The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1901-12-26
BENEFIT TO
kDRTKWEs1
Mr.. hills Statement
p. =. en- RAIL WAY MERGER
Securities Company Was Organized
to Prevent Union Pacific From
Getting Northern Pacific and
DivertinS Trade South. sl

President James ]. Hill yesterday issued
the following statement regarding the
merger of the Great Northern, the North
ern Pacific and the Burlington railroads
under the Northern Securities company,
and explaining the purpose OF forming
the securities company:
have been absent from Minnesota for more
than two months and during that time there
has arisen a wide discussion Throughout the
state of what has been generally called con-
solidation or a merger of the Northern racine
and Great Northern railways, and In this as
cussion statements have been MADE "hlch are
so widely different from the facts that feel
called upon to make a conservative statement
of Just what has been done in the past anu
what will be done in the future.
Whom the Northern Pacific failed and the
banking house of ]. p. Morgan q co. reorsah
lied it, myself and friends were holuerS Oh
large amount of that company SECURITIES
After the reorganization was completed we
bought about $26, 900, 600 of Northern RACINE
stock both common and preferred. SOME VI
this stock was afterward sold by individuals,
but a. large amount has been held from tna'
time to the present.
About a year ago the Union Paclnc company
bought the Huntington and other interests In
made an effort to buy the control of the Chi
cago, Burlington & Quincy.
With these lines in the hands of the Union
Pacific interests both the Northern Pacific and
Ga eat Northern would be
Largely Shut Out
II the States of Nebraska, Kansas, Missouri,
South Dakota, Iowa, Illinois and Wisconsin,
except by using other lines of railway some
of which We're in the market for sale and might
at any time pass under the control or or De
combined with the Union Pacific interests.
We then, with the Northern Pacific, made
proposals to the directors of the Burlington to
buy their entire property. When this transac-
ton was about being closed the people who
represented the s1Union Pacific cnmpany, ana
Wild nad previously titled Burlington
asked to be allowed to share with us in the
purchase of that company: this proposal re
fused for the reason that it would defeat our
object in buying the Burlington, and further 1t
was against the law of several of the states
in which the largest mileage of the Burlington
located
At that time, against the opposition of the
more southerly 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 were coming from Kansas and Ne
braska, along the lines of the Union Pacific.
This movement was at its height in the
month of April and after had close !
the purchase of the Burlington the Union Pa
cifc people undertook the boldest effort that
ever was made in this country and bought
over sixty millions of the stock of the North
Pacific in the markets of Europe and the
United States. I was in New York at the time
and after Messrs. Morgan & Co. were aware
of the action of the Union Pacific people 1t was
found that together we held about 26OO0.O 600
of Northern Pacific common stock and, mas
much as the common stock, by right of a con-
tract made with the preferred stockholders
when the company was reorganized and the
stock issued, had the privilege of
Paying Of the Preferred
stock at par on the first day of January in any
year until 1917, Messrs. Morgan & Co. then
bought in London and New York about 5000, =
900 of the common stock of the Northern Pa
cific; at the same time the Union Pacific in
terests having already so large an investment,
bid the stock up until there the largest
stock corner ever known; the common stock
in three or four days went up to $1,000 per
share
I explained to my friends how that, with
control of the Northern Pacific, the Union Pa
cific would control the entire Northwest and
Of the West from Mexico to the Canadian line,
except for the Great Northern. So great was
the effort to get this control that of my
friends in London, who owned 2,OeO,OOO of
Northern Pacific common. was offered and re-
fused $4,000, 600 for his stock. The result
was that Messrs. Morgan & Co. and ourselves
owned 100000 out of $4,000, 900 of the
Northern Pacific common, with the privilege OF
paying off Inc $4,000. 900 of Northern Pacific
preferred. The Union Pacific people owned
of the preferred, which clear majority OF
all the stock of the Northern Pacific, and
claimed the exclusive control of the Northern
Pacific railway and through that ownership a
control Of one-half the Burlington.
When 1t was known that these preferred
shares could and would be paid off, and before
the annual election mutual negotiations result
ed in Mr.. Morgan giving them representa-
tive in the Northern Pacific board At the
same time I was elected member of the
Northern Pacific board When I was advised
of my election I notified them that I
Could Not Legally Act
as a director of the Northern Pacific and
Great Northern at the same time and re.
signed after the first meeting of the board.
Several of the gentlemen who have long been
interested in the Great Northern railway and
it's predecessor the St. Paul, Minneapolis 8
Manitoba company and who have always been
among it's largest shareholders, but not the
holders Of a majority of its stock, whose ages
are from seventy to eighty-six years, have de-
sired to combine their individual holdings In
corporate form, and in that way secure per-
manent protection for their interests and a
continuation Of the policy and management
which has done so much for the development,
of the Northwest and the enhancement OF
their own property in the Northwest and else
where. Out of this desire has grown the
Northern Securities company.
1t became necessary Tin order to prevent the
Northern Pacific from passing under the con-
troll of the Union Pacific interests and with T.
the Joint control Of the Burlington to pay of
the seventy five millions of Northern Pacific
ouired for this purpose from a comparatively
small number of men made 1t necessary fo,
them .N| Ef.E rs 81 .. 'sstc ta"
.u To Act Together
in large and permanent manner. through the
medium Of a corporation, and the Northern
Securities company afforded them the means
Of accomplishing this object without the neces-
the transaction for the Northern Pacific:
while. at the same time. the credit Of the
Northern Securities company would be much
stronger, as It would also hold considerable
amount of Great Northern and other securities.
The Northern Securities company is organ
lied 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 operation OF railways. banking,
mining nor the buying or selling Of securities
or properties for others on commission; It Il
puraly an investment oomnany and thA oh