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The Commoner
VOLUME 13, NUMBER 27
feVGPwiUnued from Pago G.)
Later,. Lamar alleged, tho prin
cipalis iii;'iho transaction went to
Kuhn; Loeb & Co. and got nearly
$2p0,0QQ,000 which ho believed was
tof thoir own use.
Lamar testified ho used tho name
of! Representative Daniel B. lllor
dan of Now York, telephoning to
Chairman Lovott of the Union Paci
fic. !On nnothor occasion Lamar testi
fied ho phoned Paul D. Cravath, of
counsel for tho Union Pacific, sug
gesting Lautorbach would be a valu
able) advisor.
On another occasion ho talked
over tho telephone to Lewis Cass
Lodyard, using Representative Pal
mer's name, and with Maxwell
Evarts, using Representative Rior
dnn's name. In both conversations
ho spoko about Lautcrbach's ser
vices. Senator Nelson insisted that La
mar toBtlfy explicitly whether ho
stated in those conversations; that
Lauterbach had influenco iff Wash
ington with officials, senators or rep
resentatives. "I am inclined to boliove that in
my conversation with Mr. Ledyard
I wept very far in that direction," re
turned Lamar.
"Why did you change to Palmer's
namo instead of sticking to Rich
ards?" demanded Senator Nelson.
"Well, Mr. Palmer was vory much
in tho house then as one who would
luivo groat influence in the house,"
replied Lamar. Ho added that he
did not know Palmer and had no
authority to use his namo.
Lamar said tho lato J. P. Mor
gan's opposition to Lauterbach
caused him to telephone Ledyard,
sign the namo of Representative Pal
mer, to try and win his confidence
and find out who hadostraclsed
Lautorbach. . ,
"I found out it was Ledyard him
self," said La'mar.
"Did you know Ledyard had a
fjtdnographer on the line making a
rocord of the talk."
"I read everything into it I could,
said Lamar. "I think I assumed the
ontiro government, except leaving
the president out. I lectured Led
yard because ho did not appreciate
what remarkable things Lauterbach
could do at Washington for the Mor
gan firm. I finally told him tho de
fiant attitude of tho Morgan firm to
ward the democratic administration
in congress had much to do with the
decline in valuo of the Morgan se
curities," continued Lamar.
"I called attontion to tho money
trust and other investigations and
urged Ledyard to employ Lauter
bach. Then I called up Mr. Palmer's
office in Washington," said Lamar,
with a smile, "and found ho would
be in Bethlehem, Pa., the next Sun
day. Then I called Mr. Ledyard and
told him to call Palmer there. I had
done all I wanted to; gotton an in
terview for Lauterbach with Ledyard
and I didn't want Mr. Palmer in
jured I wanted to clear the atmos
phere and prevent a possible scandal
for Palmer."
Tho deception was revealed to
Palmer and Ledyard that Sunday.
Senator Overman insisted on
knowing if Lamar ever impersonated
any other congressman.
"Oh, Lord, I may have," said La
mar. Lamar diverted from his narrative
to dpnounce the Union Pacific mer
ger plan recently approved by the
federal court at St. Paul, agreed to
by Attorney General McReynolds,
and approved by President "Wilson.
The exchange of Southern Pacific and
Baltimore & Ohio stock ho charac
terized as a farce, and added that
Mr. McReynolds had been derelict in
his duty.
Lamar said that his plan was for
tho Union Pacific to buy the Central
Pacific with Central Pacific stock.
Senator Cummins questioned La
mar sharply, and in tho exchange the
witness testified that he was a
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Address, THE COMMONER, Lincoln, Nebraska
Methodist arid that Lamar was not
his original name.
"I have adopted several names,'
ho said.
Lamar's statement today before
the committee regarding the alleged
forgery of $82,000,000 on the Union
Pacific railroad's hooks in 1902 was
substantially as follows:
"In the summer some time during
1001 somebody forged the books of
the Union Pacific to the tune of $82,
.000,000. Who it was I don't know.
As a consequence the men connected
with tho company immediately there
after got $82,000,000 in cash as the
proceeds of that forgery and that
$82,000,000 was the fulcrum
through which all these giant mo
nopolies and conspiracies were fas
tened on the lines of railroads serv
ing the territory from the Rocky
mountains to the Gulf of Mexico and
from the Pacific ocean to the Mis
souri river, and more than that, it
was the fulcrum through which this
group of men profited to the extent
of $100,000,000 or $200,000,000
and Kuhn', Loeb & Co. and ono or
two others profited to the extent of
$50,000,000 to $100,000,000 in ac
quiring those gigantic fortunes.
"The first consolidated balance
sheet of the Union Pacific Railroad
company, as of Juno 30, 1900, con
tained for the first time the evi
dences and results of what had been
going on from June 30, 1898 to June
30, 1900, and this is what had happened:
"In the transaction the old organi
zation had lost control of the prop
erties. They consisted of the Ore
gon Railroad & Navigation company
and the Oregon Short Line Railroad
company. The new company re
covered them and paid for them, first
by an issue of its own. securities and
secondly by an assumption of debts
of these companies, and as I have
already said, the consolidated balance
sheet of June 30, 1900, showed for
the first time the consolidated state
ment of all these companies.
