St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-08-25
THIS IS OFFICIAL.


official and correct. 1t is herewith
published:
THIS IS OFFICIAL.
The report was circulated in Wall
street that the negotiations between
Messrs. Edward D. Adams, J. P.
Morgan and President James J. Hill,
of the Great Northern Railway COM
pany, and their immediate associates,
for the reorganization of the North
ern Pacific company, which have
6een going on for several months
past, had fallen through or been dis
continued. The reason alleged was
that Mr.. Hill, who originally agreed
to guarantee the Northern Pacific
company when reorganized $6,200,000
of net earnings applicable to pay
ment of interest upon the COM
pany's bonds, had declined to ac-
of his original proposition. 1t is
true that Mr.. Hill has declined to
modify his original proposition,
which, with other propositions, was
embodied in a contract that was ex-
ecuted by all the parties in interest,
including the Deutsche bank, the
largest single, holder of Northern
Pacific securities, at a conference
held in London last spring. But it
is not true that efforts to carry out
the terms of what is popularity spok-
en- of as the London agreement have
been abandoned.
There is excellent authority for
the statement that Mr.. Hill stands
ready to carry out his part of that
agreement whenever the Northern
Pacific railroad shall have been re-
organized. The difficulty all along
has been that various counsel for
the Adams reorganization commit
tee and for certain bankers inter-
ested in underwriting the plan Of
reorganization have asserted that
the Great Northern Railway COM
pany could not legally hold the con-
troll of the Northern Pacific COM
pany, nor guarantee it's bonds. The
answer of the Great Northern peo-
pie has been that their charter,
which is nearly forty years old, con-
fers upon the company the power to
do precisely what Mr. Hill proposes.
All of the counsel of the Great North
ern company are unanimous upon
this point.
THIRD COMPANY TALK. - ~
Chief among the suggestions of the
bankers and the reorganization COM
mittee is one for the formation of a
third company to hold a majority of
the stock of the reorganized North
ern Pacific company and also a ma:
jority of the stock of the Great
Northern company. This PROPOSE
ton was submitted to the various
parties in interest a few weeks ago
when Mr.. Hill was in this city. He
went home saying he would think
the matter over. He returned on
Monday, and on Tuesday informed
Messrs. Adams. Morgan and others
interested with them that the third
company plan did not appeal to him,
and that he had decided to stand
upon his original proposition. Mr..
Hill maintains, it is understood, that
to seek to control or operate the
Northern Pacific road by a third
company or by any indirect means
would be reflection upon the char
tered rights of the Great Northern
company.
The argument is also advanced that
the history of the Oregon and Trans
continental, the Richmond Termi-
nal and other companies formed
solely to control railway properties
haye turned out SO disastrously that
that method has fallen into disre-
pute. Another argument against the
third company is that the Northern
Pacific would not derive the full and
direct benefit of the credit of the.
Great Northern company, and that
to place the third company above
suspicion large amount of money,
say SIS, 100000, would have to be
placed in it's treasury as guarantee
that it would live up to it's ebliga-
tions. The capital of such COM
pany would easily run up to $100, ,000.-
600, upon which a large sum would
have to be paid annually in taxes,
and, besides, the character of the
company would make it target for
politicians and unscrupulous Off
cials.
Mr.. Hills determination, an
nounced on Tuesday, not to modify
the original agreement in favor of
the third company scheme, did not
result in the breaking off of the ne
gotiations; on the contrary, confer
ences between the several leaders
and their lawyers were going on all