.
Stake Packers Pay for Inspection.
An amendment adding $1,000,000 to the
appropriation for improvements in forest
reserves was also adopted without debate.
Beveridge offered an amendment pro
viding that hereafter the date of inspec
tion and canning must be placed upon
the label of meat products. This amend
ment was agreed to without discussion.
Beveridge then offered his amendment
placing the cost of meat inspection upon
the packers.
Warren gave notice that at the proper
time he would make a point of order
against this amendment.
Beveridge made the point that the only
opposition to his amendment came from
the packers, and that they, being the
beneficiaries of the act,' should be com
pelled to pay the cost.
"We will fight this matter to a finish
Otto Kelsey, Superintendent of In
surance for New York state. Whose
Removal In Recommended by Gov
ernor Hughes.
and see whether the American people are
to be taxed with an expense which be
longs to the packers. said Beveridge.
Beveridge concluded his support of the
amendment by making the suggestion,
which was said to be a most delicate
one, that the Vice-President submit the
question as to whether the amendment
was In order to the Senate Instead of
ruling on it himself.
Beveridge and Sponer Clash.
Spooner followed with an argument
against such a suggestion. As chairman
of the committee on rules, he said, he
had made tip his mind some time ago
that, whenever this suggestion should be
made again in the Senate, as it has been
so made at increasingly frequent inter
vals in the past, he should oppose it.
Spooner was concluding with the opin
that the suggestion that the chair should
submit the question to the Senate was
"indelicate," when Beveridge interjected:
"This is the first time the Senator
has ever said so.
"The Senator is impertinent," retorted
Spooner, with some show of anger.
"I will not say what the Senator is.'"
answered Beveridge. while the gavel in
the handes of Fairbanks was brought
down with emphasis.
"I am not to be lectured by the Sen
ator from Indiana," resumed Spooner.
Beveridge at this point reminded Spoon
er that he was occupying the floor in his
(Beveridge's) time. Spooner, at this sug
gestion, sat down, saying he would take
the floor when the Indiana Senator had
concluded.
Mr. Beveridge renewed his suggestion,
giving as his reason that the question
(Concluded on Page 2.)
CONTENTS TODAY'S PAPER
The Weather.
YBSTERDAT'.S Maximum temperature, 60
dep.; minimum. 44 dog-.
TODAY'S Occasional rain; southwesterly
winds.
"National.
Senate forbids new forest reserves without
action of Conres:. Paffo 1.
Spooner and Beveridge clash on meat-Inspection
law. Pane 1.
Houbr vots to take final vote on ship sub
sidy bill Friday. Page 5.
Senate ratifies Santo Domingo treaty. Page
3.
United States or Mexico may intervene In
Central American war. Page 2.
Politics.
Texas Senate votes to exonerate Bailey.
Page 4.
Domestic.
Hakln on history of telegraph system. Page
1.
Mrs. Thaw scores on Jerome at least twice.
Page 1.
Hermann trial goes on and Register Bridges
testifies. Pane 2.
Mystery of sub-treasury robbery Is unsolved.
Page S.
Harriman testifies about stock dpals but re
fuses to answer some questions. Page 1.
Vlllareal. Mexican rebel, gives Immigration
officers the Hp. Page 5.
Fa-rifle Coast.
Olympia House passes rabid anti-railroad
measure. Page .
State rests Its case In Steve Adams' trial.
Page 6.
AH business In Butte would be paralyzed I
should the miners vote a strike. Page ".
Provisions of Oregon's pure-food law made
known. Page 7. !
Commercial and Marine.
Sugar war may be at an end. Page 1..
Whpat advances In spite of bearish statis
tics. Page 15.
Selling craze takes possession of stock trad
ers. Page 15. !
Twenty-five ocean-going vesspls now In port,
total tonnage breaking record. Page 14.
Portland and Vicinity.
Biggest timber-land dal ever mad on Co
lumbia River consummated. Page lO.
C E. Loss Company in virtual bankruptcy,
but failure does not affect United Rail
ways. Page It.
Day for divorces In State Circuit Court.
Page 10.
Council committee questions Auditor Devlin
regarding report of accountants who ex
ported city hooks. Page 1 4.