"On the debit side appeared the
amount of securities issued and the
debt assumed against the acquisition
of thoso properties.
"On tho asset side credit was en
tered at the value of the properties
acquired, and again there appeared a
duplication of that. The same amount
was entered over again as represent
ed, in the value of the securities,
which in turn represented tho value
of the physical properties acquired.
"The sum of $82,000,000, or its
equivalent, was entered twice on the
asset side. But up to that time the
transaction was only open to the ob
jection and criticism that it repre
sented a piece of clumsy bookkeep
ing, for again on the debit side there
appeared an entry crossing, treating
the securities owned by the Union
Pacific as though they were still
afloat and in the hands of- the public,
but during the year 1901 somebody
erased that entry on the debit side.
"So you had the entry on one side
of the amount of securities issued by
the Union Pacific and the amount of
the debit it had assumed represent
ing the payment of the purchase
price. And then again the same
entry over again. And that condi
tion existed as a result of this for
gery as a result of this erasure.
"And that $82,000,000, before it
was erased, represented a debit en
try against a credit entry, that
credit entry being the entry repre
senting" the securities of these com
panies which the Union Pacific had
acquired.
"Now hero is what they did and
here is what followed from the for
gery. Tliey took all the securities
of the Oregon Short Line and the
securities of the Oregon Railway &
Navigation company out from tho
treasury of tho Union Pacific Railway
company and pledged them as se
curity for an issuo of bonds and
got the money for them and (hey took
that monnv nnrt fiTit.u,..i ,. lU0K
i"rti luunuy unci ;intifp it . ..
management and the financing of thu
Northern Pacific stock whirl, aC
ward became Northern Socurit o,
stock and then again Northorn pa
cific and. Great Northern Ore and
that, in the end, was sold out at a
most enormous profit, and tho pro
ceeds of that used to buy from Kuhn
Loeb & Co. in one day $200,01)0 000
of securities which the testimony be
fore the interstate commerce com
mission has strongly tended to show
they bought from themselves."
Immediately after Lamar had fin
ished this remarkable statement Paul
D. Cravath, of counsel for the Union
Pacific railroad, put in this reply:
"In view of the statement regard
ing the account on the Union Paci
fic's Railroad company which David
Lamar has gone out of his way to
make before this committee, and
which to persons not familiar with
i- a i t t .
uavia juainar s cnaracter who may
read this statement in the news
papers may be misled thereby, I deem
it my duty to make the following
statement for tho records of the com
mittee: "For several days persons con
nected with the Union Pacific Rail
road company have ben informed
that an effort was being made to cir
culate and secure publication in tho
newspapers of a bear attack in tho
form of a prepared story about an
alleged falsification of the accounts
of the Union Pacific company involv
ing $70,000,000 or $80,000,000. Wo
were informed in substance that this
story was so palpably false and scan
dalous and so plainly offered for an
improper purpose that the news
papers would not publish it. Infor
mation then came that the story
would soon be made public in such a
way that tho newspapers would have
to publish it.
"It now appears the medium for
the publication of the sto'-y was to
be this man David Lamar, who has
confessed himself to be the most un
conscionable liar of modern times.''
Senator Overman asked Mr. Cra
vath to strike out the last words of
his statement.
"I decline,"' retorted Mr. Cravath
Senator Walsh insisted that they
go out, and Cravath finally consented.
To save New York to the republi
cans, while the anthracite strike in
1902 was on, Lamar said he nu
Lauterbach call a conference between
Governor Odell, Lauterbach and
himself with a view of selling the
stock. Upon his advice, ho said,
Governor Odell threatened to call on
the legislature to repeal charters or
anthracite railroads. J. P. M1or?
sent for Lamar and Lauterbach, ine
witness said, for a conference on tnj
Morgan yacht. Lamar said he urn
not go, but Mr. Morgan sent wora
the strike would be called oft.
Before Lamar left the stand Mr.
Cravath, with the consent on
committee, had asked Lamar it no
im,i nvAr fHpH to insnire newspap"
stories about the Union Pacific.
"The day Judge Lovett gave . oui
his interview in New York I . msp re"
and helped to make public the sioiy
in the New York Journal,' said w
mar. He added he had ta Ifced . oer
the telephone directly with editors
of the Journal, he thought, witn a
man named O'Reilly. . t
Lewis Cass Ledyard testified tu
for two years previous to Lamaj
telephone conversations with mm.
members of the Morgan ??.? at
ploy some one to "control affaiis
Washington. H T,a-
Ho connected Lauterbach and
mar with them. L a.
"Did you know at first I a J.
mar talking?" asked Senator over
""i knew it was some blacki
and finally concluded it was Lamar,
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