The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1901-12-22

for sale and might at any time pass under
the control OF or be combined with the
Union Pacific interests We then, with the
Northern Pacific. made proposals TO the
owners OF the Burlington 10 ouy thelr en-
tire property
when this transaction was about being
closed the people who represented the
Union Pacific Company and who had pre-
viously tried to buy the Burlington asked
10 be allowed TO share with US i'm the pur-
chase Of that company; this proposal we
refused for the reason that il would de-
feat our object in buying the burlington
and, further, IL was against the laws OF
several of the States in which the longest
mileage Of the Burlington was located. Al
that time, against the opposition OF the
more southern lines. both the Northern
Pacific and Great Northern had put into
effect a low colonization rate and were
carrying daily thousands OF people into the
Northwest, many of whom We're coming
from Kansas and Nebraska along the hnes
of the Union Pacific.
A BOLD OPERATION.
This movement was at its height in the
month of April, and after we had closed
the purchase of the Burlington the Union
Pacific people undertook the boldest ef-
fort that ever was made in this country
and bought over sixty million of the stock
of the Northern Pacific in the markets of
Europe and the United States. 1 was in
New York at the time. and after Messrs.
the Union Pacific people it was found that
together we had bought twenty-siX millions
of Northern Pacific common stock, and
inaSmuch as the common stock by right
of a contract made with the preferred
stockholders, when the company was re-
organized and the stock was sold, had the
privilege of paying off the preferred stock
at par on the 1st day of January of any
year until 1917
''Messrs. Morgan & Co. then bought in
London and New York about sixteen
millions of the common stock of the North
ern Pacific At the same time the Union
Pacific interests. having already so large
an investment, bid the stock up until there
was the largest stock corner ever known.
The common in the three or four days went
up TO N,OCO per share. L explained 10 my
friends how that, with control of the North
ern Pacific the Union Pacific would control
the entire Northwest and the West from
Mexico to the Canadian line except for the
Great Northern. So great the effort
10 get this control that one of my friends
in London who owned two millions of
Northern Pacific common was offered and
refused $14OO0.0c0 for his stock
'MesSrs. Morgan & Co. and ourselves
then owned forty-two millions of the North
ern Pacific common out Of eighty millions.
with the privilege of paying off the seven
ty-f1ve millions of Northern Pacific pre-
ferred. The Union Pacific people owned
thirty-seven millions of the common and
about forty-two millions of the preferred.
which was clear majority of all the stock
of the Northern Pacific, and claimed the
exclusive control of the Northern Pacific
Railway and through that ownership
control of one-half the Burlington. When
1t was known that these preferred shares
could and would be paid off before the
annual election mutual negotiations re-
suited In Mr.. Morgan giving them repre-
sentative in the Northern Pacific board.
At the same time / was elected a member
OF the Northern Pacific board. When
was advised of my election | notified them
that L could not act legally director
of the Northern Pacific and Great Northern
at the same time, and ! resigned after the
first meeting of the board
THE SECURITIES COMPANY'S AIM.
Several of the gentlemen who have long
been interested in the Great Northern
Railway and its predecessor, the ST. Paul,
Minneapolis & Manitoba, and who have
always been among its largest sharehold-
ers, but not the holders of a majority OF
it's stock, whose ages are from seventy to
eighty-five, have designed to combine their
individual holdings in corporate form and
in that way secured permanent protection
for their interests and a continuation of
the policy management which has done
so much for the development of the North
west and the enhancement of their own
property In the Northwest and elsewhere.
Out OF this desire has grown the Northern
Securities Company. 1t became necessary
(in order 10 prevent the Northern Pacific
Union Pacific interests and with it the
joint control of the Burlington, to pay off
the twenty-five millions of Northern Pa
cific preferred. The enormous amount of
cash required for this purpose from a
comparatively small number of men made
1t necessary for them to act together in
large and permanent manner, through the
medium or a corporation, and the Northern
Securities Company afforded them the
means of accomplishing this object without
the necessity of creating a separate COM
IL
Northern Pacific; while, at the same time,
the credit of the Northern Securities Com
pany would be much stronger as il would
hold considerable amount of Great North
ern and other securities.
THE Northern Securities Company is
organized to deal in high-class securities,
to hold the same for the benefit of its
shareholders and to advance the interests
of the corporations whose securities it
owns. It's powers do not include the opera
tion of railways, banking, mining the
buying or selling of securities or properties
for others on commission. 1t is purely
investment company and the object of its
creation was simply to enable those who
hold its stock TO continue their respective
interests in association together and to
prevent such interests from being scat
tered by death or otherwise; to provide
against such attack as has been made
upon Northern Pacific by a rival and COM
peting interest whose main investment was
hundreds of miles from the Northwest and
whose only object in buying control of the
Northern Paclnc was TO DenenI It's South
ern properties by restraining the growth
of the country between Lake Superior and
Puget sound and by the turning away
from the Northern lines the famous
Oriental traffic which must follow placing
on the Pacific ocean of the largest ships
in the world.
''The foregoing is a brief and absolutely
correct statement of the whole subject,
and its truth can easily be verified by
the State of Minnesota and any other
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