Local capitalists form real estate Investment
company. Page .14,
DESTROYER OF
TIE iO SPACh
Telegraph System Now
Sixty Years Old.
STRETCHING OF FIRST WIRE
Carried News of Polk's Nomi
nation for President.
RICH BARGAIN REFUSED
Government Laughed at Buying
Morse Patent Veteran Operator
at Capitol V1io Sent "News
of the Civil War.
Bti FREDERIC J. HASK1X.
WASHINGTON, Feb. 20.-(Special Cor
respondence.) The telegraph is now sixty
years old. The first successful message,
was sent over an experimental line be
tween Washington and Baltimore in 1844.
and from that time until today there is
hardly any other invention which has con
tributed so much to the advancement of
our civilization. Progress anrt develop
ment have always depended upon the
communication of ideas, and the telegraph
annihilated both time and space.
When the first message, the famous
"What hath God Wrought", flashed over
the wire from Washington to Baltimore,
the key was operated by Miss Ellsworth,
daughter of the- United States Commis
sioner of Patents at that time. The Na
tional Democratic convention was then
in session in Baltimore, and when the
announcement came that James K. Poik
had been nominated for President, the
Idea that the news should become known
so quickly caused a veritable sensation.
Government Built First Line.
The question of who Invented the tele
graph has always caused a heated contro
versy and probably always will, but tt is
certain that the Idea had no practical
application until Congress, by a majority
of eight, voted the. necessary J.'JO.OOO to
build the experimental line to Baltimore.
This line was built by Morse and Vail
in May, 1844. It was in 1S3T that Samuel
F. B. Morse and Alfred Vail entered into
a contract by which Professor Morse was
assured of financial backing.
From that time until the experiment
was a success, the genius of Morse and
Vail and Joseph Henry was devoted to
the perfection of the idea. In the eight
years preceding the final success of
Cyrus W. Field's experiments with the
ocean cable in J12.dXt.000 were expend
ed in the effort to send the telegraph
across the Atlantic. This fact in Itself
shows the difficulty which attended thfi
earlier efforts to introduce the invention.
Morse and Vail could get but little capi
tal, and it was with the greatest difficulty
that Congress was persuaded to appro
priate the J30.000 spent on the first line
to Baltimore.
The method of taking telegraphic mess
ages by ear, now in universal use, was
not readily adopted. Sound-reading was
much feared by telegraphers at first and
all Instruments were recording. In the
early telegraph offices it was the rule
to fine operators $5 for each offensa If
found reading messages by the dot-and-dash
signs by sound, instead of waltlnz
for the record to be made in Ink on the
paper ribbon.
Ilefuscd to Buy Patent.
In most countries of the world, as soon
as the telegraph was adopted, it became
a part of the postal service, under th
direction of the government. In the
United States the first line was built with
National funds and for four years was
maintained by' the Government. It was
placed under the control of the Postmaster-General
and operated by him. The
patents held by Morse and Vail controlled
It. and these were offered to the Federal
Government for $100,000.
Congress laughed at the proposition
to pay that much for a toy, and would
have nQthlng to do with it. Later, In
those years between 1868 and 187,
when the Government was subsidy
mad. Congress voted an annual sub
sidy of $40,000 for ten years to one
private telegraph concern in th
West, a total of four times what it
would have cost to control the inven- .
tion. An Investigation looking to the
conversion of the telegraph lines Into
the Department of the Postoffice in
1S72 showed that all the lines in the
United States at that time, connecting
10.000 offices, might be duplicated for
$16,000,000.
Once Considered News Censor.'
In the early days of the Associated
Press there was a close relation be
tween the telegraph companies and the
newspapers whh'h formed that organ
ization, such as to give rise to decided
opposition. The statement of Profes
sor David Brooks in 1875 Is an inter
esting: bit of contemporary comment.
He said:
"The establishment of'the Associated
Press has as Its chief object, so far as
the telegraph is concerned, to silence
the criticism and secure the Influence
of those Journals enjoying Its advan
tages in the matter of preventing Gov.
ernmental Interference."
Of course, the Associated Press was
formed for the purpose of facilitating
the dissemination of news," which pur
pose it served. The modern newspaper
is the product of the telegraph, plus
the press associations and news-gathering
agencies.
Now, the telegraph lines In this
l Concluded on Page 3.)